Download 3/16/2015 Building productive capacities in the Asia-Pacific LDCs: the role of

3/16/2015
Building productive capacities in the Asia-Pacific LDCs: the role of
economic diversification
HIGH-LEVEL ASIA-PACIFIC POLICY DIALOGUE ON
THE IMPLEMENTION OF THE ISTANBUL PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIES FOR THE DECADE 2011-2020
4-6 March 2015
Siem Reap, Cambodia
Clovis Freire
Economic Affairs Officer
Macroeconomic Policy and Development Division (MPDD)
Economic and Social Commission for Asia and the Pacific (ESCAP)
Outline
Progress of Asia-Pacific LDCs in building their
productive capacities
Need for strategic diversification
Policy recommendations to accelerate
progress
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Productive capacities of Asia-Pacific LDCs have on
average increased but remain low
Share of Asia-Pacific LDCs in global trade and production
Source: ESCAP, based on trade data from World Bank.
Note: Three-year averages in the period 2005-2013.
Economic diversification: Mix picture, half of Asia-Pacific
LDCs have increased diversification and value addition
Source: ESCAP, based on trade data from UN COMTRADE.
Note: Three-year averages in the period 2005-2013.
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Progress in ICT led by mobile telephony, and less in
terms of Internet connectivity
(c) significantly increase access to telecommunication services and strive to provide
100 per cent access to the Internet by 2020
Source: ESCAP, based on trade data from UN COMTRADE.
Note: Three-year averages in the period 2005-2013.
Energy supply has increased but LDCs are still behind
regional average in per capita terms
(d) strive to increase total primary
energy supply per capita to the same
level as other developing countries
(e) significantly increase the share of
electricity generation through
renewable energy sources by 2020
(f) enhance capacities in energy
production, trade and
distribution with the aim of
ensuring access to energy for all
by 2030
Source: ESCAP based on data from International Energy Agency (IEA) accessed at the ESCAP Online Database..
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Transport: potential for greater use of
regional transport networks
• Progress in transport facilitation
• Considerable efforts on improving land transport
connectivity with neighbouring countries
• Efforts on improving and upgrading domestic
road and rail networks
• Potential for greater utilization of regional
transport networks through the development of
intermodal facilities such as dry ports
Source: ESCAP, based on trade data from UN COMTRADE.
Note: Three-year averages in the period 2005-2013.
Diversification is associated with higher GDP
Source: ESCAP, based on trade data from UN COMTRADE. Year 2013.
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And the more diversified the economy the lower the
competition for its products it faces in global markets
Source: ESCAP, based on trade data from UN COMTRADE.
But what a country produces today affects what it
can produce tomorrow
Dense network of
diversification paths
Example of
diversification paths
with limited
opportunities for
further diversification
Source: ESCAP, based on trade data from UN COMTRADE.
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The more developed the country, the greater the complexity in terms
of productive capacities required to produce
Short-term gains
Development
$
Source: ESCAP, based on trade data from UN COMTRADE.
Effect of demand: Prices of commodities and manufactures
Source: ESCAP based on data from World Bank Commodity Markets, Annual world prices of commodities and indices.
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Price shifts for manufactures and commodities have created
incentives away from diversification
Boom is not unprecedented and is driven by the
rise of Asia
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Potential new sectors for diversification with
higher share of export opportunities
Source: ESCAP, based on trade data from UN COMTRADE.
Trade links with European and North American markets continue
advantageous. Asian-Pacific, at the same time, offer about one
quarter of the export opportunities for potential new sectors
Source: ESCAP, based on trade data from UN COMTRADE.
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Within the region, East Asia and South-East Asia presents over 70%
of the export opportunities
Source: ESCAP, based on trade data from UN COMTRADE.
Policy Recommendations
A stable, investment-friendly
and competitive
macroeconomic policy
framework
Industrial policy
Domestic resource mobilization
• Exchange rate policy
• Favorable credit conditions
• Macroeconomic stability
•
•
•
•
Infant industry
Infrastructure development
Fiscal policy
FDI
• Finance in support of private investment
for new sectors
• Domestic supply of long-term capital
• Tax reform
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Thank you
www. unescap.org
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