“Finance needs
to get back to the business of providing security for
people’s savings and mobilizing resources for productive
investment,” writes Supachai Panitchpakdi, the UNCTAD
Secretary-General, in the report. “Surveillance and
regulation will need to be strengthened at all levels,” he
adds.
UNCTAD has long maintained that the current global
economic and financial system has allowed a lop-sided system
to flourish, with some participants reaping the benefits
while global income inequality and financial imbalances have
also accumulated.
In an effort to counter the growing
disparities, the agency has suggested multiple policy
measures and reforms to support living standards in
developing countries and build their resilience to external
shocks.
“Financial markets and institutions have
become the masters rather than the servants of the real
economy, distorting trade and investment, heightening levels
of inequality, and posing a systemic threat to economic
stability,” warns the report, which also defines the
dominant pattern of international economic relations during
the past three decades as “finance-driven
globalization.”
Mr. Supachai instead calls for
financial and other resources to be channelled towards
“the right kinds” of productive activities, ensuring
that measures to diversify economic development are
consistent with job creation, food and energy security, and
tackling the threat of climate change.
“It is a basic
truth that people everywhere want the same thing: a decent
job, a secure home, a safe environment, a better future for
their children and a government that listens to and response
to their concerns,” writes Mr. Supachai. “This time
around, rebalancing will need a global new deal that can
‘lift all boats’ in developed and developing countries
alike.”
