Doing business as usual is not an option for overcoming the effects of the global economic crisis, according to a U.N. report released June 29.
Major overhauls of existing international aid, finance and trade machineries are needed to get the global economy back on track, the report says.
“Sustained and widespread future prosperity will require major reforms in global economic governance and new thinking about global economic development,” states the World Economic and Social Survey 2010 report published by the U.N. Department of Economic and Social Affairs.
Among the more radical changes the report is proposing is a shift to a “needs-oriented aid system,” which it says could redefine the amount of aid donors need to mobilize.
“Additional targets may need to be set to ensure sufficient resource mobilization for supporting climate change mitigation and adaptation efforts in developing countries, aid for trade and the delivery of global public goods,” the report suggests. “There will also be a continued need for separate pools of funds for disaster relief and humanitarian aid efforts”
The report also pushes for “a more radical shift towards full adherence” of the Paris Declaration. Among the changes it proposes is channeling new sources of financing through country-owned trust funds.
The report urges the international community to focus on sustainable development as it drafts strategies to address and reverse the effects of past crises on the global economy. Addressing crisis effects require an approach that balances material wealth improvements with the protection of the environment as well as of social equity and justice, the report explains.
It also proposes reforming international institutions engaged in global governance to make them “better equipped to address challenges coherently while allowing nations and people to have the space needed to determine their own destinies.”
These reforms should be coherent with national development strategies, which the report says should be tailored to country-specific conditions and coherent across key policy areas.
When drafting national strategies, policymakers, according to the report, must recognize the need to integrate broad, development-oriented approach to macroeconomic policies, prioritize gricultural development policies, particularly in countries with low agricultural productivity, and consider the demands of sustainable development in social, industrial, infrastructure and environment policies.
Social policy should be coherent in order to avoid having a “too narrow focus on social protection and targeting of the poor,” the report says. Social policy should instead lean more toward universalism.
On governance of the international financial architecture, the report echoes various calls to reform the structure of the World Bank and International Monetary Fund. Reforms are necessary in order to better reflect the changing world order and shifting economic powers, the report explains. It also calls for the creation of a new multilateral financial agency that will establish and enforce better and more comprehensive international financial rules and regulation.
DESA clarified in the report that it does not attempt to create a blueprint but instead aims to present “ideas that could become the basis of a new, coherent ‘toolbox’ for guiding development policies and international cooperation.”