A group of 63 students and lecturers from Vi core Colombian member, Universidad EAFIT, and affiliate member, Universidad de la Sabana, joined UNCTAD’s Alfredo Calcagno for a videoconference presentation of the 2016 Trade and Development Report (TDR) October 4.
Calcagno highlighted that the disappointing growth of developed economies -- less than 2 percent on average --was mainly due to aggregate demand deficiencies.
”Solvency issues of firms and households, aggravated by austerity and wage compression policies have weakened global aggregate demand," he said.
Moreover, many emerging economies, except for those in Asia, have experienced deceleration in their growth rates , as “ they have been severely affected by the fall in the terms of trade, particularly in Latin America, Africa and West Asia, even though the current price levels are still double those prevalent in 2002," he added.
While several Asian countries managed to combine higher productivity with rising employment in the manufacturing sector, Calcagno highlighted the stagnation of manufacturing productivity and employment in Latin America, where jobs are being created in the low-productivity services sector.
”We are seeing a more tenuous relationship between investment and the rate of profit reinvestment, with higher dividend distribution by firms," he said. ”A higher proportion of investment is directed toward natural resources and energy instead of manufactures, the sector with more productive linkages.”
“Latin America set a bad example in the 1990s with the growth of the informal services sector,” Calcagno said. "Instead, what are needed are the technology-intensive sectors, generally linked to public services, and with connections with industry and the productive sector.”