Ahead of its 16th session later this month, the United Nations lead agency on trade and development, UNCTAD, has released the “Development Against the Odds” report, which gives a damning verdict on how the aspirations for a better world are off track, echoing other recent assessments.

On the Sustainable Development Goals (SDGs), projections show that only 17 percent of targets will be achieved by the 2030 end date.

Growth forecasts for the global economy reveal a low rate of 2.7 percent as the challenges of trade fragmentation, rising debt levels, shocks (also related to wars and conflicts, with 39 countries in conflict or deemed fragile) and income inequalities between countries undermine development.

Urbanisation is on a marked rise (with an estimated 56 percent of the global population living in urban areas). At the present pace, in another 25 years, about 70 percent of the world’s population will be living in cities.

The funding gap for the SDGs, especially for Global South countries, is widening and stands at $4 trillion (per year), with the least developing countries (LDCs), landlocked developing countries and small island developing countries most vulnerable.

Financing costs for developing countries are higher by up to 12 times compared to 2020, further constraining their ability for long-term investments in transformation.

Open and equitable international tax cooperation is one mechanism to boost domestic resource mobilisation for developing countries. Which makes the proposed UN framework convention on international tax cooperation an important process to address tax avoidance and evasion.

UNCTAD names five mega trends at play: the emergence of a multipolar world; accelerating technological transformation; urbanisation; demographic shifts and the planetary crisis.

Over 70 percent of world economic growth in the next five years will come from the Global South (concentrated in Asia’s major economies of China, India and Indonesia). South-South trade is on an upward trajectory.

Consequently, there is a welcome diversification and dispersal of the global economy’s economic centres. Unfortunately, this development (and the demographic reality where developing countries account for 83 percent of the world’s population) has not led to the needed and commensurate shift in the governance and representation profile of multilateral institutions, exposing a gaping legitimacy and trust deficit.

As protectionism (in trade) grows in tandem with emerging multipolarism, multilateralism is weakening, further cementing the precarity of less developed and vulnerable economies. The transformative potential of South-South trade is insufficiently exploited as a mechanism to reduce disparities.

To shift from the status quo, UNCTAD proposes four aspects of transformation: more diversified economies; greater economic sustainability, inclusivity and resilience; higher and more stable development finance; and more multilateralism.

The report also underscores the quality of growth as a yardstick for equity—addressing the limits of GDP as a measure of economic growth.

As well, boosting countries’ productive capacities to secure economic transformation and diversification is key to breaking away from the trap of over-reliance on extractives, primary commodity dependence and informality.

The latter is the position of many developing countries, confined to an unfavourable position in the global division of labour and unable to generate quality jobs or requisite value addition. In these conditions, they are even more vulnerable to adverse terms of trade and other external shocks.

The figures show that two thirds of developing countries are commodity dependent. LDCs account for a mere 0.6 percent of global manufacturing exports.

Most African countries exhibit low levels of “economic complexity” (diversification and complexity of a country’s exports basket). With diversified production, countries are more resilient and capable of weathering shocks.

Developing East and South-East Asian countries show what’s possible when international trade, investment and technology are leveraged to fire up structural transformation. Maximising on the opportunities availed by technologies requires a bridging of the technological and skills gaps.

Digitalisation can be a tool for more efficient, transparent and effective government services. This requires that regulatory frameworks be in place to avoid technological (and digital) divides and secure consumer protection.

Without surmounting the odds and shifting the status quo (of low productivity, dependence on unprocessed commodity exports and lagging in technological innovation), attaining inclusive development will remain elusive for developing countries.

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