UNCTAD economists warn of austerity risks, financial instability in avoiding another recession

An acute risk remains for global recession if government and international officials fail to address joblessness, debt distress and the fragile state of the global economy, a UN Conference on Trade and Development (UNCTAD) research has indicated.

The UN agency says the topic is controversial as others argue that governments should focus on continued austerity as well as measures to increase labour market flexibility and competitiveness, rather than expanding demand and social protection.

The topic will also be discussed by government ministers and high-level officials at a roundtable staged as part of the programme of the upcoming UNCTAD XIII quadrennial conference in Qatar.

The focus – based on the conference’s sub-theme of “enhancing the enabling environment” for stable, broad-based economic growth – will be on reforms and changes in strategy that could help to avoid a new downturn, UNCTAD said in a statement.

Speakers include senior parliamentarians and policymakers from Argentina, China, Germany, and South Africa, among other countries. “They will offer a range of experiences and lessons learned about efforts taken to respond to the fallout from the crisis and to promote recovery,” it said.

Particular attention will be given to the challenges that developing countries face in today’s highly connected and interdependent global economy. Speakers will highlight what developing countries can do to reduce their vulnerability to external shocks.

An important theme for discussion, UNCTAD indicates, is the direction in which current macroeconomic policy choices are heading, especially in the major developed economies, and what this implies for developing countries.

By Ekow Quandzie