Increasing trade linkages and foreign direct investment to contribute to Asia Pacific's growth: ADB

The Asia Development Bank (ADB) said on Tuesday in its latest report that strengthening trade linkages and attracting foreign direct investment (FDI) will contribute to Asia and the Pacific's growth and help improve resilience to emerging protectionism.

ADB's Asian Economic Integration Report 2016 noted that with the continued anemic global economic recovery, trade growth in Asia and the Pacific decelerated in 2015, falling further behind growth in gross domestic product.

Trade growth in Asia slowed to 2.3 percent in 2015, below the global average of 2.7 percent, which ADB said was mainly due to the structural transformation underway in China. Rising protectionism and non-tariff barriers are also two major obstacles to trade.

The report highlights that greater trade openness and FDI can strengthen the region's resilience to slow global growth, but countries need to improve their institutional quality, business environment, and policy effectiveness to encourage FDI.

ADB said FDI can contribute to economic growth through job creation, capital mobilization, and infrastructure development, while promoting productivity through technological and knowledge spillovers. It also fosters inclusiveness through better working conditions and rising wages.

On the other hand, the report added that financial integration continues to increase gradually in the region but lags far behind trade integration.

It was reported that migration from Asia also increased between 2010 and 2015. The increase was directed more to outside Asia than within the region. Asia and Pacific is the largest source of international migrants, with its total 83.3 million migrants accounting for more than third of the 243.7 million migrants worldwide as of 2015.

ADB's Asian Economic Integration Report reviews the progress of Asian governments' efforts to integrate their economies and improve cooperation on a variety of levels. Endit