gill2_Getty Images Sascha Schuermann/Getty Images
en English

The New Threat to Prosperity Everywhere

In early 2023, the global economy is expected to grow by a meager 1.7%, one of the slowest rates in decades. Even worse, this slump is coinciding with the emergence of a new economic-policy paradigm that will adversely affect global development around the world.

WASHINGTON, DC – It is now clear that economic harm touched off by the COVID-19 pandemic will not abate anytime soon. The global economy this year is expected to grow by a meager 1.7%, one of the lowest rates in decades. In developing economies, per capita income growth is expected to average just 2.8% over the next two years – a full percentage point below the average in the decade before the pandemic. The slump, moreover, is occurring just as a new paradigm is emerging in economic policy around the world. Its effects on global development will be anything but helpful.

There are three reasons to be worried.

The first is that one of the main engines of development – globalization – is sputtering. For decades, the rapid economic integration of countries – now scorned as “globalization” – delivered substantial gains to all countries involved. It enabled businesses to tap larger markets, improved the efficiency of production, and generated jobs for millions. By encouraging the flow of goods, capital, and ideas, it powered a remarkable era of global prosperity: a period of roughly 25 years when the incomes of the poorest countries steadily began catching up with those of the wealthiest, and when the world came within striking distance of ending extreme poverty.