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Кандидат юридичних наук, Якубовська Н.О.
Національний університет «Одеська юридична академія»
GLOBAL IMBALANCES IN WORLD ECONOMY AND DEVELOPMENT ISSUES: CHALLENGES FOR INTERNATIONAL LAW
Policy of more stable, balanced and equitable global economy recently received a significant impulse in international community [1, p.1]. Undoubtedly, globalization has brought enormous benefits in terms of overall growth and economic efficiency in the world. Unprecedented financial flows and trade in goods and services have helped many countries to promote and sustain economic development and poverty reduction. However, while the increasing integration of the global economy has brought many benefits, it has also made it more complex and introduced significant challenges. A particular challenge the international community is facing today is the need to achieve an orderly reduction in unprecedented global economic imbalances.
Commonly, when we speak about "global imbalances" in the international economic system, we are referring to the large current account deficit in some countries, particularly the United States, and the corresponding large surpluses in a some countries, notably Germany, Japan, developing countries in East Asia, especially China, and a number of oilexporting countries. Usually the current account deficit implies a trade deficit .
In a broader way global imbalances could be understood not only as the particular problem of account and trade deficits in the U.S. and other countries, but in general as the existing discrepancy between the production and consumption in global economy. That poses huge challenges for the developing countries as it creates immense wealth for developed countries but left behind a great number of people, including the majority of the 800 million citizens of the Least Developed Countries .
Developing countries as a group transfer vast amounts of financial resources to developed countries. Much of the net transfers reflect additional reserve accumulation by developing countries. It is a reflection of the need felt by developing countries to continue to accumulate foreign-exchange reserves as a form of self-protection against global economic shocks [4, p. 9].
Such state makes the efforts undertaken by international community to promote sustainable economic development of developing countries by increasing their productivity and making their products less labor-intensive not effective, as the developed countries pay for goods received from developing countries by debt instruments, but not by the latest technology in production and medicine, which is more valuable for the development of the latest.
That is why last decade the term "global imbalances" is often being used by analysts and experts in international law in the development debates, as the fact that the world economy is largely unbalanced in its basic parameters poses serious risks for long-term sustainable economic growth and development of developing countries.
Global imbalances and development issues are tightly coupled and should be considered together. Addressing today's global macroeconomic imbalances is vital for sustainable development of developing countries. And that development is a key ingredient in addressing other great issues of our time such as global poverty, the suppression of human rights, environmental despoliation, etc.
The coordinated multilateral approach is the only possible response to regulation of global imbalances and associated problems of development and the international legal instruments can serve for this as effective tool.
A correction of imbalances requires that both deficit and surplus countries play their role. But such correction is impossible in present circumstances. While the multilateral trading system contributes to certainty and predictability in international trade, the same does not hold true for current international monetary and financial arrangements. They are not organized under multilateral rules-based system, and this contributes for the imbalances we observe today. Thus, well-structured, coordinated system of global economic governance is beneficial to all countries and would help avoid global imbalances .
Because of global imbalances today's world economy doesn't stimulate the sustainable economic development, doesn't reduce the widening income disparities between developed and developing countries and doesn't promote substantial poverty reduction.
Existing international legal norms do not solve these problems as they primarily serve the public interest of developed countries. The main international legal act which is at the heart of the international financial system - the Articles of Agreement of the IMF - has significant shortcomings and is not able to prevent imbalances and provide stable functioning of the global economy on the basis of equality of states and fairness. Other international economic institutions do not meet the challenges of the global imbalances and associated problems of poverty and development as well.
1. Global imbalances: The choice of the exchange rate-indicator is key // UNCTAD Policy Brief, No 19, January 2011. [Electronic source] - Available at: http://www.unctad.org/en/docs/presspb20111_en.pdf.
2. Global Imbalances and Global Poverty - Challenges for the IMF, Remarks by Rodrigo de Rato. Available at: http://www.imf.org/external/np/speeches/2005/022305.htm.
3. UNCTAD Annual Report 2010, Foreword by Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD. Available at: http://www.unctad.org/templates/WebFlyer.asp?intItemID=5734&lang=1&print=1.
4. World Economic Situation and Prospects 2011 (United Nations publication, Sales No. E.11. II.C.2), released in January 2011. Available at: http://www.un.org/en/development/desa/policy/wesp/index.shtml.
5. UNCTAD, Thinking ahead: Some Challenges and Opportunities for Development. Available at: http://www.unctad.org/templates/Page.asp?intItemID=4051&lang=1.