Strengthening Supply Chain Resilience
AI's ability to provide real-time data and insights is becoming indispensable in supply chain management, where it is used to predict and mitigate disruptions. This enhances the resilience of global trade networks against future shocks, as underscored by the recent pandemic.
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Improve Trust in Trade Finance
Automated services will enhance trust in trade finance as AI improves the detection of fraud, counterfeiting, and illicit activities by analysing financial records, transaction data, and shipping information.
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AI Automation
AI will enhance trade services and operations by automating processes, thereby improving accuracy. Automation, including electronic invoicing and customer support through document handling and chatbots, will streamline administrative tasks in trade. This will increase sustainability, greater efficiency, and lower operational costs.
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Improved Market Analysis
AI will boost market analysis and competitive intelligence, notably in e-commerce, by swiftly processing and analysing large datasets from multiple sources, including trade databases, market reports, and social media.
Crypto and Blockchain Technologies:
Crypto-currencies in Commerce
Digital currencies and CBDCs are increasingly integrated into trade, promising faster transactions and reduced transaction costs, enhancing efficiency across global markets.
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Cryptocurrencies and CBDCs can execute cross-border transactions almost instantaneously, a significant improvement over traditional banking systems, which can take several days to process international payments.
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As of early 2024, over 20 countries have either launched CBDCs or are in advanced trials, indicating a shift towards mainstream acceptance and a framework for regulation that promises greater stability and trust in digital currencies.
Blockchain's Growing Role
Although adoption has been slower than expected, blockchain's potential to streamline transactions, increase transparency, and reduce costs remains significant for global trade.
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Blockchain reduces the need for intermediary verification, thus significantly cutting down transaction times. In the shipping and logistics sectors, this can reduce the time required to update and verify the ledger of goods from days to mere minutes.
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Despite slow initial uptake, industries ranging from finance to manufacturing are exploring blockchain for its potential to secure supply chains, manage contracts, and ensure product authenticity. The market growth rate is projected to be 67.3% from 2020 to 2025.
Challenges to Digital Currencies and Blockchain
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Digital currency adoption in international trade needs consistent regulatory frameworks. Varying regulations across jurisdictions create uncertainty and compliance challenges.
Cryptocurrencies require stability to gain trust. Volatility, exemplified by the collapses of FTX and Terra in 2022 causing a significant drop in Bitcoin's value, raises concerns for investors and businesses. -
The lack of interoperability and standardisation among blockchain networks poses adoption challenges in trade, as incompatible blockchain solutions may be implemented by different parties along the supply chain.
Widespread adoption and scalability are crucial for maximising the benefits of blockchain. However, integrating it into existing systems is costly, complex, and disruptive. While states express interest in implementing blockchain, achieving full integration requires time, cooperation, and global consensus that is currently lacking.
- The value of the e-commerce markets in Indonesia, the Philippines, Thailand, and Vietnam is expected to more than double by 2030.
- Southeast Asia's working population is projected to grow by 24 million individuals by 2030, contributing to increased consumption and economic activity, including in e-commerce.
- Southeast Asia attracted a record $222.5 billion in foreign investments in 2022, driving growth and innovation in the e-commerce sector.
- Southeast Asia is experiencing rapid growth in its e-commerce market, driven by factors such as demographic changes, increased internet and mobile penetration, regional integration efforts, investment inflows, and the migration of manufacturing and supply chains.
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