The brief, drawn from a 2015 report, Aid for Trade in Asia and the Pacific: Thinking Forward About Trade Costs and the Digital Economy looks at steps that exporters can take to overcome the vast distances and high costs that hinder trade in the region. Aid for Trade is development assistance that aims to increase trade by creating an enabling environment for exporters, and every other year ADB reports on the trends and future potential of Aid for Trade. The 2015 report includes, for the first time, a special section on the Pacific.
“Trade costs have fallen in the region but in general they remain high, which constrains business” said Alisa DiCaprio, Regional Cooperation Specialist in ADB’s Economic Research and Regional Cooperation Department.
“However fast improving communications links and the spread of the internet offer new opportunities particularly for small businesses, and those run by women, to generate increased sales.”
E-commerce allows firms to diversify and sell to a wider range of markets than traditional firms, sharply reducing the impact of geographic distance. A 2014 survey by Pacific Trade and Invest found that 44% of exporters in the Pacific had enhanced their websites to boost export orders, and a growing number of firms are engaging in e-commerce activity. Building up e-commerce, however, requires further infrastructure upgrades and continued efforts to create the right enabling environment for online business.
One group who stand to gain significantly from this trend are women-led firms who have limited involvement in export activities. Giving women greater access to the internet will allow them to explore and tap new market opportunities, and to use their limited resources more efficiently to grow their firms.
An increasing number of Pacific exporters are focusing on selling specialized products into niche markets, which can command a premium price. Goods from the Pacific have global appeal for consumers that seek environmentally or community-friendly products, and broader use of the internet will help businesses reach out to more customers.
Moving forward, the brief says, targeted investment is needed to support the private sector in utilizing the internet for business, and to help identify, develop and market niche products.