Cmcfeature-Re globalizing the World


BRIDGETOWN, Barbados, CMC – Many crises have led the world toward a profoundly unjust economic future. If we will protect the global commons and create a better existence for future generations, we need moral leadership coupled with just strategies that provide for the most vulnerable.

The COVID-19 Pandemic derailed economies everywhere, and in most developing countries, incomes remain well below pre-pandemic levels. Inflation, made worse by the war in Ukraine, is particularly painful in low-income and vulnerable countries where essentials like food and energy dominate household budgets.

Higher interest rates exacerbate debt distress across much of the developing world, squeezing public and private investment and paring back growth. To compound this, the climate crisis is hitting hardest the very countries that did the least to contribute to the problem and which have the most limited means to cope.

Already, we see the reversal of hard-won development gains. The World Bank estimates that the Pandemic and the war in Ukraine have pushed 90 million more people into extreme poverty.

The World Food Programme projects that almost 350 million people may be food insecure in 2023, nearly double that in 2020. In the wake of the Pandemic, unemployment is higher, gender gaps are more comprehensive, and the share of young people in neither jobs nor education has risen, according to the International Labour Organization (ILO).

None of this is inevitable. Let’s take the global implementation of the United Nations Sustainable Development Agenda as a barometer of progress. We are indeed on the verge of failing – particularly for countries with inherent vulnerabilities. But governments, the private sector, and civil society can make the decisions today that lay a foundation for sustainable development for generations to come.

We need a global transformation strategy that works for all. One that addresses energy transition, the climate crisis, and development finance, while putting people at its core. A just industrial and growth strategy must be part of this in small and large, developing and least developed countries: a system that decouples economic growth from environmental degradation.

Here, international trade has a critical role in driving better jobs, value addition, and greater resilience that countries seek. Over the past forty years, the global economic integration underpinned by the multilateral trading system helped lift over one billion people out of poverty.

But even before the Pandemic, it had become clear that many people in poor countries needed to share more adequately in the gains from globalization. Both had few poor people in wealthier countries.

The weaknesses exposed in global supply chains by the war in Ukraine and the Pandemic should be treated as an opportunity to reimagine globalization and assist countries and communities left behind during recent decades to use trade to meet their sustainable development aspirations.

At the crux of this reimagined globalization is bringing many more countries into what would become more profound, de-concentrated networks for producing goods and services.

Companies have already been moving to add suppliers in Southeast Asia, India, and Mexico, whether to save on costs or manage risks. Fast growing demand for services delivered over the Internet is creating opportunities worldwide.

Extending these re-alignments to encompass smaller and more vulnerable countries would enable them to use international markets, ideas, and capital to create better, more productive jobs.

Drawing more minor and women-owned businesses into these production networks would deliver disproportionate socioeconomic benefits. Beyond the gains in development and inclusion, more diversified supply chains would also be more resilient to localized shocks, like extreme weather events or disease outbreaks.

Open and predictable markets are a prerequisite for this re-globalization process. But more is needed. Access to super long-term and low-cost finance is an indispensable part of building a more sustainable, inclusive global economy.

The Bridgetown Initiative, put forward by the government of Barbados, calls for a reassessment of the current global financial architecture to drive multilateral and private sector financial resources toward climate mitigation and resilience. The operationalization of the Initiative could play an essential role in addressing the climate finance needs of developing countries and, indeed, the financing of the Sustainable Development Goals (SDGs)

A solid and effective trading system would amplify the impact of necessary action on debt reform and green investment: exports earn foreign exchange, and access to larger markets increases potential returns on investment.

Every part of this agenda is a tall order, especially during rising geopolitical tensions. But as governments demonstrated by striking several multilateral agreements at the WTO ministerial conference last June, cooperation on trade is still possible.

These efforts must continue so that the multilateral trading system helps all economies seize opportunities and cope with vulnerabilities and challenges. Working together, we can use trade to build a fairer, more just, and more resilient economic future.

*Mia Mottley is the Prime Minister of Barbados, and Dr. Ngozi Okonjo Iweala is the Director-General of the World Trade Organisation (WTO).


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