Risk, resilience and recalibration in global value chains

By Adnan Seric, Michael Windisch, UNIDO, Holger Görg, Wan-Hsin Liu, Kiel Institute for the World Economy 1

Figure 1Number of new trade policy interventions implemented each year. Note: Reporting lag-adjusted statistics. Source: Global Trade Alert

COVID-19 supply chain disruptions provide an unprecedented opportunity to examine the resilience of global value chains. Data on trade flows and manufacturing output over the course of the pandemic suggest that the supply chain disruptions of early 2020 were of a temporary nature, and that extended global value chains currently interlinking many firms and economies seem to be resilient to trade and economic shocks at least to some extent.

Escalating geopolitical tensions and trade restrictions

Geopolitical tensions have risen, in a race to address the need for self-sufficiency—especially with regard to economic dependence on China—exemplified by the escalation in trade interventions in the lead-up to early December 2020. Close to 1,800 new restrictive interventions have been imposed in 2020 – over one and a half times the number in each of the two previous years, when the China-US trade dispute and a new wave of protectionism intensified (Figure 1)2. The adoption of discriminatory trade interventions outpaced liberalisations, despite the increase in new trade-liberalising measures during this period and the lifting of some emergency trade restrictions.

Amid rising US-China trade tensions in 2018-19, China already faced a particularly high increase in trade restrictions relative to other countries, which further intensified during the COVID-19 crisis. (Figure 2)

Continue reading

Regional Comprehensive Economic Partnership: why should it involve the excluded LDCs?

By Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD)

The world’s largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), was signed in November 2020, counting 15 Asian member countries. Should the excluded countries, more specifically the low income and least developed countries (LDCs) of Asia, be worried about this development?

In recent years, the number of regional trading arrangements of various types, dealing with trade in goods or services or both, has been on the rise. 305 regional trade arrangements are already in force and the World Trade Organisation has been notified of another 496 currently under negotiation. However, the RCEP stands out for several reasons. The ten original members of the ASEAN Free Trade Area (Brunei, Indonesia, Philippines, Cambodia, Singapore, Lao PDR, Malaysia, Myanmar, Thailand and Vietnam) have now joined hands with five of the six countries with which ASEAN had bilateral free trade areas – China, Japan, South Korea, Australia and New Zealand. India opted out at the last moment, but the door has been kept open.

Continue reading

Our top 10 blogs of 2020!

In 2020 we posted 179 blogs! Here are the top 10 most read blogs of the year:


1. Landmark Supreme Court victory in Zambia: collecting millions in tax revenues and sending a message across borders

By Ignatius Mvula, Assistant Director – Mining Audit Unit, Zambia Revenue Authority, Mary Baine, Director – Tax Programmes, African Tax Administration Forum, and Ben Dickinson, Head of the Global Relations and Development Division, Centre for Tax Policy and Administration, OECD

The authors explain why a landmark Supreme Court victory in Zambia sends a message that African tax authorities are able and confident to take on and deal with complex transfer pricing transactions.

In French: Victoire historique devant la Cour suprême en Zambie : des milliards de dollars US en recettes fiscales supplémentaires et un message par-delà les frontières

2. COVID-19: consequences for international migration and development

Immigration-coronavirus

By Jason Gagnon, Development economist, OECD Development Centre

Jason Gagnon discusses how to minimise the short-term effects of the Covid-19 crisis on migrants and leverage the crisis to address the unfinished business of international co-operation on migration.

In French: COVID-19 : conséquences pour les migrations internationales et le développement

3. How China is implementing the 2030 Agenda for Sustainable Development

Photo by Robert Bye on Unsplash

By Xiheng Jiang, Vice-President of China Center for International Knowledge on Development (CIKD)

Xiheng Jiang discusses the key points of China’s Progress Report on Implementation of the 2030 Agenda for Sustainable Development (2019).


Continue reading

Public health and migration: from the Postcolonial era to COVID-19

By Ranabir Samaddar, Distinguished Chair in Migration and Forced Migration Studies, Calcutta Research Group


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Photo: Juan Alberto Casado, Shutterstock

I wrote The Postcolonial Age of Migration in 2016-2019. It came out just two months ago as the pandemic continued (and continues) to rage in India and around the world. Global mobility came to a screeching halt and I have not yet seen the book in print. Locked down in my house and aware that the book had come out, I was driven to reflect on what I had written: did I do justice to our age, which I had described as the postcolonial age of migration? The book time and again goes back to colonial histories of war, plunder, changes in land use pattern, peasant dispossession, primitive accumulation, and their continuities in our time. Against this backdrop, the book discusses how the colonial practices of violence and border building are being reproduced today on a global scale. Wars, famines, and ecological changes are major driving factors behind migration and forced migration flows today. They also influence patterns of labour mobility. Yet as I reflected, the overwhelming reality of the COVID-19 pandemic brought home the realisation that the book does not account for epidemiological disasters as an integral part of the colonial history of migration and the postcolonial age of migration. The absence of any concern for migrant workers and refugees in public health structures should have been discussed. The book speaks of refugees’ health concerns in camps, yet the broader perspective of migrants and public health is absent.

Continue reading

Prospects for Chinese and Mexican South-South co-operation post-COVID-19

By Denghua Zhang, former diplomat and Research Fellow at the Australian National University and Carlos Cortés Zea, Coordinator of the AMEXCID-UNDP Co-operation Programme


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


The COVID-19 crisis is having profound impacts on the international political and economic order. It also provides an opportunity for stakeholders to reflect on past practices in each sector and learn from lessons to improve policies in the future. In this case, we examine the purposes, approaches and capacities of emerging providers (or Southern providers as some may call them) through the lens of China and Mexico—two major players in south-south co-operation (SSC).

Emerging providers, similar to traditional donors, provide aid to serve their own national interest. Motivations underpinning emerging providers’ efforts can vary significantly. The Chinese foreign aid programme is driven by a combination of factors including diplomatic competition with Taiwan, access to natural resources in recipient countries, image building as a responsible global power, and generating geopolitical support when its relationship with developed countries is strained. For example, China is currently taking a whole-of-government approach to conduct its COVID-19 diplomacy; an effort to improve its global image and garner support from developing countries in the face of growing pressure from developed countries over China’s handling of the crisis.  

Continue reading

The potential of migration for development in Afghanistan

By Nassim Majidi, Founder and Director, Samuel Hall

A family in Sheberghan, Afghanistan. Photo: Mustafa Olgun / Shutterstock.com

Countries in Asia are at different stages of harnessing the potential of migration for development. At one end, there is the case of the Philippines, where international migration is central to domestic social and economic development. At the other end of the spectrum is Afghanistan, where much of the conversation has narrowly focused on forced migration, return and reintegration, missing out on the potential of migration for development. Yet the migration and development dialogue in Afghanistan should be a priority, at a time when COVID-19 is leading the country into an economic recession. Experts have so far provided informal estimates that up to 80% of the Afghan population may end up under the poverty line due to COVID-19, with dire consequences for food security and overall wellbeing.

Continue reading

Which path for the Development Assistance Committee down the Belt and Road?

By Philippos Pierros, EU Delegation Minister-Counsellor, & Elliott Memmi, Freelance Research Analyst

belt-road
The Chinese Xiaomi Highway bridge, between Lao’s border town Boten, and Mengla, Yunnan, China. Photo: Shutterstock

At the April 2019 Belt and Road Initiative (BRI) conference in Beijing, a new life seemed to have been given to the Belt and Road project. After 2018, marked by increased foreign criticism, suspicion, and a subsequent reigning in of ambition by China, 2019 saw a renewed confidence — with President Xi Jinping himself stepping in to address the risks of unsustainable debt and corruption and promising a more “open, green, and clean” development co-operation model. In July, China endorsed the G20 Principles for Quality Infrastructure Investment. And the China International Development Co-operation Agency (CIDCA) was promoted as the new government organ that would unify the tangled web of Chinese development actors. 2019 saw a sudden surge in new BRI agreements. Continue reading

Building a Resilient Future for Asia after COVID-19: How can ADB help?

By Yasuyuki Sawada, Chief Economist and Director General, Economic Research and Regional Cooperation Department, Asian Development Bank, Cyn-Young Park, Director for Regional Cooperation and Integration, Economic Research and Regional Cooperation Department, Asian Development Bank, Rolando Avendano, Economist, Economic Research and Regional Cooperation Department, Asian Development Bank


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


ADB-image

The latest estimates of the COVID-19 impact paint a grim picture of severe economic and job losses for developing Asia. ADB’s latest study estimates that the pandemic could cost the region from 6.2% to 9.3% in lost regional GDP, depending on whether it entails a 3-month or a 6-month containment scenario. This effect accounts for 30% of the expected overall decline in global output. The region is also expected to take the brunt of employment losses: the study projects losses from 6.0% (109 million) to 9.2% (167 million) of total employment, representing 70% of global employment losses. The shock is estimated to be seven times higher than during the global financial crisis.

Continue reading

Unbundling Corruption: Why it matters and how to do it

By Yuen Yuen Ang, Political Scientist at the University of Michigan, and the author of How China Escaped the Poverty Trap and China’s Gilded Age: The Paradox of Economic Growth and Vast Corruption

Corruption-whistleblower-shutterstock_1581042757Even amid a global pandemic, corruption persists and manifests itself in multiple forms, ranging from corrupt police extorting truck drivers delivering essential goods, rigged procurement contracts, to politically connected corporations receiving huge bailouts from the government while small businesses are starved of loans they desperately need to stay afloat. Although all of these actions are corrupt, they involve very different actors and stakes; some are transactional while others are extractive; and each brings about vastly different consequences.

Yet the conventional way of measuring corruption across countries does not capture qualitative distinctions across types of corruption. Instead, standard indices—most notably, the Corruption Perception Index (CPI)—measure corruption as a one-dimensional problem, ranging from 0 to 100. Consistently, rich countries rank at the top while poor countries are stuck at the bottom. Continue reading

From crisis to opportunity in China: stepping up digitalisation amid COVID-19

By Margit Molnar, Head of China Desk, OECD Economics Department and Kensuke Tanaka, Head of Asia Desk, OECD Development Centre


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


digitalisationDigitalisation as a way to lift growth potential

COVID-19, or the new Great Depression, is likely to have a lasting impact on economies and societies worldwide. Pandemics are shown to be followed by sustained periods with depressed investment opportunities, and/or heightened desires to save (Jorda et al., 2020), thereby reducing potential growth. To mitigate the impact of COVID-19, many governments, in addition to emergency measures to save lives and keep firms afloat, have also adopted investment stimuli. China is among those countries where the composition of stimulus is tilted towards public investment. While continuing to strike a delicate balance between keeping the pandemic under control and resuming activities, it is crucial to accelerate processes that will counter the fall in growth potential. China’s growth potential is set to decrease as the country catches up with more advanced economies and its rapid ageing also weighs on it. However, China can still reap the “reform dividend” with measures that also boost growth in the long term.

Digitalisation is a promising candidate to lift China’s long-term growth potential. Digital technologies are shown to boost productivity (Gal et al., 2019), which is the key to sustainable growth. At the current juncture, introducing digital technologies can also help jumpstart the economy as it creates new jobs and meets new demand (OECD, 2018). Indeed, in the first quarter of the year, it was the IT and software sector growing at over 13% and the financial sector at over 6% (partly thanks to surging online payments), that held up services growth. Continue reading