Post 2015: Global Action for an Inclusive and Sustainable Future

economies are structurally marginalised from
global production processes, vulnerable to external
shocks and lack the capacity (institutional, human
and physical) to deal effectively with development
challenges. as a result, poverty affects a sizeable
proportion of their population, and external
support will not be effective and sustainable
without transforming the economies on which
people depend. a new global development agenda
should mobilise all countries to focus on helping
marginalised and vulnerable economies.
this chapter has discussed the trade and
investment challenges faced by such economies,
including the fact that many of them continue to
depend on a handful of commodities. While this
increases their vulnerability to external shocks,
the volatility it invites also has far-reaching
implications beyond trade and investment. at
the same time, in a virtuous circle, commodities
can also present opportunities and resources for
economic development. the real need is, therefore,
to increase production capabilities in marginalised
economies. In a context of pervasive market and
coordination failures, who will champion such
policies? the overwhelming evidence points to the
role of a developmental state (see chapter 2).
While trade and investment policies for achieving
structural transformation will have to be tailored
to each national situation, the global context will
be equally important. this is because of increasing
interdependence, which means that the global
context must enable marginalised economies
to adopt appropriate policies. For instance, this
chapter has argued that the stalling of multilateral
trade talks, with a corresponding proliferation
of regional and bilateral approaches, is likely to
marginalise the weaker economies. Despite that
caveat, it is also acknowledged that developmental
regionalism that involves using regional approaches
to integrate into the global economy is important
(e.g. regional approaches to addressing traderelated
infrastructure, harmonising standards,
and improving cross-border movement of goods,
services and people).
changes in global trade and investment flows
and policies will set the backdrop for any post-
2015 development agenda. there is a notable shift
in trade and investment flows from north–South
to South–South. these shifts are re-orienting the
global division of labour, with the emergence of
asia as the manufacturing hub (Section 8.3.1). most
asian lDcs, but not all (e.g. nepal and myanmar),
have actively integrated into these new production
networks. once they are in the network, many
have strategically picked up production processes
as they moved downstream to maintain price
competitiveness. this is not happening to the same
extent among lDcs in africa, where most continue
to trade in commodities.
this suggests that for trade and investment
policies to contribute to structural economic
transformation needs the international community
to support marginalised and vulnerable economies:
(1) to promote modern-sector exports; (2) reduce
vulnerability to external shocks; (3) enhance
productive investments; and (4) improve global
coordination on investment policies. the following
section elaborates on these in turn and discusses
what specific roles the Eu could play.
8.6.1 Promoting modern-sector exports
as this chapter has shown, poor countries are
currently marginalised from more dynamic forms
of trade, with rather limited integration into Gvcs
and Gpns. the experience of countries that have
successfully transformed their economies – within
an unprecedentedly short time – shows the central
importance of promoting modern-sector exports as
part of an overall strategy for growth and structural
transformation, alongside a favourable trade policy
environment.
the adverse potential macroeconomic effects
of commodity dependence, as well as oDa flows
poSt-2015: Global actIon For an IncluSIvE anD SuStaInablE FuturE
Changes in
global trade and
investment flows
and policies will
set the backdrop
for any post-2015
development
agenda.
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