Annual Report Trade Among the Member States of The
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ORIGINAL : FRENCH ANNUAL REPORT TRADE AMONG THE MEMBER STATES OF THE ORGANISATION OF ISLAMIC COOPERATION ISLAMIC CENTRE FOR DEVELOPMENT OF TRADE (ICDT) www.icdt‐oic.org ICDT - Annual Report on Trade among the OIC Member States 2019-2020 EXECUTIVE SUMMARY 4 PART I: CHAPTER I: DEVELOPMENT OF WORLD TRADE 16 GLOBAL AND INTRA‐OIC AND OF THE OIC MEMBER STATES TRADE ANALYSIS CHAPTER II: TRENDS OF INTRA‐OIC TRADE 29 CHAPTER III: GEOGRAPHICAL DISTRIBUTION OF 58 INTRA‐OIC TRADE GENERAL CONCLUSION 102 PART II: CHAPTER I: BARRIERS TO INTRA‐OIC TRADE 114 INTRA‐OIC TRADE BARRIERS CHAPTER II: DOING BUSINESS SITUATION IN OIC 128 AND ACTIVITIES FOR THE MEMBER STATES PROMOTION OF TRADE AND CHAPTER III: ACTIVITIES FOR PROMOTING INTRA‐ 153 INTRA‐OCI INVESTMENTS OF OIC TRADE AND INVESTMENT OF ICDT ICDT GENERAL CONCLUSION 193 ANNEX LISTS OF ABBREVIATIONS, TABLES AND GRAPHS 195 BILBLIOGRAPHICAL REFERENCES 200 FOREIGN TRADE STATISTICS OF OIC COUNTRIES 205 2 ICDT - Annual Report on Trade among the OIC Member States 2019-2020 GLOBAL AND INTRA‐OIC TRADE ANALYSIS 3 ICDT - Annual Report on Trade among the OIC Member States 2019-2020 EXECUTIVE SUMMARY I / RECENT DEVELOPMENTS OF THE WORLD ECONOMY: According to IMF data (Outlook, April 2020) global growth forecasts from 2019 to 2020 have declined from 2.90 to ‐4.9% respectively due to the negative impact of COVID‐19 pandemic on low income households and lockdown in the first and second quarters of 2020 and also effects of tariff increases adopted in the United States and China in early 2019. This decrease was reinforced by the introduction by Germany new fuel emission standards and natural disasters in Japan and Italy concerning sovereign and financial risks which contributed to strengthening domestic demand but also weakened the financial market in certain emerging countries. Besides, the world growth could reach 5.4% in 2021, after mastering the pandemic outbreak in many countries through the international cooperation supply chain in medical and food products to assist vulnerable countries in collaboration with the private sector. This collaboration will generate supplies of medicines, protective equipment, manufacturing essential products to limit of the outbreak of the virus and supporting national public health systems. The growth of emerging markets and developing economies is also impacted and reached 3.7% in 2019 and declined by 3% in 2020 and to increase by 5.9% in 2021 by a possibly recovery of some countries such as China, India, ASEAN‐5, Russia, Mexico, Saudi Arabia, Nigeria, etc… according the IMF Projections. The growth of the OIC Member States is expected to decline by 3.7% in 2017 and 2.4% in 2019 and progress to around 3.8% in 2020. The OIC GDP was 19.5 trillion $ in 2017 against 20.6 trillion $ in 2018 accounting for 15.2% of World GDP. In 2018, GDP growth of more than 5% was recorded in the following countries: Guinea, Côte d'Ivoire, Turkey, Tajikistan, Djibouti, Senegal, Bangladesh, Turkmenistan, Burkina Faso, Maldives, Malaysia, Guinea‐Bissau, Benin, Pakistan, Mali, Uzbekistan, Niger and Indonesia. According SESRIC projections, the OIC average per capita income level is also expected to decrease by $ 11,500 in 2019 to $ 11,100 in 2020, i.e. 3.4% decline. Globally, economies are connected to each other through cross‐border flows and bilateral, regional and international relations, COVID‐19 will have an impact on their transactions in goods, services, technology transfer, and project financing, technical assistance, movement of professionals, financial capital, direct foreign investment, international banking and exchange rates. International trade is surely one of the leading mechanisms through which the virus damages domestic economies and spreads internationally. COVID‐19 contributed to the factory and company’s closures particularly SMEs including SMIs, temporary travel and exports bans and restrictions, border closings, catering services and tourism‐related services bans and will reduce exports of services to affected countries including OIC Member Countries. According to World Bank analysis, many OIC Member Countries are from Sub‐Saharan Africa (SSA) and the Middle East and North Africa (MENA) are the least affected. Their estimated loss of GDP is estimated at around 3% and the rest of South Asia by 4.6% due to soaring prices for oil, mines, chemicals and food in this region. In countries like Indonesia and Malaysia, their GDP will drop by 3.50% and 4.23% respectively. 4 ICDT - Annual Report on Trade among the OIC Member States 2019-2020 The coronavirus will have a negative impact on several levels: restrictions on the movement of people, disruptions in supply chains around the world, and negative effects on confidence, financial markets and the travel industry. A barrel went from 70 to 23 $ a barrel during the health crisis. The average petroleum spot prices per barrel are estimated at $36.20 in 2020 and $37.50 in 2021. This sharp drop in oil prices combined with lower global growth (and investor mistrust of the future) ultimately rippled through the financial markets. Several countries and regional and international organizations have injected funds to relieve populations and structures to mitigate the effect of this health crisis by several billion dollars. In this regard, OIC General Secretariat, OIC Member Countries governments, Institutions and International partners are joining their efforts to tackle this COVID‐19 pandemic depending on the nature of the shock and country‐specific circumstances by injecting funds at national, regional and international levels reaching globally many $ trillion. In the same vein and during the Extraordinary Videoconference of the OIC Executive Committee at the Level of Foreign Ministers on the Consequences of the Novel Coronavirus Disease (COVID‐19) Pandemic and Joint Response held on 22nd April 2020, it was requested to convene an establishment of a Committee of the Permanent Representatives (CPR) with a participation of the relevant OIC institutions in order to follow up the efforts and initiatives towards assisting Member States in their respective response. Besides, IsDB has launched a US$2.2 billion Strategic Preparedness and Response Program to counter the coronavirus disease (COVID‐19) pandemic through supporting the efforts to prevent, contain, mitigate, and recover from its impacts. Besides, ITFC provides also $850 Million to help OIC Countries to fight COVID‐19 pandemic for two years within the framework of the Rapid Response Initiative ($ 300 Million) and the Recovery Response Program ($550 Million) and the Arab‐Africa Trade Bridge. This programme was implemented in collaboration with Moroccan Company SMAAR in order to share knowledge and best practices on the online platform with more than 130 African Physicians teams through webinars from 18 OIC African Countries and IsDB Reverse Linkage Program. In this respect, ICIEC provides $150 Million to help OIC Countries to fight COVID‐19 pandemic through ensuring the insurance and export credit of the trade transactions within the framework of the Rapid Response Initiative in collaboration the OIC Export Credit Agencies. Also, the OIC‐Islamic Solidarity Fund (ISF) launched an Urgent Initiative to assist Member States and an ISF donation of $ 1 million to the emergency account. These initiatives will contribute to the recovery efforts against the coronavirus pandemic, including the provision of the essential medical products and equipment, strengthen the capacity of health personnel, improving health services and effectively share information and experience in this area and to address the social, economic, and financial implications of this pandemic on Member States. Several Member States have taken exceptional measures to counter the effects of this crisis by allocating exorbitant budgets to help the poor in terms of food and medical supplies to respond to this health insecurity. Regional growth will also benefit from the reduction of uncertainties related to global trade policies and from a recovery even if it remains weak in world trade. In the region, comprising the Middle East, North Africa, Afghanistan and Pakistan the forecast rate is of 0.1% in 2019 before recovering to 2.4% in 2020 and 2.7% in 2021 following the improvement of the business climate and investments in infrastructure and the rise in private 5 ICDT - Annual Report on Trade among the OIC Member States 2019-2020 consumption but also the increase in growth by 2021 would be around 3% in Djibouti, Egypt, Oman, Morocco, Qatar and the Emirates. The Economic and Social Commission for Western Asia (ESCWA) has made an initial assessment of the cost of COVID‐19 in the Arab region. The initial estimate of the impact of the COVID‐19 pandemic in 2020 is about a loss of $42 billion on their GDP. In addition, in sub‐Saharan Africa growth should drop from 2.4% in 2019 then progress to 2.9% in 2020 and then 3.1% in 2021 especially, in Côte d’Ivoire, Senegal, Benin, Uganda, The Gambia, Mauritania, Niger, Togo, Guinea‐Bissau whose growth is expected to exceed 5% due to soaring prices of petroleum, mining and agricultural products but also to the improvement of the business climate and the intensification of local production of basic products. In the countries of Europe and Central Asia (EAC), growth should drop from 2% in 2019 to 2.6% in 2020 then rise to 2.9% in 2021 due to the expected growth in Uzbekistan, in Tajikistan and in Turkmenistan because of the possible skyrocketing of the prices of the energy products which, abound this zone but also in the assumption of a stabilization of the prices of the principal basic products and in favor of advancing structural reforms. Furthermore, in South Asia, growth should climb to 5.5% in 2020 subject to a slight recovery in domestic demand and as economic activity benefits from an accommodative policy in India and Sri Lanka and improved business confidence and support for infrastructure investment in Afghanistan Bangladesh and Pakistan.