There is a global economic crisis worse than that of the Great Depression. The global credit crunch and the slowdown in economic growth in developed countries pose enormous challenges to all regions. A slowdown in exports, a fall in asset values, reduced credit for consumption and investment, and increased poverty have contributed to increased unemployment and difficulties achieving the MDGs. In addition, regions face unique challenges in achieving the MDGs.

Regional commissions are taking several actions to support their member governments in addressing these challenges. Along with actions specific to their regions, the Regional Commissions need to take action together in a few key areas:

An inter-regional dialogue between the Regional Commissions effectively promotes debate and political consensus on recommendations to reform the global financial architecture. There will also be cooperation in research that culminates in a meeting of key policymakers from each region.

We need to take a joint approach to urge the international community that sufficient resources for development be maintained in light of the increased needs caused by the crisis and the resulting pressure on budgets for developed countries. An initiative that integrates research on the crisis and MDGs could be undertaken.

The Retreat of Globalization

Globalization also declined from its highs of the previous two decades due to the global economic crisis of 2008. In the 1990s, globalization was at its height, and until 2008 it continued. However, the decade that followed 2008 was the time of retreat for globalization. Global trade and global growth were curtailed due to the global shocks that rattled the integrated and interconnected global economy in 2008.

By extension, the global economy and the globalization process are underpinned by global and international trade. Any contraction in international trade has a knock-on effect on the world economy. According to the Baltic Dry Index, a measure of worldwide shipping activity, after 2008, the Baltic Dry Index fell sharply, halving in some cases in the period following 2008. This points to a retreat in globalization after 2008. Furthermore, as global economic growth slowed and global trade slowed, countries started to rely less on international trade and more on domestic consumption as the main growth driver. As a result of these factors, globalization slowed in the 1990s and early 2000s from its peak.

Globalization: Some Indicators of Highs and Lows

In addition, the cross-border mergers and acquisitions experienced a sharp drop in volume and numbers in the period after 2008, another indicator of globalization’s retreat. Cross-border mergers and acquisitions began flourishing in the 1980s, while the years following the global recession of 2008 marked their lowest point.

Global corporations and domestic players in markets worldwide began to develop networks of relationships that began to fall apart, and these companies increasingly looked inward rather than outward to grow. Therefore, internal factors and internal consumption-led growth played a larger role in economic growth rather than reliance on global trade, which had been prevalent up to that time. This can all be attributed to the global economy resembling a system of interconnected and integrated networks. At the same time, it is susceptible to the effects of economic shocks and the resulting contractions or growth when times are good and the opposite when conditions are bad.


As a final note, the premise of this paper here is that globalization has not yet reached its zenith and that the present state of the global economy resembles an impasse characterized by weak growth and stagnation.

In the end, it remains to be seen how long and how much this impasse will remain.