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East Asia and Pacific

Three Opportunities and Three Risks of the Belt and Road Initiative

Michele Ruta's picture

The Belt and Road Initiative (BRI), first proposed by Chinese President Xi Jinping in 2013, is an ambitious effort to deepen regional cooperation and improve connectivity on a trans-continental scale. While the scope of the initiative is still taking shape, the BRI consists primarily of the Silk Road Economic Belt, linking China to Central and South Asia and onwards to Europe, and the New Maritime Silk Road, linking China to the nations of South East Asia, the Gulf Countries, North Africa, and on to Europe. Six other economic corridors have been identified to link other countries to the Belt and the Road.

What China’s Appetite for Meat means for Mongolia

Miles McKenna's picture
The concept of farm-to-fork can be complicated when it comes to meat. Fresh meat could be from the farm next door—or it could be from 10,000 kilometers away, having just arrived on a flight from the other side of the globe. With advances in cold chain transportation and logistics, distances that once took meat weeks to travel are covered in days, if not hours. And for a handful of low- and middle-income countries, meat exports are big business.  

Streamlining Lao PDR’s trade regulations to help its poorest citizens

Jose Daniel Reyes's picture
Laos customs office


Economic growth and global economic integration go hand-in-hand for Lao PDR.  As a small, land-locked, and commodity-dependent country in a fast-expanding region, Lao PDR’s growth prospects are directly linked to its ability to integrate with the global economy. This is why the government has been prioritizing economic integration with both the Southeast Asia region and the multilateral rules-based trading system. In 2010, Lao PDR became signatory to the ASEAN Trade in Goods Agreement (ATIGA), acceded to the World Trade Organization (WTO) in 2013, and ratified the Trade Facilitation Agreement in 2015.

However, efforts to modernize Lao PDR’s regulatory framework governing trade and the overall investment climate have not been matched with welfare improvements. In a recent study, we provide a comparative overview of the landscape of Non-Tariff Measures (NTMs) affecting imports in Lao PDR, and identify lingering regulatory hurdles that hamper its ability to reap the gains of deeper integration with the global economy. Our findings reveal that while the existing NTM framework is broadly in line with regional practices (figure 1), the current import licensing scheme in Lao PDR and the associated array of fees linked to it raises the time and cost to bring products to market.Ultimately, the system of quantitative controls applied by Lao PDR is equivalent to an ad-valorem tariff of 5.4%, which is well above regional and world averages.

There are three main problems associated with the procedures for obtaining import licenses in Lao PDR:

The role of standards in adding value in global value chains

Anabel Gonzalez's picture

Ando International, a Vietnamese garment firm with 900 workers in Ho Chi Minh City, has improved a lot in labour standards since joining Better Work Vietnam. Source - ILO/Aaron SantosConsumers around the world increasingly demand products and services that are simultaneously good for the economy, for the environment, and for society—the triple bottom line of sustainable growth. This rising demand is creating new pathways for businesses and governments to drive change for global good.
 
Global value chains represent one of the key ways the World Bank Group approaches these new opportunities. By better understanding GVCs, low-income countries can become participants in increasingly fragmented international production processes. GVCs thus offer tremendous potential to better connect the poor to the global economy and its benefits—more and better jobs, higher wages, improved labor conditions, and lower environmental impact.
 
That’s why we have been developing a new approach that brings the best of the Bank Group together to help low income countries connect to and upgrade within GVCs. Helping firms in developing countries meet the standards of global buyers and lead firms is a part of this effort, because in today’s sophisticated and highly mobile economy, meeting global standards is no longer optional—it’s a necessary condition for being competitive.

Waiting on a waiver - what the WTO's new services initiative could mean for LDCs

Marcus Bartley Johns's picture

Workers sort, repack, and ship goods in Al Obaied Crop Market, North Kordofan, Sudan. Source - Salahaldeen Nadir/World BankThe World Trade Organization (WTO) Trade Facilitation Agreement (TFA) has been getting a great deal of attention since it was finalized at the 2013 Bali Ministerial Conference– and rightly so. As we’ve written before on this blog, trade facilitation is a powerful driver of increased competitiveness and trade performance in developing countries.
 
But last month, the spotlight at the WTO was on another important decision from Bali—how to maximize the impact of a waiver to support exports of services from Least Developed Countries (LDCs).

At a meeting on February 5, around 30 WTO Members, covering most major export markets for LDCs, set out in concrete terms what preferences they could provide. The preferences cover a wide range of services and modes of supply, as well as regulatory issues that LDCs have identified in a “collective request” to other WTO Members. 

On the cusp of modernity: the Lao private sector at a crossroads

Amir Fouad's picture

A worker at a construction site in Lao PDR.For older generations of Lao citizens, the streets of Vientiane must be nothing short of unrecognizable. Over the past fifteen years, Lao PDR and its capital have enjoyed strong economic growth on the heels of a natural resources boom and closer regional integration. The result has been an undeniable if only gradual trend toward modernity for a country once completely shielded off from the outside world. With some of the world’s fastest growing economies right in its backyard, Lao PDR has benefited significantly from external demand for tradable goods and services and increased foreign direct investment inflows. Cooperation and coordination with development partners has intensified, leading to progressive efforts to reform and increase openness. What’s more, strong growth in real GDP (averaging over 7 percent throughout the two decades to 2014) has been accompanied by a reduction in poverty from 46 percent of the population in the early nineties to 23 percent in 2013.

Picture Trade: Getting Richer, Trading More

Jose Daniel Reyes's picture
Openness to Merchandise Trade and GDP per Capita (Average 2010-2012)

A well-established correlation in trade economics is the connection between gross domestic product (GDP) and openness to trade: as countries become wealthier, they tend to trade more as a percentage of their gross domestic product (GDP). The correlation is complex and not fully understood. As the authors of the World Bank’s Trade Competitiveness Diagnostic put it: “This relationship runs in both directions: the richer countries become the more they tend to trade; more importantly, countries that are most open to trade grow richer more quickly.”

Better Than Sliced Bread? How Trade Integration Can Boost Food Security

Amir Fouad's picture

Salt-rising bread, sliced. Source - Therese Carle-SandersWe welcome 2015 confronting an all-too-familiar reality: there are still people in the world without access to sufficient and nutritional food. One in eight people go hungry every day, according to the United Nations, including an estimated one in six children under the age of five who is underweight. The situation is especially dire for those living in extreme poverty, whose inadequate access to technology, land, water, and other agricultural inputs routinely imperils their ability to produce or secure food for themselves and their families, especially as world food prices have risen in recent years.

On a scale of one to something-must-be-done-now, tackling this problem and ensuring food security remains among the most pressing development issues of our time. The good news is the first Millennium Development Goal to eradicate world hunger is achievable—and the target to halve it by the end of this year is close to being met. But governments have too often failed to meet their obligation to nurture an enabling environment for food security, and in some cases have actually made it worse.

Trade policy can be a proactive—rather than a reactive—tool in helping to ensure greater food security, a theme expounded in our recent publication entitled Trade Policy and Food Security: Improving Access to Food in Developing Countries in the Wake of High World Prices. Although world food prices have risen in real terms in recent years after three decades of decline, there is no global shortage of food. The problem is one of moving food, often across borders, from areas with a production surplus to those with a deficit, at prices that low-income consumers in developing countries can afford.

New Voices in Investment: How Emerging Market Multinationals Decide Where, Why, and Why Not to Invest

Gonzalo Varela's picture

Emerging market multinationals (EMMs) have become increasingly salient players in global markets. In 2013, one out of every three dollars invested abroad originated from multinationals in emerging economies.

Up until now, we have had a limited understanding of the characteristics, motivations, and strategies of these firms. Why do EMMs decide to invest abroad? In which markets do they concentrate their investments and why? And how do their strategies and needs compare to those of traditional multinationals from developed countries?

In a book we will launch tomorrow at the World Bank, “New Voices in Investment,” we address these questions using a World Bank and UNIDO-funded survey of 713 firms from four emerging economies: Brazil, India, Korea, and South Africa.

At the Heart of the Matter: Improved Market Access to Food Supplies

Bill Gain's picture
Hi-Las workers weighing and sizing mangoes. Source -

At the Ninth WTO Ministerial Conference held in Bali on December 2013, all WTO members reached an agreement on trade facilitation and a compromise on food security issues, a contentious topic which had previously stalled talks during the 2008 Doha Development Round. The “Bali Package,” as it came to be known, was quickly heralded as an important milestone, reaffirming the legitimacy of multilateral trade negotiations while simultaneously recognizing the significant development benefits of reducing the time and costs to trade.

Seven months after the Bali Ministerial Conference, however, the Trade Facilitation Agreement (TFA) has yet to be ratified as India is concerned that insufficient attention has been given to the issue of food subsidies and the stockpiling of grains. India maintains that agreements on the food security issue must be in concert with the TFA.
 
Despite the current impasse in implementing the Bali decisions, the food security concern at the heart of the matter sheds light on the importance of improving the agribusiness supply chains of developing countries to ensure maximum efficiencies. Consider the fact that in 2014, farmers will produce approximately 2.5 billion tons of food. Yet, 1.3 billion tons are lost or wasted each year between farm and fork, while 805 million people suffer from chronic hunger.

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