ECONOMIC BENEFIT

MAC PROTOCOL - ECONOMIC BENEFIT

The expected economic benefits are enormous for countries that ratify the MAC Protocol. A 2018 independent report prepared by Warwick Economics and Associates states that the MAC Protocol is predicted to have a positive impact of $23 billion on GDP in developing countries and of $7 billion in developed countries, for a total impact on GDP equivalent to $30 billion a year. It is  estimated that over a ten-year period, the Protocol may increase the stock of MAC equipment in developing countries by $90 billion. As the scope of the economic assessment was limited to UNIDROIT’s 63 Member States, the actual global economic impact is likely to be much higher.

 

Benefits for developing countries and emerging markets

From a development perspective, the MAC Protocol will be one of the most important commercial law instruments aimed at improving economic growth, food security and infrastructure. In emerging and developing countries, the MAC Protocol will not only result in cheaper financing and better access to modern MAC equipment, but will also serve as a modernisation tool that is simple to implement. In general, emerging and developing economies are often more reliant on primary industries such as agriculture and mining. The Protocol will stimulate greater global productivity in the MAC sectors, thereby boosting the GDP of States that support and ratify it. The Protocol can be implemented alongside domestic secured transaction legal reform, which would complement ongoing efforts in many regions.

 

Benefits for developed countries

Developed countries will benefit from the Protocol as it is likely to lower the cost of credit in their domestic markets. In addition, the harmonisation of their secured transaction laws with those of other countries will provide a uniform legal environment for the financing of MAC equipment, thereby substantially reducing legal risks and due diligence costs and creating new markets for the export of MAC equipment, financing and the provision of legal services.

 

Benefits for the private sector

  • Farmers and other agricultural entities will benefit from increased access to modern agricultural equipment at a lower cost, thereby increasing their productivity and yields.
  • Farmers and other agricultural entities will benefit from increased access to modern agricultural equipment at a lower cost, thereby increasing their productivity and yields.
  • Mining entities will benefit from increased access to modern mining equipment at a lower cost, thereby increasing their productivity, profitability and extractive capacity.
  • Manufacturers will benefit from higher demand for their equipment and increase output.
  • Dealers and traders will be able to export and import an increased volume of equipment and begin operations in new markets.
  • Financiers will benefit from greater legal protection in issuing credit, which will allow them to provide cheaper financing in existing markets and expand operations to new markets.

Click Here to See the MAC Protocol Economic Assessment

By Art&Design s.r.l.

© UNIDROIT 2021. All Rights Reserved. Disclaimer

By Art&Design s.r.l.

© UNIDROIT 2021. All Rights Reserved. Disclaimer