Okonjo-Iweala: People Everywhere are Feeling Anxious About the Future

•Warns against taking global trade’s resilience for granted

Ndubuisi Francis in Abuja

The Director General of the World Trade  Organisation (WTO), Dr. Ngozi Okonjo-Iweala has expressed concern that “people everywhere are feeling anxious about the future,” a development,  she said,  will be felt at the ballot box this year as 60 countries, home to nearly half of the world’s population, go to the polls.

Her concern stemmed from increasing global tensions, higher food prices, energy, fertiliser, and other essentials, as well as shipping disruptions in vital waterways like the Red Sea and the Panama Canal.

The two-time Nigeria’s Minister of Finance raised the concerns during her opening remarks at the ongoing Ministerial Conference (MC13) of the WTO, in the United Arab Emirates (UAE).

She said: “If we thought the world looked tough in mid-2022, when we were slowly emerging from the pandemic, and the war in Ukraine had shaken food and energy security, we are in an even tougher place today.

“Looking around, uncertainty and instability are everywhere. Geopolitical tensions have worsened. Conflict has spread, as we see here in the Middle East, and — away from the headlines — across parts of Africa and the Arab world.

“We must not forget the conflict in Sudan, which has displaced close to eight million people internally and across borders, or the conflict in the east of the Democratic Republic of Congo.

“Higher prices for food, energy, fertilizer, and other essentials continue to weigh on people’s purchasing power, fuelling political frustration.

“Shipping disruptions in vital waterways like the Red Sea and the Panama Canal are a new source of delays and inflationary pressure, offering a real-time reminder of the risks posed to global trade and output by security problems and the climate crisis.

“People everywhere are feeling anxious about the future — and this will be felt at the ballot box this year as 60-odd countries, home to nearly half of the world’s population, go to the polls.”

She stressed that economic growth has lost pace although it held up better than expected, particularly in some major economies like the United States and India, resulting in a softer landing for the global economy than earlier anticipated.

However, she observed that there are places that are falling behind adding that the World Bank warned that the global economy is on track for its weakest five-year performance in 30 years.

According to her, in many developing countries, debt distress and high financing costs remain a drag on economic prospects.

The former minister and World Banking managing director noted that the pandemic ended a roughly 25-year-long trend during which, for the first time in centuries, poor countries began to narrow the income gap separating them from rich ones.

Several countries in Africa are already well into a lost decade, and are in danger of falling even further back, she noted.

She explained that trade itself has been resilient in recent years despite the humongous challenges, but cautioned that  it would be dangerously naïve to take trade’s continued resilience for granted

“We can be proud of the fact that trade itself has been resilient in recent years. Despite everything we have been through, global goods and services trade remain at or near record highs.

“International markets anchored in the rules-based global trading system have stayed broadly open, helping businesses, households, and economies adapt and adjust to one shock after the other.

“The global economic slowdown and wider uncertainty are already having an impact. Global merchandise trade volume growth in 2023 appears to have fallen short of the 0.8% we were projecting in October.

“And given all the downside risks, we may likely undershoot the 3.3% merchandise trade growth rate I just referred to for this year.

In addition, multilateralism is under attack. Despite the MC12 fightback, the Multilateral Trading System, which I term — a global public good since it was created 75 years ago — continues to be misconstrued in some quarters and undermined.

“Trade has become a four rather than a five-letter word in some quarters.

Yet trade remains critical to delivering on so many national and global priorities: boosting growth, expanding economic opportunities, meeting the Sustainable Development Goals, and solving collective action problems like protecting our environment or preparing for the next pandemic,” Okonjo-Iweala stated.

Without cooperation on trade, she argued, “we would move towards an increasingly fragmented world economy, and all of these priorities would become harder, costlier, and in some cases impossible to achieve. People would become more disappointed, more vulnerable, more frustrated.”

In light of these realities, she expressed the need for the WTO to stand strong as it approaches its 30th anniversary.

She also underscored the need to keep reforming and reinvigorating the WTO so that it can deliver for trade in the years ahead: seizing the full potential of services and digital trade, accelerating trade for the green transition, and fostering socio-economic inclusion.