Commerce international et finance

Curbing illicit financial flows (IFFs) can help African countries mobilize capital to finance the achievement of the Sustainable Development Goals and other national priorities. IFFs contribute to US$88.6 billion of capital flight per year from Africa. Reducing these outflows can increase the stock of capital available for businesses to build productive capacity and create jobs. Increased tax revenues can provide governments additional fiscal space to, for example, invest in infrastructure, spend on poverty reduction programmes, or assist citizens during emergencies, such as the 2020 coronavirus (COVID-19) pandemic. This policy brief examines IFFs in Africa, including how they contribute to capital flight and tax evasion. We then recommend specific actions governments can take to curb IFFs and use the proceeds to finance sustainable development.

Credit ratings play an important role providing information on sovereign borrowers. But financial markets, including credit ratings, often over-emphasize short-term economic concerns, and underweight longer-term issues, including environmental and social risks as well as investment in resilience and sustainability.

The development path followed by a country prior to graduation from the least developed country category has significant implications with regard to the challenges to be faced after graduation. The current conceptualization of a smooth transition strategy primarily aims to create a short-term post-graduation “soft landing” and ease concerns with regard to preparation for engaging in economic relations as a non-least developed country. Therefore, the concept currently does not have a focus on preparing countries for graduation with momentum. UNCTAD has maintained that the post-graduation success of a country significantly depends on the foundations built prior to graduation. Graduating countries need a new strategy, one that prepares them for the challenges ahead by linking the graduation process with the development of productive capacities and sustainable development. UNCTAD has proposed an alternative policy framework to help refocus the objectives and strategic direction of graduation strategies, as well as a new time frame for implementation.

Central banks have relied heavily on unconventional monetary policy tools, especially large-scale asset purchases, to respond to the pandemic. These programmes have helped to stabilize financial markets and kickstart economic recovery. But the central bank asset purchases have also contributed to an underpricing of risk and sharp increases in asset prices.

Does digitalization reduce corruption? What are the benefits of data-driven digital government innovations to strengthen public integrity and advance the Sustainable Development Goals? While the correlation between digitalization and corruption is well established, there is less actionable evidence on the effects of specific digitalization reforms on different types of corruption and the policy channels through which they operate. This paper unbundles the integrity dividends of digital reforms that the pandemic has accelerated. It analyses the rise of integrity-tech and integrity analytics in the anticorruption space, deployed by data-savvy integrity institutions. It also assesses the broader integrity dividends of government digitalization for cutting redtape, reducing discretion and increasing transparency in government services and social transfers. It argues that digital government can be an effective anticorruption strategy, with subtler yet deeper effects. There nevertheless needs to be greater synergies between digital reforms and anticorruption strategies.

Nowcasting can play a key role in giving policymakers timelier insight to data published with a significant time lag, such as final GDP figures. Currently, there are a plethora of methodologies and approaches for practitioners to choose from. However, there lacks a comprehensive comparison of these disparate approaches in terms of predictive performance and characteristics. This paper addresses that deficiency by examining the performance of 12 different methodologies in nowcasting US quarterly GDP growth, including all the methods most commonly employed in nowcasting, as well as some of the most popular traditional machine learning approaches. Performance was assessed on three different tumultuous periods in US economic history: the early 1980s recession, the 2008 financial crisis, and the COVID crisis. The two best performing methodologies in the analysis were long short-term memory artificial neural networks (LSTM) and Bayesian vector autoregression (BVAR).

In many small island developing States (SIDS), tourism is the engine of economic growth, export earnings and formal employment. The COVID-19 pandemic ravaged global tourism, through a major slowdown of international tourism arrivals, billions of dollars of lost revenues and millions of lost jobs. The pandemic’s impact was even more severe in highly vulnerable, tourism-dependent SIDS, with many of them closing their borders entirely to protect their populations and health systems. In this paper, we examine the impacts of the COVID-19 pandemic on economic development prospects in SIDS, through case study of Vanuatu, a tourism-dependent economy that suffered major macroeconomic impacts from the pandemic. We provide a forward look at the prospects for the post-pandemic recovery of tourism and the national economy, with policy recommendations for Vanuatu. We also aim for this case study to be useful to policy makers in other tourism-dependent SIDS and developing countries, as they undertake their post-pandemic recovery.

At the start of the coronavirus disease of 2019 (COVID-19) pandemic, expectations were that seaborne trade, including containerized trade, would experience a strong downturn. However, changes in consumption and shopping patterns triggered by the pandemic, including a surge in electronic commerce, as well as lockdown measures, have in fact led to increased import demand for manufactured consumer goods, a large part of which is moved in shipping containers. As at the third quarter of 2020, lessening of lockdown measures and varying speeds of recovery worldwide, as well as stimulus packages supporting consumer demand, inventory-building and frontloading in anticipation of new waves of the pandemic, contributed to leading to a further increase in containerized trade flows.

The coronavirus disease of 2019 (COVID-19) pandemic may have had less noticeable impacts on small island developing States (SIDS). However, the impacts may be longer lasting and more critical. The pandemic has exacerbated the unique and overwhelming challenges in these States related to connectivity; a high level of dependence on external trade; remoteness and prohibitive transport costs; food security; infrastructure gaps; resilience; sustainability; and access to finance. This policy brief builds on the findings in Review of Maritime Transport 2020 and of the ongoing United Nations-wide project “Transport and trade connectivity in the age of pandemics: Contactless, seamless and collaborative solutions”, launched in 2020 amid the pandemic. It highlights key priority actions and policy recommendations to support SIDS in strengthening their ability to respond to shocks and disruptions that undermine their maritime transportation systems and to future proof their maritime supply chains through sustainability and resilience-building efforts.

This policy brief examines illicit financial flows linked to the export of extractive resources from Africa, methodologies to measure them and their relationship to the new conceptual framework for the statistical measurement of illicit financial flows as part of the measurement of progress towards Goal 16, target 16.4. It highlights opportunities to curb illicit financial flows using improved methodologies for customs fraud detection and to enhance resource governance with regard to metals that will be in high demand for the battery-storage technology needed in the transition to a low-carbon future.