Published on Friedrich Ebert Stiftung
The world economic situation highlights both improvements and challenges for„ fulfillment of the new set of global development agreements reached in 2015. Advances and improvements include rapid economic growth in emerging and developing„ countries in the ten years following Monterrey, although with a marked slowdown since 2012, from peak levels of eight to around four per cent per annum. Other advances„ include a period of rapid growth in Sub-Saharan Africa and the ongoing graduation of several countries from Least Developed Country status. There has also been a significant expansion of foreign direct investment and access to finance for developing countries.
In regard to official development assistance (ODA), there has been a recovery since„ Monterrey, with relatively stable funding in recent years — despite the 2007-09 crisis in the developed countries — although the share received by low-income countries has fallen. Other positive signs include the adoption of the Paris Declaration on Aid Effectiveness, with its principles of ownership, alignment, harmonization, results and mutual accountability, and the Global Partnership for Effective Development Cooperation, known as the Busan Partnership, in which the United Nations Development Programme (UNDP) and the Organization for Economic Cooperation and Development (OECD) jointly provide support for the steering committee and„ the ministerial-level meetings. There is also a growing network of multinational financial institutions and increasing South-South cooperation.
Key challenges to the new global development agreements include the unfinished recovery of the industrial world after the 2007-09 North Atlantic financial crisis and the risk of »secular stagnation«. Developing countries face many specific challenges related to the Chinese slowdown, collapsing commodity prices, and premature deindustrialization processes in several parts of the developing world. In addition, pro-cyclical finance has recently hit emerging and developing countries hard.
Other challenges include the weak growth of international trade after the North Atlantic crisis and old institutional deficiencies in tax cooperation, sovereign debt and investment agreements. Finally, the long unfinished reforms of the international monetary non-system present many challenges.