Global Value-Chains and Connectivity in Developing Asia - with application to the Central and West Asian Region

November 1, 2014

An increasingly important part of international trade consists of fragmentation of the production process, with differing tasks in the global value chain (GVC) being undertaken in different locations. The paper traces the origins of the GVC phenomenon, attempts to measure the significance of GVCs, and analyzes why some countries participate in GVCs while others do not. GVCs rely on timely delivery of parts and components at every stage, with no unnecessary costs to crossing borders. West and Central Asian countries have been nonparticipating because their economies are characterized by high costs of doing business, obtrusive border controls, and other obstacles. Governments may be reluctant to undertake necessary reforms, and wary of the potential for increased volatility and inequality that sometimes accompany GVC participation.

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Topics: ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN) GLOBAL VALUE CHAINS (GVCS)

Regions: CENTRAL ASIA SOUTHEAST ASIA WEST ASIA

Authors: RICHARD POMFRET PATRICIA SOURDIN

Publishing Institution: ASIAN DEVELOPMENT BANK

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