New global 'economic architecture needed to overcome challenges'

ICC Bangladesh President Mahbubur Rahman said the global economy delivered an impressive output of about US$75 trillion in 2016 and is expected to reach $100 trillion by 2021.

However, the existing outmoded operating system of the world economy is constrained in its ability to deliver adequately fair social outcome and to protect the planet, he added.

"Indeed, we need a new global economic architecture to overcome these structural challenges," he said.

The ICC Bangladesh President made the remarks at the inaugural session of a three-day Workshop on 'International Trade Finance and Development of Global Value Chains' that began in Bangkok on December 20, says a press statement.

ICC Bangladesh jointly with ICC Thailand and the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) has organised the event.

Mahbubur Rahman said this is an era where Asia has emerged as the powerhouse of world economy. The continent accounts for 4.44 billion people or about 60 per cent of the world population inhabiting 30 per cent of the world's land mass.

The developing economies of the Asia and the Pacific region currently account for about a third of the world's output, and they are quickly reaching an economic status at par with that of the combined share of developed economies in North America and Europe, he added.

He also said that Bangladesh and Thailand have long enjoyed friendly relations as trusted and tested friends. The two countries have been working for strengthening their bilateral relations for mutual benefit.

He said two-way trades between Thailand and Bangladesh reached US$ 1 billion in 2016, which is likely to increase to US$2 billion by 2021. Bangladesh's imports from Thailand were valued at more than $900 million, while its exports to Thailand were less than 10 percent of the total bilateral trade value.

Mahbubur Rahman said great opportunities exist for Bangladesh and Thailand to further expand cooperation in many areas.

Thailand is an advanced economy, and is recognised globally as a hub of the Asia-Pacific region due to its impressive creation, innovation and development of versatile products. Being strategic partners in the region, Bangladesh and Thailand have the room to cooperate with each other both bilaterally and multilaterally, he added.

Inaugurating the workshop, Bangladesh Ambassador to Thailand Saida Muna Tasneem emphasised the need for preparing all the countries of the region, including Bangladesh, to prepare for the challenges of the 4th industrial revolution (popularly known as 4.0).

She further added that the Small and Medium Enterprises (SMEs) will be the key player in the future and for that they need credit facilities from the commercial banks or financial institutions.

"We have to support our private sector, in particular SMEs, to be part of the Global Value Chains to promote their products both at home and abroad," she added.

ICC Thailand Chairman Somyod Tangmeelarp said the emergence and expansion of global value chains has provided firms in Greater Mekong sub-region with unprecedented opportunities across borders.

"Although this is an invaluable chance for firms to participate in Global Value Chains, international trade financing is essential requirement for them to avoid risks in cross-border transactions."

Mia Mikic, Director of Trade, Investment and Innovation Division, UNESCAP, said that the emergence and expansion of GVCs have provided SMEs in the GMS with unprecedented opportunities across borders.

SMEs have been especially encouraged to link themselves into the globalised production networks and tap into the potential, often specialising in niche intermediate functions, she said.

However, a series of constraints prevalent in the sub-region, including lack of access to finance; transport and logistics system; ICT infrastructure; skilled workforce; and entrepreneurial and managerial skills, hinder many local SMEs from effectively plugging into the GVCs or upgrading themselves to conduct higher value-added activities, she added.

With financial support from the Government of Japan under the long-time technical assistance programme "Forum for the Comprehensive Development of Indo-China", ESCAP has conducted a research project on maximising the Benefits of Mekong Value Chains for SMEs.

The objective of this project is to strengthen the capacity of five Greater Mekong Sub-region (GMS) countries, namely Cambodia, Lao PDR, Myanmar, Thailand and Vietnam, to design, adapt and implement policy and institutional frameworks that foster the development of small and medium-sized enterprises (SMEs) and their effective participation in global value chains (GVCs).

At this workshop, ESCAP is making technical presentations based on the study. UNESCAP has supported the present three-day workshop under the Government of Japan technical assistance programme.

Hitoshi Kozaki, Head of International Organisation, Department Embassy of Japan, Bangkok, and Deputy Permanent Representative to UNESCAP thanked ICC Bangladesh, ICC Thailand and UNESCAP for organising the regional workshop in Bangkok.

He mentioned that the government is pleased to support such events.

Kobsac Duangdee, Secretary General of The Thai Bankers Association; Vincent O'Brien, Member of the Executive Committee, ICC Banking Commission and Chair and ICC Bangladesh Secretary General Ataur Rahman also spoke.

Vincent O'Brien, Dr Masato Abe, Economic Affairs Officer of Trade, Investment and Innovation Division, UNESCAP; Ka Kit Man, CEO of CCRM; ATM Nesarul Hoque, Vice President of Mutual Trust Bank, Bangladesh; Jaewon Kim, Consultant, Trade, Investment and Innovation Division, UNESCAP; Sheikh Morshed Jahan, Associate Professor, IBA, University of Dhaka, Bangladesh are taking part in various sessions of workshop.

The participants will attend two seminars at Bank of Thailand (Central Bank) and Bangkok Bank today.

The Workshop was attended by about 116 participants: 52 bankers from Bangladesh, 44 bankers from Thailand and participants from Cambodia, Lao PDR, Malaysia, Myanmar, Nepal and Vietnam.

ICC Bangladesh General Manager Ajay Bihari Saha and Assistant Manager Md Shakayet Hossain also attended the event.