Growing trade and investment linkages in Asia and the Pacific help improve the region’s economic resilience to uncertainties in the global economic and trade policy environment, according to a new Asian Development Bank (ADB) report.
In a study released today, the Asian Economic Integration Report 2017 (AEIR), ADB examines recent regional integration trends and introduces a new regional integration index. The report also includes a special chapter on how Asia can strengthen financial resilience in an era of financial interconnectedness.
Strong intraregional trade and investment are acting as a buffer for the region against uncertainties in global trade and economic growth, according to the report. In 2016, Asia’s intraregional trade share―measured by value―rose to 57.3% in 2016, a record high, up from an average of 55.9% from 2010 to 2015.
Foreign direct investment (FDI) within Asia rose in absolute value to reach $272 billion in 2016, despite a 6% decline in global FDI flows into the region. This intraregional FDI increased as a share of total FDI to the region from 48% in 2015 to 55% in 2016. Given the role intra-Asian FDI plays in enhancing global and regional value chain development, this is expected to help strengthen the region’s trade growth globally.
Asian economies have continued expanding their global presence, with FDI originating from Asia rising 11% in 2016 to $482 billion, primarily through investment in renewable energy, natural resources, semiconductors, and information technology.
“Asia and the Pacific is leading a recovery in world trade that is helping the region to maintain strong growth momentum amid global economic and trade policy uncertainty,” said Yasuyuki Sawada, ADB’s Chief Economist. “Asia’s continued integration and cooperation will underpin regional economic growth and financial resilience.”
The 2017 AEIR introduces a new composite index, the Asia-Pacific Regional Cooperation and Integration Index. The index measures regional integration across six components, including trade and investment, money and finance, regional value chains, infrastructure and connectivity, movement of people, and institutional and social integration. The index is aimed at helping policymakers better understand and measure the levers for greater regional integration and cooperation.
The report also features a special chapter on how Asia can strengthen financial resilience in an era of financial interconnectedness. It highlights that 20 years after the Asian financial crisis, Asia stands strong, with healthier financial systems, stronger regulations, and better regional financial cooperation mechanisms.
Significant challenges remain, however, with unresolved financial market and system weaknesses. Remaining regulatory policy gaps could also increase the region’s risk exposure and financial vulnerability through excessive leverage and risk-taking.
The report offers several recommendations for countries in the region to strengthen their resilience to future crises, including maintaining sound macroeconomic fundamentals; further strengthening national regulatory and supervisory frameworks and institutional capacities; further developing local currency bond markets; strengthening regional regulatory cooperation, including resolution mechanisms for interconnected regional banks; and reviewing and strengthening existing financial safety nets against potential contagion and spillover effects.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.
Smart city matchmaking in Barcelona
This year’s Smart City Expo World Congress (SCEWC), Europe’s biggest Smart City related event, takes place from 13 to 15 November in Barcelona and will, like previous editions, attract several thousand stakeholders.
During the congress, on November 14, the Smart Cities Innovation Partnership on Smart Cities (EIP-SCC) will organise its next matchmaking event, seeking to bring projects and investors together to stimulate action. It is especially tailored to match individual projects with financing.
To take part, stakeholders must register on the matchmaking platform where they will join other cities, industry and financial players. Registered users need to submit short descriptions of their upcoming projects. A dedicated team will then process and match them with financiers’ interests, leading to one-to-one meetings, organised specifically and individually for them and their projects.
Should participation in above-mentioned event not be possible, the matchmaking platform will remain available also after the Barcelona congress, as the EIP-SCC will organise further matchmaking events in the future.
In addition, there will be an exhibition stand, where interested stakeholders can meet any of the 12 Horizon 2020 Lighthouse projects (representing € 270 million of EU funding), experts from the EIP-SCC, the Smart Cities Information System, as well as the European Commission.
Finally, there will be a number of sessions organised at the mentioned exhibition stand as part of the SCEWC programme covering a wide range of Smart City related topics. The full programme is available at http://www.smartcityexpo.com/en/agenda-2018.
UN sounds alarm as Venezuelan refugees and migrants passes three million mark
The number of refugees and migrants who have left Venezuela worldwide has now reached three million, the two main United Nations agencies advocating for them announced on Thursday, flagging the need to increase support for the countries which are hosting large numbers of displaced Venezuelans.
According to the UN office for humanitarian coordination (OCHA), most of the 3 million are currently hosted by countries in Latin America and the Caribbean, accounting for about 2.4 million refugees and migrants from Venezuela. Colombia has the highest number with over one million, followed by Peru with half a million, Ecuador with some 220,000, and Argentina with 130,000.
In addition to South American countries, countries in Central America and the Caribbean also recorded increasing arrivals of refugees and migrants from Venezuela. Panama, for example, is now hosting 94,000 Venezuelans.
Commending these countries’ “open-door policy,” Eduardo Stein, who heads the joint effort on behalf of refugee agency UNHCR and migration agency IOM for Venezuelan refugees and migrants, noted however that “their reception capacity is severely strained,” and is “requiring a more robust and immediate response from the international community if this generosity and solidarity are to continue.”
UNHCR Special Envoy Angelina Jolie, noted during a recent visit to Peru, that every Venezuelan she had met described the situation in their country as “desperate,” adding that she heard “stories of people dying because of a lack of medical care and medicine… and tragic accounts of violence and persecution”.
With these rising numbers of families fleeing Venezuela, their basic needs have increased, along with the communities hosting them.
Governments in the region are leading the humanitarian response and working to coordinate efforts based on the Quito Declaration for example, adopted in September and which has been an important step towards a regional approach to scale up the response and harmonize policies.
To support this response, the UN and its partners have appealed for US$220 million to address the needs of 406,000 people across Colombia, Ecuador, Peru and Brazil. The UN Central Emergency Response Fund (CERF) allocated $17.2 million earlier this year.
In addition, a humanitarian regional response plan is underway to be launched in December, with a focus on four areas: direct emergency assistance, protection, socio-economic and cultural integration and capacity-building for governments of receiving countries.
The governments from the region are scheduled to meet again in Quito on 22 and 23 November to continue moving the regional process further.
Globalization Cannot Be Stopped – but It Can and Should Be Better
Global GDP has doubled since 1990, but further global integration, while inevitable, must be accompanied by structural reforms that enable greater international cooperation as well as policies that support more inclusive, sustainable societies. This was the finding from the opening plenary of the Annual Meeting of the Global Future Councils which began today in Dubai, United Arab Emirates.
The purpose of the Annual Meeting of the Global Future Councils is to convene the world’s best network of experts to identify new ideas and models that can be applied to critical global challenges. In his opening remarks, Børge Brende, President of the World Economic Forum, told participants: “Globalization cannot be stopped, but it can be improved. It should be more inclusive, sustainable and job creating. We need to stop seeing trade as a weapon but instead see it as a strong, positive force for inclusive, poverty-eradicating growth.”
“Globalization’s future is no longer about physical trade. It is about knowledge, information and technology. Digital trade already accounts for 12% of international trade, and data flows are predicted to increase another fivefold by 2022. The result will inevitably be not less globalization but more, different, globalization,” he continued.
His Excellency Mohammad Abdullah Al Gergawi, Minister of Cabinet Affairs and the Future of the United Arab Emirates, in his opening address told participants: “The future belongs to those who can imagine it, shape it and implement it. In today’s world, governments cannot create the future singularly; it is important to involve everyone from the private sector to youth, international partners and others in creating policies.”
On the power of the emerging technologies of the Fourth Industrial Revolution to bring about a more inclusive and sustainable future, Al Gergawi said: “The collective mind provided by technology is much smarter than the individual mind. The wisdom of the crowd is a common saying; however, this saying is multiplied a thousand times when talking about and using technology.”
In a special televised session to mark the beginning of the meeting, Miroslav Lajcak, Minister of Foreign and European Affairs of Slovakia, told participants that any global architecture in the age of the Fourth Industrial Revolution needed to be shaped by greater cooperation between nations. “In my 30 years as a diplomat I see less and less dialogue. Even when leaders speak these days there are more monologues and less willingness to accept that they do not own the truth. What is needed is a platform where leaders can discuss openly and honestly where our planet is heading.”
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