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Trade and Gender in South Asia

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Trade has the potential to significantly enhance women’s lives by providing new employment, boosting consumer choice, and strengthening women’s negotiating power in society. However, women’s connection with trade is complicated since it can lead to employment losses and a concentration of labour in lower-skilled occupations. To guarantee that trade improves possibilities for all individuals, irrespective of gender, authorities must examine the possible effects of trade laws on different categories of people and establish evidence-based policy responses.

Women’s economic participation can be increased by trade, reduce inequality, and enhance women’s access to skills and education. Women’s incomes rise as a result of trade, as does economic justice: Women’s share of overall manufacturing incomes might rise from 24 percent to 30 percent in developing nations that double their manufacturing exports—a standard gain for developing nations that open up to trade.

Trade policy is accidentally prejudiced against women, leading to fewer jobs and higher consumer products costs. Even though no government explicitly enforces gender-based tariffs, latent prejudices can equate to “pink tariffs,” putting women as both producers and consumers at an economic disadvantage . Women spend a bigger proportion of their income on commodities with high tariffs, such as food, than males. Import taxes might aid women earn 2.5 percent more than males in actual terms. Targeted measures can assist women in reaping the full benefits of trade. These include reducing trade restrictions that prevent women from entering foreign markets and increasing women’s access to higher education, banking sectors, and digital technology.

The international flow of commodities, services, investment, innovation, and communication has reshaped markets and modified the financial environment for individuals, families, businesses, and governments during the last three decades. During this period, cross-border commerce expanded in all areas, but it was especially expedited in South Asia, where goods trade climbed from 16% to 41% of GDP from 1993 to 2008.

Gender considerations in commerce are significant for both intrinsic and instrumental reasons. Governments have pledged to uphold and support globally agreed-upon principles of equal rights for men and women. The 5th SDG goal is committed to giving equal opportunities for women which includes women’s equal access to economic possibilities. Furthermore, gender equality and economic empowerment for women boosts a country’s economic development, export competence, and trade prospects. Wage equality for men and women in labor markets might contribute up to US$28 trillion, or 26%, to global yearly GDP by 2025. Furthermore, increasing economic engagement by women contributes to the achievement of other development goals such as reducing poverty, food and nutrition security, enhanced educational and health outcomes for children, and higher social standing for women.

South Asia is now the world’s least economically interconnected area, with intra-regional commerce accounting for only 5% of overall trade in the region when compared with Sub-Saharan African 22%  trade and 50 % East Asia.

However, boosting intra-regional commerce necessitates giving women and men equal access to the benefits of improved collaboration and partnerships. This is crucial since women’s engagement in trade occupations may help raise many families out of poverty, achieve food security, and enhancing overall human development. Gender-neutral trade barriers, like inadequate facilities and burdensome regulatory and paperwork procedures, disproportionately affect female merchants and female-owned businesses.  This is due to women having more time limitations as a result of their unequal accountability for home and care activities.

 South Asian nations are unable to enjoy the economic benefits of geographical closeness, intra-region commerce, and complementing resource endowments due to a long history of mutual distrust. The lack of intra-regional commerce can also be explained by insufficient transportation connection between nations, as well as legal and logistical hurdles. Trade between the countries of South Asia and the rest of the world is more economical than trade from within South Asia. South Asia still lacks the required infrastructure for trade.

South Asia has been slow to embrace the idea of regional integration due to past political disputes and mutual distrust. Sri Lanka pioneered trade liberalization in 1977, and other nations in the area quickly followed suit. However, trade liberalisation in the area occurred mostly as a result of independent liberalisation by individual governments, and was inconsistent and reluctant across countries.

The challenges and gradual pace of regional integration can be explained in part by

discrepancies noted in South Asian nations.  The BBIN subregion, which includes Bangladesh, Bhutan, India, and Nepal, is the most active of them. The BBIN initiative will not only facilitate the flow of goods across borders, but will also facilitate the movement of workers across borders, resulting in better people-to-people contact, which will have significant implications for regional integration, business travel, and trade in services. It may also give numerous advantages to the area as a result of the potential development of regional value chains in South Asia. Despite its strong growth performance, this sub-region falls behind in reducing poverty and gender balance, notably in women’s economic opportunities and empowerment. As regional integration gets traction among policymakers in the four BBIN nations, it provides an excellent chance to support inclusive trade policies and guarantee that women and men have equal access to and benefit from intra-regional trade expansion.

The formation of the South Asian Association for Regional Cooperation in 1985 was the initial step toward regional cooperation and integration (SAARC). Another ten years passed before a preferential tariff deal, the South Asian Preferential Trade Area, was reached (SAPTA). The South Asian Free Trade Agreement (SAFTA) was signed eleven years later, and the Trade Liberalization Programme began in 2006. More progress was achieved in 2011 with the establishment of the South Asian Regional Standards Organisation (SARSO) to improve coordination and collaboration among SAARC Member States. SAARC members decided in 2014 to form a South Asia Economic Union (SAEU) similar to the European Union (EU), promoting a shared market and abolishing trade obstacles. In terms of trade relations with neighboring areas (South East Asian nations), only big countries such as India , and to a lesser extent Pakistan, play significant roles in South Asian integration, and each country makes deals with regards to trade agreements separately.

The expansion of global value chains (GVCs) in many developing nations has expanded the number of opportunities accessible for women in labor-intensive industries such as textiles and clothing. On the one hand, the rise of these businesses may benefit women by bringing them into the formal labor force and away from areas such as subsistence agriculture. Women in South Asia, like women in many developing nations, are less integrated in value chains than males. Their lack of mobility, and hence access to markets, as well as societal conventions, limit their contact with value chain actors. Women who work in value chains, for example, are frequently excluded from contacts with customers and suppliers.

Women have restricted access to chain services such as public finance, credits, or trainings due to cultural norms, and gender disparities in education result in lesser skilled roles in value chains for women. Specific policies are put in place to help women. The gendered perspective has now become an intrinsic feature of all new policies, since difficulties became obvious in the literature and the negatives were widely recognized. These policies include:

South Asia Regional Development Program Aid Investment Plan: 2015-16 to 2018-19 (DFAT, 2015): This program was funded by the Australian government and focused on two interconnected goals to address regional barriers to sustainable economic growth. It is significantly linked with the broader objectives of the Australian aid program, which include infrastructure, trade facilitation, agriculture, and water. Gender equality is claimed to be a priority in all regional project initiatives. The World Bank-implemented Infrastructure for Growth (IFG) initiative and the South Asia Regional Trade Facilitation Program will work together to achieve this goal (SARTFP). SARTFP aims to strengthen border commerce and connectivity in South Asia’s eastern subregion, with a special focus on increasing women’s engagement in trade and economic activities.

Pakistan trade initiative funded by Deloitte and carried out in collaboration with USAID and the Pakistan Ministry of Commerce: Deloitte is assisting with trade-related policy with technical expertise. One of the goals of this project is to help women in business.

South Asian governments should also take special steps to enhance the trade benefits to women. One strategy is to enhance existing export sectors that are dominated by women. For instance, the textile and garment industry has yet to realize its full potential. Governments in the region can safeguard the garment sector’s competitiveness by identifying bottlenecks and areas for development.

Aside from export-oriented industries, investments in agriculture can greatly raise demand for female employees and businesses. This means facilitating export sectors where women are already active (such as the ginger and cardamom sectors in Nepal) as well as agricultural expansion, specifically investing in high-value specific export products such as organic crops, traditional medicines, horticulture, and floriculture, and facilitating direct participation of women into these sectors. Women have historically dominated food production in Bhutan, therefore the expansion of the agro-processing business is expected to benefit women greatly. Investments in communications, information technology, tourism, and travel may considerably boost prospects for female employees and entrepreneurs in the services industry. The corporate sector can play an important role in these initiatives.

Improving female producers’ and entrepreneurs’ access to financing is one of the most significant areas for encouraging women’s participation in trade-related activity. This agenda should involve both financial firms and the private industry. Similarly, improving women’s access to production inputs and ICTs is critical for growing female involvement in export industries. Border infrastructure should be favourable to cross-border trading by women. Good lighting, hygienic amenities, along with nursing, education, and health services at or near crossing points help female traders and make it easier to recruit women at border posts. Furthermore, trade facilitation programs that expedite and unify trade processes, develop single window systems, and allow electronic submission of import/export documents assist in leveling the playing field for women. Nepal’s Automated System for Customs Data (ASYCUDA) World and India’s Customs Electronic Commerce Interchange Gateway portal are such examples.

Economy

Friend-shoring: India’s rising attractiveness for an emerging partnership

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There are numerous forces currently affecting investment flows in the global climate for foreign investment. Investor concern has been caused by the many geopolitical issues, which had repercussions even as countries were recovering from the pandemic. Businesses are being forced to re-evaluate the global business environment and potential fault lines as a result of these disruptions. India has constantly improved the business environment (EoDB). It may now advance by utilising the advantages to strengthen its place in the global economy and fulfil the ambitions of its sizable, primarily young population. The country’s business and investment climate has significantly improved as a result of the fast and steady pace at which reforms have been implemented.

Apart from the fact that India is one of the largest economies in the world with the quickest rate of growth, the government’s emphasis on infrastructure and manufacturing, strong consumption patterns, digitization, and a burgeoning services sector all contribute to this optimism. The persistent efforts of the Indian government to lower regulatory hurdles are also fuelling MNCs’ favourable opinion of India. However, India’s expanding domestic consumer base and digital economy are the greater draws. After the US and China, the estimated actual growth in consumption is the third-highest. Given that all of these markets are sizable but relatively saturated and growing at a slower rate, India presents a particularly good opportunity for MNCs seeking growth opportunities in the ensuing ten years.This has acquired more traction in the US context as it has become clear that the nation cannot overcome all production issues on its own and that cooperation with friendly or ally nations is essential for all-around development. The term “friend-shoring,” a hybrid of the terms “onshoring” and “near shoring,” refers to forming business alliances with people who have similar principles and interests.

In a world driven extensively by globalisation, it is inevitable to not just make ally’s or create partnerships that are not only strategic and synergistic, but also facilitate a purpose driven iterative connection between two nations. A strategy used by the US to persuade companies to relocate their sourcing and manufacturing operations to friendly shores—often back to the same shores in the case of the US—is known as friend-shoring or ally-shoring. And the goal is to protect their supply networks against countries with less compatible policies, like China. But is it the best course of action? Global supply chains have changed production by enabling businesses to produce things wherever it is most affordable, thanks to decreased tariffs, lower transportation, and communication costs. This typically means that low-end production shifts to emerging markets and developing countries, while high-value-added inputs (such as research and development, design, advertising, and finance) are provided from established economies.

A commitment to cooperate with nations that “have a strong adherence to a set of norms and values about how to function in the global economy and about how to govern the global economic system” was described as “friend-shoring” in Secretary Yellen’s statements of April 13, 2022. But is it the best course of action? Any type of protectionism will worsen the already shaky global supply chain after the years-long Covid-19 shutdown has had an impact on the world economy. Despite its political unrest, China has been devoting its resources to manufacturing since the 1990s, and many businesses have already established manufacturing operations there since their suppliers are all nearby.

Even though Vietnam, India, and Thailand are also known for their low-cost manufacturing, moving the manufacturing sites could be expensive and risky for businesses because they would need to reorganise their entire supply chain for all materials required. In addition, other Asian countries might not have the full infrastructure needed to support manufacturing in some sectors. The world of today is at its best because of international cooperation. Each country’s disadvantage is made up for by having it use its greatest asset to boost global economic growth. Although there are many differences and even disagreements between nations and we are still far from full globalisation, offshoring does not seem like a good answer for a better future for the global supply.

USA is believed to pursue the “friend-shoring” strategy of deepening economic integration with dependable trading partners like India to diversify away from nations that pose geopolitical and security risks to supply chains. This is in response to an “extremely challenging” global economic outlook and geopolitical instability. She claimed that some economies’ debt loads were becoming unmanageable due to the Russia-Ukraine war-related spike in food and energy costs, and that steps to reduce these debt loads would need to be explored. Countries that already have well-established production and business service networks are those that are seen as friendly partners in the US context. India is attempting to draw MNCs that are moving their subsidiary supply chain networks and activities in this wave of supply chain restructuring and diversification of their specialised ecosystems.

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Economy

Pakistan’s elite and the current economic crisis

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Former Pakistan Finance Minister Miftah Ismail in a media interview made some very interesting points. While Ismail lashed out at his successor and current Finance Minister Ishaq Dar saying that the latter’s Anti International Monetary Fund (IMF) approach was one of the key reasons behind the current economic crisis in Pakistan. He also underscored some other points.

 First, he said that if countries like Bangladesh and India have left Pakistan behind, there are some serious deficiencies in Pakistan’s governance model.

Second, Ismail stated that different forms of government – democracy, parliamentary democracy, dictatorship – have been tried out, but the country is invariably ruled by a small elite, and this is amongst the key reasons for the numerous challenges the country is facing today.

In recent years, has been increasing criticism of Pakistan’s foreign policy and its excessive economic dependence upon other countries for its economic survival.  While earlier strategic commentators and analysts questioned the skewed nature of Pakistan’s ties with the US, in recent years several strategic commentators have begun to question the excessive dependence upon Islamabad and the terms and conditions of China Pakistan Economic Corridor (CPEC), and the lack of transparency of the project.

If one were to look at the current economic crisis which has engulfed Pakistan, there have been a series of opinion pieces critical of domestic policies, the country’s dependence upon external sources for aid not just the US, but also Gulf Countries and China and how the IMF rescue program would impact certain sections of the population more than others.

Maleeha Lodhi, a former Pakistani diplomat, and a prominent writer and commentator, in a hard hitting article titled Elite Politicsfor Dawn (December 5, 2022)argues:

‘The availability of external resources as a result of Pakistan’s foreign policy alignments during the Cold War and beyond created a habit of dependence on ‘outside help’. This habit urged successive governments — representing rural and urban elites — to avoid economic reform, mobilise adequate revenue or tax its network of influential supporters’. 

Touqir Hussain in an article An underwhelming foreign policy written for The News (November 23, 2022) highlights how Pakistan’s dependency upon China could harm the bilateral relationship. Says Hussain:

‘Because of the dependency syndrome, even the China connection has become ever more important for Pakistan, and not for all the right reasons. It is fomenting a popular view that with China at its back Pakistan does not need to care about other relationships, inciting anti-Americanism which has become in the public mind a badge of ‘independent’ foreign policy’.

S Akbar Zaidi in an article IMF as Saviour for the Dawn (January 26, 2023) makes an interesting point about how the unequal impact of the IMF program and how the elite would not just be able to deal with it but also benefit in the long run. Says Zaidi:

‘A fistful of dollars coming in, prices being upwardly adjusted, an exchange rate which is supposedly ‘market-driven’, will offer false hope to our elite while it grumbles about the tough measures of the IMF’. 

There has also been a suggestion to rethink Pakistan’s approach towards India and focus more on geo-economics. Shahzad Chaudhry, a prominent strategic commentator, in an opinion piece published in Express Tribune praised India’s foreign policy for managing to balance ties between the US and Russia, in the aftermath of the Ukraine crisis. While praising India for having been able to strike a balance he dubbed this as diplomatic coup. Chaudhry also said that Pakistan should rethink its foreign policy vis-à-vis India and focus on ‘geo-economics’.

Pakistan PM, Shehbaz Sharif in an interview to Al Arabiya TV (a Dubai based channel) had himself stated that Pakistan could not afford another war with India and had also alluded to his willingness to resume talks (The Pakistan PMO however said that Pakistan would only resume talks with India if the latter reversed the decision to revoke Article 370 in Jammu and Kashmir).

In conclusion, while Pakistan clearly has its task cut out if it is able to realize the pitfalls of excessive dependence upon external countries will it be able to put its economy firmly back on track. It is also important for Pakistan to strengthen economic ties with neighbours in South Asia rather than looking at the outside world. For this it will require Pakistani leaders to think out of the box.

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Guangdong special economic zones at China

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Guangdong Province in southern China is distinguished by the economic development. The sign been approached by “Made In Guangdong” is becoming so famous globally, besides the Guangdong industries and its unique culture.

  Guangdong represents one of the most important provinces of China for a number of political, economic, social and natural reasons. Indications of the success of the openness experiment pursued by China since the late seventies of the last century are evident in it.

Guangdong special economic zones have made great achievements. As the province with the largest economic output in China, south China’s Guangdong Province has achieved tremendous economic development in the past 40 years, thanks to the establishment of special economic zones.

 According to my information, the Guangdong region has established the “Zhuhai Doumen” intelligent manufacturing economic development zone recently, after the Guangdong Provincial Government officially approved the establishment of the “Zhuhai Doumen intelligent manufacturing economic development zone”, which will implement the existing provincial-level economic development zone policy.  It is the third regional economic development zone in “Zhuhai” after “Foshan Industrial Park and Liangang Industrial Zone”.

 Guangdong Province is an economic powerhouse in southern China, and the province will promote high-quality development this year by fostering new engines of growth and strengthening cooperation and communication in the regions of (Guangdong-Hong Kong-Macao Greater Bay) to deepen reform and opening up.

 Guangdong Province, a major part of China’s foreign trade and industrial hub, accounts for about one-tenth of China’s GDP and is the largest of all Chinese provinces.

 Guangdong Province pays close attention to the progress of China’s modernization and the overall picture of reform and opening-up and major national strategic planning. It firmly attaches importance to the reform and opening-up policy by strengthening cooperation between the province and the “Hong Kong and Macao” regions, aligning the development of Guangdong with the “Northern Metropolis” plan of Hong Kong and the economic diversification strategy of Macao, implementing the “Greater Bay Area Connection” project in a more in-depth way, and working with “Hong Kong and Macao” together to build a world-class bay area, injecting vigor and strong impetus into its modernization efforts”.

 It Is remarkable that most of the cities of Guangdong Province are crowded with visitors from all over the world, especially Arabs and Africans, who come to them for the purpose of trade and search for investment. The province is considered one of the regions characterized by the diversity of its industries, quality and attractive prices, as well as commercial activities in various fields.

 It Is also distinguished by the beauty and sophistication of its buildings, which embody the aesthetics of modern Chinese architecture, as well as the spread of green spaces and vibrant squares throughout the day. It is also distinguished in terms of weather, with its atmosphere that resembles the tropical atmosphere with heavy rain, and the various cities of Guangdong Province are also characterized by easy access to it from different parts of the world throughout the day, as well as ease of movement between its various cities, thanks to the presence of an infrastructure that makes most of the cities of the province at the forefront of attractive cities for investment globally.

  Due to the existence of the commercial ports, Guangdong has a long experience in terms of commercial exchanges regionally and globally.

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