As the months roll on, the full effects of the Covid-19 pandemic have become clearer across the globe. Without a doubt, among the hardest hit regions has been Latin America. But despite the difficult health situation, banking systems have, so far, responded well to the socio-economic impacts of the crisis.
For Better or for Worse: The Linkage Between the US Economy and the Major Economies of the Western Hemisphere
The US economy is on track to break its own record; its current 115 months of expansion is only five months shy of the record set in the 1990s. The next recession will come, maybe soon, as the economy succumbs to factors such as policy errors, foreign growth and corporate profit. And the United States will not fall alone; other Western Hemisphere countries will be dragged down with it.
Since trade finance is lifeblood of global business, it has a positive role to play in driving sustainable practices. Here, banks can lead by example: through collaborative efforts, they can play a crucial role in encouraging a diverse network of counterparties to safeguard environmental, social and governance (ESG) principles, while also stimulating growth. So, how can “sustainable trade” be fully realized to meet these ends?
Human beings tend to believe that after hitting a bump in the road, their route will eventually go back to “normal”. But when it comes to global economic and trade growth, this assumption may lead to a complacency that ultimately allows conditions to deteriorate to levels that everyone dreads.
There is much rhetoric around the opportunities provided by emerging markets. And there is plenty of discourse around the fact that banks are de-risking and retreating from such areas. The fact of the matter is that some regions of the world are riskier to operate in.
Developing countries’ joint trade profile has changed drastically in the last two decades. Developing economies accounted for almost half of the world’s merchandise exports in 2014, as compared to less than a third in 2000, and
Trade is critical; it leads to economic growth and the jobs that lift people out of poverty. But without sufficient trade finance in the form of loans and guarantees to support imports and exports, trade becomes difficult and, ultimately, poverty reduction slows.