Falling oil prices means trouble for oil exporters. Find out who they are in this data exploration by our colleague on the Open Data team, Siddhesh Kaushik: "Which countries could be affected by plunging oil prices: a data perspective."
World Trade Organization Director-General Roberto Azevêdo opened the November 27 WTO General Council meeting with a bit of tongue-in-cheek humor: “It seems we liked Bali so much we wanted to do it all over again!” he said.
It was an important moment–WTO Members had decided to move forward with implementing the landmark Trade Facilitation Agreement (TFA) and other elements of the deal agreed at the December 2013 Ministerial Conference in Bali. Although it might have felt like a trip back in time for Azevêdo and others, the good news is that WTO Members, with the support of the World Bank Group and other partners, have now made significant progress toward implementing the TFA.
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.”
Coming from a landlocked country myself (Kazakhstan), I was fascinated to participate in the 2nd UN Conference on landlocked developing countries (LLDCs) held in Austria this past November. Representatives of 32 LLDCS and many other neighboring transit countries gathered to review progress of the Almaty Program of Action (APoA) over the last decade, and to discuss further ways to help countries overcome the downsides of being landlocked.
LLDCs, by definition, lack direct access to the sea and are therefore marginalized from major transportation and services networks. This means that any product these countries try to import or export relies on transit through another country. LLDCs experience much higher costs of trade than their transit neighbours, reducing their ability to trade. LLDCs constitute a mere 1 percent share of world trade, while the transit coastal countries account for roughly 24 percent. The majority of citizens in LLDCs falls into a category that has been coined the “bottom billion” in terms of average real GDP per capita.
Air transport is an increasingly critical area for trade and trade facilitation. As such, our World Bank trade teams are always searching for global good practice and promising policy results.
This search recently brought us to Armenia, where an “Open Skies” policy has been in place since late 2013. For a country with a long legacy of tight regulations in its commercial aviation market, this new policy signaled a sharp break from tradition.
Although there are no single accepted definitions of Open Skies, it refers to a set of provisions typically agreed on a bilateral basis, that enable each party to set freely the number of flights, carriers, types of aircraft and destinations; but also pricing freedom, as well as establishing the conditions for fair competition and provisions for carriers to engage in commercial cooperation.
Armenia’ Open Skies policy is particularity important when considering the country’s historically limited connectivity with international markets – partly determined by geography, and partly determined by geopolitical considerations. Besides being landlocked, the country has open land borders with only two of its four neighboring countries.
We 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.
I recently returned from a trip to West Africa during which I crossed the Benin-Nigeria border by car at the Seme border post. While waiting for our passports to go through lengthy controls and stamping, I observed the intense activity of the numerous cars, motorbikes and pedestrians passing through.
Sure enough, most of the women were on foot, and they were the ones who were submitted to the most intense scrutiny. While the men on motorbikes were able to ram their way through by refusing to slow down, the women all had to go through a narrow passage where they were subject to questioning and document requirements. It was quite apparent that women were being asked for bribes that men were able to waive by driving right though! I had been reading about how women are subject to more intense harassment at border crossings – this experience brought this to life very vividly.
It made me thankful for all the work we at the World Bank Group are doing to help women traders on the African continent.
Turkey’s bid to join the European Union (EU) may finally be getting “back on track,” according to the bloc’s top official for enlargement. And while that track may still have a number of hurdles to clear, recent research, carried out by the World Bank Group outlines several interim policy measures that could bring the sides closer together while also benefitting the Turkish economy.
Most goods already move freely between the two economies, under the EU-Turkey Customs Union established in 1995. But agriculture, as is often the case, has proved a sticking point and remains outside the Customs Union today.
A set of permanent institutions, established under the 1963 Ankara Agreement, have chipped away at agricultural trade restrictions. These have steadily provided technical support and helped to facilitate quick action when political opportunities have arisen. And today there is still opportunity to take action on agriculture—with or without becoming an EU Member State.
Africa’s imports of staple foods could more than triple in the next 15 years. Without an increase in crop yields and an improvement in the trade of surplus food from areas with good growing conditions to deficit zones, importing sufficient amounts of staple food could cost the continent upwards of US$150 billion per year by 2030.
Fortunately, it doesn’t have to be this way. As the World Bank showed in its 2012 report, Africa Can Help Feed Africa, the continent could easily deliver improved food security to its citizens through increased regional trade.
Often the nearest source of inputs or best outlet for farm products is a across a border, yet high costs and unpredictable rules make trade difficult and discourage investments by small farmers in raising productivity and large investments by private companies in input supply and food marketing.
Facilitating regional trade is therefore more important than ever for reducing poverty and meeting Africa’s growing demand for staple foods.
Greater attention is now being devoted to trade facilitation measures. The 159 members of the WTO agreed during their December 2013 meeting in Bali on a Trade Facilitation Agreement. And the European Commission, the World Bank, and other donors have just launched the implementation of the Trade Facilitation Support Program (TFSP).
The TFSP is to help developing countries reform and modernize their border procedures. Such initiative is important as time delays at customs affect trade. Each additional day that a product is delayed prior to being shipped reduces trade by more than 1%. Put differently, each day is equivalent to a country distancing itself from its trade partners by about 70 km on average.