BANDAR SERI BEGAWAN: Brunei Darussalam ranked 26th out of 30 assessed economies in the Hinrich-IMD Sustainable Trade Index 2023 (STI 2023).
The Hinrich Foundation is an Asia-based philanthropic organisation that works to advance mutually beneficial and sustainable global trade. The STI 2023 report measured 30 economies’ readiness and capacity to participate in the global trading system by analysing 71 indicators grouped into three “pillars” that align with the long-term goals of economic growth, societal development, and environmental protection.
High-ranking economies share discernible commonalities: Under the economic pillar, those with robust infrastructure and a strong inclination towards technological innovation stand out.
In the societal pillar, the index rewards economies characterised by political stability, economic equality, high educational attainment, and social mobility.
In the environmental pillar, the top ranks are occupied by economies that uphold high environmental standards and effectively address challenges related to wastewater, air pollution, carbon and energy intensity.
MORE WORK TO BE DONE
According to the report, the Sultanate scored 19.6 out of 100 in its analysis. The country ranked 18th in the societal pillar, 21st in economic and 29th in environment.
In the report’s analysis of the economy, the nation excelled in foreign and trade payment risk (ranked first) and tariff and non-tariff barriers (ranked second). The Sultanate ranks among the top 10 economies in other indicators including gross fixed capital formation and consumer price inflation.
In other areas, the report noted that the sultanate ranked third in terms of political stability and the absence of violence. It also noted that the country did well in curbing air pollution but more needs to be done in respect to renewable energy.
The STI 2023 is outlined by a key shift in a post-pandemic world marred by geopolitical turmoil: towards the so-called “slowbalisation”. Economists generally mean by this term a slowdown in trade reform and weakening political and policy support for measures that open trade amid rising geopolitical tensions.
As a response to an increasingly fragmented world, evidence from the STI shows a deterioration across key economies in non-tariff barriers and trade costs this year compared to 2022. The world’s largest economies, which should be leading efforts to reverse “slowbalisation”, are instead among the key economies that are raising tariffs, non-tariff barriers, and slowing trade liberalisation, the data showed.
This has posed challenges to how states can properly use trade to manage and promote their economic, societal, and environmental sustainability, according to the report.
Of the 30 major trading economies studied by the STI 2023, the two that excelled in achieving such a balance were, for the second year in a row, New Zealand, and the United Kingdom. Singapore jumped from fifth to third place, and Japan dropped four positions, from fourth to eight place, said the report.
“Economies that balance trade and sustainability well tend to be the more developed ones, in which the cost of making trade more aligned to the Sustainable Development Goals is lower,” said Director of IMD’s World Competitiveness Centre Professor Arturo Bris. “With global trade challenged by geopolitical and health issues, the work of streamlining supply chains and reducing costs has become paramount, even at the expense of social or environmental considerations in global trade.
“Our index sheds light on how this trade-off is being played out,” explained Bris.
“The global trade system is experiencing fragmentation that threatens to erode the achievements of 70 years of globalisation,” said CEO of the Hinrich Foundation Kathryn Dioth.
“Protectionist trade policies are being implemented under the guise of responding to the headwinds of post-pandemic inflation and geopolitical tensions. And while global trade continues to expand in value, that is mainly due to higher commodity prices.” – Borneo Bulletin/ANN