New Delhi, May 6: The Asian Development Bank (ADB) announced on Wednesday that geopolitical tensions, supply chain disruptions, and rapidly changing technologies are reshaping how economies engage in global value chains.
According to the ADB’s “Asian Development Policy Report 2026,” increased specialization in various stages of global production has enabled the Asia-Pacific region to achieve economic growth, create jobs, and reduce poverty over the past 25 years.
The report indicates that this region accounts for nearly one-third of global value chain trade. The share of developing countries has risen from 9% in 2000 to 18% in 2023.
ADB’s Chief Economist, Albert Park, stated that the growing geopolitical divide is limiting opportunities for companies to leverage global value chains, potentially impacting industrialization and economic growth.
He emphasized the need for less developed countries to harness new technologies, strengthen infrastructure and logistics, and create a better business environment to enhance their productivity and competitiveness.
The report highlights that some countries in East and Southeast Asia are well-positioned within global production networks and are capable of adding more value. In contrast, many smaller, low-income, or remote countries remain largely excluded from these networks.
While specialization in smaller production segments has facilitated rapid integration into global markets, the benefits have not been evenly distributed. Larger and more capable industries have reaped greater rewards, while small and medium enterprises face challenges due to higher costs and limited resources.
The report outlines three key policy priorities to enhance engagement with global value chains:
First, resilience and robustness have become crucial components of competitiveness. With rising uncertainty, reliability, adaptability to rapid changes, and risk management have become essential. This requires strong infrastructure, flexible companies, and diverse market and supply sources.
Second, environmental sustainability is increasingly becoming a prerequisite for participation in global value chains. Adhering to new environmental standards is essential, motivating companies to adopt cleaner and more sustainable technologies.
Third, inclusive development is vital. This involves reducing trade costs, improving infrastructure, establishing open trade regulations, enhancing employee skill development, and providing small industries with access to finance, digital platforms, and export opportunities.
According to the report, these measures could promote balanced and sustainable economic growth in the Asia-Pacific region.
Arpit Soni has had a passion for journalism since the beginning. Now he has turned this hobby into his profession. Arpit, who is a resident of Udaipur, enjoys editing and writing news related to journalism. He has worked as a Senior Content Producer in several important roles at Bhaskar, Patrika, Pratahkal, Punjab Kesari, and Times. Arpit completed his schooling in Udaipur and Jaipur. He has been working in the media industry for more than 10 years, and his journey is still continuing. ✍️📚
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