New Delhi, May 6 (IANS). Geopolitical tensions, supply chain disruptions and rapidly changing technology are reshaping the way economies participate in global value chains, the Asian Development Bank (ADB) said on Wednesday.
According to ADB’s ‘Asian Development Policy Report 2026’, Asia and the Pacific region has achieved economic growth, increased employment and reduced poverty over the past 25 years due to increased specialization in different stages of global production.
According to the report, this sector accounts for about one-third of global value chain trade. The share of developing countries has increased from 9 percent in 2000 to 18 percent in 2023.
ADB Chief Economist Albert Park said growing geo-economic fragmentation reduces opportunities for companies to take advantage of global value chains, which could hamper industrialization and economic growth.
He said that to reduce this gap, it is necessary to help less developed countries to take advantage of new technologies, strengthen infrastructure and logistics and create a better business environment, so that their productivity and competitiveness can increase.
The report notes that some countries in East and South-East Asia are in a stronger position in the global production network and are able to add more value. At the same time, many small, low-income or remote countries are still largely excluded from these networks.
Specialization in small volumes of production has helped in rapidly connecting to the global market, but the benefits have not been distributed equally. Large and efficient industries have benefited more, while small and medium enterprises face difficulties due to high costs and limited resources.
The report outlines three key policy priorities to enhance connectivity to global value chains.
First, strength and flexibility have now become a key component of competition. As uncertainty increases, reliability, ability to adapt to rapid change, and risk management have become increasingly important. This requires strong infrastructure, flexible companies and diverse markets and supply sources.
Second, environmental sustainability is now becoming a prerequisite for participation in global value chains. It has become necessary to comply with new environmental standards, which will motivate companies to adopt clean and sustainable technologies.
Third, inclusive development is also very important. For this, it is necessary to reduce business costs, better infrastructure, open trade rules, skill development of employees and providing finance, digital platforms and export opportunities to small industries.
According to the report, these steps can promote balanced and sustainable economic growth in the Asia-Pacific region.
–IANS
DBP
