Policy Brief 13 - Coherent Trade and Employment Policies in the Global Crisis
Globalization increases economies’ exposure to external shocks, in particular if global markets become increasingly volatile. Creating fiscal space during times of growth should,
therefore, be a priority for policy makers at national and international
levels, as this will allow them to introduce mitigation measures in periods of crisis. Emphasis should also
be given during growth periods to diversifying countries’ export and higher value–added production structures in order to reduce vulnerability to external shocks, but also with an aim to industrialize and to raise income levels in developing
countries. Strengthening administrative capacity in general and social protection systems in particular should also be a priority during growth periods. In particular, the need to
build up fiscal space should not be considered a constraint for strengthening social protection systems.