Improving the SMEs Access to Trade Finance DRAFT
in the OIC Member States
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II. GLOBAL TRENDS AND PATTERNS IN FINANCING
SME EXPORTS
2.1. The State of Global Trade
Trade continues to be seen as one of the major global mechanisms to enable a broadly-based
and sustained recovery and a return to growth across the international economic system.
The WTO projects a doubling of trade volumes by 2025, and market observers seem to agree
that growth in the medium term must originate from developing and emerging markets in
South Asia, parts of the Middle East and Africa. At the same time, the influence of China on both
import and export flows (including commodity flows and capital flows linked to foreign
investment) is undeniable. The notion of a new “Silk Road” between China and economies like
Saudi Arabia has been the subject of some analysis (Cash & Trade Magazine, 2012), and there
is evidence in trade evolving corridors of trade, to show that trade patterns and the nature of
supply chains are changing.
The increasingly significant role of Turkey as an endpoint in some of these trade corridors is
being monitored and responded to by several trade finance institutions, and the expanding
influence and impact of trade flows through Dubai, likewise, reflect a reshaping of trade
activity, and an expansion of influence of such markets beyond their historical range and scope
of influence.
As noted earlier, trade finance continues to be critically necessary to the enablement of trade
flows, even as the global liquidity situation moves toward normalization, and trade finance
pricing has regained levels more reminiscent of pre-crisis conditions, dropping significantly
from the peak levels of 500% or more of normal levels at the peak of the crisis.
2.2. Selected Global Trends in Trade & Trade Financing
Trade finance globally has reached a level of visibility that is unprecedented, certainly in the
last thirty years or more, and this development allows for significant additional advocacy and
policy influence around accessibility to trade finance. Leaders of international institutions
from the WTO and beyond (Lamy and Auboin, 2009-2011) to regional institutions, to political
leaders and to other institutions and agencies have been consistently communicating the
importance of liquidity and adequate risk mitigation in support of trade flows.
In addition to this qualitative shift, there are several transformational developments in the
business of trade finance that bear mention in the context of the objectives of the COMCEC.
2.3. Global Supply Chains and the Rise of Supply Chain Finance
Traditional trade instruments support approximately 10% of trade flows, with a
disproportionate concentration in certain markets in the Middle East and North Africa.
Globally, importers and exporters are showing a clear tendency to transact on the basis of