The poorest countries world will find themselves in a worse position of $ 12 billion (£ 8.7 billion) by 2025 amid a weaker economic recovery from Covid-19 as rich countries limit their access to vaccines, the data United Nations warned.
In its annual report on trade and development, the Conference of UN on Trade and Development (Unctad) said low-income countries were hit much harder by the pandemic than during the 2008 financial crisis, which worsened their debts and increased pression on their public finances.
The economic arm of the UN has said there were growing risks that low-income developing countries would fall further behind due to limited progress in the deployment of coronavirus vaccines, despite Western leaders vowing to "build back better" after the crisis.
"So far, the world economy seems to be rebuilding itself separately ", the report says.
Unctad said the global economy is rebounding strongly this year thanks to continued financial support measures started in 2020 by governments around the world, as well as rapid advances in vaccines in economies advances. He predicted that global growth would reach 5.3% this year, the fastest rate in nearly five decades, after falling 3.5% in 2020.
However, the UN agency warned it would take the global economy several years to recoup losses from the Covid-19 shock, as the pace of growth slows from an initial rebound fast in 2021, and governments and central banks are under pressure to cut emergency aid.
Global growth is expected to fall to 3.6% in 2022, while an average annual growth rate of 3.5% from 2023 means that world production will only return to its 2016-19 trend by 2030.
Warning that policymakers in advanced economies have yet to realize the size of the shock for developing countries, or its persistence, the Geneva-based agency said that Concerted action among rich countries was needed to alleviate the debt of the poorest countries. In some cases, debt cancellation was required.necessary to "avert another wasted decade of development," he said.
The reluctance of advanced economies to follow the lead of states United on vaccine supply patent waivers were also a "worrying sign" of a rambling Western response to a crisis that would continue to plague the world economy without action, UNCTAD said. He warned that the cumulative cost of delayed vaccinations could reach $ 2.3 billion by 2025, with the developing world bearing most of the cost.
The agency pointed out that Western countries governments have deviated from 40 years of neoliberal dogma by intervening heavily in their economies to protect lives and jobs during the pandemic. He said the return to an era of weaker levels of government support, watered down labor market rules and okayunequal trade and investment would jeopardize international development.
The report said the pandemic response in developed countries had triggered a resurgence state and suspended constraints on public finances, but international rules and practices had locked developing countries into pre-pandemic responses and a semi-permanent state of economic stress.
" Over the past 40 years, we have witnessed the emergence of a full-fledged rent economy with global reach and reliance on debt, both public and private, "said Ric hard Kozul-Wright, director of the