The Association of Southeast Asian Nations (ASEAN) needs to strengthen its position in global value chains to ensure sustainable economic growth and development for its member countries. With the emergence of the Fourth Industrial Revolution and the changing global trade landscape, it is imperative for ASEAN to act swiftly to harness the full potential of its economies. The Asian Development Bank (ADB) has been actively supporting ASEAN’s efforts to enhance its competitiveness in the global market. This article explores the role of ADB and the measures ASEAN must take to strengthen its position in the global value chains.
The Asian Development Bank (ADB) recently released a report highlighting the importance of strengthening the Association of Southeast Asian Nations (ASEAN) economies’ positions in global value chains. This would boost their resilience against various challenges, including future pandemics, geopolitical instability, and climate change. The report, titled ASEAN and Global Value Chains: Locking in Resilience and Sustainability, explored the opportunities and challenges facing global value chains in Southeast Asia. The aim is to build greater resilience and promote sustainable and green economic development. ADB president, Masatsugu Asakawa, emphasized the need for economic revitalization to occur sustainably and in a greener way.
The report found that global value chains were more resilient to COVID-19 impacts than initially expected. However, businesses had to adjust to disruptions in production stages due to their dependence on a few suppliers for essential inputs and goods. As a result, the Southeast Asian region requires stronger resilience in its global value chain segments while expanding trade, investment, and regional integration. Technological advancements continue to reduce the competitive advantage of employing low-skilled labor. It is, therefore, imperative that the region creates a critical mass of workers equipped with new technology and technological skills.
Moreover, ASEAN economies must adopt policies that promote decarbonization, trade digitalization, climate-smart trade, green transport infrastructure, and carbon pricing. Such measures will help build more sustainable and greener value chains in Southeast Asia and beyond. The report also noted that recent global shocks and geopolitical trade protectionism could disrupt growth in ASEAN and elsewhere. Therefore, policymakers in the region should deepen trade cooperation and expand it to include other regions.
ADB’s annual flagship knowledge event in Southeast Asia, the Southeast Asia Development Symposium (SEADS), gathers leaders from government, industry, academia, and other sectors to explore innovative solutions to critical development issues, such as climate change and technology development. This year’s event, themed “Imagining a Net-Zero ASEAN,” will focus on how the region can transition to net zero, achieve climate resilience and ensure economic prosperity. SEADS 2023 aims to build on the priorities and successes of the G20 Summit and contribute to dialogue at the 2023 ASEAN Finance Ministers’ Meeting. The first three SEADS events attracted over 10,000 participants and showcased a diverse lineup of speakers.
In conclusion, the ASEAN economies must prioritize strengthening their positions in global value chains to build resilience to various challenges. Policymakers should adopt policies that promote sustainable and green development while expanding trade, investment, and regional integration. Technological advancements, such as trade digitalization, and a critical mass of workers equipped with new technological skills, will help ensure the sustainability and success of global value chains in the region. SEADS provides a platform for leaders to explore innovative solutions to critical development issues and contribute to ASEAN’s growth and economic prosperity.
