Deceleration of the global economy represents crisis of neoliberalism, say researchers

For the first time in the last decade, all multilateral organizations are predicting a slowdown in the world economy for two consecutive years. The United Nations (UN) predicts a growth of the global economy of 4% for the end of 2022 and of 3,5% for 2023 – numbers inferior to the 5,5% of economic increment registered in the end of 2021. “A growth fragile and uneven”, classified the organization’s secretary general, Antonio Guterres.

Likewise, the Economic Commission for Latin America and the Caribbean (ECLAC) indicated in its 2021 annual balance sheet that the region grew 6.2% in the last year, but the expectation for 2022 drops to 2.1%.

In addition to the covid-19 pandemic, the wear and tear of the world economic system could be another factor to understand the stagnation.

“It is a growth that in terms of the real economy is innocuous, it is inexpressive. It did not have an impact on the real economy, on demand, on consumption and even less on employment”, analyzes Peruvian economist Eduardo Recoba Martínez.

Only 1/3 of the countries in the region managed to recover their Gross Domestic Product (GDP) to pre-pandemic levels. In addition, around 30% of the jobs closed in 2020 have not yet been recovered, according to the ECLAC report.

Across the region, 11.5% of Latin American women are unemployed, among men the unemployment rate is 8%. According to the International Labor Organization (ILO), in the last three years, 52 million jobs were lost and the projection for the end of 2022 is that there will be 207 million unemployed people across the planet.

At the top of the ECLAC ranking is Peru, with a 13.5% increase in economic activity in 2021. Despite the general positive indices, about 70% of the economically active Peruvian population is employed in the informal sector.

“It was a totally asymmetrical growth, based on inequality and market asymmetries, with governments that supported a private sector and a private sector that associated itself with governments through mercantilist mechanisms, with models of monopolies and oligopolies”, criticizes Martínez .


According to the United Nations, 1.3 billion people live in poverty worldwide / João Paulo Guimarães / AFP

At the other extreme would be Venezuela, which according to ECLAC had a 3.1% retraction of its economy in 2021, despite official figures presented by President Nicolás Maduro indicating a growth of 4%.

Read also: Venezuela ends 42-month cycle of hyperinflation, says Central Bank

For the Venezuelan economist Alejandro de Búfalo, the country’s economic outlook requires a more complex analysis, which does not only involve GDP growth rates.

“Several academics question the use of economic growth data to evaluate government management or the success of some policy, because it obviously implies a conception of life”, he criticizes.


Peru was the country in the region with the highest economic growth in 2021, however around 70% of the economically active population remains informal / Gian Masko / AFP

Failure of the neoliberal model?

The figures confirm trends pointed out by Marxist theory about capitalism in its imperialist phase: the increase in the concentration of capital, the formation of monopolies and the reprimarization of dependent economies, as is the case in Latin America. The sectors that grew the most in 2021, according to ECLAC’s balance sheet, are linked to extractivism and agribusiness. The more expressive agricultural production, however, did not represent a decrease in the prices of products and more equity in the distribution of food.

:: After all, is Brazil on the UN Hunger Map or not? ::

On the other hand, the region continues in a process of constant de-industrialization. In the case of Brazil, the manufacturing industry stopped representing 24.5% of GDP in 1985, to contribute only 11.7% in 2021, according to the Institute of Studies for Industrial Development (Iedi).

For specialists, the panorama also represents the crisis of neoliberal theses, which gained strength from the 1980s onwards.

“You cannot completely reverse a strategy of weakening our economies that began in the 1980s, 1990s. There is no immediate effect, especially because these progressive governments also faced the challenges of an increasingly internationalized economy guided by the interests of large transnational corporations. They are the ones that dominate the economies in Latin America”, comments Marilane Teixeira from the Institute of Economics at the State University of Campinas (Unicamp).


The latest IBGE agricultural survey (2017) reveals that agribusiness dominates 77% of arable land in the country. / Photo: Government of Mato Grosso

Another trend observed by economists is that, with the advance of mechanization in the countryside, the 5G internet and the new technologies incorporated by “green economies”, the great powers tend to re-internalize industrialization processes in their countries and explore Latin America and the Caribbean. as a major source of natural resources and commodities.

:: Understand why Latin America is key to green economy plans ::

“In addition to adding more value, it is more convenient for these large groups to go back to producing in their countries, instead of transnationalizing the processes”, comments Teixeira.

While hunger hit a record for the last 15 years, the 2,700 billionaires around the world managed to double their fortunes during the pandemic, according to an Oxfam report.

The ECLAC executive secretary, Alicia Bárcenas argues that to change the scenario it is necessary to implement new tax policies in the region. “We must overcome the culture of privilege that encourages evasion, which accounts for 6.1% of regional GDP,” said Bárcenas.

In 2021 alone, states lost about $325 billion to tax evasion in 2021, according to ECLAC.

“It is essential for us to re-establish a strategic alliance with Latin America to think about a development project that is supported by the synergy that can be created between our countries, which have an enormous capacity for technology production and also for exchanges”, says Marilane Teixeira .

Editing: Thales Schmidt

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