A new United Nations report on Wednesday highlights divergent economic recoveries between countries and launches new urgency behind warnings richer countries are not doing enough to help poorer countries fall further behind as the world recovers from the disruptions of COVID-19.

“It’s really frustrating how the responses to the pandemic have unfolded in a rather rambling fashion,” said Inu Manak, an international political economy expert at the Cato Institute, a libertarian think tank based in Washington, DC in the United States. United.

“During the financial crisis, there was a declaration by all advanced countries avoiding protectionism, but during the pandemic, we saw a doubling of borders and an inward pull-back and a push towards the rhetoric of autonomy. “she told Al Jazeera.

The damage from the COVID-19 crisis exceeded that of the Great Recession of 2007-2009 to most sectors of the global economy, but was particularly exhausting for the developing world, according to a new report (PDF) of the United Nations Conference on Trade and Development (UNCTAD) released Wednesday.

The report found that developing countries (excluding China) will, by 2025, be up to $ 8 trillion poorer due to the coronavirus crisis.

The total cost of delayed vaccinations – in terms of lost revenue – will rise to $ 2.3 trillion, with developing countries bearing the bulk of that bill.

Even assuming there are no other shocks, a return to the pre-pandemic income trend could take until 2030, reflecting the lowest growth rate since the end of WWII global.

The economic fallout from the pandemic has left many developing countries with fewer fiscal resources and a higher debt burden. And for countries on the front lines of climate change, this cocktail has the potential to exclude them from growth and investment for years to come.

“The danger of a lost decade ahead remains very real,” Richard Kozul-Wright, director of globalization and development strategies at UNCTAD, told Al Jazeera. “And so far, the discussion on reforming the multilateral system, in the sense that has followed the financial crisis, has not taken place, although the system has clearly failed.”

The debt service suspension initiative for the Group of 20 (G20) countries, which has extended about $ 13 billion to eligible developing countries, is “far from meeting the needs,” he added.

Much needed funding for many poor countries was provided last month when the International Monetary Fund (IMF) approved $ 650 billion in new Special Drawing Rights – SDRs, the IMF’s reserve currency that can be exchanged for hard currencies like the US dollar, and can help struggling nations get their hands on needed cash.

But most of the new SDR allocation will go to richer countries as SDRs are distributed based on a country’s quota in the IMF, which in turn is determined by a country’s position in the IMF. ‘Mondial economy.

“We will still need large-scale debt relief and cancellation if developing countries are to be able to mobilize domestic resources to achieve the SDGs [Sustainable Development Goals]”Kozul-Wright told Al Jazeera.

The SDGs are 17 goals – focused on education, health, nutrition and women’s rights – that UN member states have pledged to achieve by 2030. This is essentially the development plan global campaign aimed at permanently lifting the least developed countries out of poverty. .

“This will require reforms to the existing multilateral financial architecture and advanced economies need to discuss with developing countries what this might entail,” Kozul-Wright said.

Inequalities: decades in the making?

Forty years of shrinking government services, growing inequalities and impunity for financial and business elites took a heavy toll on the global economy even before the coronavirus pandemic brought economies to a halt and disrupted global trade , according to the UNCTAD report.

Post-containment growth has been largely concentrated in North America, which has benefited from strong regional trade ties, strong fiscal stimulus and monetary accommodation, according to the report.

The total cost of delayed coronavirus vaccinations will rise to around $ 2.3 trillion, with the developing world bearing the majority of that bill [File: Siphiwe Sibeko/Reuters]

“We have seen places where the pandemic has caused a much greater economic collapse, for example in the developing world than in the developed world,” William Milberg, dean and professor of economics at the New School, told Al Jazeera. for Social Research.

“And we are seeing a recovery, in Europe, maybe in the United States, in China, but we don’t see that recovery in the developing world.”

This is the 40th anniversary of the UNCTAD annual report, which was first launched in 1981, when US President Ronald Reagan was in office. Reagan was a champion of neoliberal economic policies and free markets who was committed to controlling soaring inflation at home. But this localized program, said UNCTAD’s Kozul-Wright, has global ramifications.

Bringing inflation under control meant raising US interest rates, which pushed up the dollar’s value against other currencies. This made it harder for poorer countries to repay their dollar-denominated debts, ushering in extreme austerity measures that would lead to a “lost decade” of growth and development for countries caught in the maelstrom.

This brutal cycle of debt and austerity would set in again during the global financial crisis.

“The global financial crisis [of 2007-2009] exposed the dangers of this hyper-globalized system, and while reforms were promised in the G20 and elsewhere, the winners of this system resisted and instead pushed for austerity to adjust the system in their favor, ”Kozul said -Wright to Al Jazeera.

Biden: Bolder moves or “light protectionism”?

While global growth is expected to reach 5.3% this year, the fastest in nearly half a century, the global situation beyond 2021 remains extremely uncertain, even in developed economies, according to UNCTAD.

But the tide may be turning.

Since taking office nine months ago, US President Joe Biden has surpassed historic levels of stimulus and expanded welfare programs, such as the child tax credit and food stamps.

US President Joe Biden delivers remarks on Child Tax Credit Tax Relief Payments during a speech at the White House in Washington, DC, United States [File: Tom Brenner/Reuters]

These developments are “financed by more progressive taxation” and break with “a long-term trend which has shifted income upwards and risks downwards in the distribution of income,” UNCTAD said.

“We realized that a breaking point could be near in modern capitalism on issues of inequality, the environment, and I think Biden’s political stance has been quite bold,” said Milberg, who is also Co-director of the Heilbroner Center for Studies in Capitalism at the New School.

“Democrats on many economic issues had capitulated to neoliberal positions and this administration recognizes that this was not enough,” he added.

Internationally, Biden lobbied for a global minimum corporate tax rate and a waiver of intellectual property rights related to coronavirus vaccines within the World Trade Organization in order to increase equity in vaccines.

“What remains to be resolved is the US-China trade relationship. If this can be resolved in a collaborative and growth-friendly manner, it would hold great promise, rather than retirement and continued reliance on a more adversarial relationship, ”Milberg told Al Jazeera.

But some economists say Biden is dragging his feet on trade.

“We see Trump-era trade policies and ‘light protectionism’,” said Manak of the Cato Institute. “We haven’t seen any suggested change in China’s approach.”

One positive thing to come out of the trade policy of former US President Donald Trump’s administration was its proposed trade deal with Kenya, intended to boost trade with Africa, Manak said, adding that the plan is hit a wall.

“Another way to help developing countries is to trade with them,” she said. “But we are seeing a setback.”