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Fully implement global trade agreement, digital technologies

Asian governments are urged to fully implement an existing global trade agreement and use digital technologies to speed up the recovery and avert future shocks to global trade.

In making the call, Asian Development Bank (ADB) said the Trade Facilitation Agreement, adopted by the World Trade Organisation in 2017, intended to cut down the amount of red tape involved in moving goods across borders.

It said the agreement aims to expedite the movement, release and clearance of goods by improving transparency and governance, streamlining and modernising border procedures, and enhancing the movement of goods in transit.

“Ramping up ongoing national efforts to implement this agreement could reduce trade costs for economies in Asia Pacific substantially.

“On top of that, making full use of digital technologies could cut costs even further,” it said in its blog yesterday.

ADB said the Covid-19 pandemic has provided hard-earned lessons about global supply chains, as disruptions led to shortages of critical goods from medical supplies to food.

It attributed the failure in international supply chains for medical supplies to the geographic concentration of major manufacturers of vaccines and personal protective equipment; export bans on medical supplies and key raw materials; as well as restriction on transportation movement.

“A recent survey shows that implementation of the agreement is raising transparency, streamlining border formalities, and enhancing institutional arrangement and cooperation across the region.

“However, it also shows that implementation of cross-border paperless trade is lagging. Many bilateral paperless trade mechanisms remain in the pilot stage or in early development,” it said.

On digital technologies, ADB said while the pandemic has accelerated the transition to paperless trading, greater use of information and communication technologies is needed to streamline customs procedures and electronic exchange of information, implement national and regional “single windows” for document submissions and clearance, and introduce e-registration of travel documents.

For instance, all members of Asean have joined the Asean Single Window live operation, exchanging certificates of origin under the Asean Trade in Goods Agreement preferential tariff arrangement.

However, this needs to be expanded to areas such as exchange of e-documents related to phytosanitary, animal health, and food safety certificates, it added.

Source: Bernama

Fully implement global trade agreement, digital technologies

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IBM has unveiled a groundbreaking commitment and global plan to provide 30 million people with new skills needed for the jobs of tomorrow by 2030.

In a statement today, the New York-headquartered technology corporation said to achieve this goal, IBM has created a clear roadmap with 170 new partnerships and programme expansions in more than 30 countries across the Americas, Asia Pacific, Europe, Middle East and Africa.

The effort would leverage IBM’s existing programmes and career-building platforms to expand access to education and in-demand technical roles.

It said the plan relies on its broad combinations of programmes and includes collaborations with universities and key government entities, including employment agencies.

“Partnerships extend to non-governmental organisations as well, particularly those that focus on groups such as underserved youth, women, and military veterans,” it said.

In Malaysia, the company said it recently announced a collaboration with Politeknik Balik Pulau (PBU) in Penang to establish the IBM [email protected] Learning Institute, which is expected to benefit nearly 800 students at the polytechnic annually.

“Under the collaboration, PBU would tap into IBM SkillsBuild platform to access free accredited learning content, badges to certify learning and career development coaching from IBM experts,” it said.

Through IBM [email protected] Learning Institute, the company said the polytechnic aims to produce the country’s brightest young minds and provide them with the opportunity to learn the relevant skills and thrive in the future digital economy.

Source: Bernama

IBM commits to skill 30 mln people globally by 2030

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The expected implementation of the Regional Comprehensive Economic Partnership agreement next year will widen trade flows and consolidate the supply chain network in the Asia-Pacific region, economists and business leaders said.

Despite the adverse effects of the COVID-19 pandemic on the region’s economic growth, the RCEP will help China mitigate the impact caused by an aging society and pave the way for both Chinese and global companies to export more products like fruits, aquatic goods, machinery and electric passenger vehicles to various markets within the region, said Rajiv Biswas, Asia-Pacific chief economist at global research and information provider IHS Markit.

“Innovations in trade policies, products and practices will be the cornerstones of progress for China and its partners to persevere on the path of development,” said Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore’s Business School.

Specifically, China can leverage much from its leadership in global collaborations such as the Belt and Road Initiative, participation in free trade agreements like the RCEP, and sound management of the domestic economy, he said.

The RCEP is a free trade agreement concluded in November between the 10 member states of the Association of Southeast Asian Nations-Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam-and five of its FTA partners, namely Australia, China, Japan, New Zealand and the Republic of Korea.

Arthayudh Srisamoot, Thailand’s ambassador to China, said the RCEP will lay the foundation for more intraregional trade and GDP growth when it comes into force if the public looks at how the free trade agreement between ASEAN and China has boosted economic and trade ties between the two sides, or how a free trade deal between China and the Republic of Korea has contributed to bilateral trade.

“With the RCEP in force, it will attract more investments from outside the region, especially against the backdrop of the global pandemic, thus reducing the impact of the COVID-19 pandemic on the economies in the region,” he said, stressing the massive deal will not only be an economic recovery tool against the disease but also help ensure the opening of markets as well as uninterrupted supply chains.

Glenn G. Penaranda, commercial counselor of the Philippine embassy in China, said the pact will help achieve a high level of openness within the region.

“With regard to trade in goods, member countries will further open their markets to each other, as well as reinforce the collaboration of regional supply chain development to better prevent risks,” he added.

According to the common rule of origin established by the agreement, only 40 percent of regional content is required for goods to be considered of RCEP origin, much lower than the threshold of other free trade agreements.

Backed by sales and service networks and a large number of employees in Indonesia, Vietnam and Malaysia, OSell, one of China’s major cross-border e-commerce platforms, plans to build more warehouses and service centers to expand into ASEAN markets.

“The RCEP will support the growth of both regional and global trade, cross-border e-commerce and related industries, and create a more stable and open investment environment for global companies investing in the region,” said Feng Jianfeng, chairman of the Chongqing-based company.

Iris Pang, chief China economist at Dutch bank ING, said the major challenge for China’s long-term growth is (strengthening its) technological competitiveness in the international environment. This does not only mean producing top-notch technologies but also being able to export them to the rest of the world.

“The dual-circulation growth paradigm is always needed for a big economy like China. International trade offers both seller and buyer economies a better price for the same transaction than traded within their own economies,” she said, noting domestic circulation provides the backbone support for the economy when the external side is weak.

Proposed by the central leadership, the dual-circulation growth pattern has emerged as the overriding economic theme, with innovation, opening-up and the need to boost domestic demand identified as priorities during the 14th Five-Year Plan period (2021-25). It sees domestic circulation as the mainstay, with domestic and international circulation reinforcing each other.

Source: China Daily

RCEP to boost trade flows and supply chain network in Asia-Pacific

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Asia-Pacific is starting a period of recovery from the wave of the COVID-19 Delta variant, allowing for a resumption of economic recovery across much of the region in the fourth quarter of this year, according to Moody’s Analytics.

Asia-Pacific (APAC) chief Steve Cochrane said the movement controls put in place in Southeast Asia during the previous quarter due to the Delta wave has brought the region’s economy nearly to a halt.

However, he said, this will not last forever, as countries are now pulling back on movement controls as pandemic caseloads fall.

“Countries such as Indonesia, Malaysia and Thailand as well as Japan are now pulling back on movement controls as pandemic caseloads fall.

“Even the Philippines is instituting more targeted movement control orders, even as its daily caseload and coronavirus-related fatalities remain very high,” he said in a statement.

Cochrane said the uncertainty of COVID-19 and its impacts on global supply chains and industrial production is the greatest risk to the APAC economy as it approaches 2022.

While the current wave of the Delta variant is ebbing, the rapid response by policymakers to ease movement restrictions could set the region up for another as-yet-unknown variant, he said.

The Philippines, Vietnam, Indonesia and Thailand are the most vulnerable given their low vaccination rates to date.

India could be at similar risk, although there is a chance that it now has a high rate of natural immunity due to the two huge waves of infection it has already suffered, he explained.

“Fiscal and monetary policy also poses risks to economic performance in 2022. So far, Malaysia, Singapore and Japan appear set to continue some form of expansionary spending plans into 2022.

“Australia has begun a process of fiscal consolidation as it has curbed its extraordinary support for the unemployed while China moved early in paring back targeted spending programmes that supported manufacturing and infrastructure but is now injecting considerable liquidity into the financial system to ensure stability in the wake of the Evergrande debt crisis,” he added.

According to him, rising debt across the APAC region and looming acceleration inflation create risks that central banks will tighten monetary policy before Moody’s Analytics’ expectation of the second half of 2022.

“Indeed, the Bank of Korea was the first to raise its policy rate as it sought to curb high household debt and soaring property prices,” he noted.

A greater near-term threat is rising inflation, Cochrane said.

“The current pattern is uneven, but rising energy prices and China’s aggressive efforts to procure sufficient coal, natural gas, and other energy commodities for the winter months bode ill for containing inflation in the near term,” he said.

He added that at this time, inflation exceeds central bank target rates in only four APAC countries — Australia, New Zealand, South Korea and the Philippines.

Source: Bernama

Moody’s: Asia-pacific Resuming Economic Recovery Amid Lower Delta Variant Infections

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ASEAN countries will benefit from China joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Nation-Building Institute (Thailand) chairman Prof Dr Kriengsak Chareonwongsak.

The CPTPP is a free trade agreement (FTA) involving 11 countries around the Pacific Rim, namely Mexico, Canada, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Japan and Vietnam.

On Sept 16, 2021, China formally submitted a request to accede to the CPTPP, which was very much welcomed by Malaysia.

“When China is in both the CPTPP and Regional Comprehensive Economic Partnership (RCEP), we (ASEAN) can leverage both blocks, and eventually, we can merge.

“China is a big player, the more they join in (trade pacts), it would cause the competitive advantage paradigm to shift in every block,” he said during an online panelist discussion at the 2021 ASEAN Leadership & Partnership Forum today.

The forum, themed “Rebuilding ASEAN Towards Sustainable Recovery”, was co-organised by the KSI Strategic Institute for Asia Pacific and Economic Club of Kuala Lumpur.

Chareonwongsak also said ASEAN will be able to gain strength in a comparative advantage with China in both blocks.

“However, if we can pull the United States in (CPTPP) at the same time, it will be revolutionary,” he said.

Initial trade negotiations for what was then simply the Trans-Pacific Partnership went on for five years, from March 2010 until Oct 5, 2015.

The US was party to the talks, however, the presidential election of Donald Trump in 2016 led to the country’s withdrawal from the agreement before its ratification.

The remaining 11 nations amended the text of the agreement and the renamed CPTPP was signed in March 2018.

Malaysia is currently on track in ratifying the CPTPP, pending a detailed and clear mandate from the cabinet, Bernama quoted the Ministry of International Trade and Industry (MITI) as saying recently.

Malaysia has an FTA with China via the ASEAN-China FTA.

Source: Bernama

ASEAN nations to benefit from China’s inclusion in CPTPP, says expert

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Global investors are expected to move into Asia as the worldwide economic outlook is anticipated to be uncertain with fractured growth in 2022 and 2023, said economists.

Juwai IQI chief economist Shan Saeed believes that the global economy is going back to the 1970s stagflation or recession-inflation era in which the inflation rate is high, economic growth is slow, and unemployment remains steadily high.

“Because of the Covid-19 pandemic, about 100 to 300 million people had dropped into the poverty level, while 20 to 30 million people had lost their jobs globally.

“So, we are in great economic fragility in 2022 and 2023. The global economic recovery is expected to have fractured growth with financial fragilities and bazooka towards the financial market,” he told Bernama.

He highlighted that usually during the stagflation period, investors historically took a position in real estate and commodities.

“Malaysia will tend to benefit due to higher oil and commodities prices expected next year.

“Juwai IQI expects the gross domestic product to grow between 4 and 5 per cent next year,” he said.

Furthermore, he said investment opportunities also remained seen in the liquefied natural gas (LNG), e-commerce, technology and infrastructure sectors.

He also noted that infrastructure is the only winning investment strategy that can spur growth globally.

“All top players are moving into Asean and Malaysia remains a growth story due to macroeconomic stability and economic confidence at the macro level.

“The total value of the Belt and Road Initiative (BRI) infrastructure projects at the current price is tantamount to US$4.5 trillion (RM18.8 trillion) and Malaysia is an important player in BRI equation due to her strategic geographical position,” he said.

Meanwhile, Centennial Asia Advisors Pte Ltd, chief executive officer Manu Bhaskaran said Southeast Asia is in a good place right now as long-term trends remained in its favour.

He said this in a panel session at the 2021 Asia Economic and Entrepreneurship Summit today.

The summit, themed “Building Sustainable Infrastructure for Economic Growth”, was organised by KSI Strategic Institute for Asia Pacific and other partners.

“There is a reconfiguration of production supply chains which would largely benefit countries in the region. Even with Covid-19, we see foreign direct investment (FDI) inflows coming in.

“It has also been seen in the last few years that the whole supply side had reformed in many countries in Asean, which would improve the region’s effectiveness with FDI,” he said.

He noted that new changes and improvement in the ease of doing business, and cutting through a lot of red tape, would contribute to more investment and growth.

Source: Bernama

Economists expect global investors to pivot towards Asia

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Source: The Star

Developing Asia’s Growth

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The expansion of the digital economy in Southeast Asia (SEA), which has accelerated significantly during the Covid-19 era, will continue its momentum post-pandemic as the increasing digital consumers will spur online purchasing amid greater e-commerce development, said Facebook.

SEA and Emerging Markets vice-president Benjamin Joe said the pandemic has been an accelerator of the digital trend with many consumers and users now being accustomed to doing things on mobile applications.

He believes that with more people multi-screening than ever before, a new consumer way of life is emerging with new purchasing habits, new ways to discover and new expectations.

“I think we will continue to see this (digital) user trend, and every data and insight that I have seen so far points to the fact that it will only continue to increase, not decrease,” he told a virtual media roundtable at the 2021 Facebook Summit SEA today.

He was responding to a question of whether the growth in the digital economy would continue given the rapid vaccination rate and economic relaxation in many countries that would enable consumers to regain offline purchasing experience.

Also present was Mindvalley chief marketing officer Marisha Hassram, who represented the Kuala Lumpur-based educational technology firm.

According to Facebook’s survey, SEA’s migration from the offline to the online economy in 2020 has surpassed its initial estimates and took off at an accelerated pace.

The survey also showed that the digital economy will continue to play an outsized role in daily life, even after Covid-19.

About 70 million people in the SEA region, which is equivalent to the entire population of the United Kingdom, have become digital consumers since the pandemic began, it revealed.

According to studies, digitalisation is a key driver of business resilience in the post-Covid economy with the increase in home-centric consumption.

“Digital channels help businesses reach more audiences, facilitate emotional connections, and turn the audience into consumers,” Benjamin said.

Social media platforms, such as Facebook, have become essential for some businesses’ survival, he added.

Benjamin noted that at Facebook, businesses — be it large, small, medium enterprises and micro — are provided with tools to grow and strengthen their digital presence, connect with customers and upskill their teams, thus helping them recover and contribute to the economic growth in their respective countries.

Meanwhile, Facebook, in a bid to help businesses be future-ready, will be hosting the third installment of the annual Facebook Summit on Sept 28, 2021.

The summit will feature over 50 global and regional leaders, who are pushing the boundaries in the industry, spotlighting ideas on how companies are using platforms like Facebook, Instagram, WhatsApp, and Messenger to creatively engage and serve their communities better.          

Source: Bernama

Digital economy to continue post-pandemic, says Facebook

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A global survey conducted by KPMG International has found that 59 percent of chief executive officers (CEOs) in the Asia Pacific (APAC) are now more confident about global economic recovery compared to earlier this year.

However, they are also increasingly concerned about the risk to their supply chains, according to the KPMG 2021 CEO Outlook, which surveyed over 1,300 global CEOs about their strategies and outlook over a three-year horizon.

Among almost 500 CEOs in the Asia Pacific, 66 percent of CEOs in APAC stated their supply chains have been under increasing stress over the past 18 months.

It is thus unsurprising that CEOs have ranked supply chain risk as their top threat to growth this year, the consultancy firm noted.

“Pre-pandemic, risks to the supply chain had been steadily gaining attention due to increasing volatility from trade tensions and climate-driven events but were still considered a low priority for CEOs.

“However, the pandemic brought this issue into sharper focus as organisations struggled to maintain supply chain continuity during worldwide lockdowns,” said the managing partner of KPMG in Malaysia Datuk Johan Idris in a statement.

KPMG said Asia Pacific CEOs continue to recognise the importance of building resilient, flexible supply chains, with 36 per cent having stated an intention to monitor deeper into their supply chain to better anticipate potential problems, while 34 percent would diversify sources of input by adding new locations of inputs to make their supply chain more resilient.

Meanwhile, 14 percent said they would prioritise reconfiguring their supply chain to provide greater resiliency and more consistent access to achieve their growth objectives.

Other findings in the outlook stated that 70 per cent of CEOs faced increased demands from stakeholders for more reporting and transparency on environmental, social, and governance (ESG) issues and 81 per cent believed that the government’s stimulus would be required if all businesses are to reach net zero.

It also said while 68 per cent of CEOs were placing more capital investment in buying new technology, they were also looking to build human capability with 49 percent planning to invest in digital training, development, and upskilling to ensure employees’ skills remain future-focused.

“Just 18 percent of CEOs now say they are planning to downsize, or have already downsized their organisation’s physical footprint. This is a dramatic shift from August 2020 where 75 percent stated their intention to downsize their space,” it said.

Source: Bernama

CEOs more confident about global recovery but supply chain risks weigh

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The Covid-19 pandemic sped up the shift of innovation from Europe and North America towards Asia, UN world rankings showed today.

The Global Innovation Index 2021, from the United Nations’ World Intellectual Property Organisation, showed surging performances by South Korea and China.

“The pandemic has accelerated the long-term geographical shift of innovation activities toward Asia, even if Northern America and Europe continue to host some of the world’s leading innovators,” said WIPO.

While the top four in the global rankings remained the same as last year — with Switzerland leading for the 11th year running followed by Sweden, the United States and Britain—South Korea leapt five places to fifth.

The index found “substantial increases in brand values in Korea, in trademarks being filed, but also in cultural and creative services exports,” index co-editor Sacha Wunsch-Vincent told reporters, citing the K-Pop phenomenon.

The Netherlands, Finland, Singapore, Denmark and Germany round out the top 10.

Meanwhile China continued its progress towards the top 10 and is still the only middle-income economy in the top 30, up two places to number 12.

Wunsch-Vincent said the country’s innovation players were individually strong and China was now trying to connect them better “so that public research feeds into commercial innovation”.

Turkey (41), Vietnam (44), India (46) and the Philippines (51) are the only other middle-income nations that are systematically catching up.

“Beyond China, these four particularly large economies together have the potential to change the global innovation landscape for good,” WIPO said.

The index ranks 132 economies. Among low-income countries, Rwanda leads the way in 102nd place, ahead of Tajikistan (103) and Malawi (107).

WIPO’s index found that countries and businesses increased investments in innovation despite the Covid-19 crisis, in a bid to stimulate post-pandemic economic growth.

Scientific output, research and development, IP filings and venture capital deals continued to grow in 2020.

Companies whose innovations revolved around measures to contain the pandemic and its effects—particularly pharmaceuticals and information technology—redoubled their innovation investments.

However, sectors hit hard by coronavirus restrictions, such as travel, cut back.

“Many sectors have shown remarkable resilience—especially those that have embraced digitalisation, technology and innovation,” said WIPO director general Daren Tang.

“As the world looks to rebuild from the pandemic, we know that innovation is integral to overcoming the common challenges that we face.”

Wunsch-Vincent highlighted that beyond top research and development spenders such as Australia, Germany, Japan and the United States, which all increased investments, “seven out of 10 economies still devote less than one per cent of GDP to R&D”.   

Source: AFP

Covid-19 pandemic speeds innovation shift to Asia, says UN

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