Development of Regional Production Network: What Should be ...sawtee.org/saes/wp-content/uploads/2017/12/Presentaiton-of-Dr-Moazzem...Exporters 2005 2009 2016 Importers 2005 2009 2016

Development of Regional Production Network: What Should be the Strategy for South Asia?

Parallel Session on

Harnessing the Potential of Regional Value Chains for Employment Generation

Presentation by

Dr Khondaker Golam Moazzem

Centre for Policy Dialogue (CPD)

16 November, 2017

Discussion Points

1. What Kinds of Regional Production Networks to be Developed in South Asia?

2. Whether Evidences of Other Regions be Applicable for South Asia?

3. How Much Potentials of Intra-regional Trade towards Facilitating Regional Production Network?

4. What Kinds of Trade-Investment Mix can Facilitate Regional Production Network in South Asia?

5. What is the Way Forward?

2

1. What Kinds of Regional Production Networks to be Developed in South Asia?

• South Asia is well behind other regions in terms of intra-regional trade and intra-regional investment.

• Reflection of limited presence of regional production networks

• All South Asian countries are part of global production networks

• Competitive industries have been operating as part of global network

• Recent discussion portrays enough potential for developing regional production networks among South Asian countries

• Present discussion intends to raise few issues concerning development of regional production networks

• How much incremental benefit would be generated through these potential networks, particularly in competitive industries?

• Which are the sectors where incremental benefit would be higher?

• Whether South Asia as a single entity would efficiently facilitate those production networks?

3

2. Whether Evidences of Other Regions be Applicable for South Asia?

• Regional production networks are found to be successful with having specific features

• Region is largely self-contained in terms of resources and/or markets

• Key economies in the region have comparative advantages in different sectors

• Clear differences between economies (e.g. differentials between factor and product markets)

• Homogenous business environment within the region

• Potentiality of regional production network in South Asia has been discussed for a number of sectors

• Razzaque and Basnett et al. (2014), Moazzem (2014 and 2012), De and Iyengar (2014), Tewari (2014); Moazzem (2015); Anushka and Dilani (n.d.), Anukoonwattaka and Mikic (2011), Bhattacharya and Moazzem (2015) and Vaqar, Suleri and Javed (2015)

4

• Literatures mentioned similar kinds of challenges for lack of development of such value chain in the region

• Both cases of ‘high’ as well as ‘meagre’ levels of success of regional production networks are found

• ASEAN plus 3; East Asia

• Mercusur

• Discussion on broader regional network is also ongoing

2. Whether Evidences of Other Regions be Applicable for South Asia? 5


• Despite the operation of SAFTA for almost 10 years, intra-regional trade remain at 5% level.

• India’s import from the region has decelerated (from 1% in 2005 to 0.7% in 2016)

• Land-locked South Asian countries’ trade with neighbouring countries has remained at high level

• India-centric bilateral production networks are partly observed

• Sectoral analysis reveal that South Asian countries are dependent on various sources and markets

• Both within and outside the region

6

3. How Much Potentials of Intra-regional Trade towards Facilitating Production Network?

Export to South Asia as % of Total World Export Import from South Asia as % of Total World Import

Exporters 2005 2009 2016 Importers 2005 2009 2016

South Asia 7% 5.4% 2.1% South Asia 4% 3.2% 3.0%

India 5% 4.2% 6.5% India 1% 0.6% 0.7%

Pakistan 11% 12.5% 12.8% Pakistan 3% 4.2% 4.6%

Sri Lanka 10% 6.2% 9.9% Sri Lanka 19% 20.4% 21.8%

Bangladesh 3% 2.3% 1.9% Bangladesh 12% 12.0% 14.2%

Nepal N/A 71.0% 66.2% Nepal N/A 57.2% 61.1%

Afghanistan N/A 66.2% 86.1% Afghanistan N/A 12.4% 20.8%

Bhutan 93% 97.0% 98.2% Bhutan 77% 79.7% 80.2%

Maldives 13% 19.4% 11.5% Maldives 17% 19.1% 19.7%

7

• Production networks exist in some of globally competitive industries

• Use of intra-regional and extra-regional sources in efficient ways

• Specification on sourcing by buyers’ guidance

• There are cases of ‘competition’ along with ‘competition’

• Regional countries are competing on same set of products in the global export market

• Most of the economies have complementarity in resources, production processes and less differences in factor markets

• How much incremental contribution would happen through further cooperation on regional production network?

• Possibilities of more ‘trade diversion’ than ‘trade creation’ (particularly in traded products)

• Both in terms of sources of raw materials as well as markets for finished products

3. How Much Potentials of Intra-regional Trade towards Facilitating Regional Production Network? 8

Afghanistan

HS Code

(2 Digit) Top 20 Exported Products Importing Countries HS Code(2

Digit) Top 20 Imported Products Exporting Countries

99

Commodities not elsewhere specified Pakistan, India, Iran, China, Turkey,

United Kingdom, UAE, Turkmenistan,

Iraq, France, Belgium, Tajikistan,

Finland, Uzbekistan, Australia, Jordan,

Canada, Germany, Kazakhstan, Italy,

USA, Russia, Vietnam.

99

Commodities not elsewhere

specified China, Pakistan, Iran, Kazakhstan, UAE, Uzbekistan, Japan,

Turkey, India, Tajikistan, Kenya, USA, Russia, Viet Nam,

Indonesia, Malaysia, Turkmenistan, Korea, Germany, Saudi

Arabia, Netherlands, UK, Singapore, Taipei.

08

Grapes, fresh or dried Pakistan, India, Kazakhstan, Russia,

UAE, Turkey, Saudi Arabia, Germany,

Iran, Canada, Iraq, United Kingdom,

USA, Tajikistan.

27

Mineral fuels, mineral oils and

products of their distillation;

bituminous substances;

mineral . . .

Iran, Turkmenistan, Malaysia, UAE, Germany, China, Turkey,

Indonesia, Spain, India, UK, Korea, Brazil, Italy, Denmark.

13 Vegetable saps and extracts; pectic

substances, pectinates and pectates; agar-

agar and other . . .

India, Pakistan, Turkey, UAE, Japan,

Iran. 11 Products of the milling industry;

malt; starches; inulin; wheat

gluten

Kazakhstan, Pakistan, Turkmenistan, Uzbekistan, Iran, China,

UAE.

08

Other nuts, fresh or dried, whether or not

shelled or peeled (excluding coconuts,

Brazil nuts . . .

India, Pakistan, Turkey, UAE.

90

Optical, photographic,

cinematographic, measuring,

checking, precision, medical or

surgical . . .

Uzbekistan, Iran, Japan, China, Tajikistan, Pakistan,

Turkmenistan, India, USA, Germany, Turkey, Korea, UAE,

Malaysia, UK, Italy, Taipei, New Zealand, Indonesia, Hong

Kong, Sweden, Lebanon, Poland, Canada.

57

Carpets and other textile floor coverings,

of textile materials, knotted, whether or

not made . . .

Pakistan, Germany, Turkey, USA, UAE,

UK, France, Canada, Singapore,

Belgium, South Africa, Australia, China,

Spain, New Zealand.

58

Special woven fabrics; tufted

textile fabrics; lace; tapestries;

trimmings; embroidery

China, India, Pakistan, Iran, Malaysia, Turkey, Korea, UAE,

Uzbekistan.

08

Dates, figs, pineapples, avocados, guavas,

mangoes and mangosteens, fresh or dried

India, Pakistan, UAE.

84

Machinery, mechanical

appliances, nuclear reactors,

boilers; parts thereof

Pakistan, Iran, China, Japan, Kazakhstan, Russia, UAE, USA,

Germany, turkey, Malaysia, India, Korea, France, Indonesia,

Saudi Arabia, Turkmenistan, Uzbekistan, Taipei, Sweden,

Italy, Viet Nam.

10 Grain sorghum India, Pakistan, Iraq.

15 Animal or vegetable fats and oils

and their cleavage products;

prepared edible fats; animal . . .

Malaysia, Russia, Pakistan, UAE, Iran, Indonesia, Turkey,

China, Kazakhstan, Turkmenistan, Ukraine.

09 Seeds of anis, badian, fennel, coriander,

cumin or caraway; juniper berries Pakistan, India, Tajikistan, UAE,

Sweden, Germany. 72 Iron and steel Iran, Uzbekistan, Kazakhstan, Pakistan, China, USA, Turkey,

Russia, Tajikistan.

07

Tomatoes, fresh or chilled Pakistan, Tajikistan, India.

85

Electrical machinery and

equipment and parts thereof;

sound recorders and

reproducers, television . . .

China, Pakistan, India, Japan, USA, Iran, UAE, Turkey,

Thailand, Germany, Vietnam, Italy, Uzbekistan, Indonesia,

United Kingdom, Malaysia, Poland, Korea, Sweden, Taipei,

Lebanon, Ireland, Russia, Mexico

12

Other oil seeds and oleaginous fruits,

whether or not broken (excluding edible

nuts, olives, . . .

Iran, Iraq, Turkey, UAE, Turkmenistan,

India, Germany, Jordan, Uzbekistan,

UK, Pakistan, Saudi Arabia. 18

Cocoa and cocoa preparations Pakistan, Iran, UAE, India, Kazakhstan, Japan, Turkey,

Uzbekistan, China, Brazil, Tajikistan, Saudi Arabia, Ukraine,

Turkmenistan, Korea, USA, Vietnam, Malaysia, Indonesia,

Poland, Spain, Netherlands, France, Russia.

9

Top 20 Exported Products Importing Countries Top 20 Imported Products Exporting Countries

62

Articles of apparel, accessories, knit or crochet

United States of America, Germany, United Kingdom, France, Spain,

Turkey, Canada, Italy, Japan, Belgium, Netherlands, Poland,

Australia, Denmark, China, Czech Republic, Sweden, Korea, Russia,

UAE, India, Brazil, Ireland, Hong Kong.

52

Cotton China, India, Hong Kong, Pakistan, Uzbekistan, UAE, Singapore, Malaysia, Turkey, UK, Area Nes, Turkmenistan, USA, Thailand, Korea, Switzerland, Indonesia, Benin, core d’Ivoire, Taipei, Sri Lanka, Mali, Burkina Faso, Cameron.

61 Articles of apparel and clothing accessories, knitted or crocheted

Germany, UK, USA, France, Spain, Italy, Belgium, Canada, Denmark,

Australia, Poland, Netherlands, Japan, Sweden, China, Turkey,

Russia, Ireland, UAE, Mexico, Brazil, Korea, Norway, Malaysia. 84

Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof

Singapore, Kuwait, Malaysia, UAE, Indonesia, Saudi Arabia, China, India, South Africa, Viet Nam, Philippines, Korea, Oman, Thailand, Turkey, Taipei, Hong Kong, Japan, Sri Lanka, Pakistan.

63

Other made-up textile articles; sets; worn clothing and worn textile articles; rags

United States of America, Germany, UK, India, France, Canada,

Australia, Sweden, Japan, Netherlands, Spain, Russia, China,

Belgium, Poland, Norway, Sudan, Italy, Korea, Austria, Indonesia,

Denmark, South Africa, Mexico.

85

Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television . . .

China-Hong Kong, China, Singapore, India, Germany,

Finland, United States of America, Russian Federation,

Korea-Republic of, Japan

64

Footwear, gaiters and the like; parts of such articles

Germany, japan, USA, Netherlands, Spain, Italy, France, China,

united Kingdom, Korea, Area Nes, Canada, India, Poland, Hong Kong,

UAE, Ukraine, Belgium, Panama, Russia, Switzerland, Austria,

Mexico, Sweden.

27

Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral . . .

Singapore, Malaysia, China, India, Taipei-Chinese, Iran-

Islamic Republic of, Thailand, Korea- Republic of,

Indonesia, Pakistan

53

Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn

Turkey, India, China, Iran, Pakistan, Uganda, USA, Belgium, Russia, Indonesia, Uzbekistan, Cote d’Ivoire, Saudi Arabia, Korea, Area Nes, Brazil, UAE, Netherlands, Spain, Germany, UK, Algeria, Japan, Jordan.

72

Iron and steel China, Japan, India, Korea, Taipei, Australia, Canada, Brazil, Singapore, Europe othr. Nes, USA, Ukraine, New Zealand, Malaysia, United Kingdom, Bahrain, Viet Nam, Sweden, UAE, Belgium, Hong Kong, Russia, Thailand, south Africa.

03

Fish and crustaceans, molluscs and other aquatic invertebrates

UK, Netherlands, Belgium, Germany, USA, France, China, Japan,

Saudi Arabia, Denmark, Russia, India, Viet Nam, Portugal, UAE, Hong

Kong, Canada, Cyprus, Mexico, Spain, Italy, Thailand, Greece, Korea. 39

Plastics and articles thereof Saudi Arabia, China, Taipei, Korea, India, Thailand, Malaysia, UAE, Singapore, Qatar, Indonesia, Hong Kong, Oman, Japan, Area Nes, Germany, Viet Nam, Italy, Pakistan, USA, UK, Belgium, turkey, Sri Lanka.

41

Raw hides and skins (other than furskins) and leather

Hong Kong, China, Korea, Italy, Japan, Viet Nam,, Taipei, Spain,

India, Area Nes, Poland, UK, Germany, Portugal, Cambodia,

Indonesia, Turkey, Singapore, France, USA, Pakistan, Thailand,

Myanmar, Philippines.

87

Vehicles other than railway or tramway rolling stock, and parts and accessories thereof

India, Japan, China, Thailand, Singapore, Sudan, Korea, Area Nes, Germany, taipei, UK, UAE, Liberia, Italy, Hong Kong, France, Indonesia, Kenya, Turkey, Pakistan, Malaysia, Sri Lanka, USA, cote d’Ivoire

42

Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles . . .

China, UAE, Japan, Belgium, USA, Germany, Italy, India, Korea, Australia, Canada, Spain, South Africa, Singapore, United Kingdom, Netherlands, France, Taipei, Brazil, Hong Kong, Thailand, Poland, Norway, Saudi Arabia.

55

Man-made staple fibres China, Indonesia, Hong Kong, India, Taipei, Thailand, Korea, Japan, Germany, Singapore, Area Nes, Malaysia, Sri Lanka, USA, Viet Nam, Austria, Pakistan, Turkey, Italy, United Kingdom, Belgium, UAE, Spain, Europe.

27

Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral . . .

Area Nes, India, Singapore, Myanmar, Sri Lanka, Nepal.

15

Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal . . .

Indonesia, Argentina, Malaysia, Brazil, Paraguay, Viet Nam, Singapore, Spain, China, Korea, USA, India, Switzerland,.

84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof

Japan, UAE, Singapore, India, Viet Nam, USA, Thailand, Area Nes, Maldives, Taipei, Philippines, Denmark, Sudan, China, Italy, Hungary, Canada, Hong Kong, Korea, Turkey, Germany, Malaysia, Pakistan, Saudi Arabia.

60 Knitted or crocheted fabrics China, Hong Kong, Taipei, India, Area Nes, Korea, Sri Lanka, Viet

Nam, Singapore, Pakistan, Indonesia, USA, Thailand, Malaysia, Mauritius, Turkey, Macao, UAE, Canada, Spain, Cambodia, Japan.

10

Bangladesh

Top 20 Exported

Products Importing Countries Top 20 Imported Products Exporting Countries

71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad . . .

UAE, Hong Kong, USA, Belgium, Israel, Thailand, Singapore,

UK, Japan, Australia, Switzerland, Canada, China, Italy,

France, Germany, Korea, South Africa, Spain, Turkey,

Malaysia, Pakistan, Sweden.

27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral . . .

Saudi Arabia, Iraq, USA Nigeria, Iran, Qatar, Australia, Venezuela,

Indonesia, Kuwait, South Africa, Malaysia, Angola, Mexico, USA,

Brazil, Korea, Egypt, China, Singapore, Russia, Algeria, Brunei

Darussalam.

27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral . . .

UAE, Singapore, USA, Gibraltar, Oman, Netherlands, Area Nes,

Turkey, Kenya, Tanzania, Israel, Australia, Nepal, France,

China, South Africa, Japan, Korea, Taipei, Mozambique, Saudi

Arabia, Malaysia, Sri Lanka, Mauritius.

71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad . . .

Switzerland, UAE, Belgium, Hong Kong, Russia, USA, South Africa,

Ghana, Israel, Bostwana, Canada, Domincian Republic, Saudi

Arabia, China, Peru, UK, Australia.

87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof

Mexico, USA, Nepal, Bangladesh, UK, South Africa, Ari Lanka,

Turkey, Italy, Germany, France, UAE, Saudi Arabia, Colombia,

Egypt, Spain, Indonesia, Netherlands, Nigeria, Philippines,

Thailand, Chile, Peru.

85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television . . .

China, Korea, USA, Malaysia, Germany, Japan, Singapore, Hong

Kong, Viet Nam, Thailand, Taipei, Finland, Mexico, France, UK,

Italy, Israel, UAE, Indonesia.


USA, UAE, UK, Germany, Turkey, China, Bangladesh,

Singapore, Nepal, Malaysia, France, Italy, Saudi Arabia,

Kuwait, Indonesia, Thailand, Japan, Viet Nam, Philippines,

Brazil, Nigeria, Russia, Sri Lanka, Kenya.


China, Germany, USA, Japan, Korea, Italy, Thailand, Singapore,

Malaysia, UK, France, Sweden, Spain, Belgium, Czech Republic,

Canada, Austria.

30 Pharmaceutical products USA, China, Germany, Japan, Netherlands, Spain, Belgium,

Saudi Arabia, Brazil, Italy, Singapore, Indonesia, Korea,

Pakistan, Mexico, Turkey.

29 Organic chemicals China , Singapore, Saudi Arabia, Korea, Kuwait, USA, Germany,

Iran, Taipei, Malaysia.

29 Organic chemicals USA, China, Germany, Japan, Netherlands, Spain, Belgium,

Saudi Arabia, Brazil, Italy, Singapore, Indonesia, Kjorea,

Switzerland, Pakistan, Mexico, Turkey, UAE, UK, Malaysia,

Egypt, Bangladesh, Taipei.

39 Plastics and articles thereof China, Korea, Saudi Arabia, USA, Singapore, Taipei, Thailand,

Germany, UAE, Japan.

62 Articles of apparel and clothing accessories, not knitted or crocheted

USA, UAE, UK, Spain, Germany, France, Saudi Arabia, Netherlands, Italy, Japan, Denmark, Canada, Sudan, Australia, Belgium, Sweden, Afghanistan, Sri Lanka, Mexico, Brazil, Bangladesh, Malaysia, South Africa, China.

99 Commodities not elsewhere specified China, Korea, Japan, UAE, South Africa, UK, USA, Germany,

Malaysia, Russia.

85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television . . .

USA, UAE, Germany, China, UK, France, Bangladesh, Singapore, Netherlands, Hong Kong, Nepal, Malaysia, Saudi Arabia, Kuwait, Sri Lanka, Viet Nam, Japan, Oman, Italy, Kenya, Nigeria, Indonesia, Israel, Algeria

15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal . . .

Indonesia, Malaysia, Argentina, Ukraine, Brazil, UAE, Thailand,

Paraguay, Russia, Spain.

61 Articles of apparel and clothing accessories, knitted or crocheted

UAE, USA, UK, Germany, France, Spain, Italy, Saudi Arabia, Netherlands, South Africa, Poland, Canada, Belgium, Nigeria.

72 Iron and steel Area Nes, China, Germany, USA, Japan, Korea, Sweden, Hong

Kong, China, Viet Nam, France.

72 Iron and steel Italy, Nepal, Belgium, Bangladesh, UAE, USA, Korea, Spain, Viet Nam, China, Indonesia, Taipei, Malaysia, Japan, Ethiopia, Mexico.

90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical . . .

Chile, Australia, Indonesia, South Africa, Canada, Brazil, Peru

Eritrea, Argentina, Papua New Guinea.

11

India

HS

Code Top 20 Exported Products Importing Countries HS Code Top 20 Imported Products Exporting countries

63

Other made-up textile

articles; sets; worn clothing

and worn textile articles; rags

USA, UK, Germany, Belgium, Netherlands, France, Italy,

Spain, UAE, Australia, Canada, Poland, Denmark, Saudi

Arabia, Sweden, Chile, Ireland, South Africa, China. 27

Mineral fuels, mineral oils and

products of their distillation;

bituminous substances;

mineral . . .

UAE, Saudi Arabia, Kuwait, Oman, Singapore, Malaysia,

South Africa, Indonesia Afghanistan, Bahrain, Italy,

China, India, USA, Poland.

52

Cotton China, Bangladesh, Italy, Turkey, Hong Kong, China,

United States of America, Germany, Korea, Republic of

Portugal, Spain, Egypt. 84

Machinery, mechanical

appliances, nuclear reactors,

boilers; parts thereof

China, USA, Germany, Japan, Italy, Europe Othr. Nes,

Switzerland, UAE, UK, Korea, France, UK, Thailand,

Belgium, UAE, India, Malaysia, Spain.

61

Articles of apparel and

clothing accessories, knitted

or crocheted

United States of America, United Kingdom, Germany,

Spain, Netherlands, Belgium, Italy, France, United Arab

Emirates, Canada 85

Electrical machinery and

equipment and parts thereof;

sound recorders and

reproducers, television . . .

China, UAE, Viet Nam, USA, Germany, Japan, Korea,

France, UK, Italy, Malaysia, Thailand, Austria, Turkey,

Singapore, Hong Kong, Taipei, Finland, Sweden, Qatar,

Netherlands.

62

Articles of apparel and

clothing accessories, not

knitted or crocheted

USA, Spain, UK, Germany, Belgium, Netherlands, Italy,

France, UAE, Poland, Sweden, Denmark, Canada, China,

Mexico, Japan, Australia, Saudi Arabia, Portugal,

Malaysia, Norway, Ireland.

72

Iron and steel China, UK, USA, Japan, UAE, Europe othr. Nes, South

Africa, Russia, Korea, Taipei, Australia, Brazil, India,

Germany, Afghanistan, Belgium, Kuwait, Canada,

Poland, Oman, Sweden, Iran, Italy.

10

Cereals China, Kenya, UAE, Afghanistan, Mozambique, Tanzania,

Saudi Arabia, Azerbaijan, Oman, Malaysia, Yemen, Cote

d’Ivoire, Indonesia, Madagascar, Belgium, UK. 87

Vehicles other than railway or

tramway rolling stock, and parts

and accessories thereof

Japan, China, Thailand, Indonesia, Germany, Singapore,

Belarus, Korea, USA, UK, UAE, Taipei, Hungary, Malaysia, Viet

Nam, France, Australia, South Africa, Turkey, Sweden,

Philippines, Hong Kong, Finland.

42

Articles of leather; saddlery

and harness; travel goods,

handbags and similar

containers; articles . . .

Germany, USA, Spain, UK, Netherlands, France, Canada,

Belgium, Sweden, Italy, Australia, Denmark, Japan, UAE,

Saudi Arabia, Poland, South Africa, Finland. 29

Organic chemicals China, Saudi Arabia, India, Kuwait, UAE, Thailand, Italy, Korea,

USA, Malaysia, Germany, Taipei, France, Japan, Switzerland,

Netherlands, Belgium, Spain, Singapore, UK, Indonesia.

25

Salt; sulphur; earths and

stone; plastering materials,

lime and cement

Afghanistan, India, China, Sri Lanka, USA, Madagascar,

Yemen, Somalia, Italy, Netherlands, Tanzania, Comoros,

Korea, south Africa, UAE, France, Kenya, Germany,

Slovenia, UK, Turkey.

39

Plastics and articles thereof Saudi Arabia, China, UAE, Qatar, India, Korea, Thailand, Taipei,

USA, Germany, Malaysia, Singapore, Belgium, Oman, Europe

Othr. Nes, Japan, Netherlands, Kuwait, Turkey.

08

Edible fruit and nuts; peel of

citrus fruit or melons

Afghanistan, India, UAE, Russia, China, UK, Saudi Arabia,

Germany, Philippines, Indonesia, Oman, USA, Viet Nam,

Kuwait, Qatar, Ukraine, Canada, Italy, Sri Lanka, Jordan. 15

Animal or vegetable fats and

oils and their cleavage

products; prepared edible fats;

animal . . .

Indonesia, Malaysia, Argentina, Brazil, India, USA, Spain,

Australia, Paraguay, Singapore, Italy, Philippines, Turkey, UAE,

Saudi Arabia.

90

Optical, photographic,

cinematographic, measuring,

checking, precision, medical

or surgical . . .

USA, Germany, UK, France, China, India, Japan, Australia, Brazil,

Italy, UAE, Belgium, Korea, Turkey, Mexico, South Africa,

Netherlands, Egypt, Singapore, Russia, Philippines. 12

Oil seeds and oleaginous fruits;

miscellaneous grains, seeds and

fruit; industrial or

medicinal . . .

Canada, Brazil, USA, India, Romania, Egypt, Sri Lanka, China,

Thailand, Afghanistan, New Zealand, Chile, Argentina, Turkey,

South Africa, Australia, Italy, Korea, Hungary.

41

Raw hides and skins (other

than furskins) and leather

Hong Kong, Italy, China, India, Viet Nam, Korea,

Bangladesh, Spain, Germany, South Africa, Indonesia,

Cambodia, Japan, USA, France, Netherlands, UAE. 07

Edible vegetables and certain

roots and tubers

India, Australia, Canada, China, Russia, Ethiopia, Afghanistan,

Montenegro, Argentina, Ukraine, Myanmar, Viet Nam, USA,

Tanzania, Iran, Kenya, Brazil, Bulgaria.

Pakistan

12


• Each of the South Asian economies dependent on various other sources particularly in Asia

• Supply side advantages: timely availability, price, transaction cost, quality, capacity

• Buyers preferences and conditionalities

• As exporters, regional countries have established markets worldwide where they supply their products at competitive prices

• South Asian countries may have various limitations (Tiwari, 2013)

• Preoccupation with large domestic market (India) over exports

• Low value addition in manufacturing which translates into low-value component of exports

• A variety of impediments that add to production costs

• Sub-optimal scales of production in key intermediate sectors, a near total lack of quality inputs (high quality steel, electronics & quality plastics), precision and high quality tooling, and a lack of serious R&D or skill development.

• Lack of reliable power supply, inadequate infrastructure and logistics, high interest rates and land costs, and an unstable policy environment.

13


• Region-based production networks targeting global export markets would have limited implications

• Even after making necessary improvement

• Potentiality of regional production network would be higher for low-value products targeted to regional markets

14

• Inward flow of FDI from South Asia would have limited contribution to develop regional production network

• Outward flow of FDI from South Asian countries is still very small

• Mainly because of official restriction over investment and free movement of capital.

• It has increased over time (0ver $8 billion)

• India has been the major investor abroad over the years – about 98% of total FDI outflow from the region.

• Outflow from other countries were highly insignificant such as Bangladesh (US$53 million), Pakistan (US$73 million) and Sri Lanka (US$ 80 million).

• India’s outward investment marginally targets to regional countries

• India’s outward investment target to different strategically important industries in North America, Europe and Africa

4. What Kinds of Trade-Investment Mix can Facilitate Regional Production Network in South Asia? 15

• Extra-regional sources predominate in the flow of FDI in South Asia.

• Major share of FDI originated from developed countries

• Volume and share of FDI from developing countries has been increasing in recent years

• Between the early and late 2000s, number of developing countries as FDI sources for South Asia increased from 38 to 45

• Intra-regional FDI comprises a small share in total FDI flow in South Asia which is less than 5% of total flow.

• Intra-regional investment is relatively higher in Nepal and Bhutan.

4. What Kinds of Trade-Investment Mix can Facilitate Regional Production Network in South Asia?

Indicators BD Bhu India Nepal Pak

Volume (million US$)

FDI from World 7750 132 24975 506 17727

From South Asia 553 44 84 171 52

Outside South Asia 7197 88 24891 335 17675

Share (% )

FDI from World 100.0 100.0 100.0 100.0 100.0

From South Asia 7.1 33.3 0.33 33.8 0.3

Outside South Asia 92.9 66.7 99.67 66.2 99.7

Sources of FDI Stock: Within and Outside the Region

16

• South Asian countries have attracted efficiency-seeking FDI from outside the region

• Bangladesh, Pakistan, Sri Lanka and India are important players in global apparel sector nevertheless investment in this sector was not sufficient within the region.

• Investment from abroad targets efficiency seeking FDI in South Asia

• Such a structure of intra-regional investment is not favourable for contributing much in regional value chain

• Intra-regional investment alone would not adequate to facilitate regional production network

• There needs to have investment from outside the region

4. What Kinds of Trade-Investment Mix can Facilitate Regional Production Network in South Asia? 17


• Development of regional value chain through trade-investment mix need to take into account broader perspectives

• Incremental contribution of region-based value chain perhaps limited for competitive sectors

• High potentials for developing value chain in SMEs (e.g. limited level of tradable goods)

• Products targeting regional markets would better facilitated through region-based production network

• Reducing tariff and non-tariff barriers

• Establishing better connectivity

• Sharing technology and know-how

• South Asian countries should work for broader cooperation with regard to harmonization of standards beyond South Asia

• In order to develop effective production networks

18


• Overall, a broader regional perspective is necessary to facilitate production networks

• By including South East Asian and East Asian countries

• There exists factor market differentials and product markets

• Institutional approach: Beyond South Asia and also beyond trade (by including investment, other services and technology cooperation)

• ASEAN example for promotion of investment: Open regionalism for FDI

• Taking the precedence of ASEAN, a number of initiatives could be considered

• Investment cooperation and facilitation programmes; coordinating promotion programme and investment awareness activities

• Granting national treatment facilities, ensuring active involvement of the private sector in the investment area development process

• Providing a more streamlined and simplified investment process, and

• Eliminating investment barriers and liberalising investment rules and policies.

19


• Various initiatives need to be undertaken at the private sector level with the support of the government

• South Asian Industrial Joint Venture (SAIJV) and Brand-to-Brand Complementation Schemes and South Asia Industrial Cooperation scheme

20

Thank you.

21

Documents

Development of Regional Production Network: What Should be ...sawtee.org/saes/wp-content/uploads/2017/12/Presentaiton-of-Dr-Moazzem...Exporters 2005 2009 2016 Importers 2005 2009 2016