The Vi videoconference on the UNCTAD Trade and Development Report (TDR) of 2015 held November 19 for Vi core member, the Pontificia Universidad Católica del Perú (PUCP), gathered approximately 50 students and teachers from PUCP, the Universidad Mayor de San Marcos and the Universidad del Pacífico.
The presentation began with an introduction to the collaboration between the Peruvian delegation and UNCTAD by Gerald Pajuelo, Counsellor at Peru's Permanent Mission to the UN in Geneva.
Led by TDR co-author, UNCTAD’s Edgardo Torija Zane, the dialogue focused on the challenges to the global economy and on ways to reform the international financial architecture.
"Risks of a prolonged stagnation persist, due to insufficient global demand, combined with financial fragility and instability and growing inequality," Torija Zane said.
According to the TDR 2015, these trends reveal the lack of a well-functioning international monetary and financial system, which should be able to properly regulate international liquidity, avoid large and lasting imbalances and allow for counter-cyclical policies.
"International liquidity and capital movements respond to economic conditions in the main financial centers rather than to actual needs in developing countries" Torija Zanesaid. "This is a particular issue for Latin America's financial markets, as rising prospects of a Federal Reserve monetary tightening have triggered massive portfolio capital outflows from some countries in the region, after a period of huge liquidity."
He added that "inefficiencies and missing elements in the international financial architecture have had negative effects on the provision of long-term finance for development."
The TDR 2015 identifies some of the critical issues to be addressed in order to establish a more stable and inclusive international monetary and financial system which can support the development challenges over the coming years. In this context, Torija Zane pointed out that "multilateral reform remains the desirable target."
According to the report, the international financial architecture faces challenges.
"The shadow banking system needs stronger regulation to reduce excessive leverage in the financial system," he said. "Alternative ways of channeling financial resources are required, especially for long-term productive investment."
Other topics discussed during the videoconference included the emergence of new international currencies like the Chinese Renminbi, and the room for manoeuvre for Latin American states to face financial instability and create alternative South-South cooperation and regional integration mechanisms.
The session closed with comments from Vi PUCP’s member coordinator, Alan Fairlie, Dean of the Faculty of Social Sciences, and Jorge Rojas, Professor of the Department of Economics.