By Xin Huang
On the morning of June 29th, UN-ESA (Economics & Social affairs) has released its annual report: “World Economic and Social Survey2010 (WESS).”
It is a new orientation of solutions concerning the current global economic crisis. The report is calling a broader frame work and a vaster interconnection between nations, where each countries has “Common but Differentiated Responsibilities.” This new idea is titled “Retooling Global Development.”
“The global economics crisis is multidimensional”, says Mr. Rob Vos, Director of the Development Policy and Analysis Division (DPAD) of UN-ESA, who supervised producing this survey and presented it at the press conference.
The survey indicates the economic development trend chronologically. Overall, the past trend of global income (or share of global GDP) distribution and growth is mostly persistent. Quite a few developing countries (mostly in Asia) experience a significant “convergence” towards the living standards of the now advanced countries, others, especially in Africa, have fallen farther behind. The number of poor in the world living on less than $1.25 a day decreased from 1.8billion in 1990 to 1.4 billion in 2005, but nearly all of this reduction was concentrated in China.
Mr. Vos also called attention to other challenges that we will be facing, such as aging population and urbanization in developing countries.
New aid architecture is needed. The current aid architecture is fragmented and insufficient. The major providers of Official Development Assistance (ODA), united in the Development Assistance Committee (DAC) of the organization for Economic Cooperation and Development (OECD), had contributed about 0.33per cent of their combined gross national income (GNI) in 1990. This share fell to 0.22 percent in the late 1990s. By 2010, it was back up to 0.35 percent, but still fell well short of all existing commitments.
These trends raise questions not only regarding the sufficiency of aid, but also about whether the aid that is being delivered is aligned with the development financing requirements of the countries’ most in need of ODA.
This report warns that people might be using a wrong idea to solve the global crisis. “The strong desire for quick economic recovery is understandable, but getting ‘back on track’ would mean returning to an unsustainable path of global development.” Mr. Vos emphasizes that the global economic crisis can be blamed to the instability of the current economic structure. The future frame should be built on more sustainable recourses.
A new thinking is called for to solve the global economics crisis. A whole new comprehensive financial mechanism should be built where “the competition between countries should be minimized or ideally eliminated.” says Mr. Vos. He suggested that since the causes are not limited to the finance area, the policy makers should not only focus on financial reform but consider more human well-beings.
This report brings our awareness to a broader level examining the economical crisis. However, the proposals include in the report are not practical enough. The report is mainly on the data investigated around the world but it did not mention detailed policy-making suggestions adjusting the conflicts of interests among nations and protectionism. Mr. Vos says the more specific discussion is included in the UNESA’s report last year, while the report this year is more like “an orientation”. Hence the practical meaning of this report is limited other than describing an ideal picture of a future economic structure. It is sending an important message to policy makers about what lesson they should learn from the global crisis and what goal they ought to achieve tomorrow. ♦
Xin Huang is a senior at Pacific Lutheran University in Tacoma. He is participating in a summer internship in Geneva, Switzerland, where he is attending conferences at the United Nations.