TRADE & DEVELOPMENT
Interview with Danilo Spinola, Senior Lecturer in Economics, Birmingham City University, on the OPEC Fund’s emergency facility E-STAR and finding the right balance between short-term fixes and fostering long-term growth “Trade finance can play a critical role in enabling the green transition”
OPEC Fund Quarterly : From a research perspective, where do you think the OPEC Fund should target this support program? Danilo Spinola: I would start by highlighting how short-term liquidity support can protect long-term productive capacity. In many emerging economies, the core constraint is access to foreign exchange for essential imports, especially during shocks. The first priority should be countries such as small island developing states, low- and middle-income countries and landlocked economies, which have structural external vulnerabilities and rely heavily on imported food, energy, fertilizers and medicines. Second, it is best to focus on intermediate and productive inputs rather than finished goods for consumption. Supporting imports of machinery, spare parts, fuel and agricultural inputs helps keep domestic production systems running. If those inputs collapse, the economy risks longer-term damage that is much harder to reverse. Third, I would target small and medium-sized enterprises and local financial institutions. SMEs account for a very large share of employment, often around 90 percent in parts of Latin America, yet they are the least resilient to shocks and the most exposed to trade disruptions. Supporting them is not just about stabilization; it is about preserving the backbone of the economy.
OFQ : How should we tailor approaches and calibrate timelines? DS: I would be cautious about short- term fixes. There is always a risk that emergency trade finance creates medium-term distortions or reinforces import dependence. The design should explicitly link short-term support with longer-term resilience, for example by strengthening local supply chains, logistics, ports and storage systems. The program could also align with broader structural transitions, especially the green transition. Many countries need to import new technologies to shift toward more sustainable production, but lack the foreign currency and financial space to do so. Trade finance can play a critical role in enabling the transition if it is directed toward technologies and sectors that support decarbonization and resilience. Finally, I would strongly recommend grounding the program in country- specific analysis rather than a one- size-fits-all model. The evidence is clear from our research in the Global Network for the Economics of Learning, Innovation and Competence Building Systems (GLOBELICS): Policies are most effective when they are tailored to each country’s economic structure, institutional capacity and social context. Supporting that kind of tailored, evidence-based approach will make the US$1.5 billion go much further in terms of impact.
Danilo Spinola
Danilo Spinola is Senior Lecturer in Economics at Birmingham City University, UK, Senior Consultant at the Agence Française de Dévelop- pement and long-term affiliate of the Inter-American Development Bank. With a focus on sustain- able development, innovation, structural change and complexity economics, he is a board mem- ber of the Global Network for the Economics of Learning, Innovation and Competence Building Systems (GLOBELICS). He holds a PhD from UNU-MERIT, Maastricht University, the Netherlands.
Photo: SvedOliver/Shutterstock
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