Regional: Promoting Investments and Economic Growth in Central and West Asia, East Asia, and South Asia Subregions

Finance / Finance sector development - Trade finance

International trade has historically been a precursor to the economic growth of developed countries and more recently of many emerging economies. Accordingly, most Asia and Pacific region countries can likewise improve their economic growth through intra-regional and interregional trade by addressing the constraints that adversely affect their trade competitiveness. Except for India and the People's Republic of China, most economies in the CWA, East Asia, and South Asia subregions have underdeveloped trade facilitation mechanisms and inadequate trade-related infrastructure and financial support systems. These constraints limit the countries' ability to trade competitively and consequently reduce their capacity to diversify their economies and achieve sustained and inclusive growth. Having limited access to trade finance, in particular, disadvantages small and medium-sized enterprises in relation to foreign competitors who can access financial support and enhancements from national export credit agencies (ECAs) capable of offering insurance for extended payment terms and facilitating a lower cost of financing. This situation discourages trade competition, further depriving small and low-income economies of processes that are crucial to attaining productivity growth.

TCIGA would encourage and support small and medium-sized enterprises and other nontraditional exporters to trade competitively domestically, regionally, and globally. Improving DMCs' competitiveness to trade within and outside their local markets is expected to promote economic diversification and pave the way for sustainable long-term economic growth through increased value-added production and employment in the region.

Phase 1

1. TCIGA feasibility assessed

Phase 2 (contingent*)

2. In country consultations and workshops conducted

*Phase 2 implementation is contingent upon the feasibility study providing a compelling business case for the establishment of the proposed agency. If TCIGA's establishment is considered feasible, internal approval will be sought for a minor change of scope under the TA to fully implement phase 2.