Developing countries must avoid a race to the bottom to supply cheap goods to the world’s richest economies, according to a new report from Unctad, the UN’s trade and development arm.
In its annual trade and development report (pdf), published on Thursday, the Geneva-based thinktank warns that the traditional model of “export-led development,” which powered many countries in the runup to the financial crisis, is no longer viable.
“Prior to the Great Recession, exports from developing and transition economies grew rapidly owing to buoyant consumer demand in the developed countries, mainly the United States,” writes Supachai Panitchpakdi, Unctad’s outgoing secretary-general, in the report’s foreword. “But the expansion of the world economy, though favourable for many developing countries, was built on unsustainable global demand and financing patterns. Thus, reverting to pre-crisis growth strategies cannot be an option.”
via The Guardian
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