UN Calls for a Global ‘New Deal’, End to Austerity and Break from Neoliberalism

The world must abandon the policy of austerity and economic neoliberalism and adopt a global ‘new deal’ to restore balance in the economy and ensure prosperity for all, stated the UN Conference on Trade and Development (UNCTAD) in its latest report.

The global economy is accelerating but not enough, noted UNCTAD chief Mukhisa Kituyi, warning that sustained growth is hindered by “a combination of excessive debt and weak global demand,” according to a statement released on Thursday.

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After decades of neoliberalism characterized by the state’s relinquishing its role as a creator of economic and social development to the private sector within a capitalist system based on free markets, the world today needs a “makeover suitable for the 21st century,” the report concludes.

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“The entire neoliberal mantra that ‘there is no alternative’ has begun to crumble,” asserted UNCTAD’s director for globalization Richard Kozul-Wright at a press conference.

“There are many alternatives and we urgently need them given the economic and social imbalances we currently face.”

It seems that central bank governors like Bank of England chief Mark Carney and head of the U.S. Federal Reserve Janet Yellen believe they have resolved the crisis, blaming China for the remaining risks, notes a UNCTAD official.

Ending Fiscal Austerity Policy

Meanwhile, the global system continues to serve the interests of a narrow circle of people, and a change is necessary that will go beyond “cosmetic changes to the education system, loans for the poor, and… adding the adjective ‘inclusive’ to every conceivable economic process, with the belief that you have solved the problem,” warns Kozul-Wright.

“We need a global ‘new deal,'” stated the head of UNCTAD for globalization, alluding to the package of measures by U.S. President Franklin Delano Roosevelt that pulled the American economy out of the depression in the 1930s.

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The goal should be to abolish the fiscal austerity policy, which was implemented in 13 out of 14 leading developed economies from 2011 to 2015, and to prioritize reflation, full employment, and decent jobs, rather than fighting inflation and reducing public debt, he claims.

“Serious regulation of corporate abuses in the financial and corporate sector is needed, and serious redistributive measures are required – fiscal but also some more innovative ones,” emphasized Kozul-Wright.

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In the Anglo-Saxon world, resistance to austerity policies is already emerging, he stated, citing examples from countries like New Zealand and the United Kingdom, and he believes the United States could follow their example.

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European countries, however, show extreme resistance to such a change in direction, he emphasized.