PART ONE: THE CHALLENGE FOR TRANSPORT

PART ONE:
THE CHALLENGE FOR TRANSPORT
21
MEETING THE NEEDS OF TRADE
Trade has a major impact on transport development. Rapid increases in trade, and changes in
the geographic and commodity structure of trade, require expansion and adaptation of transport
infrastructure facilities and services. Conversely, inadequate transport infrastructure capacity, or poor
service levels, may well hinder further socio-economic development. The present chapter provides a
general background on the recent developments and trends in the economic and trade growth of the
world and the ESCAP region, which has driven developments in transport over the recent years.
A.
Economic growth in the world
After an annual average growth rate of 2.6 per cent over the period 1996-2000 world gross
domestic product (GDP) slowed significantly, falling below 2 per cent in both 2001 and 2002
(table I.1). This slowdown reflects the impact of the loss of momentum in the United States economy
following the stock market decline in that country.
Table I.1 also shows the impact of the Asian financial crisis of 1997-1998, when large inflows
of private capital of a largely short-term nature, coupled with a current account deficit, were followed
by a reversal of capital flows. The sudden and massive withdrawal of foreign capital led to a currency
and banking crisis. Domestic demand in crisis economies declined by up to 30 per cent.
In 2003, the predicted growth of world GDP is 2.2 per cent, continuing a gradual recovery
from the 2001 low point of 1.2 per cent. Latest forecasts from the Project LINK predict continued
economic strengthening in the short to medium term, with the growth rate estimated to reach 3.1 per
cent in 2004.
Table I.1. Annual GDP growth rates for the world and selected regions and countries, 1996-2003
GDP growth
(annual percentage)
World
Developed economies
Japan
United States of
America
European Union
Developing economies
Economies in transition
1996
1997
1998
1999
2000
2001
2002
2003a
3.0
2.9
3.9
3.4
3.2
2.6
1.6
3.9
1.9
2.1
-2.5
4.4
2.8
2.6
0.2
4.2
3.8
3.2
2.6
3.8
1.2
0.9
0.4
0.3
1.9
1.5
0.3
2.4
2.2
1.7
0.7
2.6
1.7
5.7
-0.1
2.5
5.5
1.7
2.6
1.7
-1.9
2.3
3.6
2.8
3.5
5.5
7.0
1.5
2.2
3.1
0.9
3.2
5.0
1.3
3.7
5.7
Source (1996): ESCAP, Economic and Social Survey of Asia and the Pacific 2000 (United Nations publication, Sales
No. E.00.II.F.19).
Source (1997-1999): ESCAP, Economic and Social Survey of Asia and the Pacific 2001 (United Nations publication,
Sales No. E.01.II.F.18).
Source (2000): ESCAP, Economic and Social Survey of Asia and the Pacific 2003 (United Nations publication, Sales
No. E.03.II.F.11);. 2001 to 2003 estimates for economies in transition also from this source.
Source (2001, 2002 and 2003): except for economies in transition: United Nations, Department of Economic and Social
Affairs, Global Economic Outlook, prepared for Project LINK Meeting, New York, 23-25 April 2003.
a
2003 are estimates.
22
Table I.2. Annual GDP growth rates for selected ESCAP countries and subregions, 1996-2002
GDP growth
(annual percentage)
Developing countries
South and South-West Asia
Bangladesh
Bhutan
India
Iran, Islamic Republic of
Nepal
Pakistan
Sri Lanka
Turkey
South-East Asia
Brunei Darussalam
Cambodia
Indonesia
Lao People’s Democratic
Republic
Malaysia
Myanmar
Philippines
Singapore
Thailand
Viet Nam
East and North-East Asia
China
Hong Kong, China
Mongolia
Republic of Korea
Taiwan Province of China
Pacific island economies
Cook Islands
Fiji
Kiribati
Maldives
Papua New Guinea
Samoa
Solomon Islands
Tonga
Tuvalu
Vanuatu
Developed economies
Australia
Japan
New Zealand
1996
c
1997
b
1998
a
1999
2000
2001
2002
7.2
6.2c
5.4a
6.0a
7.8a
5.8a
5.6a
6.8a
3.8a
7.0a
7.2c
3.6a
5.5a
7.8a
6.9a
5.8
4.6b
5.4
7.3
5.0
3.4
4.9
1.9
6.3
7.6
4.3b
3.6
4.1
4.7
6.9
0.1
5.8a
5.2
5.1
6.8
1.6
3.0
2.0
4.7
3.2
-6.9a
-4.0
2.1
-13.2
4.0
6.1
5.2
4.9
6.0
6.4
2.4
3.9
3.1
4.3
-5.1
3.4
2.5
5.0
0.2
7.3
7.4
5.6
5.5
6.0
5.9
4.5
6.0
4.5
5.7
6.0
5.9
3.0
5.5
4.4
6.5
3.2
4.6
5.3
5.5
5.6
4.8
4.9
2.5
-1.4
-7.4
2.2
--5.5
3.3
5.7
5.1
4.5
4.8
8.6a
6.4a
5.8a
7.5a
5.5a
9.3a
8.1c
9.6a
4.5a
2.4a
6.8a
5.7c
2.2c
-0.2a
3.4a
6.3a
7.9a
3.9a
5.9a
3.5a
-1.5a
20.4a
2.6a
3.6c
3.9a
5.1a
2.5a
7.5
5.7
5.2
8.4
-1.7
8.2
7.0b
8.8
5.0
4.0
5.0
6.8b
-3.7b
-2.8
-0.9
2.3
9.1
-5.2
1.5
-0.9
-1.4
3.5
0.6
1.0b
4.0
1.6
3.0
-7.5
5.8
-0.6
0.4
-10.2
5.8
1.6a
7.8
-5.1
3.5
-6.7
4.8a
2.0a
-2.3
1.4
8.3
9.1
1.4
2.6
1.3
0.1
14.9
6.0
-2.3a
5.3
-2.5
-0.7
5.4
10.5
3.3
5.4
4.2
4.8
7.6
7.1
3.0
3.0
10.7
5.7
3.9
2.7
6.6
1.5
8.5
3.2
5.3
-1.7
2.2
3.0
-2.5
0.5
4.7
0.2
3.9
8.2
--3.7
10.1
4.5
6.7
8.2
8.0
9.7
4.0
9.2
6.4
-3.1
3.3
-12.5
--7.6
0.8
3.5
-13.5
5.2
--4.0
1.8
4.3
1.6
4.0
0.4
10.5
3.2
-2.4
1.8
6.8
3.3
7.3
0.6
1.1
3.0
-2.1
-0.8
-3.3
4.3
-----3.4
6.5
-13.0
3.0
---0.5
-0.1
2.7
-0.3
2.5
4.2
5.5
4.6
2.2
4.9
7.0
5.7
7.9
1.7
3.9
6.1
3.2
1.1
1.4
4.4
-----0.5
1.1
3.0
3.0
---0.4
-0.3
3.3
-0.6
3.8
4.4
6.5
0.8
3.6
3.0
6.0
4.0
--4.5
3.2
5.8
Sources (1996-1999): ESCAP, Economic and Social Survey of Asia and the Pacific 2001 (United Nations publication,
Sales No. E.01.II.F.18), except:
a
Economic and Social Survey of Asia and the Pacific 2000 (United Nations publication, Sales No. E.00.II.F.19).
b
Economic and Social Survey of Asia and the Pacific 1999 (United Nations publication, Sales No. E.99.II.F.10).
c
Economic and Social Survey of Asia and the Pacific 1998 (United Nations publication, Sales No. E.98.II.F.59).
Sources (2000-2002): ESCAP, Economic and Social Survey of Asia and the Pacific 2003 (United Nations publication,
Sales No. E.03.II.F.11).
23
TableI.3. Annual GDP growth rates for economies in transition of the ESCAP region, 1996-2002
GDP Growth
1996a
(Annual percentage)
North and Central Asian Economies
5.9
Armenia
1.3
Azerbaijan
--Georgia
0.5
Kazakhstan
7.1
Kyrgyzstan
-3.5
Russian Federation
-16.7
Tajikistan
6.7
Turkmenistan
1.7
Uzbekistan
1997
1998
1999
2000
2001
2002
3.3
7.3
3.3
4.0
----5.8
10.0
7.4
11.3b
9.9 b
10.6 b
11.3
2.9
2.9
-0.2c
----1.7
-1.9
1.7
13.5
13.5
9.5
9.9
2.1
3.6
5.1
5.3 b
-0.5 b
0.9
-4.9
3.2
7.6
5.0
3.9
1.7
5.3
3.7
8.3
10.2 b
9.1 b
-11.4
5.0
16.0
17.6
20.5b
8.6 b
5.2
4.4
4.4
5.0
4.5
3.0
Sources (1996-1999): ESCAP, Economic and Social Survey of Asia and the Pacific 2001 (United Nations publication,
Sales No. E.01.II.F.18), except: a Economic and Social Survey of Asia and the Pacific 2000 (United Nations publication,
Sales No. E.00.II.F.19).
Sources (2000-2002): ESCAP, Economic and Social Survey of Asia and the Pacific 2003 (United Nations publication,
Sales No. E.03.II.F.11) except: b Asian Development Bank 2003. Asian Development Outlook 2003. OUP: Hong Kong,
China.
B.
Economic growth in the ESCAP region
In 2002 the developing countries of the ESCAP region recovered more strongly from the
slump of 2001 than the developed countries of the world, with overall economic growth rebounding to
in excess of 5 per cent (tables I.2 and I.3). Present expectations are that this solid growth is
continuing and will strengthen slightly over the next two years.24
Disappointingly, most of the least developed countries of Asia lagged behind the performance
of the rest of the region. The slowdown in demand in the developed countries that consume a high
proportion of the most important exports of these countries had a particularly severe impact on their
economic growth. In contrast to previous periods of slow growth in this group, it appears that
domestic factors played little part in bringing about the economic downturn.
GDP growth in the Pacific island economies recovered slightly following two years of
negative growth, with Fiji in particular recovering strongly from the negative impact of political
disturbances. Unfortunately, renewed unrest in the Solomon Islands appears certain to undermine
what appeared to be a tentative recovery in that country. Papua New Guinea continues to struggle to
achieve positive growth.
Growth in many countries in Central Asian was buoyant, due to large oil and gas investments
(as in Azerbaijan and Kazakhstan), while smaller economies (such as Armenia and Tajikistan)
benefited from expansion in their mining and metals sectors. Growth for the Central Asian region as a
whole is projected to be 4.6 per cent in 2003, accelerating to 5 per cent in 2004.25
In general, the South and South-West Asian economies survived the economic downturn well,
with GDP growth rates for the subregion remaining above 4 per cent. Sri Lanka and Turkey, however,
suffered severe downturns, recording negative growth rates in 2001 before recovering in 2002. A
small decline in the continuing positive growth rate of India was mainly due to a drop in agricultural
production induced by unfavourable weather conditions.
24
ESCAP, 2003. Economic and Social Survey of Asia and the Pacific 2003 (United Nations publication,
Sales No. E.03.II.F.11).
25
Economic Monitoring and Assessment Unit, Department of Economic and Social Affairs, Global
Economic Outlook. (United Nations, New York, 2003).
24
Countries within the South-East Asian subregion had a very mixed performance, with those
most dependent on high technology exports experiencing a very poor year in 2001. Malaysia and
Singapore were particularly hard hit. The economy of Singapore remained very subdued in 2002, but
most of the other economies of the subregion rebounded quite strongly, driven by a mixture of strong
domestic demand, some recovery in electronic and electrical manufactures and improved commodity
prices. Overall the subregion grew at a steady 4 per cent in 2002.
Sustained growth in China continued to drive the overall results for the East and North-East
Asian subregion, despite a lacklustre performance for all of the other economies in the group during
2001. China continued to register consistently high annual growth rates in the range 7 to 8 per cent
per annum. Hong Kong, China was particularly hard hit by the global slowdown of 2001, while the
Republic of Korea proved relatively resilient, maintaining growth above 3 per cent in very adverse
conditions before accelerating to over 6 per cent in 2002.
Within the developed economies, the Australian economy continued to expand throughout the
period, although slowing notably in 2001 and 2002. The sustained solid economic performance was
supported by strong domestic demand and dynamic exports. A strengthening exchange rate together
with the lagged effect of severe drought is likely to dampen Australian growth prospects in 2003.
The Japanese economy continued to perform poorly, belying the hopeful signs that were
detectable two years ago. Negative growth rates were recorded in both 2001 and 2002 and, while
prospects for 2003 appear a little brighter, growth is expected to remain below 1 per cent.
The New Zealand economy has recovered very strongly from the very short-lived recession in
1998 when output contracted by 0.7 per cent, largely due to the Asian financial crisis, severe drought,
weaker domestic demand and low international prices for farm commodities. Over the subsequent
four years GDP has expanded at an average of 3.5 per cent per annum, despite the impact of the 2001
global economic downturn. The economy’s strong growth has been supported by domestic demand
through an increase in business spending and housing investment.
C.
Intraregional and interregional trends in merchandise trade
This section provides a brief overview of the current trends in trade volumes within the
ESCAP region, and between it and the rest of the world. While the focus is on trade in goods, trade in
services (including transport services) is becoming increasingly important.
Section C.1 provides a brief overview of global and regional trends in merchandise trade26.
Section C.2 then analyses trade flows more closely, in terms of trade by origin and destination, as well
as by type of goods.
1.
a)
Value of trade
World trade
The first half of the 1990s was characterized by a rapid economic growth by many ESCAP
developing countries with the developed world, fuelled by rapid trade expansion.
In the second half of the 1990s, sharp swings in world trade flows were caused by the
1997-1998 Asian financial crisis, the subsequent rapid recovery in Asia in 1999 and hikes in
commodity prices. Trade by the developing countries declined in volume in 1998, and even more so
in United States dollar terms27. Trade volumes and trade values diverged, as United States dollar
26
27
However, for most ESCAP economies only trade flow data up to 1998 is available.
ESCAP, 2001. Economic and Social Survey of Asia and the Pacific 2001 (United Nations publication,
Sales No. E.01.II.F.18).
25
prices of some commodities and certain manufactures declined. This discrepancy persisted in 1999,
when both exports and imports into developing countries recovered.
World non-oil commodity prices recovered slightly in 2000, after sharp declines in 1998 and
1999. The next two years saw sustained increases in price that were particularly beneficial to
developing countries, with prices increasing by nearly 15 per cent between 2001 and 2003.28 Oil
prices, after falling to a low of about US$ 10 per barrel in early 1999, increased sharply to US$ 27 per
barrel in 2000 and have gradually crept higher since: the average price in the first six months of 2003
was US$ 29/barrel.29
After slowing considerably in 1998 and 1999, world trade expanded by 12.81 per cent in 2000
(table I.4). This was followed by a dramatic fall in 2001, with the volume of trade actually
contracting by 0.7 per cent, ahead of a modest recovery in 2002.30 Early indications, particularly from
the maritime industry, are of strong trade volume growth in 2003 and 2004.28
Table I.4 compares the growth of exports from selected ESCAP countries and subregions of
the period 1980-2002 with export growth for the world as a whole and for other major regions.
Throughout the 1980s and 1990s export growth in the region was exceptionally strong,
averaging 8.7 per cent per annum over the first of these decades and 8.9 per cent over the second.
Some caution must be exercised with respect to this second figure, however, as the ESCAP total for
the year 2000 includes exports of the Russian Federation and six Central Asian economies not
included in 1990. If this is taken into account, export growth for the region as a whole falls to 8.1 per
cent. This remains well above the estimate growth for the world as a whole of 5.4 per cent per annum
over the 1980s and 6.4 per cent per annum over the 1990s. However, figure I.1 shows that the growth
of the ESCAP share of world exports between 1980 and 2002 is concentrated in two rather short
periods: 1980 to 1984 and 1990 to 1995.
During the first of these periods, the fastest growing subregion was North and North-East
Asia, which grew at an average of 9.8 per cent over 1980s. However, growth was fairly evenly spread
throughout the region, with the Pacific Islands the only subregional grouping to record average export
growth of less that 6 per cent per annum over this period.
The picture changed somewhat during the 1990s, with South-East Asia taking over the role of
export growth leader. ASEAN’s export growth peaked at 23 per cent per annum in 1994 and 1995,
falling sharply to a low of -6 per cent in 1998. Currency devaluation and concerted efforts to boost
exports led to a rapid recovery from this low to record 19 per cent growth in 2000. During the second
half of the decade, Central Asia also recorded very strong export growth, averaging 11.3 per cent per
annum over the period 1995-2000. South Asia’s export growth was also high, averaging 9.0 per cent
over the decade, although growth was somewhat uneven across the subregion, with very high growth
rate in Bangladesh, Nepal, Sri Lanka and – to a lesser extent – India partly offset by more modest
performance in the other economies.
28
World Bank Development Prospects, “Commodity Price Data Pinksheet-June 2003”. (Index for nonenergy commodities for low and middle income countries).
29
30
World Bank Development Prospects, “Commodity Price Data Pinksheet-June 2003”.
ESCAP, 2003. Economic and Social Survey of Asia and the Pacific 2003 (United Nations publication,
Sales No. E.03.II.F.11); and Economic Monitoring and Assessment Unit, Department of Economic and Social
Affairs, Global Economic Outlook (United Nations: New York, 2003 (April)).
26
b)
Asia and Pacific exports
TableI.4. Exports of merchandise (f.o.b.) at current prices, 1980-2002
US$ million
Subregion
Country
North and North-East Asia
Total
of which
China
Hong Kong SAR a
Japan
Republic of Korea
Macao, China
Mongolia
Taiwan Province of China
Central Asia Total
1980
1990
2000
201,541
514,988
18,189
13,684
130,441
17,512
613
418
19,784
62,091
29,002
287,581
65,016
1,701
661
67,079
2001
2002
1,075,81
6
249,203
23,536
479,249
172,268
2,539
536
147,777
966,459
266,098
20,273
403,496
150,439
2,300
522
122,505
1,054,53
2
325,565
16,691
415,985
162,471
2,349
501
130,257
0
18,555
294
1,745
330
9,126
504
785
2,506
3,265
18,584
343
2,314
320
8,647
460
650
2,706
3,144
19,612
508
2,016
322
9,570
464
721
3,068
2,943
27,365
21,944
5,421
49,146
39,752
9,394
77,142
63,870
13,272
77,110
63,387
13,723
79,337
64,987
14,350
2,405
127
4
470
30
61
26
105
418
1,031
17
74
7
35
2,810
311
5
497
111
82
3
66
449
1,177
9
70
11
19
4,150
346
20
584
222
74
17
28
635
2,096
14
69
9
26
3,658
383
16
538
195
61
28
13
501
1,813
16
47
13
22
0
14.9
-2.1
5.2
10.2
4.1
-2.1
8.2
14.3
-15.8
-6.8
-2.9
-3.8
-3.3
-6.1
11.3(b)
5.4 b
17.7 b
13.4 b
18.9 b
6.8 b
8.2 b
2.6 b
4.2 b
2.8
31.4
7.5
-1.2
2.4
-4.1
-4.2
10.6
-5.1
6.0
6.1
5.7
4.6
4.9
3.5
1.4
0.9
4.0
3,361
376
16
497
184
37
24
17
424
1,646
12
52
18
48
1.6
9.4
2.3
0.6
14.0
3.0
-19.4
-4.5
0.7
1.3
-6.2
-0.6
4.6
-5.9
4.0
1.1
14.9
1.6
7.2
-1.0
18.9
-8.2
3.5
5.9
4.5
-0.1
-2.0
3.2
-10.0
4.2
-10.6
-7.7
-9.0
-29.3
18.8
-22.1
-18.3
-11.4
-7.4
-13.2
41.4
35.9
71,086
5,733
50,039
88
645
9,882
4,699
7.7
8.2
15.2
7.7
20.6
9.8
7.9
6.0
8.9
14.4
5.2
9.0
3.9
14.7
4.9
11.0
5.2
-5.3
n.s.
8.7
7.6
-10.4
4.6
-7.0
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
Armenia
Azerbaijan
Georgia
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
of which
Australia
New Zealand
of which
American Samoa
Cook Islands
Fiji
French Polynesia
Guam
Kiribati
Nauru
New Caledonia
Papua New Guinea
Samoa
Solomon Islands
Tonga
Vanuatu
of which
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
13,135
759
17
8,586
8
80
2,618
1,067
27,493
1,671
70
17,969
52
204
5,615
1,912
64,232
6,399
116
42,379
76
804
9,028
5,430
64,416
6,085
116
43,347
76
737
9,238
4,817
of which
Turkey
Iran, Islamic Republic of
Afghanistan
15,918
2,910
12,338
670
32,499
12,959
19,305
235
56,016
27,485
28,345
186
55,351
31,334
23,904
113
57,709
34,750
22,880
79
7.4
16.1
4.6
-9.9
5.6
7.8
3.9
-2.3
1.5
12.4
-10.2
-34.8
of which
Brunei Darussalam
Cambodia
Indonesia
Lao People's Democratic
RMalaysia
bli
Myanmar
Philippines
Singapore a
Thailand
Viet Nam
65,204
4,581
16
21,909
28
12,958
472
5,741
12,656
6,505
338
126,245
2,213
86
25,675
79
29,452
325
8,117
34,826
23,068
2,404
368,414
2,855
1,264
62,124
330
98,229
1,620
39,783
78,703
69,057
14,449
326,032
2,796
1,378
52,115
331
88,005
2,358
32,664
66,172
65,113
15,100
342,702
2,727
1,379
52,048
329
95,655
2,761
35,627
67,024
68,622
16,530
6.8
-7.0
18.3
1.6
10.9
8.6
-3.7
3.5
10.7
13.5
21.7
11.3
2.6
30.8
9.2
15.4
12.8
17.4
17.2
8.5
11.6
19.6
-3.6
-2.3
4.5
-8.5
-0.2
-1.3
30.5
-5.4
-7.7
-0.3
7.0
Pacific Islands Total
South Asia Total
South-West Asia Total
South-East Asia Total
Russian Federation
-
13.1
7.8
8.2
14.0
10.7
4.7
13.0
of which
ANZ Total
-
Average annual growth rate
1980199020001990
2000
2002
9.8
7.6
-1.0
...
-
-
105,565
103,139
106,858
7.7(b)
0.6
Total ESCAP Region
325,568
753,181
1,769,89
0
1,614,74
9
1,735,19
7
n.a
8.7
8.9
-1.0
North America
Latin America
Western Europe
C./E. Europe/Baltic States/CIS
Africa
Middle East
World
293,555
109,700
815,535
157,440
121,500
212,800
2,034,00
521,775
146,800
1,637,12
105,420
105,500
139,300
3,448,00
1,058,08
360,500
2,506,56
271,945
146,500
259,000
6,431,00
989,275
348,800
2,511,16
285,900
137,500
239,700
6,176,00
946,365
351,500
2,648,44
309,415
138,900
236,000
6,424,00
5.9
3.0
7.2
-3.9
-1.4
-4.1
5.4
7.3
9.4
4.4
9.9
3.3
6.4
6.4
-5.4
-1.3
2.8
6.7
-2.6
-4.5
-0.1
Source: Based on data in WTO, World Merchandise Trade by Region and Selected Economy. Downloaded from
<http://www.wto.org/english/res_e/statis_e/statis_e.htm#wtr2003>, September 2002.
a
Excludes re-exports.
27
b
1994 to 2000.
Figure I.1. ESCAP exports as a share of world exports (by value), 1980-2002
30
25
Percentage
20
15
10
5
0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
excluding Central Asia/Russian Federation
including Central Asia/Russian Federation
Source: Based on data in WTO, World Merchandise Trade by Region and Selected Economy.
The value of exports from the region contracted sharply in 2001, falling by 8.8 per cent.
Export growth over the 2000-2002 period has still been very much weaker than earlier, with a fall in
export values of approximately 1.0 per cent per annum over this period. During the same period, total
global export values fell marginally (by 0.1 per cent per annum). South Asia – and particularly India
– managed to grow relatively strongly despite the global downturn, while Central Asia, South-West
Asia, Australia/New Zealand and the Russian Federation maintained positive – though modest –
growth. However, the East and South-East Asian subregion both saw a reduction in the value of their
exports over the period.
2.
Direction of trade
In the early 1990s, intraregional trade in the ESCAP region was rising rapidly due to growing
openness and affluence in the region31. This trend continued until 1996, when the share of
intraregional trade in the total trade of ESCAP member countries reached 52 per cent, up from 44 per
cent in 199032. Consequently, in 1996 interregional trade (that is, ESCAP trade with the rest of the
world) accounted for 48 per cent of its total world trade.
The share of intraregional trade in the ESCAP region then decreased rapidly, from 52 per cent
in 1997 to 49 per cent in 1998. The share of intraregional exports in the region dropped even faster
from 52 per cent in 1997 to 46 per cent in 1998. In other words, as a consequence of the financial
31
Note, however, that an increase of the share of intraregional trade in total world trade does not
necessarily mean greater economic integration, since this increase may, for example, be simply due to an increase in
the share of ESCAP gross regional product in gross world product.
32
ESCAP, 1995. Studies in Trade and Investment No.6, Review and Analysis of Intraregional Trade
Flows in Asia and the Pacific (ST/ESCAP/1506).
28
crises, ESCAP trade with countries in the ESCAP region declined more rapidly than their trade value
increased with the European Union and the United States. However, the ESCAP share of
intraregional trade has increased subsequently as economic recovery in the region got underway.
Table I.5 shows that, for the developing countries of the region as a whole, the share of exports
destined for China over the period 1990-2001 increased from 6.0 to 10.1 per cent, more than
offsetting a fall in the share destined for Japan from 14.4 to 11.8 per cent. As the share of exports
going to other ESCAP member countries remained virtually unchanged, the result has been a slight
increase in the overall intraregional share.
Table I.5 also shows that the geographical distribution of exports from the developing
countries of ESCAP differs somewhat from subregion to subregion. Perhaps the most complex
changes have taken place within the East Asian subregion. The proportion of exports from China
destined for other developing countries of the region have fallen significantly over the period 1990 to
2001, with both the European Union and the United States increasing in importance as export
destinations. For the Republic of Korea, on the other hand, exports to other developing countries of
the region have become increasingly important. Trade to other ESCAP member countries, excluding
China and the developed ESCAP member countries, rose from 14.8 to 19.6 per cent over the period.
If exports to China are included, the increase is from 14.8 to 38.2 per cent. As a result, even after a
substantial drop in the share of exports destined for Japan is taken into account, intraregional trade has
become increasingly important. This is true also for Hong Kong, China and Mongolia, although in
these cases increasing trade with China is clearly the dominant factor. Overall, the increasing extraregional share of China’s export trade and the increasing intraregional share of the exports of the other
East Asian economies roughly balance out, leaving the total share of intraregional exports from East
Asian economies largely unchanged at a little under 50 per cent.
The intraregional share of exports from the South-East Asia region has increased slightly over
the period 1990-2001, for trade with developing countries of the region more than offset the decline in
the share of exports going to Japan. In total, exports to other ESCAP member countries (excluding
Australia and New Zealand) increased from approximately 49 to 52 per cent. The increase in
intraregional share was particularly marked for the Philippines, Singapore and Thailand.
The intra-ESCAP share of South Asian exports has historically been low, with the European
Union and the United States being the major export destinations for the trade of these countries.
While this remains the case, there has been a marked increase in the share destined for other
developing countries of ESCAP, from 12.7 per cent in 1990 to 20.2 per cent in 2001. Once again this
has been largely offset by a decline in the trade share of Japan, with the result that total exports to
ESCAP countries are little changed over the period.
29
Table I.5. Direction of exports for selected countries and subregions (percentage share), 1990-2001
DMCs
East Asia
China
Hong Kong, China
Republic of Korea
Mongolia
South-East Asia
Cambodia
Indonesia
Lao People’s Democratic
Republic
Malaysia
Myanmar
Philippines
Singapore
Thailand
Viet Nam
South Asia
Afghanistan
Bangladesh
India
Maldives
Nepal
Pakistan
Sri Lanka
Central Asia
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
The Pacific
Fiji Islands
Kiribati
Nauru
Papua New Guinea
Samoa
Solomon Islands
Tonga
Tuvalu
Vanuatu
DMCs
China
Japan
EU
United States
Other
1990
2001
1990
2001
1990
2001
1990
2001
1990
2001
1990
2001
24.3
52.2
10.7
14.8
2.6
29.1
82.9
18.4
69.0
21.1
30.9
8.7
19.6
0.9
34.1
6.3
28.9
45.0
9.6
0.0
24.8
0.0
11.4
1.9
0.4
3.2
9.1
14.6
0.0
36.9
12.1
47.9
4.5
1.3
5.5
1.6
12.5
14.7
5.7
18.6
17.6
18.3
7.6
42.5
7.1
12.0
16.9
5.9
11.0
2.1
13.4
1.0
20.9
1.5
20.9
8.5
24.1
28.6
2.0
19.6
0.0
13.1
0.1
21.2
20.4
22.3
20.9
30.5
18.2
64.2
15.3
0.9
14.8
10.0
18.5
14.8
20.5
15.8
5.0
12.0
9.4
14.5
15.4
14.5
13.1
8.0
15.0
24.8
13.8
25.6
17.9
14.7
16.2
23.1
45.9
15.3
4.1
10.6
5.3
16.6
16.4
11.7
23.2
10.6
14.9
2.3
15.7
25.4
40.0
49.0
14.2
34.7
19.3
25.3
12.3
14.3
8.6
11.3
38.5
11.6
17.2
9.1
35.5
48.4
24.0
43.4
28.0
20.0
17.4
48.5
5.0
20.0
24.9
37.2
16.0
7.6
10.4
1.8
5.9
21.4
17.6
27.8
24.5
12.7
15.3
43.6
31.7
9.6
12.4
54.7
3.1
14.3
54.0
25.4
2.1
8.1
0.8
1.5
1.2
0.3
0.4
0.4
1.5
0.1
0.0
2.3
1.2
0.2
4.3
4.4
2.5
4.4
4.4
6.8
2.8
0.2
0.1
3.5
0.1
0.7
3.1
0.1
4.5
0.1
7.6
4.1
0.0
0.1
0.3
3.3
0.0
0.0
0.0
4.2
0.0
6.9
0.0
0.0
0.6
10.1
15.3
6.9
19.8
8.8
17.2
13.5
8.4
1.5
3.9
9.3
8.5
0.8
8.2
5.4
13.3
3.4
15.7
7.7
15.3
17.5
3.8
0.2
1.1
4.5
2.8
1.8
2.0
3.9
0.4
0.0
0.2
0.1
0.0
0.0
2.4
10.4
5.0
49.2
6.9
10.6
1.4
21.9
51.3
0.0
12.4
11.8
16.9
2.3
37.9
21.3
22.7
0.0
16.3
3.4
30.5
15.1
24.2
23.4
12.4
25.9
20.2
16.6
28.0
15.4
20.3
7.6
23.8
0.8
29.6
21.0
54.4
34.8
24.3
40.8
1.8
0.6
1.8
1.5
0.2
4.0
2.5
6.8
28.8
3.0
0.0
1.5
11.2
3.4
34.4
0.0
1.0
19.9
15.4
6.9
18.5
15.0
22.7
6.8
29.9
61.7
31.5
27.7
26.2
53.3
36.0
26.3
13.6
14.5
19.3
13.4
16.1
26.8
26.1
26.9
41.3
24.0
11.6
19.6
27.1
26.7
29.6
69.5
23.3
24.7
32.8
11.3
21.2
9.6
13.5
1.8
1.4
8.9
2.0
5.3
3.0
79.0
19.7
15.6
10.3
26.8
8.9
18.7
17.0
54.1
32.8
18.7
24.0
36.5
2.6
8.6
25.0
33.2
13.0
12.7
10.6
15.8
15.9
21.3
26.1
23.4
22.9
27.1
6.2
5.8
27.5
20.9
53.3
28.0
61.1
48.2
49.4
56.7
49.1
57.2
37.4
2.4
60.0
65.1
72.9
7.8
8.2
6.8
12.3
17.2
13.3
4.1
1.0
1.5
17.0
6.8
19.4
1.7
0.0
3.3
25.1
0.3
0.5
0.0
0.0
0.2
0.0
0.0
0.0
0.1
0.0
6.0
21.6
5.9
12.2
0.0
27.8
0.9
43.1
30.0
0.0
20.6
14.4
4.2
8.4
8.9
2.0
2.4
6.9
3.9
26.0
0.0
3.7
20.0
23.4
23.3
72.3
0.5
24.1
20.5
22.6
1.6
12.6
54.3
16.3
Source: Asian Development Bank, 2003. Asian Development Outlook 2003. OUP: Hong Kong, China.
37.3
57.7
5.7
86.1
28.6
64.9
10.9
40.7
87.3
18.1
18.1