TRADE AND DEVELOPMENT

1 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENTFROM RECOVERY TO RESILIENCE: THE DEVELOPMENT DIMENSIONTRADE AND DEVELOPMENT REPORT 2021 UNITED NATIONSUNCTADTRADE AND DEVELOPMENT REPORT 202140 ANNIVERSARY EDITIONthUNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENTTRADE AND DEVELOPMENTREPORT 2021 FROM RECOVERY TO RESILIENCE: THE DEVELOPMENT DIMENSIONR eport by the secretariat of theUnited Nations Conference on TRADE and DevelopmentUNITED NATIONSG eneva, 2021 UNCTAD/TDR/2021 Sales No. ISBN: 978-92-1-113027-0eISBN: 978-92-1-001027-6 ISSN: 0255-4607eISSN: 2225-3262 2021, United Nations All rights reserved worldwideUnited Nations publication issued by the United Nations Conference on TRADE and to reproduce excerpts or to photocopy should be addressed to the Copyright Clearance Center at other queries on rights and licences, including subsidiary rights, should be addressed to:United Nations Publications, 405 East 42nd Street, New York, New York 10017, United States of America Email: Website.

2 Designations employed and the presentation of material on any map in this work do not imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or publication has been edited AND DEVELOPMENT REPORT 2021 FROM RECOVERY TO RESILIENCE: THE DEVELOPMENT DIMENSIONE xplanatory notes ..ixAbbreviations ..xOVERVIEW ..I XIIIC hapter 1 GLOBAL TRENDS AND PROSPECTS: POSITIVE VIBRATIONS OR WAITING IN VAIN? ..1A. Introduction.

3 1B. The Global Economy: Building Back Separately? ..21. Global growth prospects ..22. Inflationary Pressures: Nothing to Fear but Fear Itself ..63. Fiscal Policy and Public Debt ..104. Timing counter-cyclical measures or targeting DEVELOPMENT ? ..14C. Global Finance and Developing Country Vulnerabilities ..171. Debt sustainability in developing countries: No sign of relief on the horizon ..21D. Trends in International TRADE ..241. Goods and services ..242. Commodity markets ..28E. Regional Trends ..311. North America and Europe ..313. The Russian Federation and Central Asia.

4 334. East Asia ..345. South Asia ..356. South-East Asia ..357. Western Asia ..369. Africa ..37 Notes ..38 References ..40 Annex: Methodological Note for Box ..44 Chapter 2 THE TROUBLED HISTORY OF BUILDING BACK BETTER: FROM THE 1980S DEBT CRISIS TO COVID-19 ..45A. Introduction ..45B. The TRADE and DEVELOPMENT Report at 40 ..461. Swimming Against the Tide ..462. A Lost Decade ..473. Birth of the Hot ..484. Winners and Losers ..495. Growth Picks up; Imbalances Widen ..516. A Feature not a Flaw ..527. A New Normal versus a New Deal ..538. Back to the Future ..54ivC. Living in the The growth picture.

5 562. The triggers of the slowdown ..573. Unfavourable conditions for most developing regions ..584. Overcoming the dilemmas of interdependence ..61D. From Economic Recovery to Building Back Better ..621. Avoiding separate DEVELOPMENT ..632. Taming the rentiers ..663. Making green recovery packages work ..68E. Towards a new economic settlement ..73 Notes ..76 References ..77 Annex ..82 Chapter 3IT S THE END OF THE WORLD AS WE KNOW IT: SURVEYING THE ADAPTATION LANDSCAPE ..83B. Measuring up to the adaptation challenge ..841. Slowing growth, widening gaps ..862. Sectoral and regional impacts.

6 873. The Economic Costs of Adaptation ..89C. The disarticulated architecture of climate governance ..91D. Climate adaptation: Risky business? ..95E. Conclusion ..98 Notes ..99 References ..99 Chapter 4 FROM DE-RISKING TO DIVERSIFICATION: MAKING STRUCTURAL CHANGE WORK FOR CLIMATE ADAPTATION ..105A. Introduction ..105B. The Lewis model of DEVELOPMENT for a climate-constrained world ..1061. Capital investment ..1072. State Capacity ..1083. Linkages ..109C. Climate change, DEVELOPMENT and post-Covid recovery ..110D. Policies to combine structural transformation and climate adaptation strategies.

7 1151. Industrial policy revisited ..1162. Fiscal policy ..1203. The role of central banks ..1204. Towards a green developmental state ..122E. Conclusion ..124 Notes ..125 References ..126 Chapter 5 ADAPTATION GOVERNANCE: CHALLENGES IN INTERNATIONAL TRADE AND FINANCE ..133A. Introduction ..133vB. Climate adaptation and the international trading system ..1341. TRADE and environment in the WTO and other TRADE agreements ..1342. Carbon border adjustment mechanism in the era of global value chains ..1363. Push to liberalize environmental goods and services ..1384. Can international trading rules promote the circular economy?

8 1405. The way forward on the TRADE and environment agenda ..140C. Financing climate adaptation: issues, instruments, institutions ..1421. The role of ODA and climate funds ..1432. Debt relief for adaptive DEVELOPMENT ..1443. The topography of green finance: instruments and institutions ..147D. Banks and climate finance ..1501. Dedicated green banks ..1502. Multilateral DEVELOPMENT banks with a climate change agenda ..151E. Policy recommendations ..154F. Conclusion ..156 Notes ..156 References ..158viList of figuresFigureBox The economic impact of GFC, 2009 2010, vs.

9 Covid-19, 2020 2021 .. World output level, 2016 2022 .. Real income growth, selected countries, 2021 over 2019 .. Real GDP and personal consumption expenditures in the United States, 2019 2021 .. Employment-population ration in the United States, January 2005 July 2021 .. Consumer inflation, selected economies, December 2005 December 2020 .. Variation in exchange rate of selected currencies vis- -vis the dollar of the United States, selected time periods,1 Jan. 2020 30 Jul. 2021 .. Consumer inflation in the United States and the euro Price gap from a 2 per cent inflation trend, selected economies, December 2005 April 2021.

10 Ten year break even inflation in the United States .. Real wage in the United States, January 1979 March 2021 .. Additional primary outlays in 2020 relative to inherited debt ratios in developing and developed economies .. Public and private investment in selected country groups, 1995 2016 .. Net private capital flows to developing countries, 2017 2021 .. Total external debt to export revenues, developing countries, 2009 2020 .. Sovereign bond repayment profiles, selected regions, 2021 2030 .. Gross government debt to government revenues, selected developing country regions and.