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Why now is the time to advocate for global trade


Dr José Viñals Group Chairman

2 Nov 2023

Home > News > Why now is the time to advocate for global trade

A World Bank-IMF meeting reminds us dialogue can boost opportunity

The annual World Bank-IMF meeting in Marrakesh earlier this month took place against the backdrop of a stuttering global economy. The post-COVID recovery continues, but at a slower, more uneven pace. Activity in the US and Europe has remained resilient, and Asia as a whole continues to lead the pack on growth, despite a troubled Chinese economy.

Alongside this, the geopolitical picture looks more concerning. We now see an uptick in outright violence involving both state and non-state actors, bringing immense suffering to the lives of innocent civilians.  

It was in fact a minor miracle that the meeting happened at all. Our Moroccan hosts showed incredible resilience and ingenuity to keep the show on the road after the devastating earthquake that struck the Marrakesh region in early September. We pay huge tribute to the organising team, and once again send our deepest condolences to those who lost loved ones and livelihoods.

As was the case at the Spring meeting in Washington DC, the conversation in Marrakesh dwelt on the consequences of the rapid increase in interest rates across key markets. This has revealed weaknesses in the bank and non-bank financial system, as we saw so starkly during the banking stress of March this year. As rates stay higher for longer, we can perhaps expect more balance sheet problems to emerge in a variety of places, especially those whose leverage has been building up more strongly and opaquely. This will put even more emphasis on the importance of sound risk management and appropriate regulation and supervision.

This new rate environment has also placed additional pressure on heavily indebted countries. Many developing economies have experienced sovereign risk issues in the past year or so, and the cost of borrowing means yet more are struggling to make much needed investments in sustainability and climate mitigation. Progress continued to be made on cooperation between multilateral institutions, official debtors and creditors, and the private sector in moving to a more efficient debt restructuring process.

This makes the other major topic of conversation – expanding the role of public-private finance within sustainable investment – even more timely. There were extremely productive discussions on measures to ensure that multi-lateral development banks make the best use of their balance sheet to de-risk critical net zero projects, and more actively mobilise private investment. The role of the World Bank was prominent, adding further impetus to its evolution towards a more impactful, creative institution ready to address poverty, climate and other global challenges.

It was a great pleasure to speak with George Yeo, former Minister for Foreign Affairs for Singapore, in my ‘In Conversation…’ session. We discussed the growing divides in geopolitics, and their impact on geo-economics and global prosperity. For George, the various crises we are now experiencing are not isolated events, but are all connected to the emergence of a multipolar order.

However, he stressed that such a world need not be inherently adversarial. Though US-China trade tensions have grabbed headlines in recent years, he is encouraged by the current dialogue between the two countries. China remains the US’s 3rd largest trading partner, and the two countries have engaged in a raft of political meetings in recent months alongside the launch of Economic and Financial Working Groups.

Jose Viñals, Group Chairman, Standard Chartered

This emphasises the continued importance of free trade in delivering global prosperity. According to Standard Chartered research, intra-Asia trade flows will increase further in coming years, propelled by greater regional wealth and a more intense focus on supply chain resilience – exports from East Asian countries to ASEAN, for example, will almost double to $1.1trn by the end of the decade.

Our recent Future of Trade report also shows significant potential corridor growth in Africa. It has a young and fast-growing population, set to double by 2050 to 2.5 billion. Many of its countries are resource rich, with growing manufacturing muscle and pioneering digital services. Exports from Africa, currently USD 645.3 billion, are set to reach USD 952 billion by 2035, with connections with South Asia, East Asia and the Middle East growing at particular pace. Intra-African trade is also expected to flourish – flows within East and West Africa will grow by 15.1 and 13.2 per cent respectively, far outpacing the global average of 4.2 per cent.

I was lucky to get a glimpse into the changes happening in African markets during my visit to Ghana in late June this year. In conversations with staff and clients, I was struck by the potential  of new, innovative solutions to make major improvements in local growth – like our Solv platform, which provides small and medium-size enterprises better access to financing, and more secure participation in domestic and cross-border trade.

Re-setting globalisation – continuing to reap its benefits while ensuring no communities are left behind – is a key goal for Standard Chartered. By 2030, our trade finance platforms could increase exports in 13 of our key markets by close to one trillion USD, representing a 7.5 per cent increase from our baseline forecast. We believe measures like these, alongside our continued advocacy for global trade at multi-lateral platforms like World Bank-IMF, are the best way to guarantee economic opportunity for our customers in the years to come.

The 2023 IMF-World Bank Annual Meetings

With topics around urban transformation, energy transition, the future of transport and critical infrastructure across Asia, Africa and the Middle East, the content series will unearth fresh trends and showcase how we are supporting clients in the transition towards a more sustainable and inclusive future.