Global Economy Faces Major Challenges: Slavery and Job Insecurity Intensify

The Global Economy Faces Challenging Times

The global economic landscape is shifting dramatically, with projections indicating a slowdown in growth. According to the UN Trade and Development body (UNCTAD), growth is expected to decrease from 2.9% in 2024 to 2.6% in 2025. Factors contributing to this change include financial volatility and geopolitical uncertainty, which are placing significant pressure on global trade and investment.

UNCTAD Secretary-General Rebeca Grynspan emphasized that the dynamics of trade have transformed, stating that "trade is not just a chain of suppliers but also a chain of credit lines, payment systems, currency markets, and capital flows." This evolution in global trade highlights not only the rapid interconnectivity of markets but also the inherent risks associated with these developments, particularly for developing economies.

Developing Economies Are Under Increasing Pressure

While developing economies are showing a faster growth rate than advanced economies, they are encountering significant obstacles. High borrowing costs, financial volatility, and climate-related risks are curtailing their ability to invest and sustain growth. The impact of climate change is particularly devastating, as countries facing extreme weather conditions are now paying, on average, an additional $20 billion annually in interest, due to their classification as high-risk by lenders.

The Dominance of the US Dollar in Global Finance

As global economic dynamics evolve, the US dollar's significance remains unchallenged, accounting for a significant portion of cross-border payments. Its dominance has increased from 39% to roughly 50% in just five years. Although this stability can provide a buffer during financial turmoil, it simultaneously exposes developing nations to volatile US financial cycles, often beyond their control. This imbalance necessitates proactive strategies for these countries to mitigate potential shocks.

Contemporary Slavery: A Persistent Crisis

The observed reduction in global economic growth coincides with a sobering rise in modern slavery, which now affects an estimated 50 million people worldwide. On December 2, the UN marked the International Day for the Abolition of Slavery, highlighting that contemporary forms of slavery include human trafficking, sexual exploitation, child labor, and forced marriage.

UN Secretary-General António Guterres urged a global movement to address these issues, stating, "Contemporary forms of slavery are perpetuated by crime rings that prey on individuals facing extreme poverty and discrimination, as well as by traffickers exploiting vulnerable populations fleeing armed conflict or seeking better opportunities through migration." No region is immune to this crisis, with Asia and the Pacific bearing the highest burden.

The Human Toll on Labor Markets

Another area of concern is the conditions of labor in the global market, particularly in Latin America, where over 80% of agricultural jobs operate informally. The lack of formal labor protection and social security places workers at a substantial disadvantage, exacerbating vulnerabilities. Specifically, women, youth, and older workers in rural areas are disproportionately affected, facing significant barriers to employment.

Current data reveals that 86.4% of women in the agricultural sector are employed informally, vastly outnumbering their male counterparts. This issue also extends to child labor, with the informal sector accounting for 46% of children working in the region. Acknowledging this crisis, international organizations like the International Labour Organization (ILO) and the Food and Agriculture Organization (FAO) are striving to implement policies that can transition this informal workforce into more sustainable and equitable employment.

Looking Ahead: Collective Action is Essential

In light of these pressing global challenges—economic slowdown, rising slavery, and labor market exploitation—collective awareness and action are vital. Each of us has a role in fostering a world where economic opportunities are equitable, human rights are upheld, and the chains of modern slavery are broken.

To make a difference, individuals can get involved at local and global levels by supporting organizations working to combat these issues, advocating for fair labor practices, and raising awareness about the realities of modern slavery in their communities.