BY: ARFA NAWAZ
TRADE AND AID
⦁ Is the trade being globally affected by technology?
Introduction:
I have chosen this topic because it is one of the global issues. Trade is the
voluntary exchange of goods or services between different economic actors. It
is the key to keeping a contentious worldwide economy. Nowadays, we can
trade stocks via the internet with the press of a button or two. Modern
financial markets move at high speed, enabled by underlying data transmission
technology. Many conversions have taken place in the history of international
trade through technology. In the era when there were barriers between many
trade routes, technology helped to disclose them. Though we can say that the
new ways of managing a business, or a trade aids us to have more profits and
benefits. All the famous global businesses have high technology and
information boards to build a more interconnected network between the
world and their company. IT advancements have allowed suppliers and
customers to connect over great distances. But there are also some countries
where there is no access to transport, communication, and other facilities
which are efficient for trade like; Bangladesh, Bhutan, and Cambodia.
Technology is a part of every single industry, and as such, businesses need to
invest in technological advancements in order to improve their products and
services, gain market share and keep up with their competition. When it comes
to trading and trade financing, technology has made the demand for supplies
more urgent.
Causes and consequences:
Digitalization contains the potential to decrease costs and boost trade
revenue. As the cost of making trade internationally is $1.8 Trillion, of which
20% is the price of the paper used to prepare contracts and deals, which is
being saved with the help of AI. Technology has been recorded to increase the
trade from $1.3 Trillion to $2.1 Trillion1. According to a report, in 150 countries,
an increase in digitization of 10 percentage points triggered a 0.50 to 0.62
1
Tradingeconomics.com. 2022. Bangladesh - Trade (% Of GDP) - 2022 Data 2023 Forecast 1960-2021
Historical. [online] Available at: <https://tradingeconomics.com/bangladesh/trade-percent-of-gdp-wb-
data.html> [Accessed 28 August 2022].
percent gain in per capita GDP. Trade (% of GDP) of Bangladesh was reported
at 27.72 % in 20212. While a country full of technology. In 2020, the United
States ranked as the third largest global merchandise exporter, with a value of
about 1.43 trillion U.S. dollars, which accounted for 8.1 percent of the world's
total export trade3.
Pakistan has global IT sales of about $2.8 billion, out of which $1.6 billion
accounts for the country’s software and IT services exports4. South Korea has
achieved considerable growth in its GNP from 87 USD in 1962 to 10 936 USD in
2001. In 1988, high-tech products accounted for 15.97% of the total export
volume. In 1999, the high-tech products reached 32.2% 5. Technology makes
VMAC Global Technology Inc more competitive16. Pakistan exports for 2021
were $34.57B, a 23.75% increase from 2020. Pakistan exports for 2020 were
$27.94B, a 7.3% decline from 2019. Pakistan exports for 2019 were $30.14B, a
1.39% decline from 2018. Pakistan exports for 2018 were $30.56B, a 9.59%
increase from 2017. From 2019 to 2020, the global retail market grew by 4.5%,
whilst the e-commerce market grew by 18%6.
The progress in technology has greatly helped South Korea in achieving good
results in the global trade market and resulted in great growth in GDP and its
overall economy. In China, high technology raised trade to 9.4% by 201418.
According to CIO, countries all around the world spend about $6 trillion per
year in corporate spending on hardware, software, data centers, and more to
help in handling the database of the trade all around the globe.
Perspectives:
The use of technology in trade is seen in many different aspects. According to
the local perspective of the farmers, technical appliances such as tractors and
threshers are helping the farmers to a great extent in agricultural
2
TechJuice. 2022. 20 reasons why Pakistan's Technology Industry is much more than a fake degree scam.
[online] Available at: <https://www.techjuice.pk/pakistan-technology-achievements/> [Accessed 28 August
2022]
3
2022. [online] Available at: <https://www.worldbank.org/en/news/press-release/2016/12/13/innovation-
and-technology-can-help-pakistan-become-an-export-powerhouse> [Accessed 28 August 2022].
4
Ukessays.com. 2022. Impact of Technology on Trade. [online] Available at:
<https://www.ukessays.com/essays/economics/impact-of-technology-on-trade-and-development-economics-
essay.php> [Accessed 21 August 2022].
5
Macrotrends.net. 2022. Pakistan Exports 1960-2022. [online] Available at:
<https://www.macrotrends.net/countries/PAK/pakistan/exports> [Accessed 2 October 2022].
6
development, which increases a country's trade. Technology helps a business
to grow into a global one.
Pakistan can be one of the top trading countries. As Illango Patch Muthu,
World Bank's Country Director for Pakistan says, "Pakistan, in particular, has
important strategic endowments and development potential". Located at the
crossroads of South Asia, Central Asia, China, and the Middle East, Pakistan is
at the heart of a regional market with a vast population, large and diverse
resources, and untapped potential for trade. "Pakistan is on 5th most
economically attractive location in the world for offshore services”, according
to A.T. Kearney’s Global Services Location Index 2019.7
Internationally, businesses with annual revenue between $500 million and
$750 million say4007 that "recruiting new talent" has the most impact. Nearly
half of the parties from the $1 Billion+ companies expect that modernization is
having and will have a significant impact on their business.
internationally, the number of people employed has decreased recently as
they are being replaced by robot technical machinery. One report from Oxford
University states that 47 percent of all jobs may be automated in the upcoming
years. According to the future perspective of this world, 85 percent of the
jobs that will exist in 2030 are not even invented yet, which will leave
employees in a tough position as to how they will figure out and enhance their
talent for jobs that will exist tomorrow13. Technology reduces the talent of
people14.
According to a World Bank survey, the number of adults that did not
participate in banking dropped by 20 percent between 2011 and 2014.
Additionally, there was a 13 percent increase in account ownership, mostly
due to mobile banking15. Businesses can use technology in manufacturing,
improving customer care, transportation, human resource management, and
business communication, and use technology to improve their services or
products as a way of gaining more economic and social wealth.
The African Development Bank’s current estimates for GDP growth from $1.7
trillion in 2010 to more than $15 trillion by 2060 with the help of technology. In
Nigeria, a public-private partnership between CBI Nigeria and SAP integrated
7
Futureoftrade.com. 2022. Technology and Trade | Future of Trade 2020. [online] Available at:
<https://www.futureoftrade.com/technology-and-trade> [Accessed 25 August 2022].
850 000 small maize producers into the agricultural value chain and equipped
unemployed graduates with a technology platform that gives farmers access to
farming inputs
As technology has a lot of benefits but it also has some disadvantages as
according to a McAfee-sponsored study, organizations worldwide lose up to
$400 billion as a result of hacking, credit card fraud, and intellectual property
theft. not only technology in the workplace and arguably the most potent is
the loss of jobs.
The course of Action:
To make trade more efficient and easier here are some ways which I think will
be helpful.
i. Once Dennis Snower, from the Keil institute of the world economy said,
"Skills of people, they grow slowly, 2% a year that is the maximum of our
capacity But machines' skills, they grow at Moore's law, double every two
years and now we are reaching the crossover point and once machines have
crossed over, they will leave us in the dust and so we should got to prepare for
the time when machines take over many of our cognitive tasks because once
they have done so, it's a game over." It tells us that now it's the time for us to
enhance and polish ourselves for the upcoming technical era.
ii. We should use technology to promote trade, but the remote areas
should be overlooked by the World Trade Organization (WTO) as it is affecting
the Global Economy.
iii. Data plays a very important role in trade success. Most trades’ successes
and failures depend on the data, research, strategies, and plans. And if the
competitor gets the data of any business, then the business can face a lot of
loss. Most of the trade’s data is lost by hackers. Hackers and competitors hack
the trade and steal precious data and information and sell it to the competitors
which the trade market faces failures.
Source Evaluation:
I used plenty of sources like journals, websites and other media resources
including many interviews of the people part of WTO (World Trade
Organization). Marilyn Blattne-Hoyle in one of her interviews says "so what we
really need to think about is how all of the parties in the ecosystem of trade
can use data and platforms to streamline things some of the things that AIG is
doing in this area is using, for example, algorithms and data around invoices to
be able to allocate our risk appetite more quickly and more efficiently and
effectively to actually drive the risk and then support the trade transactions."
Conclusion:
To conclude, the use of technology in the trade department is much more
trustworthy than imagined. It enhances work efficiency and provides
opportunities. In my area I haven't seen the rapid use of it in the trade market,
which led me to choose this topic for my research. Pakistan's Neighbour
country India's Prime Minister Narendra Modi once said that" Importance of
technology is increasing every day."
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8
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