CRITICAL REVIEW OF CHAPTER II - TRENDS IN INTERNATIONAL MARKETS: TRADE AND DEVELOPMENT REPORT 2022, (P41-67)

Abstract

This critical review concentrates on Chapter II of The Trade and Development Report (TDR), which is prepared annually by the United Nations Conference on Trade and Development (UNCTAD) and presented to the General Assembly via the Secretary-General of the United Nations. TDR 2022 provides analysis of global trade trends and policy issues that affect trade and financial flows, and offers recommendations how to make the world economy fairer for all nations. Published in April 2023, the Report relays a warning of economic stagnation which will especially adversely affect developing nations. It cites supply-side disruptions and the war in Ukraine as major factors behind inflation, food and energy price increases and cost-of-living crises. It singles out monetary tightening in advanced economies and appreciating US dollar as main contributing factors in capital retreat from developing nations and increases in cost of their dollar denominated debt. TDR 2022 estimates that after having spent $379 billion of national reserves for the purpose of currency protection in 2022 alone, many developing nations are now left with dwindling central bank reserves. This begs the question, does the supremacy of some economies in relation to the global economy and their outsized influence on the global economy, warrant an attempt at new and improved central bank mission statements that should be looked at by various governments? Perhaps that effort could concentrate at articulating statements that take into account central bank actions that are intended to stabilize, protect, and expand the global economy as a whole, thus evolve today’s selfish approach by competing central banks that are single-mindedly focused on domestic circumstances. By concentrating locally, their actions are often seen as simply displacing economic pains rather than attempting to fix them. Therefore, the Report offers some recommendations how to avert negative spillovers from monetary tightening policies in advanced economies and austerity measures that accompany them. Other recommendations pertain to leveling the global economic playing field and include reforming the international legal framework governing debt, windfall taxes on excessive profits, and reigning in speculative activities in commodity markets.