Over the past five years, the global economy has continuously experienced weakness due to several negative factors. This includes the COVID-19 pandemic, which has affected both the economy and society. As economies were not fully recovered from the pandemic, they faced further challenges with the war situation leading to increased energy prices and subsequently higher inflation rates.
The United States, a major driver of the global economy, has repeatedly increased interest rates to combat inflation, resulting in higher interest rates compared to other countries. Developing countries, which often have significant debt burdens, are now facing increased interest costs, reducing their ability to implement expansive fiscal policies. This situation has further complicated the economic circumstances in these developing nations.
Trade and Development Report 2023 (TDR 2023) by the United Nations Conference on Trade and Development (UNCTAD) highlights that slowing economic growth is a significant challenge for developing and least developed countries. These nations are still not fully recovered from the COVID-19 crisis and are grappling with existing structural issues such as over-reliance on exports, lack of technology and innovation, low-quality labor, income disparity, high public debt, increasing non-tariff trade barriers, the impacts of the global economic power struggle, and the intensifying effects of climate change.
UNCTAD urges developing countries to balance financial, fiscal, and supply-side measures to achieve financial stability and promote investment and job creation. The report emphasizes the need for long-term financial sustainability and collaborative efforts among various institutions for rapid economic growth.
The report forecasts that global trade in goods and services in 2023 will grow only by 1%, which is below the average growth rate of the past decade. In the medium term, global trade is expected to return to pre-COVID-19 levels, but it will remain below pre-crisis levels in the short term.
This projection suggests that the developing countries in Southeast Asia should reconsider enhancing cooperation, including promoting regional trade by reducing trade barriers, fostering cooperation among developing nations, uniting ASEAN members to negotiate with global powers, and taking a clear stance on environmental trade measures implemented by developed countries.
The International Institute for Trade and Development (ITD) is organizing an event titled “TDR 2023: A Vision for ASEAN’s Inclusive Growth.” The event will feature UNCTAD economists presenting key insights from the report and experts in trade and regional development discussing new directions to address the multi-dimensional global crisis. The event will be streamed on ITD’s Facebook page on December 14, 2023, starting at 3:00 PM.