The annual Trade and Development Report by UNCTAD is the flagship publication of this international organization. The 2018 report is titled «Power, Platforms and The Free Trade Delusion». In the report, the authors state that the global economy has been unable to fully adapt to the changed conditions following the financial crisis of 2008. Both advanced and developing economies are characterized by increasing instability, while growth rates are slowing down and inequality is rising.
The publication also describes the paradoxes of the current stage of globalization. First, UNCTAD experts point out that though the global level of unemployment has decreased, wages are still growing very slowly. Second, the authors note that the volume of investments is low, despite a rise in profitability, and remark that nothing has changed much over the post-crisis decade. Moreover, global indebtedness of the private sector has grown by 50% reaching 250 trillion dollars. Current trade wars are a symptom of a greater imbalance caused by a failure to learn the lessons of the past crisis. Notably, developing economies have seen a significant drop in GDP growth, while big players have profited from international trade. As seen by UNCTAD experts, global trade is the main factor aggravating inequality.
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The report also analyzes problems of the new age. Today, while developing countries are still trying to integrate into the digital economy, a number of technological mega-corporations such as Facebook or Google have overgrown the notion of corporation itself, reaching a fundamentally new level. UNCTAD experts name customer relations and personal data protection as a key to success for emerging economies. These issues signal an urgency for change. Without changes in the near future, developing countries risk losing to mega-corporations.
Finally, UNCTAD emphasizes the importance of adequate infrastructure and the necessity for urgent structural transformation to narrow the growing gap between the biggest global market players and emerging market participants which are currently less profit-oriented.
UNCTAD stresses the need for a new global policy which should include several components:
- inclusive economic rise of all nations;
- tax policy changes and restrictions for capitalism;
- a shift from capital to labor, which should ensure fair global sharing of benefits.
