By Gustavo Capdevila
GENEVA, Oct 2 2001 (IPS)

The United Nations Commission on Trade and Development (UNCTAD) has praised the measures adopted by the nations of the industrialised North aimed at curbing the global economic impacts of the Sep 11 terrorist attacks, and is now asking that developing countries take similar steps.

Rubens Ricupero, UNCTAD secretary-general, commented that the world economy had already begun to decelerate a year ago, but had suffered a serious blow as a result of the attacks on the World Trade Centre in New York and the US Defence Department (Pentagon) in Washington.

The “swift and determined” response by the monetary authorities in industrialised countries has been an encouraging sign and should help toward the rebuilding of confidence worldwide, he said.

The Federal Reserve Bank in the United States cut its inter- bank interest rate to three percent annually, and the European Central Bank endeavoured to prop up the dollar, which had lost ground as a consequence of the Sep 11 attacks.

But a similar rapid action would be desirable from developing South as a means to confront the economic consequences the attacks are likely to have on those countries, stressed the UN official.

UNCTAD outlined a relatively optimistic panorama with respect to the economic recovery of the United States in the medium term.

The losses the attacks caused to US infrastructure and productive capacity could be as high as one percent of the North American giant’s gross domestic product (GDP), which reaches nine trillion dollars, according to estimates by UNCTAD sources.

However, “there is a good reason to believe that if a recession proves unavoidable, (it would be) of short duration,” said Ricupero, predicting that recovery could begin as soon as next year’s second semester.

A prolonged contraction of the world’s three major economies – European Union, Japan, United States – would have disastrous nomies – European Union, Japan, United States – would have di

Excerpt: