IDB World: Electronic Commerce, Ecological Forests, Regional Remittances

We present three selected blog posts from the IDB Group, on international e-commerce, the importance of forests as providers of ecosystem services, and cross-border capital transfers during the pandemic.

banner

A Year and a Half into the Pandemic: How Did Cross-Border E-Commerce Evolve?

Cross-border e-commerce initially contracted in Uruguay because of the pandemic but started to show a pronounced recovery in mid-2020. Data on all credit and debit card purchases made abroad in the framework of the country’s franchise regime revealed that it decreased significantly between January and May 2020.[1] The aggregate annualized value of these purchases from Uruguay dropped 5.9% over this period. However, in June 2020, online purchases abroad grew around 37% relative to June 2019.

What happened with cross-border e-commerce in Uruguay in the most recent 15 months? Using the same, updated detailed data, we found that (i) the recovery has continued, driven by an increase in the number of transactions made by a larger number of buyers; (ii) there has been a shift in the geographical origins towards the United States and away from China; and (iii) there has been a stronger trend to substitute electronics for apparel.

Uruguay’s cross-border e-commerce has expanded substantially since mid-2020. Annual online purchases abroad grew about 42% between May 2020 and September 2021 to reach US$ 82 million. In terms of weight, the growth was around 40% over the same period and the total topped almost 1.5 million kilos. These annual values were already 33% larger than those registered in February 2020, the month before the onset of the pandemic (Figure 1—left panel), and more than 200% larger than those prevailing at the end of 2014, the first full year of the regime. As a reference, standard annual imports increased 17.6% from May 2020 to September 2021.

Read more.

Latin America and the Caribbean forests: large providers of ecosystem services

Our life on Earth is intimately linked to forests. From the raw materials we obtain from them for construction, daily use products or medicines, to the air we breathe, we are dependent on the irreplaceable services that these valuable ecosystems provide.

Latin America and the Caribbean is known as a biodiversity superpower, largely due to its forests. The region has approximately a third of the world’s forests, half of its tropical forests and a quarter of its mangroves.

On the International Day of Forests, let us highlight the vital ecosystem services they provide and the importance of these ecosystems for our economies and our quality of life.

Read more.

graph

Why Chileans Brought Money Home While Colombians Sent It Abroad in 2020

Chile and Colombia are two of the most solid economies in Latin America and the Caribbean. While in 2020 they contracted 5.8% and 6.8%, respectively, they were among the strongest performers in the region amid difficult circumstances. Both are open market economies, with flexible exchange rates and access to foreign markets. They also have faced social unrest and protest regarding inequality and other issues in the last couple of years.

Given their similarities, it was striking to discover that in 2020 Colombians increased their savings abroad by 2 percentage points of GDP while Chileans repatriated assets instead of engaging in their usual behavior of saving 2% of GDP abroad each year. Were Chileans more confident about their economy? Were Colombians scared about their country’s prospects?

It turns out that both countries managed the situation well. Government policy in both allowed them to tap unconventional financing sources, which successfully helped to smooth financial net flows in a global environment in which external financing to Latin American and Caribbean countries was severely strained.

Read more.

 

Sustainability Week Banner

 

Authors

IDB Invest Team

IDB Invest seeks to be the primary bank for private sector solutions in Latin America and the Caribbean. We support projects to advance clean energ

Financial Institutions

Related Posts

  • small business, financing, digital, e-commerce
    Using Digital Payments to Push Financial Inclusion

    Access to digital transactions leads to the financial inclusion of the unbanked, underbanked and vulnerable populations, while boosting the resilience and growth of micro, small and medium-sized businesses.

  • banner
    Boosting Financial Inclusion for the Most Vulnerable Through Social Bonds

    Thematic bonds—and transparently measuring and reporting their impact—are a powerful tool for mobilizing resources and deepening financial inclusion for microenterprises within the most vulnerable groups of society who have yet to be served by the financial sector.

  • banner
    Leveraging the Sustainable Fund Ecosystem in Latin America & the Caribbean

    The ecosystem growing around sustainable funds offers a source of financing for companies in the region, which may help international and local investors to develop their own sustainability agenda with transactions classified as impact investments in their portfolios.