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Asia-Pacific’s economic gains must not undercut social and environmental goals

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While the Asia-Pacific trade outlook for this year is positive, some uncertainties ¬– including the possible impact of structural rebalancing of China from export orientation to domestic consumption – are forecast for 2018, the United Nations commission for the region said Monday.

In its flagship annual report on trade and investment in the region, Channelling Trade and Investment into Sustainable Development, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) underscored the importance of integrated liberalization policies to achieve the Sustainable Development Goals (SDGs).

“The impact analysis of different policy scenarios featured in the report make it clear that SDGs cannot be achieved through protectionist policies,” said ESCAP Executive Secretary Shamshad Akhtar launching the report in Bangkok.

Ms. Akhtar emphasized that an integrated approach to trade and investment liberalization is essential to achieving the SDGs in the region, but that SDG-targeted trade and investment policies and complementary domestic policies need to mitigate social and environmental impacts of trade and investment.

“What we need is targeted trade and investment liberalization policies that are more inclusive and mindful of the social and environmental dimensions of sustainable development,” she stressed.

The report emphasized that cutting trade costs and deepening regional cooperation are key to reaping the benefits across the region, which may result in $100 billion more regional exports annually.

Export growth is forecast at 4.5 per cent for 2017 and foreign direct investment is also expected to rebound this year, building upon fast growth in greenfield investment in 2016 and continued investment liberalization.

The ESCAP study noted that the expected growth of exports by developing Asia-Pacific economies is 4.8 per cent while that of developed countries in the region is 3.3 per cent.

Some ‘grey clouds’ on the horizon

Countries previously affected by the slowdown of global value chains are expected to enjoy significantly better trade prospects this year. At the same time, the rising prices of industrial commodities and fuel will contribute to dynamic growth for commodity exporters.

The study also anticipates more modest export growth in 2018, at 3.5 per cent, while the import volume will increase by less than three per cent. Export and import prices, especially commodity prices, may trend downward, due to the potential slowdown of investment and consumption precipitated by rising uncertainties, causing slower trade value growth in 2018.

At the same time, deepening uncertainties may also affect the extent of investment liberalization, which is found increasing the gross domestic product (GDP) annually by $19.5 billion, while decreasing inequality in the region by 0.02 per cent per year.

Cautioning that there may be some “grey clouds on the horizon,” the report says structural factors that have contributed to weak trade performance since the 2008-2009 global financial crisis persist. For instance, import demand in China, especially for intermediate inputs, will moderate due to the structural rebalancing of China from export orientation to domestic consumption.

Moreover, while many of the fears about renewed trade protectionism from some developed economies may not be realized, rising uncertainties could be a disincentive for long-term investment and trade.

A strong message from the report is that integrated liberalization increases trade and GDP significantly more than any of the other stand-alone policy changes. This integrated approach facilitates the participation of countries in global value chains and significantly increases the competitiveness of regional exports – providing strong evidence of the important synergies that can be achieved by liberalizing and facilitating trade and investment.

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China to Improve Inland Waterway Transport with World Bank Support

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The World Bank’s Board of Executive Directors approved a US$150 million loan today to improve the capacity and reliability of inland waterway transport along the Han River in China’s Hubei Province. The project will increase connectivity between the less developed central and western regions and the more prosperous eastern provinces, and yield local and global environmental benefits by promoting a green mode of transport and producing renewable energy.

As part of the Yangtze River Economic Belt, China is relocating industries in the less developed inland regions of the middle and upper reaches of the Yangtze River. This requires an efficient multimodal transport that can move freight over long distances in a sustainable manner.

“Inland waterway transport is a cost effective and environmentally friendly mode of transport that is underexploited in China. The new project will increase inland waterway transport along the Han River and promote a shift from roads to waterways, which reduces carbon emissions from transport,” said Zhai Xiaoke, World Bank’s Senior Transport Specialist and leader of the project.

The Hubei Inland Waterway Improvement Project will construct the Yakou Navigation-Hydropower Complex in the middle reaches of the Han River. It will upgrade about 53 kilometers of waterway between the Yakou and the Cuijiaying Complex to Class III navigation standards and help enable the completed investments at other cascades to realize their full navigation capacity and economic benefits. The hydropower station will supply renewable energy to Yicheng City, which is located 16 kilometers from Yakou.

The project will also provide gravity flow irrigation to over 5,300 hectares of existing farmland. Other anticipated benefits of the project include the significant reduction of lifting costs, the improvement of flood resilience, and the creation of a better landscape for recreational tourism.

The total investment of the project is US$515.13 million; the IBRD loan will finance US$150 million and the Hubei Provincial Government will invest US$365.13 million. About 5.61 million residents along the Han River are expected to benefit from the economic development and ecological improvement brought about by the greener transport mode.

Starting with the First Inland Waterways Project in 1995, the World Bank has supported seven inland waterway projects in China, with each successive phase introducing important additionality, ranging from technical innovation to integrated development and management of multi-purpose inland waterway transport, as well as improved institutional capacity and environmental aspects.

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EU investment in gas interconnection between Bulgaria and Serbia to enhance energy security in the region

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To boost the diversification of energy sources in the Western Balkan region, reduce dependency on one dominant supplier and increase energy security, a joint commitment to implement the gas interconnector between Bulgaria and Serbia has been signed today 17 May by the Energy Minister of Bulgaria, Ms. Temenuzhka Petkova, and the Energy Minister of Serbia, Mr. Aleksandar Antić, on the occasion of the Western Balkans summit of Leaders in Sofia, Bulgaria. This interconnection will for the first time link the gas systems of Bulgaria and Serbia.

This new political impetus to the project showcases the political will of all parties. Once completed, the interconnector will constitute a major contribution to the solidarity in the Energy Union. The interconnector will allow for the transfer of between 1 and 1.8 billion cubic metres of natural gas annually from Bulgaria to Serbia and 0.15 billion cubic metres from Serbia to Bulgaria. The project forms part of the EU’s Projects of Common Interest and is a priority in the context of the Central and South Eastern Europe Energy Connectivity High Level Group (CESEC).

The European Commission is contributing notably to the Serbian side of the Bulgaria-Serbia Interconnector with a Pre-Accession grant of EUR 49.6 million. The Commission is actively facilitating progress on this priority project in close contact with both the Bulgarian and the Serbian authorities.

The new gas pipeline will provide a new supply route from Bulgaria not only to Serbia, but also to other parts of the South-East European region. This will enable access to liquefied natural gas from Greece, Azeri gas from the Southern Gas Corridor, as well as gas from Black Sea offshore production, and ensure improved integration of these sources into the EU’s internal energy market.

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ASEAN youth promotes “green” entrepreneurship at ASEAN Youth Expo 2018

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ASEAN youth leaders and youth entrepreneurs showcased their efforts and creativity in promoting environment-friendly enterprises at ASEAN Youth Expo 2018 held on 3-4 May at the Grand Sahid Jaya Hotel, Jakarta.

The expo, themed “Proliferating Youth Entrepreneurship: Tacking Environmental Issue by Being Greenpreneurs”, was hosted by the Ministry of Youth and Sports of Indonesia. It was held in conjunction with the Ninth ASEAN Senior Officials Meeting on Youth (SOMY IX) and the Eighth ASEAN Plus Three Senior Officials Meeting on Youth (8th SOMY+3)

The ASEAN Youth Expo is a recurring activity under the ASEAN Work Plan on Youth 2016-2020 led by Indonesia. This year’s event aimed to strengthen collaboration among the youth in ASEAN and the Plus Three Countries in addressing environmental problems through entrepreneurship.

Each country sent four best youth representatives to join the youth-organised and youth-led event which comprised workshop, seminars, discussions, and an exhibit of the products of the youth entrepreneurs. A total of 450 youth leaders and youth entrepreneurs participated in the two-day event.

Nineteen display booths were installed featuring their “green” or environment-friendly products such as biodegradable plastic bags, fresh and processed fruits from organic and integrated farming, and other environmental friendly and recycled products.

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