## Brave New World: Tracking Trade from Space

_IMF Blog, November 2, 2021_

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## Bibliographic details
- Authors: Serkan Arslanalp, Robin Koepke, Jasper Verschuur
- Published: November 2, 2021

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### Overview and context
- Publication: Chart of the Week
- Authors: Serkan Arslanalp, Robin Koepke, Jasper Verschuur
- Date: November 2, 2021
- Theme: Use of satellite-based big data to measure and track trade in real time, filling data gaps for small fragile states and informing policy decisions.

### Key findings from IMF staff research
- Satellite data can measure and track trade volumes in real time, providing critical input for policy decisions.
- This method could have highlighted trade and supply-chain disruptions to the Pacific region well before the World Health Organization (WHO) declared a global pandemic in March 2020.
- Pacific island countries insulated themselves from COVID-19 infections by closing borders but were not insulated from economic repercussions, especially in early 2020.
- All countries experienced sharp import contractions in the early stages of the pandemic due to supply disruptions related to port restrictions affecting the regional trade network, including lockdowns in China.
- Later, imports were further depressed by a lockdown-induced demand shock.
- Imports subsequently recovered in countries with low dependence on tourism but remained depressed in tourism-oriented economies.

### Methodology highlights
- The new estimation method helps fill gaps in official data and provides early warnings of turning points in economic activity.
- The algorithm overcomes challenges of previous studies in estimating cargo payloads.
- Uses detailed information on shipping liner schedules to validate port calls.
- Applies country-specific information to define port boundaries.
- Uses satellite-based vessel tracking data from the UN Global Platform to construct daily indicators of port and trade activity for the Pacific island countries.

### Policy relevance and implications
- Timely information on trade disruptions is particularly important for Pacific island countries given their vulnerability to external shocks, including climate-related natural disasters.
- The approach could be extended to measuring the impact of climate-related shocks, providing critical information to close data gaps and potentially help build resilience to climate change.
- These and other related issues will be discussed in November at the IMF Statistical Forum on Measuring the Economic and Financial Dimensions of Climate Change.

### Suggested policy actions (implied by research)
- Incorporate satellite-based trade indicators into real-time monitoring systems for small and fragile states.
- Use validated, schedule-informed algorithms to improve accuracy of vessel and cargo estimates.
- Leverage daily port-activity indicators to provide early warnings for supply-chain disruptions and demand shocks.
- Extend satellite-based monitoring to assess and quantify impacts of climate-related natural disasters on trade and economic activity to inform resilience-building policies.

*Source: Brave New World: Tracking Trade from Space (IMF Blog), November 2, 2021*

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## References

- [https://www.imf.org/wp-content/uploads/2021/11/COTW-Brave-New-World-Chart-1-1.jpg](https://www.imf.org/wp-content/uploads/2021/11/COTW-Brave-New-World-Chart-1-1.jpg)
- [IMF Statistical Forum](https://www.imf.org/en/News/Seminars/Conferences/2021/11/17/9th-statistical-forum-measuring-climate-change)
- [Pacific Island Airlines: Flying on Empty?](https://blogs.imf.org/2021/08/18/pacific-island-airlines-flying-on-empty/)
- [How Countries Can Diversify Their Exports](https://blogs.imf.org/2021/09/22/how-countries-can-diversify-their-exports/)
- [Trade as a Tool for an Efficient Recovery](https://blogs.imf.org/2020/09/14/trade-as-a-tool-for-an-efficient-recovery/)
- [Tracking Trade During the COVID-19 Pandemic](https://blogs.imf.org/2020/05/14/tracking-trade-during-the-covid-19-pandemic/)

_Source: https://www.imf.org/en/blogs/articles/2021/11/02/brave-new-world-tracking-trade-from-space_