fernando mistura, oecd, 2014 asean-oecd investment policy conference
DESCRIPTION
This presentation by Fernando Mistura was made at the session "Integrating ASEAN firms into global value chains through investment" during the 2nd ASEAN-OECD Investment Policy Conference held on 10-11 December 2014. Find out more at: http://www.oecd.org/daf/inv/investment-policy/2014-asean-oecd-investment-policy-conference.htmTRANSCRIPT
SECONDOECD-ASEAN INVESTMENT
POLICY CONFERENCE
Day 2
Integrating ASEAN firms into global value chains through investment
10-11 December 2014Jakarta, Indonesia
GVCs are an important driver of productivity and economic growth across countries, both in developed and developing countries
Outline:
1. Firms rely more on access to world class inputs in order to increase their productivity – in other words, they import in order to export successfully.
2. The services sectors play a vital role in well-functioning GVCs.
3. Participation in GVCs is not automatic, depends to some extent on fixed factors but also policies play a significant role both to facilitate integration and upgrading
The rise in GVCs: why does this matter?
The rise in GVCs: firms rely heavily on access to
world class inputs to boost their productivity
0
10
20
30
40
50
60
70
80
GVC Participation, as % of gross exports, 1995 and 2009
2009 Participation index, backward 2009 Participation index, forward 1995 Participation index
% of gross exports
Source: OECD-WTO TiVA database. Note: the indicator is expressed as the share of foreign inputs (back participation) and domestically
produced inputs used in third countries’ exports (forward participation) in a country’s gross exports as proposed by Koopman et al. (2010)
0
2
4
6
8
10
12
14
16
18
20
Global trade ingoods andservices
Non-TNC trade All TNC-relatedtrade
Intra-firm trade NEM-generatedtrade, selected
industries
TNC arm'slength trade
Global gross trade (exports of good and services), by type of TNC involvement, 2010
USD Trillion, estimates
Global
trade in
goods and
services
Non-TNC
trade
All TNC-
related
trade
Intra-firm
trade
NEM-
generated
trade,
selected
industries
TNC arm’s
length
trade
FDI is an important driver of GVC participation
FDI stock vs GVC Participation
Global gross trade (exports goods and services),
by type of TNC involvement, 2010
Source: OECD-WTO TiVA database; UNCTAD statistics;
UNCTAD (2013), World Investment Report: Global Value Chains: Investment and Trade for Development, Geneva.
TNC-related trade: ~80%
Estimates
~19 ~4
~15~6.3
~2.4
~6.3
0
10
20
30
40
50
60
70
80
-1 0 1 2 3 4 5 6 7
FDI as a share of GDP, 1995-2009 (log)
GVC Participation Index, 1995-2005¹
Ownership matters: contribution of foreign
affiliates to domestic value added in exports
Figure 11. Share of national value added under control of foreign affiliates, 2010
OECD countries, Foreign affiliates share of national value added by sector
Source: OECD, Activity of Multinational Enterprises Database, Eurostat, Inward FATS Database, June 2013.
0
10
20
30
40
50
60
70
80
90
%
Manufacturing Total services, except finance and insurance Total business economy, except finance and insurance
Source: OECD, Activity of Multinational Enterprises Database, Eurostat, inward FATS database, June 2013
Competitiveness in GVCs: the role of services
~half of total value added in exports
0
10
20
30
40
50
60
70
80
90
Services value added, as % of Gross Exports, 2009
Domestic services value added content of gross exports Foreign services value added content of gross exports
% of gross exports, 2009
Source: OECD-WTO TiVA database
Services account for a large share of value
creation in the manufacturing sector
Source: OECD-WTO TiVA database
To what extent the increased interconnectedness between countries through GVCs calls for different policies?
What are the opportunities and challenges of GVCs for ASEAN countries?
What type of policies are needed to foster greater integration into GVCs and to maximize the potential benefits to the domestic economy?
What are the risks and opportunities of Responsible Business Conduct in dealing with this additional layer of complexity of increased fragmentation of international production networks?
Discussion question to the panel
Thank You
For further information
OECD Global Value Chains
http://www.oecd.org/industry/ind/global-value-chains.htm
OECD Trade in Value Added Database
http://www.oecd.org/sti/ind/measuringtradeinvalue-addedanoecd-wtojointinitiative.htm
Policy Framework for Investment (and User’s Toolkit)
www.oecd.org/daf/inv/mne/pfi.htm
www.oecd.org/investment/toolkit/
Investment Policy Reviews
www.oecd.org/investment/countryreviews.htm
Thank You
For further information
OECD Global Value Chains
http://www.oecd.org/industry/ind/global-value-chains.htm
OECD Trade in Value Added Database
http://www.oecd.org/sti/ind/measuringtradeinvalue-addedanoecd-wtojointinitiative.htm
Policy Framework for Investment (and User’s Toolkit)
www.oecd.org/daf/inv/mne/pfi.htm
www.oecd.org/investment/toolkit/
Investment Policy Reviews
www.oecd.org/investment/countryreviews.htm
Participation of countries in Global
Value Chains
Figure 9. ASEAN-7 GVC Participation Index, % of total exports (1995, 2009)
Source: Miroudot, S. and K. De Backer (2013), “Mapping Global Value Chains”, OECD Science, Technology and Industry
Working Paper, OECD Publishing. Note: The indicator is expressed as the share of foreign inputs (backward participation) and
domestically produced inputs used in third countries' exports (forward participation) in a country's gross exports as proposed by
Koopman et al. (2010).
0%
10%
20%
30%
40%
50%
60%
70%
80%
2009 Backward Participation 2009 Forward Participation 1995 Participation Index
Table 5. ASEAN-7, Top 3 sectors with highest gross exports, 2009
Source: OECD-WTO, Trade in Value Added (TiVA) Database, May 2013.
C ambo diaAgriculture, hunting,
forestry and fishing
Textiles, textile
products, leather and
footwear
Wholesale and retail
trade; Hotels and
restaurants
Indo nesia
Food products,
beverages and
tobacco
Chemicals and non-
metallic mineral
products
M ining and quarrying
M alaysiaElectrical and optical
equipment
Chemicals and non-
metallic mineral
products
M ining and quarrying
P hilippinesElectrical and optical
equipment
Transport and storage,
post and
telecommunication
Wholesale and retail
trade; Hotels and
restaurants
Singapo reElectrical and optical
equipment
Chemicals and non-
metallic mineral
products
Transport and storage,
post and
telecommunication
T hailandElectrical and optical
equipment
Chemicals and non-
metallic mineral
products
Food products,
beverages and tobacco
Viet N amAgriculture, hunting,
forestry and fishing
Textiles, textile
products, leather and
footwear
M ining and quarrying
Legend: High domestic
value added
High foreign value
added