A recent survey conducted among UN economists identified Climate change and Poverty and inequality as the top pressing economic challenges of our times, with finance, debt and austerity interlinked to all of these issues. Indeed, these are some of the most pressing challenges facing the global economy today. In many regions, including Africa, additional challenges include demographic changes, rapid and unplanned urbanization, digital and skills divide, food and health insecurity, inefficient education systems, among others.

It would be fair to say that these challenges are keeping most of us economists up at night. In a bid to solve these, newer solutions are being proposed that include language change, such as instead of focusing on economic growth, let's focus on green growth, inclusive growth, purple economy, etc. However, things are unlikely to change on the ground unless we fundamentally change the way we think about what got us in the current situation to begin with. It would be a classic case of isomorphic mimicry as Lant Pritchett calls it—that is, governments and organizations pretend to reform by changing what policies or organizations look like rather than what they actually do. In this space, UN economists have a unique role to play because the UN is not bound by ideology, is in a unique position to give an alternative view on sustainable development vis-à-vis the Bretton Woods institutions and has the ability to provide context by pooling knowledge and best practices from all over the world (the wider UN system).

On the sidelines of the High-Level Political Forum last week, UN's Economist Network (UNEN) organized an event to discuss "How can economists in the UN system address the most pressing challenges of the day?" The event opened with remarks from ASG Navid Hanif and a keynote address by Prof. Mariana Mazzuzato from the University of London. This was followed by a panel discussion: moderated by Ms. Sara Castro de Hallgren from UN-DESA. I was in the panel alongside Dr. Wycliffe Alwago from UN-WIDER, Mr. Basil Oberholzer from Global Green Growth Institute, and Mr. Stuart Alan Davies from RCO Jamaica.

I made the point that to solve some of the current and future challenges, we need blue-sky thinking. The failed policies from the last 80 years will not work, yet again. As Einstein has famously said, insanity is doing the same thing over and over again and expecting different results. Sometimes, we continue to profess the traditional view because, as James Galbraith noted, "[it] serves to protect us from the painful job of thinking." However, thinking is all we have left now to save the world. So, here is what I think we need to do:

First, have the courage to speak the unspeakable – to say things people are afraid to say out loud. For instance, it is not the time to blindly propagate for another round of globalization or free trade as it hasn't quite delivered for the developing world. Instead, the emphasis should be on fair trade. Indeed, the breakdown of the value chains during the COVID-19 pandemic showed how fragile the current system is. At the time, we started to question the wisdom behind advocating for efficiency versus equity and resilience. However, just a few years down the lane, we are back to towing the line on efficiency and free trade that the COVID-19 pandemic showed us was fundamentally flawed. 

Second, propose new solutions to old problems. Given the breakdown of the global value chains during the COVID-19 pandemic, more emphasis needs to be placed on sourcing inputs locally – both within the country and across the continent – and developing regional value chains. This approach will not only help make countries self-sufficient but also help build resilience and deal with the climate change problem, as people have alternate routes to market, and encourage people to live in harmony with nature and adopt more environmentally friendly consumption behaviors. Such strategies will also help with the creation of decent jobs and economic growth – something that would be more sustainable.

Third, back all new creative ideas with updated analytical work: We all know as economists that when we run regressions based on past data, parameters calculated from such an exercise are a poor guide to predict the future in the face of major structural changes (Lucas' critique). Hence, relying on older econometric techniques and data to discuss the future could be misleading. It is time to refresh our analytical methods prioritizing new approaches like strategic foresight and behavioral science, as advocated by the Secretary General in his Quintet of Change.

Fourth, foster multidisciplinary thinking. Given the strong interconnectedness of the current challenges, for instance, urbanization with migration and climate change, we need to think more holistically. This means more collaboration among economists (development, macroeconomic, microeconomic, urban and labor economists, among others) as well as with researchers from other disciplines such as political economy, political science, sociology, anthropology, physicists, ecologists, biologists, etc. Such multidisciplinary engagement will help account for the complexity of economic systems, which is at the center of effective policymaking.

Fifth, produce contextual knowledge products: At the UN, our strength is our ability to bring in more nuanced perspectives on economic matters by leveraging insights from the extensive network of UN country offices. This could help provide context-specific recommendations rather than advocating for one-size-fits-all policy solutions. The Quality-of-Life Initiative is one such example. In the same vein, more micro-evidence can be used to advance the development agenda, particularly the principle of leaving no one behind by bringing to light the needs of the most vulnerable – for instance, doing Voluntary Local Reviews rather than Voluntary National Reviews.

Sixth, invest in standardized guidance, methodologies and other rules of procedure. While SDGs guide the contemporary development agenda, countries also need detailed guidelines and frameworks in various other aspects. For example, the World Bank and IMF have a set of standards under the Debt Sustainability Analysis (DSA), in which countries are able to understand their overall debt level and their debt carrying capability and be alerted of the early warning signs. The UN should also invest in such kind of innovations on standards and rules, backed by our knowledge, and guide countries towards optimal approaches to achieving the SDGs.

Last but not the least, be a leader in facilitating cooperation and dialogue and increase leverage to influence. Act as policy brokers, facilitate dialogue and promote collective action to address transnational economic challenges.

By addressing the challenges through these innovative ways, UN economists can contribute significantly to global stability, equitable growth, and inclusive development.

As we move forward, let's not forget to think critically and creatively and follow it up with bold actions!!!

By Sweta C. Saxena

Director of Gender, Poverty and Social Policy Division, Economic Commission for Africa (ECA).