ASEAN should boost global value chain position for resilience: ADB

The report highlights the challenges and opportunities facing global value chains in Southeast Asia as countries strive to build greater resilience and promote sustainable and green development. Despite the disruption caused by COVID-19, global value chains proved to be more resilient than expected, given their dependence on only a few suppliers for essential inputs and goods. However, the region needs to build stronger resilience in its global value chain segments while expanding trade, investment, and regional integration.

The competitive advantage of employing low-skilled labour is diminishing as new technology continues to upgrade global value chains. To remain competitive, it is imperative that the region creates a critical mass of workers equipped with new technology and technological skills, as per the ‘ASEAN and Global Value Chains: Locking in Resilience and Sustainability’ report.

In addition, ASEAN economies must embrace sustainability and go green. The report suggests that policies promoting decarbonisation could strengthen ASEAN's global value chains. To achieve this, the region should accelerate trade digitalisation and promote climate-smart trade, green transport infrastructure, and carbon pricing.

Finally, the report warns that recent global shocks and geopolitical trade protectionism could disrupt growth in ASEAN and elsewhere. The report explores the significant policy impact and benefits of deepening Asia's trade cooperation and expanding it to include other regions.

Fibre2Fashion News Desk (DP)