Tag: Trade

Photo of a man harvesting his field
Building resilience

The expanding threat to food security in least developed countries

By Brendan Vickers, Head, International Trade Policy Section; Salamat Ali, Economic Adviser & Trade Economist and Neil Balchin, Economic Adviser, Trade Policy Analysis, The Commonwealth Secretariat, London.

The number of severely food insecure people across the world is estimated to have doubled in the first two years of the COVID-19 pandemic to 276 million. This number is expected to reach 323 million in 2022 due to the war in Ukraine. Least developed countries (LDCs) are particularly exposed to this crisis within a crisis: data from the Food and Agriculture Organization indicates more than 251 million people in LDCs are severely food insecure.

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Development Matters
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Building resilience

A new global economic diversification index

By Aathira Prasad, Director, Macroeconomics and Nasser Saidi, President, Nasser Saidi & Associates

“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” 

Lewis Carroll, Alice in Wonderland

The well-known “natural resource curse” comes from the observation that economic growth in nations with an abundance of natural resources tends to be lower and more volatile. A number of empirical regularities characterise these countries: (a) resource-abundant countries tend to underperform their resource-poor counterparts, with evidence of a negative relationship between real GDP growth per capita and resource exports; (b) resource-based economies’ exposure to adverse external shocks leads to macroeconomic instability and higher economic risks; (c) non-resource based activities get crowded out; and (d) institutions tend to be weak and anarchic.   

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Development Matters
Africa, Building resilience

Can the African Continental Free Trade Area drive Africa’s automotive industry?

By Anthony Black, Professor of Economics at the University of Cape Town [1]

With a large and growing middle class, Africa has huge potential as an automotive market. Vehicle ownership rates across the continent are low, at just 45 per 1 000 persons compared with a global rate of 203 per 1 000. Even more striking is the low level of production: the continent accounts for less than 1% of global vehicle output. Outside South Africa and Morocco, production is minimal: most small national  markets are supplied by imports, consisting mainly of used cars shipped primarily from Europe, Japan and the US.

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Development Matters
Building resilience

How aid for trade can best support Least Developed Countries in the next decade

By Ratnakar Adhikari, Executive Director of the Enhanced Integrated Framework Executive Secretariat at the World Trade Organisation and Annette Ssemuwemba, Deputy Executive Director of the Enhanced Integrated Framework Executive Secretariat at the World Trade Organisation

The median recovery time of least developed countries (LDCs) from the economic impact of the COVID-19 pandemic is three years, according to the International Monetary Fund. More worryingly, more than a dozen of them are likely to take at least five years to recover.   

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Development Matters
Building resilience

How emerging markets can leapfrog into the digital age

By Angel Melguizo, Vice President, External & Regulatory Affairs, AT&T VRIO Latin America; Eduardo Salido Cornejo, Public Affairs and Policy Manager Latin America, Telefónica; and J. Welby Leaman, Senior Director, Global Government Affairs, Walmart, Inc1

IPhone, Google, Facebook, Netflix, YouTube, Bitcoin, Twitter, TikTok, LinkedIn, Uber, Rappi: how many of them have you used today? And if so many of the things that impact our day-to-day lives, creating common experiences across the globe, did not exist 25 years ago (see John Erlichman’s tweet), what can an increasingly connected world create over the next 25 years? The next 60?

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Development Matters
Building resilience, Covid-19, Reviving multilateralism

Least Developed Countries have 13 years to meet global trade rules, but still lack critical flexibility at the WTO

By Rachel Thrasher, Researcher, Boston University Global Development Policy Centre

By only granting a 13-year extension in a critical time for economic recovery from COVID-19, Members of the World Trade Organization may be creating more severe challenges for Least Developed Countries and the global economy down the road.

Without much fanfare, on June 29, 2021, the member countries of the World Trade Organization (WTO) quietly agreed to extend the transition period for least-developed countries (LDCs) to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) for another 13 years.

The recently granted extension falls substantially short of what was requested, though it is slightly longer than the previous two nine-year extensions. The news has received relatively little attention in the midst of negotiations for vaccine access and pandemic fears about new vaccine-resistant variants, but to be sure, the failure to acknowledge the need for a longer-term transition period has substantial impacts for LDCs’ development trajectories.

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Development Matters
Asia, Building resilience

Risk, resilience and recalibration in global value chains

By Adnan Seric, Michael Windisch, UNIDO, Holger Görg, Wan-Hsin Liu, Kiel Institute for the World Economy 1

COVID-19 supply chain disruptions provide an unprecedented opportunity to examine the resilience of global value chains. Data on trade flows and manufacturing output over the course of the pandemic suggest that the supply chain disruptions of early 2020 were of a temporary nature, and that extended global value chains currently interlinking many firms and economies seem to be resilient to trade and economic shocks at least to some extent.

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Development Matters
Asia, Building resilience, Development in Transition

Regional Comprehensive Economic Partnership: why should it involve the excluded LDCs?

By Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD)

The world’s largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), was signed in November 2020, counting 15 Asian member countries. Should the excluded countries, more specifically the low income and least developed countries (LDCs) of Asia, be worried about this development?

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Development Matters
Reviving multilateralism, Trade

Reforming industrial subsidies usage through the WTO: process proposals

By Professor Peter Draper, Executive Director and Dr Naoise McDonagh, Lecturer, Institute for International Trade, The University of Adelaide

The distorting effects of state-owned enterprises (SOEs) and industrial subsidies on global market competition has become a topic of increasing importance for many World Trade Organization (WTO) members in recent years. There is growing pressure from key actors for WTO reform. The U.S., EU and Japan have jointly outlined a reform agenda for the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM)1 , focusing on market distorting effects of state capitalism. China has offered a different reform agenda that seeks greater recognition of the role of subsidies in pursuing legitimate social and development goals, as outlined in a recent WTO communication. Subsidy usage is therefore a key development issue.

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Development Matters
Covid-19, Least developed countries, Trade

Lessons from LDCs’ responses to COVID-19: From crisis to opportunities?

By Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide. This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs). 

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June 2020 : Staff members outside the Republican Hospital for Covid-19 Patients in Taiz, Yemen. Photo: Akramalrasny / Shutterstock.

Many least developed countries (LDCs) have not yet seen large numbers of COVID-19 cases – though there are notable exceptions such as Afghanistan, Bangladesh, Nepal and Sudan.

Yet, all LDCs are confronting severe economic disruptions – and a major fiscal squeeze – from the global demand shock, supply chain disruptions and, significantly reduced income from tourism and remittances. Domestic lockdowns to prevent the spread of the virus present unique challenges in countries with high poverty rates in which large sections of the workforce are informally employed.

At the same time, crises can come with opportunities for positive change, and the present crisis might offer this for LDCs, to undertake much-needed reforms that would place them on firmer footing as economic recovery takes hold. A few LDCs have done just that, examples of which are below. Continue reading “Lessons from LDCs’ responses to COVID-19: From crisis to opportunities?”

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