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South Asia

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.

Power Pools: How Cross-Border Trade in Electricity Can Help Meet Development Goals

Michael Pollitt's picture

Power lines strecth over water. Source - DCCXLIXFor nearly three-fifths of the world population, the lack of access to energy is a major challenge to economic development and poverty reduction.

Increasing cross-border trade in electricity can play a major role in helping overcome these challenges. Trade in electricity can help bring down energy prices, mitigate against power shocks, relieve shortages, facilitate decarbonization and provide incentives for market extension and integration.

Yet, countries have been reluctant to trade electricity across borders. Global exports of electricity are currently around 3 percent of total production. This is an anomaly in the energy sector. Think of oil. Roughly 64 percent of all oil produced is traded between countries.

A recent working paper published by the World Bank looks at the institutional arrangements of regional power pools in both developing regions and those in developed countries. In understanding how the regional integration of electricity markets has developed, the paper is able to draw useful lessons for the promotion of future trade arrangements.
 

What Will the Trade Facilitation Agreement Mean for the Aid for Trade Agenda? New e-Book Provides Answers

Jaime de Melo's picture

The world’s 45 Least Developed Countries that are not oil producers (non-oil LDCs) are exporting less and less in the global market place. Between 1985 and 2012, the world market share of non-oil LDCs’ exports of goods and services fell from 1.2 percent to 0.8 percent—all while their share in world population rose from 7.5 percent to 9.9 percent.

The 2005 Aid for Trade (AFT) initiative was designed to arrest this decline. Yet, LDCs’ trade costs continue to fall less rapidly than those of their competitors.

Clearly, it’s time to re-evaluate the AFT initiative.

A new e-book does just that, and, contrary to what some may think, concludes that the initiative has been beneficial. But due to a collective failure to clearly articulate its results, the achievements of the AFT initiative are now at risk as development budgets come under increasing pressure.

Bhutan: Connectivity in the Cloud(s)

Charles Kunaka's picture

Bhutan has some of the most thrilling rides in the world—in the air and on the ground.
 
Flying into Paro Airport, the only international airport in Bhutan, is an experience like none other—its narrow runway tucked between rugged 18,000-foot peaks, high in the Himalayas. Below, the road between Thimphu, the capital, and the border city of Phuentsholing twists and turns as it navigates some of the world’s highest mountain passes, often blanketed in fog with visibility reduced to mere meters. On clear days, both offer some of the most stunning, breathtaking views you will ever see.
 
But stunning peaks do not make for easy trade routes, and this is a problem in Bhutan. That’s why the World Bank’s International Trade Unit teamed up with the South Asia Transport Unit to conduct a diagnostic of impediments to transport and trade facilitation in Bhutan.  The diagnostic, a prelude to a potential investment operation, was based on the recently released Trade and Transport Corridor Management Toolkit.
 

Eliminating Customs of Corruption: New Approaches in Cameroon & Afghanistan

Gerard McLinden's picture

Corruption continues to plague customs administrations around the world regardless of their level of development and despite intense public attention.

Recent high profile cases in many first world countries reinforce what we always knew—that no country is immune, and that there are no quick fix solutions available. The very nature of customs work makes it vulnerable to many forms of corruption, from the payment of informal facilitation fees to large scale fraud and other serious criminal activities.

But this blanket generalization belies some genuine progress in countries where reforms are making a measurable impact on operational effectiveness and integrity. 
 

Notes From the Field: India, South Asia Buying into Integration

Kaori Niina's picture

Train station in Mumbai, India. Source - World BankEditor's Note: "Notes from the Field" is an occasional feature where we let World Bank professionals conducting interesting trade-related projects around the globe explain some of the challenges and triumphs of their day-to-day work. The views expressed here are personal and should not be attributed to the World Bank. All interviews have been edited for clarity.

The interview below is with Ashish Narain, a Senior Economist at the World Bank Group’s Investment Climate Department. He is based in India from where he manages the World Bank Group’s South Asia Regional Trade and Investment Project. He spoke with us about his project, his personal connection with the region, and the evolution of regional trade facilitation in South Asia.

A Fragile Country Tale: Restrictions, Trade Deficits, and Aid Dependence

Massimiliano Calì's picture

 Masaru Goto, World BankPart of the World Bank’s new vision is to step up its efforts to help fragile and conflict-afflicted states break the vicious cycle of poverty. But this is no easy task.
 
The destruction of productive assets and the restrictions on the capacity to produce are among the most severe economic impacts of conflicts and fragility. These effects explain why countries in conflict or emerging out of conflict typically have very large trade deficits. The productive sector is often particularly weak by international standards, so exports are low and domestic consumption has to rely on imports. Indeed, five of the ten countries with the largest trade deficit in the world (Timor-Leste, Liberia, the Palestinian territories, Kosovo and Haiti) are considered fragile by the World Bank and other regional development banks (figure 1).
 

Using Video to Promote Successful Trade Facilitation in Laos

Miles McKenna's picture

The World Bank has been working with the government of Lao PDR to better integrate the country into the regional and global economy since 2006. As the only landlocked country in Southeast Asia, Lao PDR faces a number of barriers to trade. Since beginning to implement reforms in 2008, the country has seen marked improvements in a number of key areas -- culminating in Lao PDR's formal ascension to the WTO last year. The Trade Post spoke with Richard Record, a senior economist based in the Lao PDR country office, about the video. Here's what he had to say...  
 

Travel Channel Meets Discovery Channel: How Tourism Can Promote Export Performance and Diversification

Gonzalo Varela's picture

Folded pashminas on display in China. Source - Ashley Wang. We all enjoy a nice vacation. Today, tourism has become a major driver of economic growth around the world. But measuring its impact, either directly or indirectly, is an evolving exercise.  

Our new research unveils a strong association between tourism inflows from a particular country and increases in exports of traditional or “exotic” goods to that same country the following year. In other words, tourism not only helps local vendors sell goods to people on vacation, but also works as a springboard for promoting traditional products abroad once that vacation is little more than a memory.
 

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