rural-urban dynamics_report.pdf - Khazar University

66 MACROECONOMIC, TRADE, AND AID DEVELOPMENTS GLOBAL MONITORING REPORT 2013
many of those natural resource sectors, such
as mining, are capital intensive and will not
provide the jobs needed to accommodate the
rapidly growing working-age population in
the region.
The recent growth in real wage levels in
China, together with Sub-Saharan Africa’s
demographic dividend—implying declining
dependency ratios in the future—suggest that
manufacturing in Sub-Saharan Africa could
become increasingly competitive. But irrespective
of whether economies grow through
strengthening the manufacturing sector
(Mozambique, Tanzania) or services (Kenya,
Mauritius), it is unlikely that they can do so
without first experiencing a major acceleration
of agricultural productivity growth.
Update on trade trends and
trade policy developments
Post-crisis recovery in trade has been
uneven
Since the outbreak of the financial crisis over
four years ago, global interdependency has
been underscored by the largely synchronized
nature of trade trends between high-income
and developing countries. As of November
2012, neither the United States nor the European
Union had surpassed pre-crisis levels
of imports, although their combined share
of world imports remains sizable, at roughly
one-quarter of the total. On the other hand,
Japan and large emerging economies like
Brazil, the Russian Federation, India, China,
and South Africa (BRICS) have seen their
import levels rise steadily above pre-crisis levels,
a trend that began in early 2009 (figure
1.19). These divergent recovery trends have
translated into weak trade performance in
regions that have traditionally relied on U.S.
and EU markets. Exports from Europe and
Central Asia, Latin America and the Caribbean,
and Sub-Saharan Africa all hover only
slightly above pre-crisis levels. The situation
is especially dire for countries in the Middle
East and North Africa that are not members
of the Gulf Cooperation Council; in these
nonmember countries, political developments
combined with external economic factors
have led to a steady decline in exports since
late 2011. Meanwhile, other regions have
adjusted with more success. The East Asia
and Pacific region has experienced steady
positive real export growth, fueled not only
by China, but also by smaller economies such
as Cambodia, Vietnam, Thailand, and the
Lao People’s Democratic Republic. In South
Asia, positive real export growth in Bangladesh
and India helped the region experience
the strongest export recovery, peaking
in December 2010 at a level one and a half
times higher than pre-crisis levels. Since then,
however, South Asia’s export performance
has been lackluster.
Global trade in 2012 was hampered by
a mid-year slump in global imports and
steadily contracting import demand on
the part of high income countries, with the
Euro area at the epicenter. Growth rates for
world imports of industrial goods during
the first half of 2012, year-over-year, were
negative (World Bank 2013). At the same
time, increased import demand in developing
countries helped mitigate the dearth of
demand in high income economies. Developing
countries’ real exports also fluctuated
considerably in 2012, with differences across
countries and regions.
Protectionist outbreak avoided despite
uncertain future for global economy
According to the World Trade Organization’s
(WTO) monitoring of trade protectionist
measures, 190 new trade-restrictive measures
were introduced by Group of 20 (G-20) countries
between mid-October 2011 and mid-
October 2012 (figure 1.20). While this represents
a slowdown compared with previous
years, the new measures add to the stock of
restrictions put in place since the outbreak of
the crisis. The growing accumulation of trade
restrictions is of concern not only because it
undermines the benefits of trade openness,
but it also exacerbates the combined effects of
the new measures with pre-crisis restrictions
and distortions, such as agriculture subsidies
and tariff peaks. Nevertheless, in the five
months leading up to October 2012, the pace
of removal of previous measures was better