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AID FOR TRADE IN ASIA AND
THE PACIFIC PROMOTING CONNECTIVITY FOR INCLUSIVE
DEVELOPMENT
Cyn-Young Park Director
Regional Cooperation and Integration Division
Economic Research and Regional Cooperation Department
Asian Development Bank
7 February 2018 | University of South Pacific, Suva, Fiji
1
Key Messages Aid for trade flows account for about 40% of total official development
assistance to Asia in 2015. Globally, Asia is amongst the largest recipients
of AfT.
Fast growing e-commerce presents abundant growth opportunities for the
region.
Aid targeted at tradable services sectors can be an important catalyst in
promoting inclusive economic growth and structural transformation.
Promoting connectivity is a priority to expand trade in services and achieve
inclusive growth in geographically challenged economies of Asia and the
Pacific.
AfT should target further improving infrastructure, building an enabling policy
and regulatory environment to advance growth in services trade, and
promote the integration of geographically challenged economies into
regional and global markets.
2
Regional Trends in Aid for Trade and
Trade Costs
4
AfT flows to Asia and the Pacific have been growing steadily
-80
-60
-40
-20
0
20
40
60
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Asia and the Pacific
TPR (on left, $ million)
BPC (on left, $ million)
INF (on left, $ million)
Aid for Trade (on right, % of ODA)
-50
-40
-30
-20
-10
0
10
20
30
40
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
World
TPR (on left, $ million)
BPC (on left, $ million)
INF (on left, $ million)
Aid for Trade (on right, % of ODA)
Official Development Assistance and Aid for Trade, 2002–2015 ($ million, %)
ODA = Official Development Assistance.
Note: Total aid for trade (AfT) is the sum of INF (aid for infrastructure), BPC (aid for building productive capacity) and TPR (trade policy
and regulations and trade-related adjustment).
Source: ADB calculations using data from OECD. Creditor Reporting System. http://www.oecd.org/ (accessed April 2017).
5
0
10
20
30
40
50
60
70
80
0.0
0.5
1.0
1.5
2.0
2.5
2002–05 avg.
2006–08 avg.
2009–11 avg.
2012–14 avg.
2015 2016 2010–11 avg.
2012–14 avg.
2015 2016
Commitments Disbursements
(%)
($ b
illio
n)
Central Asia East Asia
South Asia Southeast Asia
Pacific Aid for Trade (on right, % of ODA)
Source: ADB calculations using data from OECD. Creditor Reporting System (accessed 25 January 2018).
ADB's Aid-for-Trade Contribution by Subregion,
2002–2016
6
0.0
0.5
1.0
1.5
2.0
2.5
2002–05 avg.
2006–08 avg.
2009–11 avg.
2012–14 avg.
2015 2016 2010–11 avg.
2012–14 avg.
2015 2016
Commitments Disbursements
Economic infrastructure Building productive capacity Trade policies and regulations
Source: ADB calculations using data from OECD. Creditor Reporting System (accessed 25 January 2018).
ADB's Aid-for-Trade Contribution by Category,
2002–2016 ($ billion)
Aid for trade enhances trade performance and helps reduce
the burden of trade costs
7
8
Reducing trade costs remains a priority
Distance to ‘Best Performer Frontier’ in
Trading Across Borders by Region and
Asia’s Subregions, 2014 and 2016
0 20 40 60 80 100
Central Asia
Pacific
South Asia
Southeast Asia
East Asia
Africa
Middle East
Asia and the Pacific
Latin America
North America
EU-28
2016 2014
Note: Asia includes developing economies only.
Source: ADB calculations using data from World Bank. Doing Business
Database. http://doingbusiness.org
(accessed March 2017).
Trade, Inclusive Growth, and
Employment for Women
10
Trade can deliver inclusive growth and quality jobs
1,393 1,351
1,141 1,143
1,036
812
709
581
467 435
330
51.1
47.1
38.0 36.4
31.8
24.0
20.3
16.3
13.0 12.0
9.0
0
10
20
30
40
50
60
0
200
400
600
800
1,000
1,200
1,400
1,600
Hea
dco
un
t ra
tio
(%
)
He
adco
un
t (m
illio
n)
Population below the $1.90 a Day Poverty Line, Asia and the Pacific (2011 PPP)
Source: ADB estimaes using World Bank. PovcalNet Database. http://iresearch.worldbank.org/PovcalNet/home.aspx (accessed 4 October 2016).
11
“Evidence is compelling that participation in global value chains generate more jobs for women”
12
“AfT can support targeted policies that increase opportunities for women”
The Digital Economy and Trade
Connectivity
14
Fast growing e-commerce presents abundant growth
opportunities for Asia and the Pacific
15
Technology can be leveraged to improve inclusiveness of trade-driven growth
Internet Users and Mobile Cellular and Fixed Broadband Subscriptions in Asia and the
Pacific, 2000–2015 (per 100 people)
0
20
40
60
80
100
120
140
2000 2005 2010 2015
a. Mobile cellular subscriptions
0
5
10
15
20
25
2002 2005 2010 2015
b. Fixed broadband subscriptions
Note: For fixed broadband subscriptions, 2002 reported the required (earliest year) data for the largest number of constituent countries in each subregion.
Source: World Bank. World Development Indicators. http://www.data.worldbank.org (accessed April 2017).
0
10
20
30
40
50
2000 2005 2010 2015
c. Internet users
16
In order to unlock the potential of service trade and e-commerce in
the region, it is imperative to take on the following measures:
Boost market access by removing barriers to digital trade.
Improve the availability and quality of connectivity
infrastructure
Institute legal, regulatory and institutional reforms
Intensify regional efforts to modernize and harmonize
regulations.
Close data gaps and limitations
17
Mainstreaming gender into ICT initiatives
can promote women’s entrepreneurial
activities
Aid for Trade and Services
19
“Aid targeted at tradable services sectors can be an important catalyst in promoting inclusive economic growth and structural
transformation.”
20
0
2,000
4,000
6,000
8,000
10,000
12,000
Distribution of Aid for Trade in Services in Asia and the Pacific ($ million)
Central Asia East Asia
South Asia Southeast Asia
Pacific
Note: Services AfT include six aggregate sectors: transport and storage; communications; energy; banking and finance; business and other services; tourism.
Source: ADB calculations using data from OECD. Creditor Reporting System. http://www.oecd.org/ (accessed April 2017). UNComtrade. https://comtrade.un.org/
(accessed June 2017).
.
Asia takes the lion’s share of services AfT
0
200
400
600
800
1,000
1,200
1,400
1,600
Services Trade by Region ($ billion)
Africa Americas
Asia and the Pacific Europe
0
5,000
10,000
15,000
20,000
25,000
30,000
Global Aid for Trade in Services by Region ($ million)
Africa Americas
Asia and the Pacific Europe
21
“Aid that enhances economic infrastructure and boosts productive capacity is positively correlated with services trade across the region.”
Targeted AfT can boost trade in services
AFG ARM
AZE GEO
KAZ
KGZ
PAK
TAJ UZB
BAN
BHU
IND
MLD NEP SRI
PRC
MON CAM
INO
LAO
MAL
MYA
PHI THA
VIE
FIJ
KIR RMI FSM
PNG
SAM SOL
TIM
TON
TUV
VAN
12
14
16
18
20
22
24
26
28
12 14 16 18 20 22
Log
of
ave
rage
se
rvic
es
trad
e
Log of AfT in economic infrastructure
Economic infrastructure Central Asia
South Asia
East Asia
Southeast Asia
Pacific
Linear (CentralAsia)Linear (South Asia)
Linear (East Asia)
Linear (SoutheastAsia)Linear (Pacific)
Services Trade and AfT: Asia and the Pacific (average 2002–2015)
AFG ARM
AZE GEO
KAZ
KGZ
PAK
TAJ UZB
PRC
MON
BAN
BHU
IND
MLD NEP SRI
CAM
INO
LAO
MAL
MYA
PHI THA
VIE
FIJ
KIR RMI FSM
PNG
SAM SOL
TIM
TON
TUV
VAN
12
14
16
18
20
22
24
26
28
12 13 14 15 16 17 18 19 20 21
Log
of
ave
rage
se
rvic
es
trad
e
Log of AfT in productive capacity
Productive capacity
“Empirical analysis shows a
significant impact of AfT on
services trade across all
subregions, most pronounced for
South Asia and Southeast Asia.”
22
Integrated and coherent policies—together with more trade liberalization and regulatory reform—are critical for services trade
Promoting Connectivity in the Sealocked Economies of the
Pacific
24
Small size and remoteness are key bottlenecks to trade for Pacific countries
25
Improving the business environment and reducing trade costs remain as priorities
0 10 20 30 40 50 60 70
Kiribati (Rank 152)
FSM (Rank 151)
Marshall Islands (Rank 143)
Palau (Rank 136)
PNG (Rank 119)
Solomon Islands (Rank 104)
Fiji (Rank 97)
Samoa (Rank 89)
Tonga (Rank 85)
Vanuatu (Rank 83)
Seal
ock
ed
eco
no
mie
sA
sia
2016 rankings (Overall distance to frontier scores, 2014 and 2016
2016 20140 20 40 60 80 100
FSM
VAN
KIR
SOL
FIJ
PNG
RMI
SAM
TON
PAL
Average
Seal
ock
ed e
con
om
ies
Asi
a
2016 2014
Distance to Frontier in the Ease of
Trading Across Borders Ease of Doing Business Rankings (out of 190)
Note: Asia refers to developing Asia.
Source: World Bank. Doing Business Database (accessed March 2017).
26
Aid for trade promotes growth and trade in services in geographically challenged economies…
Mean services trade and AfT: aggregate services
(geographically challenged economies, 2002-2014)
… with the most pronounced impact on tourism services for sealocked
economies
AFG
ARM
AZE
BHU
KAZ
KGZ
LAO
MON NEP
TAJ
UZB
FIJ
KIR RMI
FSM
PNG
SAM SOL
TON
TUV
VAN
12
13
14
15
16
17
18
19
20
21
12 13 14 15 16 17 18 19
log o
f avera
ge
serv
ices
trade
log of AfT in aggregate services
Landlocked economies
Sealocked economies
Linear (Landlockedeconomies)
Linear (Sealocked economies)
27
Sealocked economies can benefit from developing their tourism industries. Some of the crucial actions for this include: - establishing tourism linkages with the local economy - enhancing tourism management capacity through institutional and human capacity development - tapping private sector resources - pursuing regional integration strategies
28
Policy Prescriptions AfT should target (i) further improving infrastructure (ii) building an enabling policy and regulatory environment to advance growth in trade in services (iii) promote the integration of geographically challenged economies into regional and global markets
29
Thank You! Download at: https://www.adb.org/sites/default/files/publication/329166/aid-trade-asia-pacific-2.pdf
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