The Asian Development Bank (ADB) and the HSBC have launched a programme to support up to $1.2 billion a year in trade by companies in Asia and the Pacific producing goods crucial to the ongoing fight against the coronavirus disease (COVID-19) pandemic.
The targeted financing available through the new program will support trade in multiple sectors affected by the pandemic, including pharmaceuticals and apparel as well as critical medical supplies that might not otherwise be available, said an ADB press release..
“Partnerships, like this one with HSBC, are critical to closing market gaps, ensuring that we fuel growth necessary to build back the global economy, and creating jobs and prosperity,” said ADB Trade and Supply Chain Finance Program Head Steven Beck.
“This partnership will complement ADB’s own ground-breaking efforts to map the supply chain for products critical to the fight against COVID-19, and to support trade flows that will drive the recovery,” added the ADB official.
The move comes shortly after the World Trade Organization, the International Chamber of Commerce, and B20 warned in a joint statement of a trade finance shortfall totaling between $2 trillion and $5 trillion that could impede the ability of trade to support the global economic recovery.
“Trade has a critical role to play in both the frontline fight against COVID-19 and in supporting the global recovery,” said Global Head of Trade and Receivables Finance at HSBC Natalie Blyth.
“This agreement will help ensure that trade finance gets to where it is needed and when to support the production and distribution of essential medical supplies and the return to growth, ”added Natalie.
The release said ADB has boosted its capacity to support trade and supply chains with more money and flexibility for its $2.4 billion Trade and Supply Chain Finance Programme.
Trade finance deals and partnerships will help to bridge the trade finance gap and enable ADB members to counter the severe health and macroeconomic impacts caused by COVID-19.
ADB’s support for developing members to cope with, and recover from, the impact of COVID-19 includes an enhanced support package of $20 billion, announced on April 13.