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Trade

Unlocking the transformative power of waterways

Karla Gonzalez Carvajal's picture


Transport history was in the making a few days ago when a Bangladeshi ship carried a consignment of
1,000 tons of steel and iron sheets from the Port of Kolkata in West Bengal to India’s northeastern states, through Bangladesh. This first-ever transshipment of transit goods marked the formal launch of transit trade and transport between India and Bangladesh using a combination of river and land routes. 
 
Senior government officials and top diplomats from both countries, including the Indian High Commissioner in Dhaka, the Bangladesh Minister and Secretary of Shipping, the Senior Secretary of Commerce, and officials of the Bangladesh Inland Water Transport Authority, attended an inaugural ceremony to observe the unloading of goods at Ashuganj Port on the bank of the Meghna River, according to media reports. The general cargo terminal at Ashuganj Port will be rehabilitated and modernized under the newly approved regional IDA project to support Bangladesh’s waterways to handle the loading and unloading of large volumes of cargo.

Harnessing Stitches for Riches in South Asia

Gladys Lopez-Acevedo's picture
Stitches to Riches? The Potential of Apparel Manufacturing in South Asia

In the coming years and decades, China is expected to slowly relinquish its lead position in the global apparel market, opening the door to other competitors. This is a huge opportunity for South Asia to create at least 1.5 million jobs that are “good for development” – of which half a million would be for women – according to a new World Bank report Stitches to Riches?  But those numbers could be much higher if the region moves quickly to tackle existing impediments and foster growth in apparel, which will also yield dividends for other light manufacturers (like footwear and toys).
 
How South Asia fits in the global apparel market
Currently, China holds by far the largest share of global apparel trade – at 41 percent, up from 25 percent in 2000, with about 10 million workers. But as China continues to develop, it is likely to move up the global value chain into higher-value goods (like electronics, and out of apparel) or switch production among sectors in response to rising wages. A 2013 survey of leading global buyers in the United States and European Union (EU) found that 72 percent of respondents planned to decrease their share of sourcing from China over the next five years (2012-2016).
 
Already, the top four apparel producers in South Asia – Bangladesh, India, Pakistan, and Sri Lanka – have made big investments in world apparel trade, now accounting for 12 percent of global apparel exports (see figure). In terms of apparel export value, Bangladesh leads the pack (at $22.8 billion), followed by India ($12.5 billion), Sri Lanka ($4.4 billion), and Pakistan ($4.2 billion).
 
China dominates global apparel trade
(Country share of global apparel exports)


Source: Stitches to Riches?
 
Why apparel jobs are “good for development”
When we think of jobs that are “good for development,” the main yardstick is whether they will help translate growth into long-lasting poverty reduction and broad-based economic opportunities. Apparel fits the bill for numerous reasons. 

Three Key Ideas for Creating Effective Investment Policies

Roberto Echandi's picture
Attracting, promoting and retaining foreign investment is a complicated matter – especially for a developing economy. Evidence shows a compelling case for foreign direct investment (FDI): foreign investors can create jobs, bring capital and technologies, create knowledge spillovers, help local companies integrate with global value chains, and drive economic growth in general.

Is the (Developing) World Ready for the New Container Weight Regulations?

Perikilis Saragiotis's picture
A major change in the way containers’ weight is measured and certified, is fast approaching. As of July 1, 2016, all shipping containers will be required to verify their gross mass before they can be loaded onto a vessel. Previously, shippers could accept weight estimates, but now shippers are responsible for weighing cargo, prior to loading.

'Making the case for trade': Winning voters’ trust by strengthening social safety nets

Christopher Colford's picture

Policy persuasion is most effective when it draws on the evidence base of all the social-science disciplines. Every strand of the social sciences – not just the mathematical precision of economics, but also the nuanced interpretations of history and the subtle trajectories of sociology – has a great deal to contribute as policymakers balance competing priorities.

That multidisciplinary approach – emphasized in such recent works as The History Manifesto, in which Harvard and Brown University historians call for policymakers’ greater reliance on the combined reasoning of all the social sciences – was thoroughly borne out in the recent Development Economics Series lecture by economist David Autor of MIT (who is a scholar at the National Bureau of Economic Research). Presenting a research paper on trade policy, and underscoring the importance of public opinion in shaping policymakers’ approach to it, Autor’s presentation used the logic of political science to highlight the electoral mood swings that help shape countries’ position on international trade.

Using the perspectives of political science – in the paper, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure” (co-authored with colleagues from the University of Zurich; the University of California, San Diego; and Lund University) – was a valuable way to help remind Autor's economics-focused World Bank Group audience that policymaking does not occur in an academic vacuum. Even though the Bank’s economics-heavy analyses may try to distill policy options into quantifiable formulae, the policymakers whom the Bank advises get their political mandate from their countries’ volatile voters – who do not always follow homo economicus’ coldly rational approach to decision-making.

Amid the topsy-turvy 2016 electoral cycle in many countries – in which voters’ fears about job losses due to international trade have been inflamed amid an upsurge of populism and protectionism – you don’t have to be a public-opinion pollster to affirm Autor's assertion in his analysis of recent U.S. voting patterns: “We detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s.”

Translation: If you’re a pro-trade lawmaker in a district that has a high degree of imports from overseas, in a region that has endured what Autor calls “economic scarring,” then you’re likely to pay a heavy price at the ballot box – and, if you’re defeated, your successor just might be a strident protectionist. The Autor analysis shrewdly underscores the adjective “political” in the anodyne textbook phrase, “political economy.”

Powering up Central and South Asia

Annette Dixon's picture
Can One Country's Electricity Surplus Be Another Country's Gain?

The opening ceremonies in Dushanbe, Tajikistan starting Wednesday for construction works on the CASA-1000 project mark an important milestone. The project could bring a trade in sustainable electricity between Central and South Asia; address energy shortages in Afghanistan and Pakistan; and will provide financing for new investments and improve winter energy supplies for Central Asian countries.

This ambitious project, costing $1.17 billion, is based on a simple idea.

Chart: How Do Asia's Apparel Exporters Compare?

Tariq Khokhar's picture

China remains the world’s largest apparel exporter, but apparel as a share of its total exports has been falling. The "Stitches to Riches" report finds that countries in South Asia have an opportunity to grow their apparel exports, creating much-needed jobs, especially for women.
 

Higher education for the 21st century in action

Joe Qian's picture
The graduating class of the University of Moratuwa’s Department of Textile and Clothing Technology. Photo Credit: Isuru Udara

Imagine a school that teaches knowledge and provides hands-on training. A place where students express confidence in their skills, and are excited to make a difference in their future jobs. A bastion of confidence and optimism, where 100% of graduating students have jobs lined up before graduation.
 
Sounds too good to be true? I found this haven at the University of Moratuwa’s Department of Textile and Clothing Technology, supported by the Higher Education for the 21st Century Project (HETC), which is designed to modernize education by its increasing its quality and relevance. 24-year-old Malaka Perera, who is graduating next month, told me how the program has helped him build a foundation for his career. “The program taught me how to deal with people, along with communications and problem solving skills that I used during my internship. As a result, finding a job was quite easy.”
 
Sri Lankans have enjoyed the benefits of broad education access for decades, which has allowed the country to build human capital to rise and become a middle income country. However, as a country with rising aspirations in an increasingly globalized world and competitive region, the quality and relevance of its education system is key for the country to maintain its edge and reach new heights.


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