Incoming WTO head Ngozi Okonjo-Iweala faces world economy disrupted by COVID-19

On Monday the World Trade Organization appointed the first female and first African as the next Director-General. Dr. Ngozi Okonjo-Iweala, set to assume the role on March 1, faces an unprecedented set of global challenges due to the COVID-19 pandemic. Vaccine distribution, increased economic protectionism, shrinking trade and a host of other issues will require careful attention in order for the global economy to recover.

Dr. Okonjo-Iweala previously served as Nigeria’s Finance Minister and “brings a wealth of knowledge in economics and international diplomacy” said the United States Trade Representative in a statement withdrawing the Biden-Harris administration’s support for Yoo Myung-hee from the Republic of Korea. The statement acknowledged the strong campaign ran by both women and threw its full backing behind the appointment of Dr. Okonjo-Iweala.

Dr. Okonjo-Iweala acknowledged the importance of the WTO in tackling the pandemic. “A strong WTO is vital if we are to recover fully and rapidly from the devastation wrought by the COVID-19 pandemic. I look forward to working with members to shape and implement the policy responses we need to get the global economy going again. Our organization faces a great many challenges but working together we can collectively make the WTO stronger, more agile and better adapted to the realities of today.” (WTO.org)

Dr. Okonjo-Iweala sees equitable vaccine distribution as a key step to economic recovery. In her Op-Ed originally published by Project Syndicate she wrote, “To end the cycle, we cannot vaccinate people in some countries; we must protect people everywhere. Yet as vaccines have been rolled out, demand has predictably outpaced supply. Under these conditions, even if doses are promised for the rest of the world further down the line, allocating vaccines to the highest bidder will merely prolong this crisis.”

The pandemic has stifled the ability of global trade policy to influence the flow of goods due to rising economic protectionism. Nations are worried about their domestic industries and an increasing number are placing restrictions on what can be imported or exported. Particularly in the case of medical supplies, supply chains are being disrupted. Developing nations, often more dependent on trade than ones with developed production capacity, are bearing the brunt of the reduction of availability of medical equipment, food, and sanitation products.

Global trade has been shrinking while unemployment is rising according to a recent report by the Congressional Research Service. Countries especially dependent on trade will face the worst of the pandemic’s economic disruption. Estimates by the WTO predicting up to a 9.2% drop in global trade in 2020 coupled with uncertainty of the recovery’s timeline, over four years in certain estimates, threaten the economic security of over 100 million people. Joblessness, unrest, and the continuing public health crisis threaten the economic progress made over the past few decades and threaten the future outlook for growth.

The World Bank reported a drop in global energy prices. The drop comes along side falling prices in metal and rubber, threatening the entire transportation industry. Transportation issues would bring a host of challenges to food security, vaccine access, and the flow of medical equipment around the world.

The WTO and Dr. Okonjo-Iweala will play one of the most important roles in the global recovery from the COVID-19 pandemic. The policies and leadership enacted by the world’s leading trade authority will be critical in guiding the future towards prosperity. Dr. Okonjo-Iweala’s experience and expertise will assist her in facing the greatest disruption to trade in our lifetime.

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