A world divided into two trading blocs will result in 5 per cent shrinkage in the global economy over the long term, which is more than the world economy lost during the financial crisis, director general of the World Trade Organisation said in Davos.
Nations in emerging markets and developing countries stand to lose more with fragmentations and decoupling of trade, Ngozi Okonjo-Iweala told the World Economic Forum on Tuesday.
Nations in emerging markets and developing countries stand to lose more with fragmentations and decoupling of trade, Ngozi Okonjo-Iweala told the World Economic Forum on Tuesday.
“One thing we cannot do if we want growth is to talk about fragmentation [and] decoupling because there are serious costs. I always say that talk is cheap,” she told a panel in the Swiss resort.
“And for emerging markets and developing countries, it would be even worse: like 12 per cent [or] double-digit losses.”
The world will need to strengthen multilateralism and co-operation if it intends to recover from the economic and trade slowdown and pick up pace, Ms Okonjo-Iweala said.
“We have to look at those parts of trade that are growing … trade is the future,” she said.
Digitally delivered services are growing in “leaps and bounds”. In 2005, that trade was worth about $1 trillion and it rose to $3.5 trillion in 2021.
