In a third of developing countries dependent on commodities (where 870 million people live), the average real income is lower today than in 2014. This includes several large countries, such as Angola, Argentina, Brazil, Nigeria, Saudi Arabia and Africa of the South. The information appears in a report released by the United Nations (UN) organizations last week.
The document also says that the number of people living in extreme poverty has increased in several countries in sub-Saharan Africa and in parts of Latin America and West Asia. UN estimates indicate that to eradicate poverty in much of Africa, annual growth per capita of more than 8% would be required, compared to the average rate of just 0.5% in the past decade.
Africa, in particular, has experienced a decade of near stagnation in GDP per capita and many countries around the world are still suffering from the effects of the 2014-16 commodity price slowdown, which has resulted in persistent production losses and setbacks. in poverty reduction.
The low GDP growth is added to a series of other negative factors that affect the quality of life of the poorest people. These factors include the climate crisis, high social inequalities and increasing levels of food insecurity and malnutrition. “Policymakers must go beyond a narrow focus on merely promoting GDP growth and, instead, seek to increase well-being in all parts of society. This requires prioritizing investment in sustainable development projects to promote education, renewable energy and resilient infrastructure, ”emphasizes Elliott Harris, UN chief economist and assistant secretary general for economic development.
For the UN, the solutions for inclusive growth are in the energy transition – with the use of renewable or low carbon energy sources – and a more balanced combination of public policies. This combination should mix economic growth with greater social inclusion, gender equality and environmentally sustainable production. “Much more attention needs to be paid to the distributional and environmental implications of policy measures,” concludes Harris.
Optimism for 2020
The UN Report states that an average global growth of 2.5% is possible in 2020, but an outbreak of trade tensions, financial turmoil or an escalation of geopolitical tensions may hamper the recovery. For the UN Secretary-General, António Guterrez, these risks can reduce the prospects for development as they encourage economic policies aimed at the interior, at a time when, according to him, global cooperation is fundamental.
In a negative scenario, global growth would slow to just 1.8% this year. In 2019, the global economy experienced the slowest growth in a decade, falling to 2.3%. Despite significant headwinds, East Asia remains the fastest growing region in the world and the largest contributor to global growth, according to the Report. Growth in other major emerging countries, including Brazil, India, Mexico, the Russian Federation and Turkey, is expected to gain momentum in 2020.
+ Read the UN´s report: https://nacoesunidas.org/wp-content/uploads/2020/01/WESP2020_Summary-Final_Web.pdf