UN report advocates policy shift to address global economic insecurity

A new United Nations report is advocating a shift in policies to ensure greater economic stability and security given the increased threats and vulnerabilities, from rising food prices and fuel prices to mortgage defaults and bank runs, facing the world today.

“There has been an increased spread of economic insecurity in recent decades, culminating in circumstances which some might see as constituting a bit of a ‘perfect storm’ as far as the food crisis is concerned,” said Jomo Kwame Sundaram, UN Assistant Secretary-General for Economic Development.

“But there of course other dimensions of economic insecurity,” Mr. Sundaram told reporters in New York at today’s launch of the UN’s World Economic and Social Survey 2008.

The annual report – whose theme this year is “Overcoming Economic Insecurity” –examines several issues that impact on economic security, including macroeconomic and financial shocks, natural disasters, conflict and poverty.

Published by the UN Department of Economic and Social Affairs (DESA), the report notes that the current global economic insecurity prevails despite reasonably strong growth in recent years and a decline in economic volatility.

The growing economic anxiety in various parts of the world is attributed to a large extent to the deregulation of trade and financial markets, which leads to a lot of economic activity but also comes with a lot of risks and strains on individuals and on households.

“One of the core messages is that more active policy responses are needed to help communities and countries to better manage the manifestations of economic insecurity,” said Rob Vos, Director of DESA’s Development Policy and Analysis Division and the main author of the report.

The report calls for an alternative economic policy agenda – one that more successfully integrates economic and social policies, and will help people and countries to better cope with risks.

It also recommends a range of responses at the national and international levels to reduce sources of economic volatility and insecurity, including strengthened multilateral surveillance and mechanisms for policy coordination; reforms to the international monetary system, including a better pooling of international reserves; and improved regulation of financial markets.

The report is being presented to the UN Economic and Social Council (ECOSOC), which will be discussing the state of the world economy as part of its annual session that began yesterday in New York.