Professor Yeldan remarked that we are currently living through the extremes of the Age of Anxiety, with faltering productivity growth, stagnant investments, declining wage incomes, and increased global inequality and social exclusion, all intensified with the threat of climate change and global warming of our planet. Yeldan quoted Richard Kozul-Wright, director of UNCTAD’s division responsible for the report, who argued that “the global economy does not serve all people equally. Under the current configuration of policies, rules, market dynamics and corporate power, economic gaps are likely to increase and environmental degradation intensify”.
The Report argues that since the global financial crisis, market-friendly solutions to these global challenges have failed to push economies in a more economically, socially and environmentally sustainable direction. This year’s report casts doubt on proposals to do more of the same: to finance the development objectives via speculative flows of international finance through blending scarce sources using products and techniques taken from the playbook of banking conglomerates. Yet, these have routinely failed to boost productive investment and were instrumental in the boom-bust cycle that led to the 2008 global financial crisis.
Instead, the report sets out a series of measures and reforms that would give the lead in financing a Global Green New Deal to the public sector and calls on the international community to find the political will to advance such an agenda.
The report recasts the post-1930 Depression Era’s signature policy on a global scale – a Global Green New Deal – as the right policy framework to make a clean break with years of austerity and insecurity following the global financial crisis, help bring about a more equal distribution of income and reverse decades of environmental degradation. It proposes a series of reform measures to make debt, capital and banks work for development and finance a deal.
Projecting an annual increase in total green investment of 2% of global output – around US$1.7trillion, or just one third of what is currently spent by governments on subsidizing fossil fuels – could, UNCTAD economists estimate, generate a net increase in global employment of at least 170 million jobs, with cleaner industrialization in the South and an overall reduction in carbon emissions by the target year of the 2030 Agenda.
The appropriate policy package will vary from country to country, but all will involve fiscal stimulus, public investment in infrastructure and green energy, and measures to boost wages, the Report underlined.