Standard Chartered report names key Emerging Markets as world leaders for Trade Growth Potential
A Standard Chartered report has revealed ASEAN emerging markets, namely Indonesia, Thailand and Vietnam, as amongst the economies showing the greatest potential for future trade growth, according to the “Trade20” study.
The study looked at 66 economies across the globe and has revealed that of the top 20 rising stars of global trade, five of them hail from the ASEAN region. The research determines each market’s potential for trade growth by analysing changes across a wide range of variables, grouped into three equally weighted pillars: economic dynamism, trade readiness and export diversity.
Indonesia has been revealed to be in 7th place in the rankings for greatest trade growth potential, having scored particularly well in the trade readiness pillar category, only losing out to a podium finish in this category to China, India and Kenya.
Vietnam and Thailand performed similarly well in the trade readiness pillar; this is defined as being a market’s foundations for future trade growth.
Vietnam and Indonesia’s high scores in this category were the product of the markets’ improvements to their infrastructure and ease of doing business scores, whilst Thailand’s was due to its growth in e-commerce.
Vietnam was also named as benefitting from healthy GDP growth, resulting in further boosted economic dynamism, and is showing the strongest progress in trade growth potential of all the ASEAN markets in the Trade20 index.
The Philippines was named as receiving a particularly strong score for economic dynamism, due to its strong export and GDP growth. Singapore, similarly, scored high on the back of its economic dynamism, with its measures to improve its trade growth potential and increasing levels of inward foreign direct investment resulting in the high ranking.
China has been named in the report as continuing to enhance its trade growth potential, playing a key role in the success of other markets, namely as a key catalyst for global trade growth.
The “Financial Hubs” of Singapore and Hong Kong, as they’re termed by the report, have similarly been named as strong contenders in the Trade20 index.
Singapore has been praised for its strong economic dynamism, still making substantial progress to improve its trade growth potential despite its status as a developed economy. Hong Kong, has been heavily praised for its economic dynamism, with only China and the USA having higher levels global FDI inflows that “the gateway to China.”
India has also been named as extremely promising, evolving from a relatively closed markets to an emerging powerhouse over the course of the last 25 years. The country’s trade readiness improvements has allowed it to come out as a strong player in the Trade20 report; its prioritisation of trade growth and making the market attractive to businesses, combined with strong GDP growth foundations and a large population, are keeping the nation on an upward-growth trajectory.
Indonesia was reported to have experienced a significant uptake in secure internet servers; a 16,368% increase has been recorded during the period of 2013 to 2018, with a 13% increase in the number of internet users in this same period.
The Chief Executive Officer for Standard Chartered’s Indonesian operation, Rino Donosepoetro, said in a press release that “The report validates further the strong potential Indonesia has in becoming one of the world’s top exporting countries. In Indonesia and export growth has indeed been steadily increasing year-on-year. The government is working to establish trade agreements, expand into non-traditional markets, and create a conducive trade environment.
He continued that “With presence of more than 150 years in Indonesia and being the only international bank present in all 10 ASEAN countries, Standard Chartered has been working closely with its clients and the government in order to further boost the country’s export capabilities by providing world class trade services supported by Straight2Bank, our award-winning electronic banking platform for corporates to perform their trade transactions online, 24 hours a day. We also facilitate Indonesia’s trade with new markets such as Africa and South Asia. Our strong global network in over 60+ countries further positions Standard Chartered Bank as a valuable partner in facilitating international trade.”
The Indonesian government has made steps towards boosting the country’s exports, which included increasing Indonesia’s market share through bilateral trade agreements and carrying out promotion negotiation strategies to reduce trade barriers. Incentives will also be a strategy that the Indonesian government will explore, especially to increase the local’s manufacturing products in the global market.
The Indonesian government is also said to be working with its fellow countries in the ASEAN region to conclude the Regional Comprehensive Economic Partnership. This is a proposed regional economic integration agreement among the 10 ASEAN countries and its six free-trade agreement partners—Australia, New Zealand, Japan, China, South Korea and India.