Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
| PDS Creation Date | – |
| PDS Updated as of | – |
| Project Name | Global Supply Chains and Trade in Value Added |
| Country |
Regional |
| Project/Program Number | 46196-001 |
| Status | Proposed |
| Geographical Location | – |
| In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. | |
| Sector and/or Subsector Classification | Industry and trade / Industry and Trade Sector Development |
| Thematic Classification | Economic growth |
| Gender Mainstreaming Categories | – |
| Type/Modality of Assistance | Approval Number | Source of Funding | Approved Amount (thousand) |
|---|---|---|---|
| Technical Assistance | - | Technical Assistance Special Fund | 500 |
| TOTAL | US$ 500 | ||
| Environmental Aspects – |
| Involuntary Resettlement – |
| Indigenous Peoples – |
| During Project Design – |
| During Project Implementation – |
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The fragmentation of production processes and the rise of global supply chains (GSC) since the 1980s have become increasingly important factors in linking developing countries to international production networks and markets. Today, a large share of production within GSC takes place in developing countries, especially in East and Southeast Asia. Strategy 2020 emphasizes the [&] great promise that regional cooperation and integration activities present for accelerating economic growth, raising productivity and employment, reducing economic disparities, and achieving closer policy coordination and collaboration in support of regional and global public goods [&]. This technical assistance (TA) contributes to this strategic priority by shedding light on poorly understood aspects of the regional integration of production and by raising the capacity of Asian Development Bank (ADB) to formulate policy advice on the basis of state-of-the-art data and methods for the analysis of GSC in the region. In cooperation with partner organizations, such as Organisation for Economic Co-operation and Development (OECD), World Trade Organization (WTO), Institute of Developing Economies-Japan External Trade Organization (IDE-JETRO), the Fung Global Institute (FGI), and the Asian Development Bank Institute (ADBI), this TA will facilitate ADBs establishment as a contributing member within the nascent research consortium focusing on these issues. |
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The international fragmentation of production has created the need for new measures of trade that account for the value that is actually added by a country to the goods or services it exports, net of the imported value of intermediate parts and components (trade in value added). By contrast, traditional trade statistics reflect gross value, thus double-counting the value of intermediates as they cross international borders multiple times. As a result, international trade statistics provide an inaccurate picture of trade involving heavily networked economies. For example, domestic value added is estimated to account for roughly 60 percent of the exports value of Peoples Republic of China (PRC) while its trade surplus with the United States is thought to be overestimated by about 40 percent . Only by duly accounting for trade in value added (TVA) can ADB research and policy advice be made reflective of the economic and social implications of production networks in the region. Moreover, TVA analysis informs forecasts and estimates on the impact of foreign demand or supply shocks as they propagate through GSC, such as were triggered by recent natural disasters in Japan and Thailand, or such as threats posed to regional growth by the unresolved Euro Area crisis. Analytical issues in relation to GSC and TVA concern mainly the measurement of global supply chains and vertical specialization (the foreign value added embedded within exports). The main approaches are: (i) input-output analysis, associating inputs with industry outputs and identifying the source of those inputs; (ii) defining product categories using some descriptors like parts and components; (iii) firm level data on foreign inputs, tracking both foreign input purchases and exports by firms have become available; (iv) processing trade data, available for some countries, notably PRC and Mexico, where trade statistics are reported separately for firms that are officially designated as export processing; (v) multinational firm data, especially datasets that provide information on affiliate sales or intra-firm trade. This TA will compare the strengths and weaknesses of these approaches with special reference to Asias role in GSC. A further issue concerns the assessment of the determinants and structure of GSC. Such analysis typically has used measures of vertical specialization, or value added trade, as the dependent variable in regression analysis focused on understanding if trade of this sort behaves differently from other trade, e.g., is more sensitive to trade costs. The literature is still extremely thin on these issues and this TA can do much to shed light on the drivers and impediments to GSC and TVA in Asia. Finally, there is a key issue concerning offshoring and its effects on firms and labor markets. Such analysis has to rely mainly on firm level data, which is becoming increasingly available. Because these datasets also include firm level characteristics and are in some cases linked to employment databases, analysis can now go much further in understanding why individual firms choose to produce with foreign value added, and how this affects their outcomes, for example in terms of productivity or wages. |
| This TAs expected impact is the enhanced awareness of the policymakers from developing member countries (DMC) on the nature and impact of global supply chains in national economic growth and development. |
| Description of Outcome Improved understanding of the nature and role of GSC and trade in value added as it involves DMCs and developing Asia as a region. |
Progress Towards Outcome – |
| Description of Project Outputs A TA book analyzing GSC as they involve DMCs and developing Asia as a region, plus GSC case studies published separately. Knowledge transfer to DMCs through TA conferences and seminars. |
Status of Implementation Progress (Outputs, Activities, and Issues) – |
| Status of Development Objectives – |
Material Changes – |
| Date of First Listing | 2012 Jul 10 |
| Consulting Services To be determined |
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| Procurement To be determined |
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| Procurement and Consulting Notices http://www.adb.org/projects/46196-001/business-opportunities |
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| Concept Clearance | 31 May 2012 |
| Fact-finding | – |
| Management Review Meeting | – |
| Approval | – |
| Last Review Mission | – |
| Approval No. | Approval | Signing | Effectivity | Closing | ||
| Original | Revised | Actual | ||||
| – | – | – | – | – | – | – |
| Date | Approval Number | ADB (US$ thousand) | Others (US$ thousand) | Net Percentage |
| Cumulative Contract Awards | ||||
| Cumulative Disbursements | ||||
| Approval Number | Approved Amount | Revised Amount | Total Commitment | Uncommitted Balance | Total Disbursement | Undisbursed Balance |
| Responsible ADB Officer | Benno Ferrarini (bferrarini@adb.org) |
| Responsible ADB Department | Economics and Research Department |
| Responsible ADB Divisions | Macroeconomics and Finance Research Division |
| Executing Agencies | – |
| Project Website | http://www.adb.org/projects/46196-001/main |
| List of Project Documents | http://www.adb.org/projects/46196-001/documents |