RELEASED: Trade Finance Talks – Trade at a tipping point

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Editor’s note

In the world of trade finance, things can change very quickly.

As 2021 gave way to 2022, we could have been celebrating a new record high for the value of world trade – coming in at $28.5 trillion for the year, according to UNCTAD.

But instead, we are now looking at yet another year of volatility and uncertainty, as Russia – the world’s 11th largest economy by GDP – becomes a pariah state once again, thanks to its aggression in Ukraine.

A number of major western banks and commodities producers have already announced they will be cutting all ties with Russia, and a blanket ban on Russia’s access to SWIFT would reduce one of the world’s largest economies to a financial castaway.

The dust still hasn’t settled, however, and the question of how far Russia will go to neutralise Ukraine, and how far other nations will go to neutralise Russia, remains open.

Cold War 2.0

As the global economy slumps back into a system of multipolarity not seen since the Cold War, what does the future hold for trade finance?

As in the last crisis – that of COVID-19 – we will have to draw on the best of our industry to keep liquidity moving around the world, and to ensure that shelves are stocked, homes are heated, and businesses prosper.

As ever, digitalisation will remain a major theme in this regard, and I am pleased to say that we have had some excellent submissions on this idea from the likes of Emmanuelle Ganne, Ed Lam and Pamela Mar, Andre Casterman, John Omoti, and Enno-Burghard Weitzel and Rebecca Brace.

As we move deeper into 2022, it seems we may be looking to digitalisation not just to deliver trade finance to where it is needed, but also to make sure that it doesn’t stand to benefit the Russian state.

But cutting out Russia from the global economy will beg huge questions for the developed world – particularly for our energy industry.

Can Europe cope without Russian gas? Will oil stay under $100 a barrel without Russian production?

And will a green transition in energy – as promised at COP26 – help or hinder the global economy from an inflation and productivity standpoint?

These questions, too, remain open.

Green finance has come a long way in the last few years, and was definitely in vogue around COP26, but could its progress be undone by a different kind of fossil fuel crisis – that of the loss of a major producer.

On green finance, we are pleased to have the likes of Anna Sands, Irene Gambelli, Diana Rodriguez, and Richard Simon Lewis writing brilliantly in this issue.

We hope you enjoy reading, we thank all of our superb contributors.

Deepesh Patel

Editorial Director, TFG