For sustainable recovery from the COVID-19 global economic shock, it’s imperative to break from policy choices that produce a concentration of economic power and wealth in a limited section of the economy but old habits, die hard warns UNCTAD’s Richard Kozul-Wright. Lynn Fries / GPEnewsdocs

TRANSCRIPT

LYNN FRIES: Hello and welcome. I’m Lynn Fries producer of Global Political Economy or GPEnewsdocs. Today I am joined by Richard Kozul-Wright. He is going to be giving us some big picture context on COVID-19’s pre-existing conditions and what that means for building back better from the economic consequences of the COVID-19 pandemic.

Richard Kozul-Wright is chief economist at the United Nations Conference on Trade and Development or UNCTAD. Where he is Director of the Division on Globalization and Development Strategies. This division, known as GDS, is UNCTAD’s macro-economic unit. Tasked with providing economic policy advice and technical support to UNCTAD Member States.

The Trade and Development Report, UNCTAD’s flagship annual report, is produced by the GDS division headed by Richard Kozul-Wright. Welcome, Richard.

RICHARD KOZUL-WRIGHT: Thanks for the invitation, Lynn.

FRIES: Your report released in March is titled Out of the frying pan... Into the fire? (as a question) and is an update of UNCTAD’s 2020 Trade and Development Report. And as the question suggests, the update warns that economic policy makers are falling well short of what’s needed to build back better from COVID-19. And the UNCTAD press release for the report warns: Global economy gets shot in the arm from US stimulus, but pre-existing conditions have worsened

To help us get to the bottom of what worries you and what that warning means, start with a comment on those pre-existing conditions.

KOZUL-WRIGHT: Yeah. These are problems that we've been talking about now for a number of years after the global financial crisis; a lot of talk back in 2009-2010 that we were going to recover better from that crisis. If you remember the 2009 G 20 meeting in London, there was a lot of big promises about a new Bretton Woods and tackling the inequality that had contributed to the fragilities in 2008-2009. There would be regulation of the banking system et cetera. Most of that didn't come to fruition.

As we looked at the evolution of the global economy after the global financial crisis, we saw these persistent trends that simply were not being tackled by policy makers: the declining share of labor income in global income which was a very prominent feature across developed and developing countries, the growing concentration of markets, the increased power of corporations and a certain brand of predatory rent-seeking behavior that became prevalent over the last decade, the persistent influence of financial markets, financialization short term kind of speculative mindsets that were not only present in asset markets but also across large parts of the global economy. And of course the ongoing climate crisis and the failure to tackle the environmental breakdown that was becoming ever more present.

FRIES: Trade and Development Reports have consistently emphasized that these persistent trends, you’ve been warning about, are the product of policy choices. So inequality is a product of policy choices. Explain that.

KOZUL-WRIGHT: The phrase of choice for thinking about inequality over the...