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No Winners But Fewer Losers In Global Economy From COVID Than Expected


The COVID-19 pandemic seriously impacted all
economies around the world last year, with trillions of
dollars of lost earnings, UN trade and development experts
UNCTAD
said
on Thursday, before highlighting how several countries also
showed unexpected resilience, too.

According
to trade and development body UNCTAD, the
global economy posted its sharpest annual drop in output
since records began to be aggregated in the 1940s, “with
no region spared”.

“Multilateralism has
essentially lost its mojo”, said Richard Kozul-Wright,
head of the Division on Globalization and Development
Strategies at UNCTAD, in a year that saw an estimated 3.9
per cent drop in global output – 0.4 per cent better than
the forecast in mid-2020 – that was largely owing to
stronger performances in China and the United
States.

‘Weak’ support for the
poorest

Speaking to journalists in Geneva, the UN
economist maintained that debt-relief initiatives for poorer
countries expected by the G20 group of advanced economies
had been “extremely weak”, at a time when developing
countries feared losing much-needed foreign direct
investment.

Efforts to organise a fair and equitable
COVID-19 vaccine
rollout had also showed “serious weaknesses in the global
health architecture”, Mr. Kozul-Wright maintained, while
the first year of the coronavirus crisis
saw “destruction of income on an unprecedented scale, an
estimated $5.8 trillion, and with already vulnerable parts
of the population bearing the brunt”, according to
UNCTAD’s Trade and Development report.

In concrete
terms, the coronavirus crisis triggered an effective loss of
255 million full-time jobs worldwide, according to the
International Labour Organization (ILO), cited by
UNCTAD.

Second wave dashes revival

Although
the global economic recovery began in the third quarter as
countries started to lift restrictions, UNCTAD noted that a
second wave of virus hit earlier than expected in the final
quarter of 2020 which dampened the recovery, most notably in
Western Europe.

Countering this downward pressure on
growth were vaccine breakthroughs and improved management of
lockdown measures, both of which offset COVID-19’s overall
economic impact, the UN report said.

Latin American
resilience

Regionally, UNCTAD data indicates that
East Asia and Latin America fared “a little better than
expected” – likely shored up by Brazilian growth – but
Europe, India and South Africa did worse.

“Positive
surprises” were Brazil, Turkey and the United States,
thanks to large relief measures that acted as a
shock-absorber for recession, while rising commodity and
asset prices spurred growth.

The rebound in raw
materials prices also benefited “several” developing
African economies, UNCTAD continued, while the region as a
whole saw lower-than-expected pressure on public health
systems from COVID-19, UNCTAD said.

Food insecurity
concerns

The UN body cited concerns nonetheless that
more volatility may be emerging, particularly in markets of
some agricultural commodities, with a threat to food
security in several countries

It also noted that
losses in global growth ‘will persist as even the most
optimistic projections for the bounce back of growth will
not cover the shortfall of income for several
years”.

For 2021, UNCTAD announced global growth of
4.7 per cent – 0.6 per cent better than its previous
mid-2020 forecast.

But this “more optimistic
scenario” depends on international support for three
things, UNCTAD insisted: “improved vaccination and disease
containment in advanced and middle-income countries, a
speedy transition from economic relief policies to
recovery-policies in the largest economies of the world; and
no financial crash of global
significance”.

© Scoop Media

 



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