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UNCTAD reports rise in value of merchandise  

The United Nations Conference on Trade and Development (UNCTAD) has reported that the value of merchandise trade rose slightly in 2021, though it remained below the pre-Covid pandemic levels.  

The UNCTAD Handbook of Statistics 2021 shows that there was a strong increase of 22.4 percent in the value of global merchandise trade this year compared with 2020.  

According to the trade agency, the strong growth will push the value of world trade in goods about 15 percent higher than before the Covid-19 pandemic.  

“Global merchandise trade recovered fast, exceeding its pre-crisis level by the end of 2020,” it said.  

For global services trade, the recovery path seen in the first six months of 2021 was expected to continue strongly into the third quarter of 2021.  

“The trade in services, however, will still fall short of pre-pandemic levels despite the 13.6 percent growth for 2021, after a deep contraction recorded in 2020,” UNCTAD said.  

The report does not reflect the potential impacts of the new Omicron variant.  

In the data released this month, South Africa led in exporter country rank by value, with an annual growth rate of -4.6 percent followed by Morocco (-6.8 percent) and Nigeria at -43 percent.  

Travel was severely affected, shedding an immense 63 percent in 2020 and strongly upsetting tourism-oriented economies.  

International transport sales passengers and freight dropped by 20 percent while exports of business, intellectual property, financial and insurance services showed more resilience.  

Meanwhile, trade in telecommunications, computer and information services continued growing throughout the pandemic, except in Africa.  

The annual report presents the statistical landscape for 2020 through a wide variety of statistics relevant to international trade, investment, maritime transport and development. It also depicts developments in 2021 through data-led projections, known as nowcasts, for now and the immediate future.  

“Reliable and timely data are in high demand as Covid-19 puts unforeseen pressure on decision makers, who are scrambling to get a handle on the pandemic-affected economic landscape. These statistics are needed for evidence-based policy responses to the pandemic,” said UNCTAD’s acting head of statistics, Anu Peltola.  

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U.N. agency wants $1trn debt write-off

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By Reuters

The UN Conference on Trade and Development (UNCTAD) has said that around one trillion dollars of debt owed by developing countries would be cancelled under a proposed global deal.

The UN agency said that the plan was to help them overcome the impact of the coronavirus pandemic.

The world’s developing economies, which were already struggling with a rapidly growing debt burden, must now confront a record global downturn, plummeting prices for their oil and commodities exports and weakening local currencies.

At the same time, they need to spend more money on healthcare and to protect their economies. Some 64 low-income countries currently spend more on debt service than their health systems, according to UNCTAD.

“This is a world where defaults by developing nations on their debt is inevitable,” Richard Kozul-Wright, director of UNCTAD’s Division on Globalisation and Development Strategies, said during a video conference with newsmen.

In a report calling for a plan to relieve developing countries’ debt burden, UNCTAD estimated their liquidity and financing requirements due to the pandemic amount to at least 2.5 trillion dollars.

High-income developing countries have debt service obligations of between two dollars to 2.3 trillion dollars in 2020 and 2021 alone, while middle and low-income countries have debt service obligations of 700 billion dollars to 1.1 trillion dollars.

Having poured some eight trillion dollars into stimulus for their own economies, the Group of 20 wealthy nations (G20) last week agreed to suspend the bilateral debt service payments by the world’s poorest countries until the end of the year.

“It’s kicking the can down the road. You extend the problem and you pretend it’s going to go away in two or three years’ time if growth picks up in the world economy.

“We don’t think this is credible,” Kozul-Wright said.

UNCTAD calculated the G20’s debt moratorium would cover 20 billion dollars of public debt to official bilateral creditors.

An additional eight billion dollars would be included if all private creditors joined the initiative, and a further 12 billion dollars, if all multilateral creditors did as well.

That has little impact on the developing world’s overall debt burden, the agency said, and the money would need to be paid back with interest at the end of the suspension.

Instead, it called for a “Global Debt Deal” that would grant initial one-year debt standstills on request, which could be extended after a review and would include a stay on all creditor enforcement actions.

Debt relief and restructuring programmes would follow to ensure long-term debt sustainability, a process that would require significant debt cancellation.

Using as a benchmark the case of post-war Germany, which saw about half its debt cancelled, UNCTAD calculated the figure for developing economies would be around one trillion dollars.

An independent debt authority would oversee the process rather than the International Monetary Fund and World Bank, which are among poor countries’ leading creditors and therefore not impartial, according to UNCTAD.

Kozul-Wright said it was in the interest of wealthy nations to support a plan allowing developing countries to concentrate their resources on fighting the new coronavirus rather than their external debt.

“This is not a charity exercise. The health pandemic will eventually hit much of the south.

“If that happens there will be a blowback in terms of health to countries that thought they had somehow conquered this virus. That’s almost inevitable,” he said.