Connect with us
//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js (adsbygoogle = window.adsbygoogle || []).push({});

Trade

The impact of trade opening on developing Asia

Moving to poverty and inequality, there have been huge reductions in poverty all over Asia arising from opening to trade.

Asian Development Bank

Published

on

Even though in aggregate, trade leads to economic gains, it almost always creates winners and losers.

To design appropriate social protection policies, it is important to know the identities of these winners and losers.

These policies need to be in place for equity reasons as well as to build and sustain support for free trade.

Winners and losers

To determine the identity of potential winners and losers, we can divide the population in several different ways. For example, for every good produced, we have two main groups, namely producers and consumers.

In this context, what researchers have found for the various Asian countries they have studied is that trade liberalization improves productivity through greater competition from imported products as well as through cheaper and a greater variety of inputs.

They also find the input channel to be the stronger of the two. At the same time, trade liberalization affects price-cost markups.

While greater competition through trade lowers the monopoly power of domestic firms and reduces these markups, cheaper inputs give firms or producers the scope for greater profit margins and markups.

The net effect of these two channels results in lower prices faced by consumers and improvement in their welfare.

At the same time, due to the dominance of the input-related channel, firm profitability could also go up.

Moving to poverty and inequality

Moving to poverty and inequality, there have been huge reductions in poverty all over Asia arising from opening to trade.

The two largest Asian countries, the People’s Republic of China (PRC) and India, have experienced large reductions in poverty, brought about by their impressive growth since liberalizing their trade regimes.

The PRC has had a better performance than India in both growth and poverty reduction. However, while both have witnessed an increase in inequality, the PRC’s rise in inequality has been much sharper. While the World Bank’s $1.90-a-day poverty rate for India in the 1980s was about 55%, it is about 20% now.

The PRC, within the same period, has brought down its poverty rate drastically from almost 70% to 1% now. The Gini inequality index for India has increased from 32 to 34, while for the PRC it has gone up from 28 to 42. While the ratio of the top 10% to the bottom 10% within the last 3 decades increased from roughly 7 to 8 in India, it has increased from 6 to 18 in the PRC.

The impact of trade opening on developing Asia: Evidence and policy implications | Asia Pathways

0/5 (0 Reviews)
Continue Reading
Comments

Malaysia

Department of Foreign Trade (DFT) to organize Southern Trade Fair

The event will provide a platform for business negotiations and stimulate the economy, trade and investment in the three southern border provinces.

National News Bureau of Thailand

Published

on

DFT to organize Southern Border Trade Fair

BANGKOK, 18 April 2019 (NNT) – The Department of Foreign Trade (DFT) will organize a Southern Border Trade Fair to provide knowledge to entrepreneurs in preparation for accessing the Malaysian market.

(more…)
4/5 (1 Review)
Continue Reading

News

Commerce Ministry revises May export goal

National News Bureau of Thailand

Published

on

BANGKOK, 13 April 2019 (NNT) – As a reduction in the global economic growth projection by the International Monetary Fund to 3.3% from 3.5%, and a new lower value of global trade expectations of 3.4% down from 4%, will eventually affect the Thai export sector; the Ministry of Commerce will be holding talks with the private sector and industries after the Songkran holidays to make necessary adjustments to the May export projection, and to evaluate the situation with Thai commercial attaches nationwide.

(more…)
3/5 (1 Review)
Continue Reading

Business

Thai fruit exports rise to $2.65 bln under FTA deals

Boris Sullivan

Published

on

BANGKOK, 1 April 2019 (NNT) – The Director-General of the Department of Trade Negotiations, Auramon Supthaweethum, said Thailand exported fruits worth 2.65 billion US dollars in 2018.

(more…)
3.7/5 (3 Reviews)
Continue Reading

Most Read

Must Read

Subscribe via Email

Enter your email address to receive notifications of new articles by email.

Join 14,286 other subscribers

Trending