ADB Commits to Aid For Trade

Good afternoon your excel­lencies, distinguished col­leagues and friends: On behalf of the Asian Devel­opment Bank (ADB), I welcome you all to this discussion on the progress and future of inclusive
10 Feb 2018 11:00
ADB Commits to Aid For Trade
From left: Vice-President for Knowledge Management and Sustainable Development of the Asian Development Bank, Bambang Susantano, Permanent Secretary for Industry, Trade and Tourism Shaheen Ali and Vice Chancellor and President of the University of the South Pacific, Professor Rajesh Chandra at the USP Laulaca Campus on February 7, 2018

Good afternoon your excel­lencies, distinguished col­leagues and friends:

On behalf of the Asian Devel­opment Bank (ADB), I welcome you all to this discussion on the progress and future of inclusive trade-driven growth in the Pacific.

It is our pleasure to share ADB’s 2017 report on the World Trade Organisation’s Aid-for-Trade(AfT) initiative and how it impacts the Asia and Pacific region.

I appreciate the partnership with the World Trade Organisation, the Pacific Islands Forum Secretariat, and graciously acknowledge fi­nancial support from Australia’s Department of Foreign Affairs and Trade in preparing the report.

I thank our co-host, Vice-Chan­cellor Chandra of the University of South Pacific, with which the ADB recently signed a co-opera­tion agreement to boost knowl­edge-sharing between our institu­tions, particularly in developing policies that can help tackle the unique challenges of the Pacific region.

We are most grateful to Fiji’s Ministry of Trade, Industry and Tourism for supporting this event. ADB’s operations in Fiji date back to 1970 and have been consistent with the priorities of successive administrations across a range of sectors such as transport, energy, water and sanitation, public sec­tor management, among others.

We greatly value our continued strong partnership, particularly on pressing issues such as climate change, where Fiji was last year’s COP23 president.

ADB’s dedication

As the largest development fi­nance institution in Asia and the Pacific, ADB is dedicated to reduc­ing poverty across the region.

We marked our 50th anniversary last year. And we are privileged to partner with the region’s devel­oping economies and our donor members to support the rapid de­velopment that has helped trans­form Asia and the world.

From some of the world’s poor­est, most economies in the region have reached middle-income sta­tus, with dramatic economic and social improvements.

Our latest forecasts show eco­nomic growth will remain robust in 2018. If this trend continues, de­veloping Asia’s per capita income could rise six-fold by 2050.

And its share of global output would increase from 32 per cent today to over 50 per cent.

We have seen international trade as a key driving force behind this remarkable economic growth—growth that has lifted more than a billion people out of poverty in our region since 1990.

Aid for Trade can play an impor­tant role in ensuring this contin­ues—by maximising opportuni­ties to expand trade further and, more importantly, spread evenly, the resultant economic gains.

Today, developing Asia and the Pacific is benefiting from a rise in investment, manufacturing and trade—all from strengthening global demand.

Despite the broadening trade recovery since last year, there re­main risks to ensure a sustained recovery. The uncertainties in the global economic environment and financial markets remain, primar­ily from anti-globalisation fac­tions and continued geopolitical risks.

Yet, despite these uncertainties, we must continue to push for open trade and use it to provide more inclusive and shared growth.

Lessons from the Report

This Aid for Trade report analy­ses how AfT can increase trade in services though regulatory reform and modern trade facilitation such as paperless trade.

Lessons highlighted in the report will help policy makers target sec­tors with the greatest potential to create jobs and reduce poverty, and better identify areas for policy actions under the Aid for Trade Initiative

Clearly, trade costs must be lowered further. This is key to integrating developing econo­mies—especially lower-income countries—into the global econo­my.

Lowering costs will help draw in small and medium-sized en­terprises and marginalised com­munities into global and regional trade and value chains.

To do this we must:

  • Accelerate trade facilitation, build the infrastructure to expand our capacity and im­prove the business climate to attract more investment.
  • Enhance regulatory reform to make it less cumbersome thus reduce costs.


Progress on these fronts is im­portant for Asia and the Pacific because trade can create the jobs needed to meet employment tar­gets under the UN’s Sustainable Development Goals, or SDGs.

Aid for developing services—in­creasingly tradable as digital tech­nology transforms business and logistics—is particularly impor­tant as the sector employs 60 per cent of the workforce globally, and 70 per cent of women workers.

For the island nations of the Pacific, the challenges to engage­ment in international trade are exponentially compounded by ge­ography.

– The small size and isola­tion of sea-locked economies in­crease the costs of providing ser­vices and doing business.

– Their high exposure to climate change and natural disas­ters, and their narrow economic base, make them extremely vul­nerable to natural and economic shocks most often beyond domes­tic control.

– Supply-side capacity and trade-related infrastructure con­straints further impede access to markets and connections to global value chains, and greatly amplify the isolation.

Therefore, aside from the physi­cal infrastructure needed to trade efficiently, it is especially impor­tant for Pacific countries to con­tinue improving the business en­vironment and minimise barriers to services trade.

Governments can make efforts to leverage sectors with the most potential to contribute to inclusive growth, trade flows, and to gener­ate economy-wide spillovers.

For example, around 70 per cent of the total output in the Pacific is generated by services, such as tourism, which employs a large proportion of the workforce—ranging from about 10 per cent here in Fiji to almost 50 per cent in Palau with strong links with the rest of the economy.

This can help the Pacific nations to overcome the challenge of geog­raphy, better connect with inter­national trade flows and achieve inclusive growth.

Rapid digitalisation and the growth of e-commerce also offers a historic opportunity for the Pa­cific economies to increase trade, tap into niche export markets, and promote inclusive growth.

Still much to be done

While Pacific nations have made great strides toward regulatory reform of telecommunication services to enhance investment, much still needs to be done.

For instance, with just 60 per cent of the population holding mobile subscriptions and only 13 per cent with internet access, there is an urgent need to expand ICT infra­structure

By better channelling Aid for Trade in services, improvements can be made in ICT infrastructure.

Further a regulatory environ­ment needs to be enabled to help the Pacific nations to share the benefits of the digital economy. Expanded internet access can be particularly transformative in providing opportunities for small firms—often owned by women—to tap previously inaccessible mar­kets.

Overall, Aid for Trade has helped strengthen economic infrastruc­ture and the productive capac­ity needed for economic develop­ment—to achieve higher levels of sustained and inclusive growth.

It accounts for about 40 per cent of official development assistance in Asia and the Pacific.

Sea-locked Pacific economies rely more significantly on Aid for Trade, which accounts for 2 per cent of GDP. It.

Aid for Trade has also been an important part of ADB’s support for regional co-operation and in­tegration for ensuring sustain­able development in Asia and the Pacific.

More than 60 per cent of Aid for Trade to the region targets infra­structure, especially transport, energy and agriculture.

These are prerequisites to fur­ther economic development and achieving SDG targets.

ADB has remained actively in­volved in the Aid for Trade Initia­tive since it began in 2005.

We work to further reduce trade barriers, facilitate trade, assist domestic regulatory reform, and deepen regional co-operation, in part by enhancing trade linkages between economies.

ADB continues as a close part­ner with the WTO by contributing to the Global Review of Aid for Trade through research collabo­ration and knowledge-sharing on related policies.

I reaffirm ADB’s continuing sup­port for Aid for Trade.

I look forward to new and bold ideas to bolster international trade inclusively by

  • improving connectivity
  • leveraging digital technol­ogy and the services sector.
  • mobilising Aid for Trade re­sources to address existing constraints—for example, limited ICT infrastructure and the regulatory bottle­necks that remain barriers to growth.


Once again, a sincere welcome, and best wishes for active, vibrant, and constructive discussions.

Thank you


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