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Sri Lanka has been featured as one of the rising stars of global trade in a new report released by Standard Chartered Global Research, which puts the country among top 20 performers that have the greatest trade growth potential.
Titled ‘Trade20: The rising stars of global trade’, the report looks at the 20 markets that have demonstrated impressive progress in trade growth potential in the last decade. Côte d’Ivoire leads the list, followed by India, Kenya, China, Ireland, Vietnam, Indonesia, Thailand, Oman, and the UAE rounding off the top 10. Sri Lanka is ranked 14, below Hong Kong, Russia and Ghana but ahead of Bahrain, Singapore, Switzerland, Chile, Turkey, and the Philippines.
These markets are identified by measuring changes in 12 metrics across three pillars: economic dynamism (foreign direct investment, export and GDP growth), trade readiness (infrastructure, e-commerce and ease of doing business), and export diversity.
The Trade20 index identifies the economies in each region that have the greatest trade growth potential. The index highlights existing trade powers like China, India and Singapore; medium-sized trading economies like Vietnam, Indonesia and Thailand that continue to make good progress; and smaller trading nations like Côte d’Ivoire, which are showing great promise.
“Home to both rising stars and trade powerhouses, Asia-Pacific markets remain focused on improving trade growth potential. Markets in Asia-Pacific – including India, China, Sri Lanka, and ASEAN – dominate Trade20. Nine of the Trade20 economies are in this region, suggesting that the potential for individual markets to increase their trade growth is particularly high in Asia,” the report said.
It also observed that a cluster of Asian markets is progressing particularly well in terms of trade readiness, including existing trading giants China and India, and ASEAN accelerators Vietnam, Indonesia, Thailand, and the Philippines.
“While there is currently a focus on US-China trade tensions, overall these markets are benefitting from regional trade deals, physical and digital infrastructure investments, and increasing openness. Although already major exporters, Asian trading powers India and China rank highly, showing that their potential to increase trade continues to grow, even from their high starting point,” it added.
China’s trade readiness improvements, including ambitious infrastructure projects that will be initiated as part of the Belt and Road Initiative (BRI) to enhance connectivity between China and its trading partners, underpin its continued pace of progress, but it is China’s effect on the trade growth potential of other nations that places it in a league of its own.
India is likely to continue to prioritise trade as a key engine of growth, with the Indian Government especially focused on relationships with the US and China, despite recent geopolitical tensions. With its large population and strong GDP growth, India is poised to be a future giant of world trade. The index confirms this, showing that India has made strides to improve its trade readiness potential, Standard Chartered Global Research said.
Business reforms over recent years have helped to improve the market’s ease of doing business score, moving closer to international best practice and boosting trade growth potential. These reforms have made it easier to start a business, obtain construction permits, raise finance, pay taxes, and import and export goods.
India has also made rapid improvements in its digital infrastructure, spearheading mobile payment innovations, witnessing rapid e-commerce growth, and using technology to revamp the taxation system. While India still has some way to go in its trade development journey, important progress has been made.
India is likely to continue to prioritise trade as a key engine of growth. Its Government, with its mantra of ‘Reform, Perform and Transform’, used its first Budget to focus on stimulating growth, simplifying tax, digitising the economy, further improving ease of doing business, and pushing forward with the ‘Make in India’ initiative. The latter aims to encourage companies to manufacture their products in India with the intention of making it a global manufacturing hub.
Several ASEAN nations show impressive momentum in their trade growth potential. The strong readiness scores of Vietnam and Indonesia are driven by improvements to their infrastructure and ease of doing business scores, while Thailand has shown substantial e-commerce growth. The Philippines scores particularly well for economic dynamism, driven by strong export and GDP growth.
These ASEAN nations have remarkable success stories to share, with economic and political reforms over recent decades driving rapid economic growth and reducing poverty levels. Export-oriented manufacturing, growing intra-ASEAN trade, strong domestic demand, close trading ties with China, and healthy job markets are helping to propel these economies forward.
“While they all face the challenges of heightened global uncertainty, they are well-placed to benefit if multinationals consider moving their supply chains due to trade tensions elsewhere,” the report noted.
