Improve productive capacities in the world’s poorest countries for stronger recovery, UNCTAD says
The COVID-19 economic crisis is forecast to reverse years of painstaking development progress in education and nutrition, and to pull 32 million people back into extreme poverty.
Efforts to rebuild the economies of the world’s poorest nations post-pandemic will fall significantly short unless their productive capacities are drastically improved, according to UNCTAD’s Least Developed Countries Report 2020.
Least developed countries (LDCs) with the most developed productive capacities have best been able to combat the fallout from the pandemic, according to the report.
Productive capacities are the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and 3 enable it to grow and develop.
“The pandemic has brutally reminded us of the urgent need to develop productive capacities in LDCs to enable them to achieve structural transformation, reduce exposure to external shocks and build resilience,” UNCTAD Secretary-General Mukhisa Kituyi said.
He said the development of productive capacities in most LDCs has been too slow for them to overcome major development challenges and shocks such as COVID-19.
New survey shows COVID-19’s impact on e-commerce in poorer nations
The coronavirus pandemic is impacting actors in the digital economy differently. While some digital businesses are showing resilience, costs are rising for others, a new UNCTAD survey shows.
Even though COVID-19 has pushed more consumers in developing countries to buy online, many e-commerce businesses in these nations have seen a slump in sales, according to an UNCTAD study published on 17 November.
Presenting hard-to-collect data from 23 countries, mainly in Africa and Asia, the research shows a stark divide between the pandemic’s impact on different actors in the digital economy.
While 58% of businesses selling their own products or services online have recorded a drop in monthly revenue, about 64% of third-party marketplaces have seen a spike in sales, according to data collected between March and July 2020 from over 250 companies, most of which have less than 10 employees.
“We found that wholly digital businesses, especially third-party online marketplaces, have been more resilient during the current crisis,” said Shamika N. Sirimanne, UNCTAD’s technology and logistics director.
“Even with growing demand for e-commerce, most businesses have struggled to adapt and scale-up their operations online.”
How ports in Africa and Asia are tackling common challenges
The 8th edition of UNCTAD’s port management series spotlights the top work done by TrainForTrade graduates from Ghana, Indonesia, Malaysia, Nigeria and the Philippines.
The efficiency of a port directly affects the economic prospects of the countries it serves, given that more than 80% of goods traded worldwide are carried by sea and thus handled by ports.
“A port can only be as efficient as the people who work in it,” UNCTAD Secretary-General Mukhisa Kituyi said.
An UNCTAD report presented on 24 November spotlights case studies on how some ports in Africa and Asia are tackling today’s most common challenges, including cargo handling operations, land and waste management, digitalization and employee turnover.
The studies were done by participants of UNCTAD’s TrainForTrade port management programme in Ghana, Indonesia, Malaysia, Nigeria and the Philippines.
DDG Wolff urges G20 leaders to back WTO action to support economic rebound, pandemic response and WTO reform
In an address to leaders from the Group of 20 leading economies, Deputy Director-General Alan Wolff said on 21 November that the WTO membership faces three challenges: using trade to bolster the economic recovery from the coronavirus pandemic, facilitating trade in products needed to treat COVID-19, and reforming the institutions that govern global trade. He urged participants at the summit, which was chaired by Saudi Arabia, to actively engage on WTO reform.
The full text of his remarks is below:
Thank you very much, Your Royal Highness, and I thank Saudi Arabia for its leadership.
With respect to trade, there are three immediate challenges: to utilize trade to help underwrite the economic recovery, to facilitate trade in essential medical products to treat the pandemic, and to reform the institutional framework for world trade.
WTO’s achievements, challenges addressed at 25th anniversary event
Senior government officials and representatives from the private sector, civil society and intergovernmental organizations met virtually on 19 November to exchange views on the achievements and challenges facing the WTO as it marks its 25th anniversary. Speakers underlined the continued relevance of the rules-based trading system as demonstrated by the key role of trade in contributing to the COVID-19 pandemic response but said reform of the WTO must be made a priority in order to make the organization “fit for purpose” for trade in the 21st century.
In his keynote address to the opening session of the event, Swiss Federal Councillor and Vice-President Guy Parmelin said the continued importance of the WTO and the multilateral trading system has been underlined by the current COVID-19 crisis, with global supply chains and open markets playing an important role in ensuring rapid access to medicines and other essentials needed to fight the pandemic.
“To the sceptics, I wish to remind them that international trade is part of the solution and not part of the problem,” he declared. “Trade and health can and should be mutually supportive.”
EU member states approve EIB Group Climate Bank Roadmap 2021-2025
- Support €1 trillion in investment for climate action and environmental sustainability in the decade to 2030
- EIB Group is now aligning all financing activities from end of 2020, with goals of Paris agreement
- More than 50% of annual financing dedicated to green investment by 2025
- More Green advisory services and financing of innovative low carbon technologies
- Support for green capital markets, climate change adaptation, Just Transition projects
On Wednesday, the European Investment Bank (EIB) Board of Directors, composed of representatives from the EU member states, approved the Climate Bank Roadmap (CBR) that sets out in detail how the EIB Group aims to support the objectives of the European Green Deal and sustainable development outside the European Union.
Least developed countries hit hard by trade downturn triggered by COVID-19 pandemic
Least developed countries (LDCs) have been hit hard by the downturn in global trade triggered by the COVID-19 pandemic, with LDC merchandise exports declining by 16 per cent during the first half of 2020, WTO members were told at a meeting of the WTO’s Sub-Committee on LDCs held on 11 November.
The WTO Secretariat reported that the decline in the value of LDC merchandise exports was steeper than the 13 per cent average decline in global exports registered in the first six months of the year. The LDC services sector also took a hit, with preliminary estimates suggesting a drop of close to 40 per cent in the first six months of 2020. The LDCs also had a subdued trade performance in 2019, with their share in world exports (goods and services combined) remaining static at around 0.96 per cent.
The impact of the pandemic on LDC trade was a special focus of the Secretariat's latest annual report on market access for products and services of export interest to LDCs.
COVID-19 and beyond: What role for LDCs?
By Paul Akiwumi, Director for Africa and Least Developed Countries, UNCTAD
As the world seeks to recover from the COVID-19 pandemic and the ensuing global recession, there is a temptation to prioritise domestic health and economic concerns, especially in advanced economies.
But resorting to inward-looking policies or protectionism threatens to leave behind the world’s most vulnerable economies or least-developed countries (LDCs). In responding to the global challenge posed by COVID-19 and building back better for long-term prosperity, the international community must not forget LDCs.
Why LDCs matter
An estimated 1.06-billion people live in the world’s 47 LDCs and by 2030 over 15% of humanity will be living in them. Despite their large demographic weight, LDCs account for less than 1.5% of global GDP. In 2019, the average GDP per capita in LDCs was only $991, compared with a world average of $11 069.
COVID-19 cuts global maritime trade, transforms industry
The pandemic has sent shockwaves through global maritime transport and laid the foundations for a transformed industry and associated supply chains. UNCTAD expects a return to growth in 2021
Global maritime trade will plunge by 4.1% in 2020 due to the unprecedented disruption caused by COVID-19, UNCTAD estimates in its Review of Maritime Transport 2020, released on 12 November.
The report warns that new waves of the pandemic that further disrupt supply chains and economies might cause a steeper decline. The pandemic has sent shockwaves through supply chains, shipping networks and ports, leading to plummeting cargo volumes and foiling growth prospects, it says.
According to the report, the short-term outlook for maritime trade is grim. Predicting the pandemic’s longer-term impact as well as the timing and scale of the industry’s recovery is fraught with uncertainty.
Global foreign direct investment falls 49%, outlook remains negative
The biggest drops occurred in developed countries, cutting across all major forms of foreign direct investment.
Global foreign direct investment (FDI) flows fell 49% in the first half of 2020 compared to 2019, due to the economic fallout from COVID-19, reveals UNCTAD’s latest Global Investment Trends Monitorreleased on 27 October.
In the wake of the pandemic, lockdowns around the world slowed existing investment projects and the prospects of a deep recession led multinational enterprises to reassess new projects.
“The FDI decline is more drastic than we expected, particularly in developed economies. Developing economies weathered the storm relatively better for the first half of the year,” said James Zhan, UNCTAD’s investment and enterprise director. “The outlook remains highly uncertain.”
Developed economies suffer steepest fall
According to the report, developed economies saw the biggest fall, with FDI reaching an estimated $98 billion in the six-month period – a decline of 75% compared to 2019.
The trend was exacerbated by sharply negative inflows in European economies, mainly in the Netherlands and Switzerland. FDI flows to North America fell by 56% to $68 billion.