Economists grapple with worst recession in decades
| July 26th 2020
Senior UN officials, Nobel laureates and eminent academic experts gathered virtually on Wednesday for the launching of a new UN report and reached a consensus that new approaches must be taken while the world is grappling with the worst recession in decades due to the Covid-19 pandemic.
Titled Recover Better: Economic and Social Challenges and Opportunities, the report analysed economic trends critical to the achievement of the Sustainable Development Goals (SDGs) and recovery from the disease.
“Parallel threats linked to health, economic and social crises have crippled countries and left us at a standstill,” said Liu Zhenmin, UN Undersecretary-General for Economic and Social Affairs, as he presented the new report by the High-Level Advisory Board on Economic and Social Affairs.
Among the recommendations in the report is a greater focus on the environment, as well as promotion of research and development, investment in infrastructure and education, and improvement in economic equality.
“Overcoming the crisis and getting back on track to achieve the Sustainable Development Goals will require a strengthened multilateralism,” said Liu, adding that Covid-19 has laid bare how much leadership, foresight and collaboration among all governments and stakeholders matter.
In a video message, UN Deputy Chief Amina Mohammed said as many as 100 million people are expected to be pushed back into extreme poverty in 2020, the first rise in global poverty since 1998.
“We need all hands on deck if we are to rebuild our economies sustainably and inclusively,” she said.
Noting that the report calls for better international tax cooperation and more equitable access to digital technologies, Moahmmed said the sustainable management of natural resources and value-added approaches to trading goods will also be critical.
The 2030 Agenda remains the agreed framework for recovering in ways that accelerate progress on climate change, poverty and gender inequality, and address the fragilities exposed or exacerbated by the pandemic.
“We must all do more,” she added.
During two policy dialogues held at the launching event, 12 experts wrestled with whether the world is currently in a recession and if so, what it will take to recover in ways that can thoroughly reform underlying vulnerabilities.
“There is no trade-off between economic efficiency and equality,” said Alicia Barcena, executive secretary of the Economic Commission for Latin America and the Caribbean, who contributed a chapter on the topic.
During a panel on the theme, “Ensuring a sustainable recovery through more inclusive and strengthened multilateralism,” Barcena underscored the urgent need for structural change.
Between 2000 and 2010, 60 million people in Latin America and the Caribbean moved out of poverty. Now, 45 million risk being pulled back in.
“The market is not going to equalise society. We need a new social and political compact altogether,” she said, pointing out that Costa Rica, Uruguay and Cuba - societies that have high trust in government - have fared better during the pandemic than others.
She also called for a progressive tax system, as countries in the region have a 23 per cent tax burden, lower than those in the Organisation for Economic Cooperation and Development, as well as more regional integration.
“The post-pandemic world is going to be a world of regions, a world of blocs,” said Barcena.
Ricardo Lagos, former President of Chile, suggested the creation of an internationally binding agreement on pandemics, forged under the auspices of the World Health Organisation.
Along similar lines, Marcel Fratzscher of research institute DIW Berlin said that on July 21, European countries agreed to establish a 750 billion euros recovery fund, transferring resources from stronger to weaker countries with the goal of rebuilding Europe.
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