Topics Covered: Important International institutions, agencies and fora, their structure, mandate.
United Nations Conference on Trade and Development (UNCTAD)
What to study?
For Prelims: All about UNCTAD, suggestions made.
For Mains: Concerns expressed and significance of the suggestions made.
Context: The United Nations Conference on Trade and Development (UNCTAD) has released its latest Trade and Development Report.
Present global scenario:
- This is necessary because of the hardship caused by the Covid-19 pandemic. Developing countries may see their public external debt increase to $2.4-3.6 trillion in 2020 and 2021.
- Even before the coronavirus pandemic hit developing economies, many of them are trapped in a debt-spiral — struggling with unsustainable debt burdens for many years, as well as with rising health and economic needs.
- The financial turmoil from the crisis has triggered record portfolio capital outflows from emerging economies and sharp currency devaluations in developing countries, making servicing their debts more onerous.
Need of the hour- suggestions made by UNCTAD:
The report outlined three key steps:
- Automatic temporary standstills:
Provides macroeconomic “breathing space” for all crisis-stricken developing countries requesting forbearance to free up resources, normally dedicated to servicing external sovereign debt.”
If the standstills are long and comprehensive enough they would facilitate an effective response to the Covid-19 shock through increased health and social expenditure in the immediate future and allow for post-crisis economic recovery along sustainable growth, fiscal and trade balance trajectories.
- Debt relief and restructure programmes:
Such programs would ensure the “breathing space” gained under the first step is used to reassess longer-term developing country debt sustainability, on a case-by-case basis.”
A trillion dollar write-off would be closer to the figure needed to prevent economic disaster across the developing world.
- International developing country debt authority:
To oversee their implementation and lay the institutional and regulatory foundations for a more permanent international framework to guide sovereign debt restructuring in future.
About United Nations Conference on Trade and Development (UNCTAD):
UNCTAD is a permanent intergovernmental body established by the United NationsGeneral Assembly in 1964.
It is part of the UN Secretariat. It reports to the UN General Assembly and the Economic and Social Council, but has its own membership, leadership, and budget. It is also a part of the United Nations Development Group.
Objectives and roles:
It supports developing countries to access the benefits of a globalized economy more fairly and effectively. Along with other UN departments and agencies, it also measures the progress made in the Sustainable Development Goals, as set out in Agenda 2030.
Reports published by UNCTAD are:
- Trade and Development Report
- World Investment Report
- Technology and Innovation Report
- Digital Economy Report