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Sustainable Economic Systems

The document discusses steps towards a more sustainable global economy. It argues that economies must diversify to reduce susceptibility to price shocks. It also argues that rising inequalities threaten long-term growth and progress on sustainability goals, so living standards must be raised for the most deprived. Additionally, the document states that the world needs a new financial architecture to shift trillions in assets towards long-term investments in areas like infrastructure and human capital, in order to close the multi-trillion dollar funding gap for achieving sustainability goals. Improving governance, institutions, and business environments in developing countries is also presented as important.

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Hayzan Faith Puyao
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121 views9 pages

Sustainable Economic Systems

The document discusses steps towards a more sustainable global economy. It argues that economies must diversify to reduce susceptibility to price shocks. It also argues that rising inequalities threaten long-term growth and progress on sustainability goals, so living standards must be raised for the most deprived. Additionally, the document states that the world needs a new financial architecture to shift trillions in assets towards long-term investments in areas like infrastructure and human capital, in order to close the multi-trillion dollar funding gap for achieving sustainability goals. Improving governance, institutions, and business environments in developing countries is also presented as important.

Uploaded by

Hayzan Faith Puyao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SUSTAINABLE

ECONOMIC SYSTEMS
SUSTAINABLE ECONOMY
● An ideal and sustainable economy promote
the use of available resources in a way that
is both efficient and responsible, and likely
to provide long-term benefits. In economic
terms, to be truly sustainable, the overall
demand for natural resources(ecological
footprint) must be less than the nature’s
renewable supply of resources
(biocapacity).
GOAL
● The goal of economic sustainability is
to establish profitability over the
long term by responsible and efficient
use of available resources. This
involves not only making sure that the
economy is making a profit, but that
the operation is not creating
environmental concerns that could
cause harm to the balance of the local
ecology.
CHALLENGES IN THE GLOBAL ECONOMY
The global economy in the first decade of the 21st century had become
a sphere of extreme uncertainty and risk.
Apart from collapsing financial markets, there
were rising unemployment, deeper
inequalities, a shrinking middle class, extreme
indebtedness, inability of governments to force
through reforms, and increasing challenges of
climate change and availability of resources,
which are necessary to develop new
technologies and keep economies growing.
STEPS TOWARDS A MORE SUSTAINABLE
GLOBAL ECONOMY
DIVERSIFY ECONOMIES
● Development strategies are not implemented overnight. The Sustainable
Development Goals (SDGs) are a 15-year global endeavour. Planning for
such distant horizons requires a stable source of financing. Many
developing countries that depend on only a few commodities are deprived
of that luxury. Without diversification, they are highly susceptible to price
shocks and shifts in investment cycles.
● The current favourable economic winds open a window of opportunity for
countries to restructure and broaden their source of revenue through fiscal
reform. The Gulf Cooperation Council countries, for example, are trying
to break their dependence on oil through a planned introduction of value-
added tax.
STEPS TOWARDS A MORE SUSTAINABLE
GLOBAL ECONOMY
STEM THE RISE OF INEQUALITIES
● In 2017, the International Monetary Fund estimated that around 10 percent
of income in advanced economies went to just 1 percent of the population.
Rising inequalities not only disrupts social cohesion, but also threatens
long-term growth and hampers progress on the SDGs.
● To sustain economic expansion and move forward on the Global Goals,
countries will have to urgently raise the living standards of the most
deprived and address the inequality of opportunities in the long term.
These investments will not only improve the quality of growth but
increase its longer-term potential.
STEPS TOWARDS A MORE SUSTAINABLE
GLOBAL ECONOMY
MAKE FINANCE SUSTAINABLE
● The cost of achieving the universally agreed SDGs is estimated at several
trillion dollars every year through 2030, with public funds able to cover no
more than $1 trillion per year. The need for the private sector to chip in is
obvious, but a multi-trillion-dollar gap can hardly be covered by charitable
side-projects. A fundamental shift is required in the way business is done.
● The world’s financial and capital markets handle in excess of $300 trillion
in assets. The world needs a new financial architecture that would
gradually shift these trillions away from transactions focused on
short‑term profits and towards long-term investments in research and
development, machinery and equipment, infrastructure, human capital and
healthcare.
● All countries have the power to support this process, including through
public investments that crowd-in private investments, public-private
partnerships, better institutional capacities, regulatory changes and
structural reforms.
STEPS TOWARDS A MORE SUSTAINABLE
GLOBAL ECONOMY
IMPROVE INSTITUTIONS
● Weak governance and political instability remain fundamental obstacles to
achieving the SDGs and economic growth in many parts of the world. In
2017, capital started flowing back to the developing countries, but it may
pull out again at the very first sign of trouble, unless states can improve
their legal institutions, administrative capacities, transparency and
business environment.

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