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Asia needs diversified trade to spur inclusive development: ADB

Asia needs diversified trade to spur inclusive development: ADB

ISLAMABAD: Export diversification could help Asia and the Pacific to better cope with the current global slowdown in trade and make development more inclusive, said a new report of the Asian Development Bank (ADB).

According to the report, boosting industrial capacity, international competitiveness, and transport infrastructure was key to diversification, said the report titled, “Aid for Trade in Asia and the Pacific: Promoting Economic Diversification and Empowerment”,  released at the 7th Aid for Trade Global Review 2019, held at the World Trade Organization headquarters in Geneva, Switzerland from 3 to 5 July.

The report is part of the Aid for Trade Initiative, which aims to help developing economies build trade-related infrastructure and supply-side capacity.

“Challenges to trade include the risk of sluggish global economic growth, the adoption of more inward-looking trade policies in some parts of the world, and widening social and income inequalities,” ADB Vice-President for Knowledge Management and Sustainable Development Bambang Susantono said.

“There is now greater need for economic and export diversification, and well-targeted aid for trade to catalyze financing that enables sharing the benefits of open trade more equitably,” Susantono added.

The expansion of services throughout Asia and the Pacific, particularly in information and communications technology, is an opportunity for economic and export diversification.

Integrated and coherent policies, with increased trade liberalization and regulatory reform, are critical for services trade to develop, the report said.

Meanwhile, aid for trade targeted at digital connectivity boosts economic opportunities by linking businesses to markets that otherwise would be well beyond their reach.

It also opens up export avenues for business services, telecommunications, and information services in addition to supporting e-commerce in the manufacturing sector.

Digital technologies and the rise in services have helped to boost entrepreneurship among women in recent years, lifting economic growth.

However, more efforts are needed to bring down the barriers that make it difficult for women and other vulnerable groups to reach international markets and integrate into global supply chains.

Aid for trade can support that by tailoring trade policies and regulations to promote women’s businesses and supporting small firms, including those owned by women, the report added.

The Aid for Trade Global Review is held every two years to strengthen the monitoring and evaluation of aid for trade. This year’s focus is on how trade can further contribute to economic diversification and empowerment.