2006/177

UNCTAD CALLS FOR MULTILATERAL APPROACH

TO TACKLE GROWING TRADE IMBALANCES

TEHRAN, 31 August 2006 (UNIC)--United Nations Conference on Trade and Development (UNCTAD) warns that if rapid international measures are not taken to reduce global trade imbalances, financial crises could develop and spread in developing nations. Recently, these countries have made encouraging economic progress due in part to climbing prices for oil and other natural resources.

Advancing an argument for greater "policy space" for such countries, UNCTAD’s Trade and Development Report (TDR) 2006 launched today in Geneva, recommends that their Governments show will and creativity in developing macroeconomic policies. It notes that such countries could reap long-term benefits from a favourable global economic environment. 

It also recommends that they adopt active industrial policies intended to spur economic growth and structural change that create employment and raise living standards over the long term. This is a change from the 1980s and '90s, when developing nations were advised by the Bretton Woods institutions to keep their hands off and let market forces do the work of "getting the prices right."

The TDR argues that there is no single quantifiable balance between multilateral disciplines and national policy autonomy that would suit all countries or apply across all spheres of economic activity. But it counsels that the multilateral trading regime must take better account of the asymmetries existing between its members.

The report says international trade rules and conditionalities attached to aid and loans provided to developing countries should not reach the point of restricting the Governments of those countries from doing what is best for their economies.

The Report urges the international community to set up and put into force a multilateral system of monetary and financial measures that will reinforce the Global Partnership for Development.

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