Specialisation Brings Gains – Environmental, Social and Governance (ESG); Trade Finance Brings Cross-border Specialisation Gains

Absolute advantage describes a situation in which a business or country can produce more of a good or service than any other producer with the same quantity of resources. 

Author’s Bio:
Joel Pang is the Chief Operating Officer and serves as a member of the Board of Directors of Incomlend Capital.  In addition to these responsibilities, he is also the Group Chief Compliance Officer (CCO) and Money-Laundering Risk Officer (MLRO) for Incomlend Group

For example, with its skilled workforce, abundant natural resources, and advanced technology, China can produce many goods more efficiently than potential trading partners, giving it an absolute advantage in producing medium to high technology goods. However, this does not mean that China does not benefit from trading with other nations or countries. 

Comparative advantage describes a situation in which a business or country can produce a good or service at a lower opportunity cost than another producer. For example, Canada makes maple syrup at a meagre opportunity cost with avocados because it has abundant maple trees.  

On the other hand, with its ample sunshine and a warm climate, Mexico can grow avocados at a much lower opportunity cost in terms of maple syrup given up than Canada.

Trade finance enablement smoothens cross-border trade movements and the exchange of goods and services across international borders, allowing crystalising specialisation gains. In the quest for investments that bring good merits in Environmental, Social and Governance (ESG), trade finance enablement has brought more excellent utility to the use of resources – natural and human, maximising production and specialisation gains, allowing countries and companies to do more with less and to maximise their efficiencies. 

This would not be possible if trade barriers are not lowered and or completed eradicated. Trade finance receivable investment improves the lives and livelihood of hundreds of millions of people across the globe. It has brought scores of populations out of poverty and desperate and dismal living conditions and opened up many opportunities for countries without a hinterland and resources. 

Doing good is good, but doing good while investing and making your assets grow is a win-win situation that can be more enriching. 

Speak with us today to learn more about playing your part in breaking down trade barriers, improving millions of people’s lives and livelihoods, and making the world a better place. Contact our team at info@incomlendcapital.com.

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