By Khalifa Hemed
Published July 18, 2021
Commonwealth countries are estimated to have lost up to US$345 Billion worth of trade in 2020, including US$60 Billion in intra-Commonwealth trade.
The Commonwealth Trade Review says COVID-19 pandemic has taken a heavy toll globally, substantially impacting the economies of all Commonwealth members and leading to US$1.15 Trillion in foregone Gross Domestic Product (GDP) in just one year. Compared to pre-pandemic growth trends in 2020, Commonwealth economies contracted by approximately 10%.
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Most Commonwealth countries also experienced a significant decline in overall Foreign Direct Investment (FDI) inflows in 2020, with a loss of US$153 Billion to the Commonwealth.
Given the linkages between trade and investment and the role of FDI in supporting cross-border trade, these disruptions, according to the report on the theme, Energising Commonwealth Trade in a Digital World: Paths to Recovery Post-COVID, could limit trade prospects for Commonwealth countries.
The economic fallout from COVID-19 varied across Commonwealth regions. The drop is higher for developing Commonwealth countries, where exports have contracted by approximately 10.1%.
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In absolute terms, Asian economies suffered the largest decline in exports (at US$146 billion), followed by African (US$20 billion), Caribbean (US$4.2 billion) and Pacific members (US$1.3 billion). However, relatively Caribbean Small Island Developing States (SIDS) underwent a greater slump. Their global exports shrank by almost 20 per cent. These SIDS largely rely on the exports of services, particularly travel and tourism, which were hit hard in this pandemic.
For FDI the drop affected all developed and developing countries but to a varying degree, with Australia and Rwanda notably experiencing a 50 per cent decline in inflows compared with the pre-pandemic (2017-2019) average.
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Only eight Commonwealth developing countries recorded higher overall FDI inflows in 2020 compared with this previous average. They were The Gambia, Malawi and Sierra Leone in Africa; India in Asia; Belize, Guyana and Trinidad and Tobago among Caribbean SIDS; and Papua New Guinea in the Pacific.
