The emergence of the COVID-19 pandemic, coupled with increasing trade tensions and an already slowing global economy, have paved the way for the world’s worst economic performance since the Great Depression, according to the new Asia-Pacific Trade and Investment Trends briefs issued by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
The UN body, in particular, notes that global international trade value is estimated to dip by 14.5 percent in 2020.
It says smaller economies face additional obstacles due to the pandemic’s impact on travel and tourism, and remittances.
According to Ms. Armida Salsiah Alisjahbana, Executive Secretary of ESCAP, COVID-19’s “devastating effect” on both developed and developing economies also risks pushing millions back into poverty.
She urged countries in the region to work towards developing a better set of trade rules that are resilient in times of crisis and stimulate sustainable economic recovery for inclusive and greener economies.
Alongside trade, foreign direct investment (FDI) also suffered an “immediate and significant” impact, due to the global crisis.
“While data is still being collected on all forms of FDI, quarterly figures from announced ‘greenfield’ investments clearly demonstrate how hard the region has been hit,” ESCAP said, referring to investments into projects starting from scratch.
In the first three quarters of 2020, “greenfield” FDI dropped by 40 per cent compared to the same period in 2019, depressed primarily by the impact of lockdowns resulting in delayed and canceled projects.
ESCAP added that FDI is expected to remain below pre-crisis levels throughout 2021, with the future outlook “highly uncertain” and dependent on the duration of the crisis, the effectiveness of policies to stimulate investments, and recovery from socio-economic effects of the pandemic.
The trade updates are an annual ESCAP publication to support countries develop short-to-medium term plans to respond to emerging risks and uncertainties in the global and regional economies.
Established in 1947, ESCAP is the largest of the UN’s five regional commissions – both in terms of geographic coverage and population served – its membership spans from the Pacific island nation of Kiribati in the east, to Turkey in the west, and Russia in the north, to New Zealand in the south.
