Seaborne trade expanding world economy

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Offline Anhar Sharif

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Seaborne trade expanding world economy
« on: February 19, 2020, 08:50:46 AM »
International seaborne trade in recent immediate past years gathered momentum with volume expanding 4 per cent in 2017. This is the highest record in last five years. Those countries have more than one sea ports are noticed to go up economically by leaps and bounds since the concerned ports are helping to expand their business through sea way easily. Asia region among others is being benefited much following excess seaborne trade. Among other continents in the world, Asia placed better position in respect of loading goods in its seaports. With the expanding trade on sea route, global economy is in good temper. Seaborne trade has been blessing to the developing and transition economies that are on the track of becoming developed economies shortly. Due to rise such kind of activities, trade surplus in transition economies has been almost doubled in last ten years. United Nations Conference on Trade and Development (UNCTAD) in its study revealed that around 4.4 out of total 10.7 billion tons of goods loaded in Asian seaports. Developing economies share of global goods unloaded rose to 63 per cent in 2017- UNCTAD also said. If the trend continues for long, I think the economies under least developed countries must stand before world with head high and proud. The trend of rising global trade through marine route began a few years back to a great extent against the backdrop of increasing global demand. Some countries that are land locked have been trying to make friendship to the countries belonging sea ports in order to ease trading activities. Most land locked countries lying in the African continent are in great danger since they have no alternative option for trading in cost-effective way. At present around 32 countries belong to the group of landlocked developing countries (LLDCs). 16 are located in Africa, 12 Asia, 2 in Latin America and 2 in Central and Eastern Europe. According to UNCTAD, in 2017, 10.7 billion tons of goods were loaded worldwide. 1.5 billion tons more than in 2012. Loading of dry cargo alone increased by 1.2 billion tons; crude oil, petroleum products and gas contributed the remaining 305 million tons to the overall increase. Asia was by far the largest trading region. In 2017, 4.4 billion tons of goods were loaded, and 6.5 billion tons unloaded, in Asian seaports. The other continents registered less than half of these amounts. The volumes of goods delivered to ports in Oceania were, at less than 200 million tons. Developing economies continue to make a major contribution to global seaborne trade. They account for almost two thirds of goods loaded and unloaded worldwide. Their share in seaborne trade imports, as measured by goods unloaded, has steadily increased over the last ten years, to reach 63 per cent in 2017. This trend has been driven strongly by developing economies in Asia. In developing economies of Asia and Oceania, about one quarter more goods were unloaded in 2017 than in 2012 In 2014, developing economies turned from net exporters into net importers of seaborne trade volumes. By 2017, they developed a deficit of 400 million tons, as compared to a surplus of 190 million tons in 2012. These figures, however, hide considerable differences across continents. Unlike developing economies in Asia and Oceania, and consistent with past trends, developing economies in America and Africa continued running significant surpluses in 2017. Transition economies have almost doubled their surplus over the last ten years, reaching 599 million tons in 2017. In developed economies, the deficit of 1.4 billion tons in 2007 almost vanished by 2017. It is said that landlocked countries face a good number of trade challenges while doing business with the countries that have sea ports. They face transit as well as custom problem at the time dispatching and receiving transported goods. Business cost in huge is noticed in the countries that have no sea facility. Truly speaking, landlocked countries see very poor flow of foreign direct investment. Because of having no sea facilities in that countries, business giants are not interested to invest there. So, the need for making easier ways for investors is a must so that they might appear in those countries with huge capital. Ongoing trade war among many developed economies has become barrier to increase seaborne trade. With a view to more volume of sea way trade, there is no alternative to reduce freight cost. Number of mother vessels is badly needed in this moment to address current need. If companies related to loading and unloading are aware of cutting longer time, the volume must be increased in the days to come. A speedy customs service might bring momentum seaborne trade. Needless to say, that Asian countries are in better position in respect of seaborne trading. But, still now three landlocked countries- Nepal, Bhutan and Afghanistan are facing many trade challenges due to having no easy transit facilities. Bangladesh, China, India, Myanmar Economic corridor (BCIM-EC) might pave the ways these three countries to expand transit facilities more if implemented shortly. After ending trade war, World economy is set to expand at a rapid pace if sea routes can transport existing volume of goods.
Md Anhar Sharif Mollah

Assistant Professor of Finance

Department of Business Administration

            &

Assistant Proctor

Daffodil International University

Cell: +8801758883609