The UK has ranked second in a new index assessing 30 countries’ ability to participate in global trade based on economic growth, societal development and environmental protection.
New Zealand tops the 2023 Hinrich-IMD Sustainable Trade Index – published by the International Institute for Management Development and the Hinrich Foundation – largely thanks to its pollution management and clean energy standards, while Singapore completes the top three.
Looking at the UK specifically, the country ranks fifth in the economic pillar, fourth in the societal pillar, and second in the environmental pillar.
“In the environmental pillar, the economies that perform well – the UK among them – are using very high environmental standards, and they not only have laws around all this, but they actually implement them,” said Christos Cabolis, chief economist at the IMD's World Competitiveness Center.
“Such laws address issues of water waste, pollution, carbon, and energy intensity. Those countries that perform better are also making the transition towards more renewable energy sources.”
The index uses 71 indicators for sustainable trade, giving an equal weighting to economic, societal, and environmental criteria. The economies assessed represent around 67% of global GDP and 63% of the world’s population.
Looking at the global picture, the researchers said there has been a deterioration among many of the indicators, including long-term barriers to trade, trade costs, the rule of law, pollution, and energy intensity.
“Things we should be worried about as a human race,” said Chuin Wei Yap, program director for international trade research at the Hinrich Foundation.
“The Index is a blueprint of how we see the world and how we see policy as managing, in equal parts, the huge accelerative benefits of trade, along with its potentially quite devastating effects on society.”
Russia is ranked lowest in the Index, with Myanmar, Papua New Guinea, Pakistan and Brunei completing the bottom five.
“Trade can supercharge growth, especially when applied to small economies, such as those in the Asia Pacific,” Yap continued.
“But if you let this growth become untrammeled, mismanaged, or neglected – for instance by policy – you end up with the kind of situation that we saw in 2016, where two-thirds of the US GDP voted for one candidate, but the third of GDP that voted for the other got that candidate elected.
“These are the kinds of outcomes that the rest of policy needs to manage to make trade effective.”
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