A group of 25 students and lecturers from Bulgarian Vi core member, University of National and World Economy, joined UNCTAD’s Alfredo Calcagno for a videoconference presentation of the 2016 Trade and Development Report (TDR) November 16.
According to the report, growth in the volume of global trade remains low, mainly due to lack of global demand and is expected to decrease below 2.5 per cent. The current investment rates in most developing regions are not high enough to support rapid structural transformation.
“Today’s challenge is that we must re-invent industrial policies,” Calcagno said. “We have not had a country that has industrialized without targeted production transformation policies.”
Effective policies create linkages that support development, and in order to formulate such policies, policymakers must take an integrated policy approach.
“In the long-term, the key term is productivity, which can be increased in two ways, either by increasing it within an economic sector, or shifting employment from low productivity toward higher productivity and more advanced sectors,” he said.
For example, labour productivity expanded rapidly in Asian countries with dynamic modern sectors absorbing surplus workers from agriculture. This productivity growth also allowed these countries to successfully enter global markets.
The distribution of gains from productivity increases in manufacturing activities affects the pace of the transformation process, Calcagno explained.
“In the future, it will be necessary for large developing countries to reorient production more toward domestic and regional demand rather than putting all efforts into exports.
“Successful structural transformation requires high levels of investment and an economic policy that integrates macroeconomic, financial, trade and industrial policies,” Calcagno concluded.