role of agro-based and resource-based small and medium enterprises (smes) for export promotion,...

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Promoting Resource-Based Export-Oriented SMEs for Employment

Generation and Poverty Alleviation in Asia and Pacific*

_____________________________________________________________________

DR. TARUN DAS**

Economic Adviser

Ministry of Finance

Government of India

January 2003

________________________________________________________________________

* Prepared for the International Trade and Industry (ITD) Division, ESCAP, UnitedNations, Bangkok as a background paper for the Expert Group Meeting on Promotingresource-based Export-oriented SMEs for poverty alleviation in Asia and the Pacific.

** The author would like to express his gratitude to ESCAP, particularly to the Director

and Chief of the ITD Division for providing an opportunity to prepare this report and theMinistry of Finance, Government of India for granting necessary permission for writingthis report. However, the paper expresses personal views of the author and should not beattributed to the views of the Government of India.

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Promoting Resource-Based Export-Oriented SMEs for Employment

Generation and Poverty Alleviation in Asia and Pacific*

_____________________________________________________________________

CONTENTS

1.1 Objectives and Scope of the Study1.2 An Overview of the Study1.3 Profile of Regions and Sample Countries

(a) South Asia and SAARC(b) East and South East Asia

1.4 Structure of GDP and External Trade(a) Trend in sectoral shares in GDP(b) Structure of manufacturing value added(c) Structure of merchandise exports and imports

1.5 Export dynamism of Asian developing countries(a) Trend in export shares(b) Contribution of labour-intensive products to exports(c) Twenty most dynamic products in world trade

2 Resource based and agro based industries: Sectors main characteristics

Definition and types of industries(a) Typology of industries(b) Distribution of world MVA for selected branches(c) Leading producing countries of agro and resource based industries(d) Concept of small and medium enterprises (SMEs)

2.1 Structure of the sector2.2 Economic significance

(a) Contribution to GDP(b) Contribution to employment(c) Contribution to productivity

2.4 Issues at stake(a) Prospects of agro based and resource based SMEs(b) Major issues for consideration(c) Availability of skilled labour and modern technology

(d) Availability of raw materials and credits(e) International barriers on trade(f) Role of multinationals and foreign investment

(i) international production networks(ii) production sharing and preferential market access

(g) Environment and sustainability

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3 Rationale for development and contribution of agro-based

and resource-based industries to poverty alleviation

Rationale for development of agro and resource based SMEs3.1 Growth and poverty alleviation

3.2 Employment generation

4 Economic Policies and strategies for Development of

agro-based and resource-based industries

4.1 Industry development formulation4.2 Business environment

(a) Licenses and regulatory system(b) Fiscal and investment incentives(c) Export promotion schemes(d) Role of special economic zones (SEZs)(e) Foreign investment policy

4.3 Development of skills and technology4.4 Access to capital(a) Lending by commercial banks(b) Specialised financial institutions(c) Role of micro finance

4.5 Infrastructure and information technology(a) Cluster development(b) Trading houses(c) Networking(d) IT and E-Commerce

5 Role of International Organisations for the development

Of agro-based and resource-based industries

5.1 Role of World Bank, ADB and IMF for policy planning5.2 Institutional capacity building

(a) Role of ESCAP(i) Exchange of national experiences(ii) Promotion of indigenous capacity building(iii) Research on sectoral restructuring

(b) Asian and Pacific Centre for Transfer of Technology (APCTT)(c) Environmentally sound technologies (ESTs)

(i) Technology Fairs and Promotion of ESTs(ii) Technology Bureau of Small Enterprises (TBSE)(iii) Mechanism for Exchange of Technology Information (METI)

5.3 World Trade Organisation (WTO)(a) Role of WTO(b) WTO and market access

(i) Import tariffs(ii) Agreement on Agriculture

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6 Conclusions and Recommendations

6.1 Role of Agro-based and Resource-based industries6.2 National Level Policies6.3 Development Strategy for the Agro-based and Resource-based industries

(a) Macro economic policies

(b) Fiscal incentives(c) Technology development(d) Infrastructure and human resource development(e) Competent and committed bureaucracy(f) Legal, Institutional and Regulatory System

6.4 Role of External Trade(a) Trade and techniques of production(b) Role of export promotion policies(c) Free trade zones (FTZs)

6.5 Participation at Regional Level(a) Regional economic co-operation

(b) Role of ESCAP(i) FDI and technology transfer(ii) FDI and export promotion(iii) Multilayered bilateral cooperation(iv) Cooperation at subregional level(v) Role of NGOs(vi) Source Book on ESTs(vii) Cooperation among country associations6.6 Multilateral Level Actions

(a) Role of WTIO(b) Market access for agriculture and T&C

6.7 Technical Assistance

Selected References

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SEZ Special Economic ZoneSMIs Small and Medium-Sized IndustriesSIDBI Small Industries Development Bank of IndiaSSI Small Scale IndustrySOEs State Owned Enterprises

TBSE Technoly Bureau of Small EnterprisesTNCs Transnational CorporationsUN United NationsUNCTAD United Nations Conference on Trade and DevelopmentUNDP United Nations Development ProgrammeUNIDO United Nations Industrial Development OrganisationVATIS Value Added Technology Information SystemWB World BankWTO World Trade Organisation

Notes on Units

Million = 1000 thousandBillion = 1000 millionTrillion = 1000 billionTons = 1000 kilogramsDollar $ = US dollars, unless otherwise specified

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1 INTRODUCTION AND OVERVIEW

1.1 Objectives and Scope of the Study

The present report is a part of studies being prepared for the Expert Group Meeting onPromoting Resource-based Export-oriented SMEs for Poverty Alleviation in Asia and thePacific to be held in November 2002 by the International trade and Industry Division ofthe ESCAP, United Nations. The basic objective of the meeting is to deliberate on the prospects and challenges for promoting resource-based and agro-based Small andMedium Enterprises (SMEs) for employment generation, export-promotion and therebyhelp countries in promoting integration at the regional and global levels. The meeting isalso expected to identify areas for policy orientations, institutional capacity building andprivate sector led rural enterprise development with a view to improve employment inrural areas and productivity improvement for poverty alleviation. It is also expected that

some new ways and means entrepreneurship development would be evolved.

As the study is concerned with the role of agro-based and resource-based SMEs foremployment generation and poverty alleviation in the past and future issues, the timeframe of the study is confined mainly to 1990s. For analytical purpose, Asian economiesconsidered in the study have been grouped into the following regions:

South Asia comprising Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and SriLanka.

The Newly Industrializing Economies (NIEs) comprising Hong Kong, China; theRepublic of Korea; Singapore; and Taiwan, China.

Developing Economies in the Southeast Asia comprising Cambodia, Indonesia, LaoPDR, Malaysia, Myanmar, the Philippines, Thailand and Vietnam. These countriesalongwith Brunei and Singapore now constitute the Association of Southeast AsianNations (ASEAN) and ASEAN Free Trade Area (AFTA).

Three other economies in East Asia viz. Japan, Mongolia and Peoples Republic of Chinaare also included in the study.

1.2 An Overview of the Study

This report is divided into six chapters including this introduction which describes thescope of the study, and provides general economic profiles of Asian economies. Thechapter also discusses the structure of GDP and external trade and the contribution of theagro-based and resource-based small and medium industries in merchandise exports.

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Chapter-2 discusses the types of industries, their structure and key industry players, theircontribution to employment generation, industrial value added and overall GDP. Thechapter also provides an introduction of various issues at stake such as the following:(a) Integration of agricultural production and agro-based industries

(b) Availability of basic raw materials and finance(c) Location of the industries, transport cost and accessibility to markets(d) Economies of scale and size of markets(e) Availability of skilled workers and technical capacity building(f) Role of multinationals and foreign investment(g) Technological Upgradation(h) Environment and sustainability

Chapter 3 discusses valuable contributions made by agro-based and resource basedindustries to poverty alleviation and the rationale of promoting these industries towardseconomic empowerment of the poor. Development of agro-based industries, particularly

SMEs, in rural areas leads to valorization of agricultural land and commodities,enhancement of revenues, and development of skill of the rural poor. These enterprisesemploy the work force, which may otherwise remain idle or under employed and therebycontribute significantly to poverty alleviation and promote economic and social justice.Agro-based industries open up new channels of distribution and marketing of agriculturalcommodities produced by the small farmers and raise their incomes. Higher employmentprovides the poor with a source of empowerment and income security.

Chapter 4 deals with industry development strategies and business environment in Asiandeveloping countries. It provides a critical analysis of problems and barriers faced by theagro-based and resource-based industries. Major problems relate to the following:

(a) Unfavorable business environment through proliferation of licenses,regulations, permits, taxes and duties on agricultural commodities, andvarious restrictions on movements and trade of agricultural goods,(b) low level of skill development,(c) low access to capital provided by banks and development institutions,(d) Constraints on transport, communications and information technology.

The chapter focuses on need for integration of industrial activities at regional level,regional capacity building and identification of credible pilot programmes, rationalisationof fiscal, monetary and other policies for development of SMEs, and improvement ofinfrastructure and information technology in rural areas.

Chapter 5 deals with role of international organisations (including the United Nations) forthe development of agro-based and resource-based industries through technical assistanceprograms for formulation of appropriate policies, institutional capacity building, skilldevelopment, networking and investment promotion.

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Chapter 6 summarises the basic issues and problems for development of agro-based andresource-based industries and makes recommendations for appropriate national levelactions and strategies and regional level actions for promoting these enterprises forpoverty alleviation in Asia and the Pacific.

The report ends with a list of selected bibliography on the subject.

1.3 Profile of Regions and Sample Countries

Selected countries for this study covering 55 per cent of the world population and 15 percent of area display a number of contrasts (see Tables 1.1 and 1.2 for general economicprofiles of the countries). The sample includes two most populous countries of the worldviz. China and India, and also small economies like Bhutan and Maldives with populationless than a million and a city-state like Singapore. The sample includes the worldssecond largest economy Japan with per capita GNP of $35620 in 2000 on the one hand,

and some of the poorest countries of the world Bangladesh, Cambodia, Mongolia,Nepal and Vietnam. Social development indicators also differ widely among the regions.While East Asia generally have higher degree of adult literacy and life expectation, SouthAsian countries except Sri Lanka, Maldives and Myanmar lag far behind.

Despite serious foreign exchange and financial crisis in some of the East Asian countriesin 1997-1999, Asian developing economies had shown remarkable economic vigor anddynamism during 1990-2000 by outperforming by a wide margin other developingregions and industrial countries as a group (Table 1.2). As regards industrial growth,performance by the developing countries of Asia continued to outpace that in every otherdeveloping region and even the industrialised countries by about 5 percentage points. Thecontinued robust growth in Asia was attributable to a number of factors such aswidespread and sustained policy reforms in industry, trade and financial sectors andcontinued surge of foreign capital flows to these countries.

The best performers during 1990s have been in Asia. Chinas growth has beenparticularly spectacular, with real GDP growing at 10.3 percent a year and real per capitaincome at 9.2 percent during 1990-2000. Building on past investments in human,physical and institutional capital, continual high growth was the result of an ambitious,comprehensive and sustained reforms programme. There were continual liberalisation ofagriculture, redirection of savings to the provinces, removal of price controls, gradualliberalisation of external trade, revamping of the tax and financial systems, andconversion of economic zones into attractive manufacturing platforms for export.

The slowdown of global growth during 2001 was accompanied by an even more markeddeceleration of growth of international trade. After expanding by about 14 per cent in2000, export volumes from the developing countries rose by less than 1 per cent in 2001.This slowdown affected almost all major regions. The economic impact of these declineswas reinforced by downward pressure on export prices. Leading to a pronounceddeterioration by 3 per cent, in the terms of trade of developing countries in 2001.

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Table-1.1 Basic Economic Indicators of selected Asian countries in 2000

Country Population

million

Area

'000

sq.km.

GNP

US$ billion

GNP

per capita

(US $)

PPP GNP

US$ billion

PPP GNP

Per capita

(US $)

Adult

Literacy

(%)

Life

Expectancy

(years)

2000 2000 2000 2000 2000 2000 2000 2000

Newly Industrializing Economies (NIEs)

Hong Kong 7 1 176 25920 174 25590 79 80

Korea,Republic 47 99 421 8910 818 17300 72 73

Singapore 4 1 99 24740 100 24910 76 78

Taiwan,China 22 36 280 12670 .. .. 75 76

China & Mongolia

China 1262 9598 1063 840 4951 3920 69 70

Mongolia 2 1567 0.9 390 4 1760 64 67

South-East Asia

Cambodia 12 181 3 260 17 1440 53 54

Indonesia 210 1905 120 570 596 2830 64 66

Lao, PDR 5 237 1.5 290 8 1540 52 54

Malaysia 23 330 79 3380 194 8330 71 72

Myanmar 48 677 .. .. .. .. 59 60

Philippines 76 300 79 1040 319 4220 66 69

Thailand 61 513 122 2000 384 6320 69 69

Vietnam 79 332 30 390 157 2000 68 69

South Asia

Bangladesh 131 144 48 370 209 1590 58 61

Bhutan 0.8 47 0.5 590 1.2 1440 48 61

India 1016 3287 455 450 2375 2340 62 63

Maldives 0.3 0.3 0.5 1960 1.2 4240 63 68

Nepal 23 147 6 240 32 1370 55 58

Pakistan 138 796 61 440 257 1860 60 63

Sri Lanka 19 66 16 850 67 3460 72 73East Asia

Japan 127 378 4519 35620 3436 27080 80 81

World

Low & middle income 5154 101491 6315 1230 19980 3910 65 64

East Asia & Pacific 1855 16385 1962 1060 7609 4130 68 69

Europe & Central Asia 474 24217 953 2010 3140 6670 68 69

Latin America & Carib. 516 20459 1895 3670 3624 7080 69 70

Mid. East & N.Africa 295 11023 618 2090 1545 5270 66 68

South Asia 1355 5140 595 440 2984 2240 61 63

Sub-Saharan Africa 659 24297 310 470 1044 1600 52 47

High Income 903 32315 24994 27680 24793 27770 77 78

World 6057 133806 31309 5170 44459 7410 67 66

Note: (a) Two dots (..) stand for "Data not available"

Sources :

(1) World Development Indicators 2002, World Bank.

(2) World Development Report 2002, World Bank.

(3) Asian Development Outlook 2002, Asian Development Bank, Manila.

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Table-1.2 Growth of output in selected Asian countries in 1980-1990 and 1990-2000

Country GDP growth

per annum

1980-1990

GDP growth

per annum

1990-2000

Agriculture

Growth pa

1990-2000

Industry

Growth pa

1990-2000

Manufacture

Growth pa

1990-2000

Services

growth pa

1990-2000


Hong Kong 6.9 4.0 .. .. .. ..

Korea,Republic 8.9 5.7 2.0 6.3 7.5 5.7

Singapore 6.7 7.8 -1.6 7.9 7.1 7.8

Taiwan,China 8.8 6.1 0.5 5.3 5.5 7.0

China & Mongolia

China 10.1 10.3 4.1 13.7 13.4 9.0

Mongolia 5.4 1.0 3.2 -0.5 .. 0.1

South-East Asia

Cambodia n.a. 4.8 1.9 8.3 8.2 6.9

Indonesia 6.1 4.2 2.1 5.2 6.7 4.0

Lao, PDR 3.7 6.5 4.9 11.0 11.7 6.5

Malaysia 5.3 7.0 0.3 8.6 9.8 7.2

Myanmar 0.6 6.6 5.3 10.1 7.0 6.8Philippines 1.0 3.3 1.6 3.3 3.0 4.0

Thailand 7.6 4.2 2.1 5.3 6.4 3.7

Vietnam 4.6 7.9 4.8 12.1 .. 7.7

South Asia

Bangladesh 4.3 4.8 2.9 7.3 7.2 4.5

Bhutan 7.5 6.2 10.2 10.5 2.5 5.7

India 5.8 6.0 3.0 6.4 7.0 8.0

Maldives 12.1 6.6 10.3 10.5 2.4 7.2

Nepal 4.6 4.9 2.5 7.2 9.2 6.2

Pakistan 6.3 3.7 4.4 3.9 3.5 4.4

Sri Lanka 4.0 5.3 1.9 7.0 8.1 6.0

East AsiaJapan 4.1 1.3 -3.2 -0.4 0.5 2.5

World

Low & middle income 3.5 3.5 2.2 3.7 5.7 4.1

East Asia & Pacific 7.9 7.2 3.1 9.3 9.9 6.4

Europe & Central Asia .. -1.5 -2.3 -3.8 .. 1.6

Latin America & Carib. 1.7 3.3 2.3 3.3 2.6 3.4

Mid. East & N.Africa 2.0 3.0 2.6 0.9 3.8 4.5

South Asia 5.6 5.6 3.1 6.2 6.6 7.1

Sub-Saharan Africa 1.6 2.5 2.8 1.6 1.6 2.6

High Income 3.3 2.5 0.0 0.7 .. ..

World 3.3 2.7 1.4 1.5 .. 2.9


Sources :



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Table 1.3 Structure of Demand in selected Asian economies in 1990 and 2000

Country Household finalconsumptionexpenditure

as % of GDP

General govt.consumptionexpenditureas % of GDP

Gross DomesticInvestment% of GDP

Exports of goodsand services% of GDP

Imports of goodsand services% of GDP

Gross DomesticSavings

% of GDP

1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000

Newly industrializing Economies (NIEs)

Hong Kong, China 57 58 7 10 27 28 134 150 126 145 36 32

Korea,Rep 53 58 10 10 38 29 29 45 30 42 37 31

Singapore 46 40 10 10 37 31 202 180 195 161 44 50

Taiwan,China .. .. .. .. .. .. .. .. .. .. .. ..

China and Mongolia

China 50 47 12 13 35 37 18 26 14 23 38 40

Mangolia 58 66 32 20 38 30 24 65 53 82 9 14

South-East Asia

Cambodia 91 92 7 .. 8 15 6 40 13 47 2 8

Indonesia 59 67 9 7 31 18 25 39 24 31 32 26Lao, PDR .. 82 .. 5 .. 24 .. 36 .. 48 .. 13

Malaysia 52 43 14 11 32 26 75 125 72 104 34 47

Myanmar 89 87 .. .. 13 13 3 0 5 1 11 13

Philippines 72 63 10 13 24 18 28 56 33 50 18 24

Thailand 57 60 9 9 41 23 34 67 42 59 34 31

Vietnam 86 69 8 6 13 27 26 .. 33 .. 6 25

South Asia

Bangladesh 86 78 4 5 17 23 6 14 14 19 10 18

Bhutan .. .. .. .. .. .. .. .. .. .. .. ..

India 66 65 12 13 25 24 7 14 10 17 22 21

Maldives .. .. .. .. .. .. .. .. .. .. .. ..

Nepal 83 75 9 9 18 24 11 24 21 32 8 16

Pakistan 74 77 15 11 19 16 16 16 23 19 11 12

Sri Lanka 76 72 10 10 23 28 29 40 38 51 14 17

East Asia

Japan 53 56 13 16 33 26 10 10 9 8 34 28

World

Low & middle income 60 60 14 14 26 23 21 31 20 29 26 26

East Asia & Pacific 54 54 11 11 35 30 26 42 26 37 35 35

Europe & Central Asia 55 58 18 16 28 21 23 44 24 39 26 26

Latin America & Carib. 65 66 13 15 19 20 14 17 12 18 21 19

Mid. East & N.Africa 57 51 20 18 24 20 33 38 35 28 23 30

South Asia 69 68 12 12 24 23 9 15 13 18 20 20

Sub-Saharan Africa 66 66 17 17 15 17 27 32 26 32 16 17

High Income 59 61 18 17 23 22 20 22 20 22 24 22

World 59 61 17 17 24 22 20 23 20 23 24 23

Note: Two dots (..) stand for "Data not available"

Sources :



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In Asia, where recovery after the 1997 financial crisis was driven by exports, owing tothe rapid expansion of investment in the IT sector, the fall in United States demand led tostagnation in export growth, a rapid deterioration of current account positions anddeclining growth rates in early 2001 in all countries except India and China.

The adverse impact on the region of the slowdown in the United States has beenexacerbated by the return of recession in Japan. The Asian Development Bank hasestimated that for its members the value of exports fell by 5 per cent in 2001, comparedto an increase of over 20 per cent in 2000. Similarly, the value of merchandise imports,which grew by almost 25 per cent in 2000, declined by 3 per cent 2001. Overall, theaggregate current account balance for the region, in surplus since 1997, is expected toremain positive but to fall as a share of GDP from 3.4 per cent 2000 to 2.3 per cent in2001, and to further erode in 2002 as recovery fuels import demand (ADB, 2001).

The mechanism that contributed the high growth of the Asian economies in these yearscan be summarised as export-oriented investment-led growth supported by extremely low

production costs. As judged by ratios to GDP, investments and exports together made amuch higher contribution to growth in Asia than in the other regions (Table 1.3). Asianeconomies achieved high economic growth by introducing capital and technology fromadvanced countries, while enjoying the benefits of the huge markets that these advancedcountries offer. In other words, the Asian economies are typical examples of catch-uptype economic growth.

Rapid growth in intra-Asian trade was accompanied by rising FDI. The traditional focusof foreign investment by Asian companies in financial sector and real estate of industrialcountries was augmented by rapid growth in investment in manufacturing, primarily inSouth-east Asia. The changing pattern of capital flows was partly due to the changingcost structure in the Asian economies as wages and other costs were rising rapidly inJapan and the NIEs. It was also indicative of the movement towards higher value addedand more technologically intensive activities in these economies.

The process of rapid growth in output and intraregional trade and investment in Asia issometimes referred to as a virtuous circle of economic development. Foreign capitalinflows were the result of favourable policy environment, sustained industrialisation,trade expansion and overall economic growth. This process is gradually helping tointernalise Asian growth and to reduce Asias vulnerability to external shocks.

During 1990s, the virtuous circle evolved rapidly primarily due to the structuraladjustment process in Japan subsequent to the sharp appreciation of the yen following thePlaza Accord. Japans growth became increasingly domestic demand led and it hadbeen sustaining rapid export growth of other Asian countries. More recently, such aprocess occurred in the NIEs as well, fueling further intra-regional trade and investment.Rapid structural adjustment and shifting comparative advantage from Japan to the NIEsand further to the Southeast Asian countries due to rising wages and factor pricescontributed significantly to Asias dynamism. South Asia, which depended more on theagriculture sector, was initially left out of this process. But the situation changed in

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The challenge facing South Asia in the new millennium is how to continue the higheconomic growth of the 1990s with rapid reductions in poverty and unemployment andimprovement in social indicators. A sustainable growth path for the 2000s must be basedon continued economic reforms, lower fiscal deficits, dynamic capital market, sustainable

balance-of-payments, and improvement in environment. Economic cooperation in theregion would be an effective instrument for improving the welfare of the people.

(b) East Asia and South-East Asia

Over the past three decades, the economies of East Asia made remarkable economicprogress and grew faster than all other regions of the world. Many South East Asianeconomies, particularly Korea, Taiwan Province of China, Hong Kong SAR, China,Indonesia, Malaysia, Thailand and Singapore experienced sustained economic progresssince 1980s with some attaining an average growth rate of 8-10 percent a year, except forthe crisis period during 1997-1999. In East Asia and Pacific, GDP grew at average annual

rate of 7.2 percent in 1990s, while annual population growth averaged 1.2 percent.

The rapid growth of the East Asian economies was accompanied by impressive advancesin social development indicators. Poverty, infant mortality, and adult illiteracy declinedsignificantly, while life expectancy at birth rose considerably. Also, contrary to the earlierconventional wisdom, rapid economic growth was achieved with significant reduction inpoverty ratios and without increases in income inequality (World Bank 1998).

Economic growth in Asia correlates strongly not only with export growth but also withhigh savings and investment rates. A trinity of openness to trade, high investment andhigh savings rates coexist the fast growing economies of Asia and it is important to stressthe presence of three factors to achieve higher growth. The benefits of a more liberaltrading environment reached beyond the narrow efficiency gains highlighted by thetheory of comparative advantage. Other benefits include more competitive goods andfactor markets, increased investment including foreign capital, and associated transfer ofknowledge and technology.

Savings and investment rates of the South East Asian economies were generally higherthan those in other regions. Governments boosted savings through a combination offundamental and interventionist policies. The former included maintaining macro-economic stability primarily controlling inflation, and ensuring the security of banks.The latter included forced savings by both households and corporate bodies throughpublic provident funds and insurance.

East and South East Asia relied heavily on export-push strategy and were generally opento foreign investment and technology transfer. Initially endowed with abundant labourresources, they expanded their exports of low value added and labour intensive goods.Subsequently, as labour costs increased, they shifted the structure of manufacturingproduction and exports towards more sophisticated and higher value added products.

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The prospects for an improved world-trading environment have been enhanced with theformation of the World Trade Organisation (WTO). But there are still legitimate concernsin a number of areas. There is a view that the gradual nature of some of the reforms didnot adequately cover investment issues, and much remains to be done to reduce tariff andnon-tariff barriers to trade in both services and agriculture. Some developing countries

fear that new obstacles in the name of social conditionalities and environmentprotection might take the place of old ones. There is also evidence that someindustrialized countries have bound themselves to maximum tariffs on manycommodities such as textiles and agricultural commodities in which many developingcountries in Asia have comparative advantage. Dirty tariffication, as this practice iscalled, opens the way to reducing the potential gains from the WTO agreement.

During 1997-1999, a number of Southeast Asian economies and Korea had been in thegrip of severe financial crises that had thrown the region into deep recession. Economicactivity in Japan, after languishing since the busting of the asset price bubble in 1990,also contracted sharply since spring 1997. Unemployment rates increased to 3 percent in

Malaysia, 6 percent in Korea and 15 percent in Indonesia in 1998. Poverty, therefore,increased at an alarming rate. Indonesia, which had an impressive record of povertyreduction, experienced a rise in the poverty ratio from 11 per cent to about 16 percent within a year (World Bank 1998). The severity of the Asian crisis raised questionsabout the durability of the regions rapid growth and the factors that underlay it.

Although the region recovered quickly following the structural reforms and adjustmentprograms supported by the IMF and other funding agencies, recent crisis had highlightedthat there remain serious obstacles to sustained development for many countries in theregion. Despite recent gains, the countries of the region had an average income ofUS$4120 in 2000, which is much below that of US$27450 in the developed countries.Serious environmental damages associated with rapid urbanisation, inadequate regulationand planning, and incorrect pricing of resources, continues to impose major costs.

Another serious problem is the historical inadequacy of infrastructure investment relativeto rapidly growing demand. As the regions infrastructure needs are large, the privatesector themselves and foreign direct investment (FDI) will have to play an increasinglycritical role in developing and modernising East Asias infrastructure base. In turn,governments of the region will need to strengthen the regulatory and legal frameworks toattract and secure such investment. The need for expanding competent managementacross most areas of development is emerging as a major issue in East Asia. Effectiveinstitutions are essential in pollution monitoring and control, design and implementationof monetary and fiscal policies, traffic-management planning and deregulation.

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1.4 Structure of GDP, Trade and Employment

(a) Trend of Sectoral Shares

Sectoral shares in GDP indicate mixed trends over time among regions and countries

(Table 1.4). In all the regions and countries under study except Mongolia and Myanmar,share of agriculture declined during 1990s. For newly industrialized countries (NIEs),which have dominant share of the services sector in GDP, share of industry andmanufacturing either remained unchanged or declined and shares of services increasedfurther in 1990s. Only in Korean republic, share of manufacturing in GDP increased from29 per cent in 1990 to 31 per cent in 2000 and that of agriculture declined from 9 per centto 5 per cent over the same period.

In East Asia and Pacific as a whole, the shares of industry, manufacturing and servicesincreased in 1990s at the cost of agriculture whose share declined by 7 percentage points.As regards individual countries in the Southeast Asia, only Myanmar, Philippines and

Vietnam experienced decline of share of manufacturing in 1990s. There was alsosubstantial increase in the share industry in overall GDP in 1990s in all countries exceptin Myanmar and Philippines (Table 1.4).

For South Asia as a whole, the share of services in GDP improved in 1990s at the cost ofall other sectors. In all the individual countries, agricultural share declined, whileindustrial share increased in Bangladesh, Bhutan, Nepal and Sri Lanka.

Structure of manufacturing value added

An analysis of the structure of manufacturing given in Table 1.5 indicates that in generalthe shares of agriculture and primary sector based traditional goods (such as food, beverages, tobacco, textiles and clothing) in overall manufacturing value added havedeclining share, while the shares of machinery, transport and equipment, chemicals orother products have increasing share in GDP in 1990s. It is also observed from the tablethat these agro-based and allied sectors have significant shares in manufacturing in HongKong, China, Indonesia, Philippines, Thailand, Bangladesh, India, Nepal, Pakistan andSri Lanka.

Structure of merchandise exports and imports

An analysis of the structure of exports and imports given in Tables 1.6 and 1.7 indicatethat manufactures have predominant share in both merchandise exports and imports in all

the countries. Agricultural products and raw materials and primary goods (such as oresand minerals) have significant shares in total merchandise trade in China, India,Malaysia, Myanmar, and most of South Asian countries.

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Table 1.4: Structure of output in selected Asian countries in 1990 and 2000

Country GDP

billion US$

GDP

billion US$

Agriculture

% of GDP

Industry

% of GDP

Manufacture

% of GDP

Services

% of GDP

1990 2000 1990 2000 1990 2000 1990 2000 1990 2000


Hong Kong 75 163 0 0 25 14 18 6 74 85

Korea, Rep 253 457 9 5 43 43 29 31 48 53

Singapore 37 92 0 0 34 34 27 26 65 66

Taiwan,China 158 279 3 2 40 35 30 24 57 63

China and Mongolia

China 355 1080 27 16 42 51 33 35 31 33

Mangolia .. 1 17 33 30 19 .. 5 52 48

South-East Asia

Cambodia 1 3 56 37 11 20 5 6 33 42

Indonesia 114 153 20 17 38 47 18 26 42 36

Lao, PDR 1 2 61 53 15 23 10 17 24 24

Malaysia 44 90 15 11 42 45 24 33 43 44

Myanmar .. .. 57 60 11 9 8 7 32 33

Philippines 44 75 22 16 34 31 25 23 44 53

Thailand 85 122 12 10 37 40 27 32 50 49

Vietnam 6 31 37 24 23 37 19 18 40 39

South Asia

Bangladesh 30 47 29 25 21 24 13 15 50 51

Bhutan 0.3 0.4 38 33 28 32 20 20 34 35

India 317 457 31 25 28 27 17 16 41 48

Maldives 0.3 0.4 .. 10 .. 15 .. .. .. 75

Nepal 4 5 52 40 16 22 6 10 32 37

Pakistan 40 62 26 26 25 23 17 15 49 51

Sri Lanka 8 16 26 20 26 27 15 17 48 53

East Asia

Japan 3052 4842 2 1 39 32 27 22 58 66

World

Low & middle income 4404 6561 16 12 38 35 23 23 46 54

East Asia & Pacific 927 2059 20 13 40 46 28 32 40 41

Europe & Central Asia 1253 942 17 10 44 35 .. .. 39 57

Latin America & Carib. 1133 2001 9 7 36 29 23 21 55 64

Mid. East & N.Africa 401 660 15 14 39 37 12 14 47 48

South Asia 405 597 31 25 27 26 17 16 43 49

Sub-Saharan Africa 298 323 18 17 34 30 17 14 48 53

High Income 17414 24927 .. .. .. .. .. .. .. ..

World 21817 31493 7 5 36 31 .. 22 57 64


Sources :



(3) World Development Outlook 2002, Asian Development Bank, Manila.

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Table 1.5 Structure of manufacturing in selected Asian economies in 1990 and 1999

Country ManufactureValue AddedUS$ billion

Food-beveragesand tobacco

% share

Textiles andClothing% share

Machinery andTransportEquipment

% share

Chemicals

% share

Othermanufacturing

% share

1990 1999 1990 1999 1990 1999 1990 1999 1990 1999 1990 1999

Newly Industrializing economies (NIEs)

Hong Kong 12.6 8.5 8 11 36 21 21 24 2 3 33 40

Korea,Rep 72.8 124.8 11 8 12 8 32 45 9 10 36 29

Singapore 9.9 21.0 4 4 3 1 53 60 10 11 29 25

Taiwan,China 47 67 .. .. .. .. .. .. .. .. .. ..

China and Mongolia

China 116.6 333.4 15 16 15 12 24 28 13 11 34 32

Mangolia .. 0.05 33 .. 37 .. 1 .. 1 .. 27 ..

South-East Asia

Cambodia 0.06 0.2 .. .. .. .. .. .. .. .. .. ..

Indonesia 20.9 36.6 27 16 15 18 12 20 9 9 37 36

Lao, PDR 0.1 0.2 .. .. .. .. .. .. .. .. .. ..

Malaysia 10.7 23.2 13 9 6 5 31 43 11 8 39 35Myanmar .. .. .. .. .. .. .. .. .. .. .. ..

Philippines 11.0 16.5 39 33 11 9 13 15 12 13 26 29

Thailand 23.2 38.0 24 .. 30 .. 19 .. 2 .. 26 ..

Vietnam 1.2 5.0 .. .. .. .. .. .. .. .. .. ..

South Asia

Bangladesh 3.8 6.9 24 .. 38 .. 7 .. 17 .. 14 ..

Bhutan 0.06 0.08 .. .. .. .. .. .. .. .. .. ..

India 48.8 61.6 12 11 15 10 25 24 14 20 34 35

Maldives .. .. .. .. .. .. .. .. .. .. .. ..

Nepal 0.2 0.4 37 35 31 34 1 3 5 6 25 23

Pakistan 6.2 8.5 24 23 27 26 9 13 15 16 25 22

Sri Lanka 1.0 2.3 50 .. 24 .. 4 .. 4 .. 17 ..East Asia

Japan 810 970 9 11 5 4 40 40 10 10 37 35

World

Low & middle income 852 1350 .. .. .. .. .. .. .. .. .. ..

East Asia & Pacific 260 584 .. .. .. .. .. .. .. .. .. ..

Europe & Central Asia n.a. n.a. .. .. .. .. .. .. .. .. .. ..

Latin America & Carib. 254 330 .. .. .. .. .. .. .. .. .. ..

Mid. East & N.Africa 46 77 .. .. .. .. .. .. .. .. .. ..

South Asia 61 81 .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa 43 39 .. .. .. .. .. .. .. .. .. ..

High Income 3765 4048 .. .. .. .. .. .. .. .. .. ..

World 4617 5398 .. .. .. .. .. .. .. .. .. ..


Sources :



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Table 1.6 Structure of merchandise exports in selected Asian economies in 1990 and 2000

Country Merchandiseexports

US$ billion

Food% share

Agrl. Rawmaterials% share

Fruits% share

Ores andminerals% share

Manufactures% share

1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000


Hong Kong 82.4 202.4 3 2 0 0 0 0 1 2 95 95

Korea,Rep 65.0 172.3 3 2 1 1 1 5 1 1 94 91

Singapore 52.8 137.9 5 2 3 0 18 10 2 1 72 86

Taiwan,China .. 148 .. .. .. .. .. .. .. .. .. 95

China and Mongolia

China 62.0 249.3 13 5 3 1 8 3 2 2 72 88

Mangolia 0.7 0.4 .. .. .. .. .. .. .. .. .. ..

South-East Asia

Cambodia 0.09 0.7 .. .. .. .. .. .. .. .. .. ..

Indonesia 25.7 62.1 11 9 5 4 44 25 4 5 35 57Lao, PDR 0.08 0.3 .. .. .. .. .. .. .. .. .. ..

Malaysia 29.4 98.2 12 6 14 3 18 10 2 1 54 80

Myanmar 0.3 1.4 51 .. 36 .. 0 .. 2 .. 10 ..

Philippines 8.1 39.8 19 5 2 1 2 1 8 2 68 92

Thailand 23.0 69.1 29 14 5 3 1 3 1 1 63 76

Vietnam 2.4 14.5 .. .. .. .. .. .. .. .. .. ..

South Asia

Bangladesh 1.7 6.5 14 7 7 2 1 0 0 0 77 91

Bhutan .. .. .. .. .. .. .. .. .. .. .. ..

India 18.0 42.3 16 14 4 1 3 0 5 2 71 79

Maldives .. .. .. .. .. .. .. .. .. .. .. ..

Nepal 0.2 0.8 13 21 3 0 0 0 0 2 83 77

Pakistan 5.6 9.2 9 11 10 3 1 1 0 0 79 85

Sri Lanka 2.0 5.1 34 21 6 2 1 0 2 0 54 75

East Asia

Japan 287.6 479.2 1 0 1 0 0 0 1 1 96 94

World



Europe & Central Asia 125 307 .. 5 .. 3 .. 26 .. 6 .. 53


Mid. East & N.Africa 127 213 3 3 1 0 79 80 3 2 15 14

South Asia 28 64 16 15 5 1 2 0 4 2 71 80

Sub-Saharan Africa 66 93 13 17 3 4 28 28 7 8 20 36

High Income 2730 4612 8 6 3 2 5 4 3 2 79 82

World 3433 6356 10 7 3 2 8 8 4 3 74 78


Sources :



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Table 1.7 Structure of merchandise imports in selected Asian economies in 1990 and 2000

Country Merchandiseimports

US$ billion

Food% share

Agrl. Rawmaterials% share

Fruits% share

Ores andminerals% share

Manufactures% share

1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000


Hong Kong 84.7 214.2 8 4 2 1 2 2 2 2 85 91

Korea,Rep 69.8 160.5 6 5 8 3 16 24 7 6 63 62

Singapore 60.9 134.5 6 3 2 0 16 12 2 2 73 82

Taiwan,China .. 148 .. .. .. .. .. .. .. .. .. 95

China and Mongolia

China 53.3 225.1 9 4 6 5 2 9 3 6 80 76

Mangolia 0.9 0.6 .. .. .. .. .. .. .. .. 62 65

South-East Asia

Cambodia 0.2 0.6 .. .. .. .. .. .. .. .. .. ..

Indonesia 21.8 33.5 5 10 5 7 9 18 4 3 77 61Lao, PDR 0.2 0.6 .. .. .. .. .. .. .. .. .. ..

Malaysia 29.2 82.2 7 4 1 1 5 8 4 3 82 85

Myanmar 0.3 2.4 13 .. 1 .. 5 .. 0 .. 81 ..

Philippines 13.0 33.8 10 8 2 1 15 12 3 3 53 76

Thailand 33.4 61.9 5 4 5 3 9 12 4 3 75 77

Vietnam 2.8 15.6 .. .. .. .. .. .. .. .. .. ..

South Asia

Bangladesh 3.6 8.4 19 15 5 5 16 7 3 2 56 69

Bhutan .. .. .. .. .. .. .. .. .. .. .. ..

India 23.6 50.5 3 7 4 3 27 31 8 5 51 51

Maldives .. .. .. .. .. .. .. .. .. .. .. ..

Nepal 0.7 1.6 15 17 7 5 9 12 2 3 67 63

Pakistan 7.5 11.0 17 14 4 3 21 33 4 2 54 47

Sri Lanka 2.7 6.8 19 15 2 1 13 6 1 1 65 77

East Asia

Japan 235.4 379.5 15 13 7 3 25 20 9 6 44 57

World



Europe & Central Asia 137 312 .. 9 .. 2 .. 9 .. 3 .. 65


Mid. East & N.Africa 100 138 19 18 3 2 6 6 3 2 68 70

South Asia 39 79 9 10 4 4 23 26 6 4 54 54

Sub-Saharan Africa 56 86 .. 10 .. 2 .. 14 .. 2 .. 68

High Income 2846 4949 9 7 3 2 11 10 4 3 72 75

World 3516 6565 9 7 3 2 11 10 4 3 71 74


Sources :



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1.5 Export dynamism of Asian developing countries

(a) Trend of export shares

Between 1970 and 1999 merchandise exports of developing countries grew at an averageannual rate of 12 per cent, compared to 10 per cent for the world as a whole, resulting intheir share in world merchandise trade increasing from less than one fourth to almost onethird. During this period share of trade among them also reached 40 per cent of their totalexports. These trends were accompanied by a rapid transformation in the composition oftheir exports from primary commodities to manufactures, which accounted for 70 percent of developing country exports at the end of the 1990s compared with around 20 percent during 1970s and early 1980s. The share of agricultural commodities fell from about20 per cent to 10 per cent during the same period.

Rapid liberalization of trade and foreign direct investment (FDI) has been the chosen

policy approach, and in many cases this has indeed been accompanied by increasedparticipation of developing countries in world trade, including a rapid expansion of theirexports. However, as indicated in TDR 1999, for almost all developing countries importsexpanded faster than exports, resulting in a deterioration of their trade balance. Therefore,their trade expansion was not necessarily accompanied by faster growth in gross domesticproduct (GDP) and by greater income convergence with industrial countries. The share ofdeveloped countries in world income increased from less than 73 per cent in 1980 to 77per cent in 1999, while that of developing countries stagnated at around 20 per cent.

The share of developed countries in world manufactured exports fell from 82 per cent in1980 to 71 per cent in 1997. Their share in world manufacturing income also declinedfrom 85 per cent to 73 per cent during this period (Table 1.8). Among the developingcountries, it was mainly the East and South East Asian economies that improved theirshare in both world manufacturing income and manufacturing exports, and was able toreduce the gap with richer industrial countries. All the countries under the group of NIEsand ASEAN had significant increase in their shares of world manufacturing exportsduring 1980-1997. Chinas share in world manufacturing exports increased significantlyfrom 1.1 per cent in 1980 to 3.8 per cent in 1997 and that in world manufacturing incomeincreased from 3.3 per cent to 5.8 per cent over the same period.

Developing economies shares both in world manufacturing exports and value added showa sharp increase during the same period, but growth in exports is much stronger than invalue added. All Asian economies increased their shares in world manufacturing exports.Similarly, with the exception of Hong Kong (China) and the Philippines, all East Asiancountries increased their shares in world manufacturing value added. All these economiespursued rapid liberalization of trade and investment over the past two decades.

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Table 1.8: Share of selected regional groups and developing economies in world

manufacturing exports and manufacturing income in 1980 and 1997

Region/ economy Share in world

Manufacturing exports

Share in world

Manufacturing income

1980 1997 1980 1997

Developed countries 82.3 70.9 85.5 73.3

Developing countries 10.6 26.5 14.5 23.8

Latin America 1.5 3.5 7.1 6.7

Argentina 0.2 0.2 0.9 0.9Brazil 0.7 0.7 2.9 2.7Chile 0.0 0.1 0.2 0.2Mexico 0.2 2.2 1.9 1.2

South and East Asia 6.0 16.9 7.3 14.0

NIEs 5.1 8.9 1.7 4.5

Hong Kong, China 0.2 0.6 0.3 0.2Republic of Korea 1.4 2.9 0.7 2.3Singapore 0.9 2.6 0.1 0.4Taiwan, China 1.6 2.8 0.6 1.6

ASEAN-40.6 3.6 1.2 2.6

Indonesia 0.1 0.6 0.4 1.0Malaysia 0.2 1.5 0.2 0.5Philippines 0.1 0.5 0.3 0.3Thailand 0.2 1.0 0.3 0.8

China 1.1 3.8 3.3 5.8

India 0.4 0.6 1.1 1.1Turkey 0.1 0.5 0.4 0.5

Source: UNCTAD (TDR 2002)

(b) Contribution of labour-intensive products to exports

A classification of products made by TDR 2002 according to the mix of different skill,technology and capital intensity and scale characteristics results in five categories:(A) Primary commodities,(B) Labour and resource-intensive manufactures,(C) Manufactures with low skill and technology intensity,(D) Manufactures with medium skill and technology intensity, and(E) Manufactures with high skill and technology intensity

Trade in all five categories expanded considerably since the mid-1980s (Table 1.9).Generally, trade in skill and technology-intensive manufactures increased faster than thatof labour-intensive and resource-based manufacturers and primary commodities. Thesedifferences cannot be explained only in terms of differences in income elasticity orcomparative advantage. Policies governing market access also play a major role inboosting skill and technology-intensive sectors in which industrial countries have acompetitive edge over agricultural commodities and middle-range manufactures, whichare more important for less advanced countries.

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Table-1.9 Structure of exports by product categories

according to factor intensity in 1980 and 1998

(percentage share)

Product category Share in exports of developing countries

Share inWorld exports

1980 1998 1980 1998A. Primary commodities 50.8 19.0 25.7 14.8

B. Labor-intensive and resource basedmanufactures

21.8 23.2 14.7 15.0

C. Manufacture with low skill andtechnology intensity

5.8 7.3 10.1 7.6

D. Manufacture with medium skill andtechnology intensity

8.2 16.8 26.6 29.6

E. Manufacture with high skill andtechnology intensity

11.6 31.0 20.2 30.2

F. Unclassified 1.8 2.7 2.7 2.8

The expansion was rapid for manufactures with high skill and technology intensity since1993. Trade in such products increased about fivefold in 1980-1998. Trade in labour- andresource-intensive products, and medium skill-and technology-intensive manufactures,also increased faster than total non-fuel trade. By contrast, trade in manufactures withlow skill and technology intensity, and non-fuel primary commodities, increased atslower rate than the average, particularly in recent years. Thus there was a sharp fall inthe share of non-fuel primary commodities in world trade, and a strong and sustainedincrease in the share of manufactures with high skill and technology intensity. Indeed, bythe end of the 1990s, the share of the latter product category came to exceed the share ofmedium skill-and technology-intensive manufactures (Table-1.9).

Perhaps the most striking finding is that the higher the skill and technology contents ofexports, the faster is the growth rate of exports of developing countries. However, thisdoes not necessarily imply that there has been a rapid and sustained technologicalupgrading in exports of developing countries. First, their rapid growth in exports of skill-and technology-intensive goods started from a relatively small base in the early 1980s.Secondly, in many cases, in involvement of developing countries in exports of suchproducts is usually limited to the labour-intensive processes in these sectors as a part ofinternational production sharing.

(c) Twenty most dynamic products in world trade

Table-1.10 shows the trend growth rates of the 20 most dynamic products in world tradeduring 1980-1998. Most of these products fall into four categories:

Electronic and electrical goods

Textiles and labour-intensive products particularly textiles and clothing

Finished products from industries that require high R&D expenditures and arecharacterized by high technological complexity or economies of scale; and

Primary commodities including silk, non-alcoholic beverages and cereals

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The main exports of developing countries are concentrated in computers and officeequipment; telecom, audio/video equipment, semiconductors; and clothing, whichinvolve labour-intensive processes. This suggests that the increased importance of global

production sharing has been a crucial determinant of the growth of their exports.

Table-1.10 Export value growth and share in total exports

Of the 20 most market-dynamic products 1980-1998

(per cent)

SITCcode

Product groups Averageannualexportgrowth

Share in totalworld export

Share in totalexports fromdevelopingcountries

1980-1998 1980 1998 1980 1998

776 Transistors and semiconductors 16.3 1.0 4.0 1.9 7.7752 Computers 15.0 0.9 3.4 0.2 5.0

759 Computer parts, office machines 14.6 0.7 2.3 0.3 3.6

871 Optical instruments 14.1 0.1 0.3 0.0 0.3

553 Perfumes and cosmetics 13.3 0.2 0.5 0.1 0.2

261 Silk 13.2 0.0 0.0 0.0 0.0

846 Knitted garments 13.1 0.3 0.6 0.8 1.4

893 Plastic articles 13.1 0.6 1.2 0.6 1.1

771 Electric power machinery 12.9 0.3 0.6 0.2 0.8

898 Musical instruments & records 12.6 0.3 0.7 0.2 0.5

612 Leather manufactures 12.4 0.1 0.1 0.1 0.2

111 Non-alcoholic beverages 12.2 0.1 0.1 0.1 0.1

872 Medical instruments 12.1 0.2 0.4 0.1 0.2773 Electricity distribution equipment 12.0 0.4 0.7 0.3 1.0

764 Telecommunications and parts 11.9 1.5 3.0 1.7 2.9

844 Textile undergarments 11.9 0.2 0.3 0.8 0.8

048 Cereal preparations 11.9 0.2 0.4 0.1 0.2

655 Knitted articles 11.7 0.2 0.3 0.1 0.6

541 Pharmaceutical products 11.6 1.1 2.0 0.4 0.6

778 Electrical machinery 11.5 1.1 1.7 0.7 1.5

20 most dynamic products 12.9 9.5 22.6 14.1 28.7

Memo Items:

World exports

Developing country exports

8.4

11.3 15.4 24.3

Source : UNCTAD, TDR 2002.

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The experiences of major exporting countries regarding fastest growing product groupsof exports reveals the following:

Computers, office machines, optical instruments, and telecommunications, audio and

video equipment are the most important subgroups in the dynamic exports of theASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand).

Passenger motor vehicles are also among the 20 fastest growing exports fromASEAN countries.

The most dynamic products in exports from South Asia belong to a wide variety ofproducts groups, but there are significantly fewer electronics products than in EastAsia. The absence of any product from the clothing sector is also notable.

Electronic and electrical goods are the leading exports of all four first-tier NIEs(though they are less important in the Republic of Korea than in the others) as well asof Malaysia, the Philippines and Thailand. They also play an important role in China,Costa Rica and Mexico.

Textiles and labour-intensive manufactures, in particular clothing, are important inChina, Costa Rica, India, Mexico, Morocco, the Philippines, the Republic of Korea,Taiwan, Thailand, Tunisia and Turkey.

Primary commodities and, in particular, supply-dynamic primary commodities are ofsome importance in India, Indonesia, Malaysia, the Philippines, Thailand, Tunisia andTurkey, and are very important for a number of countries in South America and forMorocco.

No doubt country-specific factors, including size and resource endowments, influencedthe export composition and dynamics of these countries. However, there is a distinctiveregional pattern in the experiences of different countries, which suggests that geography

has played an important role. However, this does not mean that international productionnetworks are contained within regions.

Traditional labour-intensive products are the obvious candidates for the first generationof manufactured exports. As incomes rise and the surplus labour is absorbed, risinglabour costs and the entry of lower-cost producers progressively erode thecompetitiveness of many labour-intensive manufactures. This leads to a new challenge,that of upgrading industrial activity so as to produce more sophisticated manufactures.This move away from resource-dependent and labour-intensive activities towards moretechnology-and skill-intensive activities underlies the success of post-warindustrialization in East Asia, mainly in Japan, the Republic of Korea and Taiwan

Province of China.

China participates in labour-intensive segments of international production networks, andthe direct import content of its exports of electrical and electronic goods is high. It hasalso large traditional labour-intensive export industries with relatively high value addedand little import content. Furthermore, China has so far avoided rapid importliberalization (except for exports), and its imports of manufactured consumer goodsremain low.

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2 RESOURCE BASED AND AGRO BASED INDUSTRIES:

SECTORS MAIN CHARACTERISTICS

2.1 Definition and Types of Industries

(a) Typology of Industries

There is no uniform definition of the agro-based and resource-based industries. Differentorganisations and consultants use different concepts depending on the scope of the study.In the broadest sense of the terms, all manufacturing industries depending on agriculturaland natural resources can be categorized as agro-based and resource based industries. Asper International Standard Industrial Classification these manufacturing units may fallunder the following broad categories (detailed types of these are indicated in Table 2.1).

(a) Food processing industries and beverages (ISIC 311-313)(b) Tobacco and tobacco products (314)(c) Textiles (321)(d) Wearing apparel, leather and leather products and footwear (322-324)(e) Wood and cork products (331)(f) Paper (341)(g) Printing and publishing (342)(h) Rubber and plastic products (355-356)(i) Non-metallic mineral products (361-362, 369)

(b) Distribution of World MVA for selected branches

Tables 2.2-A and 2.2-B indicate the distribution of world manufacturing value added. Itis observed that the share of industrialised countries in world MVA declined continuouslyfrom 85.5 per cent in 1980 to 76 per cent in 1990 and that of the developing countries hadthe corresponding increase from 14.5 per cent to 24 per cent over the period (Table 2.2-A). The importance of Asian developing countries in world manufacturing productioncan be highlighted by the fact that they account for more than two thirds of total MVA inthe developing countries. The share of South and East Asia increased from 43 per cent in1985 to 66.8 per cent in 2001 and that of China from 13.3 per cent to 30.2 per cent indeveloping country MVA, while the shares of all other regions (viz. Africa, LatinAmerica, West Asia and Europe) declined during the same period (Table 2.2-B).

Table 2.3 indicates that the developing countries increased their shares in all agro-basedand resource-based industries as classified above during 1985-2000. They also gainedtheir share in chemicals, petroleum and coal products, basic metals, metal products,electrical machinery and transport equipment, and their share in sectoral MVA declinedonly in non-electrical capital goods. In 1990s South and East Asia recorded positivegrowth rates in all branches except clothing, leather and wood products and had thehighest growth rates in all branches in developing countries (Table 2.4-A). Consequently,South and East Asia increased their shares in 1990s in the MVA of all agro-based,

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resource-based and all other products except in wood and cork products with onlymarginal loss (Table 2.4-B).

Table 2.1: Agro based and Resource based industries as per ISICISIC Description

3-digit level 4-digit level

3 Manufacturing

311/2 Food manufacturing

3111 Slaughtering, preparing and preserving meat

3112 Manufacture of dairy products

3113 Canning and preserving of fruits and vegetables

3114 Canning, preserving and processing of fish, crustacean and similar foods

3115 Manufacture of vegetable and animal oils and fats

3117 Manufacture of bakery products

3118 Sugar factories and refineries

3119 Manufacture of cocoa, chocolate and sugar confectionery

3121 Manufacture of food products not elsewhere classified

3122 Manufacture of prepared animal feeds

313 Beverage industries3131 Distilling, rectifying and blending spirits

3132 Wine industries

3133 Malt liquors and malt

3134 Soft drinks and carbonated waters industries

314 3140 Tobacco manufactures

321 Manufacture of textiles

3211 Spinning, weaving and finishing textiles

3212 Manufacture of made-up textile goods except wearing apparel

3213 Knitting mills

3214 Manufacture of carpets and rugs

3219 Manufacture of textiles not elsewhere classified

322 3220 Manufacture of wearing apparel, except footwear

323 Leather, leather products & substitutes, fur, except footwear/wearing apparel3231 Tanneries and leather finishing

3232 Fur dressing and dyeing industries

3233 Leather, leather products & substitutes except footwear and wearing apparel

324 3240 Footwear, except vulcanized or molded rubber or plastic footwear

331 Manufacture of wood and wood and cork products, except furniture

3311 Sawmills, planing and other wood mills

3312 Manufacture of wooden and cane containers and small cane were

3319 Manufacture of wood and cork products not elsewhere classified

332 3320 Manufacture of furniture and fixtures, except primarily of metal

341 Manufacture of paper and paper products

3411 Manufacture of pulp, paper and paperboard

3412 Manufacture of containers and boxes of paper and paperboard

3419 Manufacture of pulp, paper and paperboard articles not elsewhere classified

342 3420 Printing, publishing and allied industries

361 3610 Manufacture of pottery, china and earthenware

369 Manufacture of other non-metallic products

3691 Manufacture of structural clay products

3692 Manufacture of cement, lime and plaster

3699 Manufacture of non-metallic mineral products not elsewhere classified

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Table 2.2-A Distribution of World Manufacturing Value Added (MVA) 1980-2001

Industrialized Countries Developing Countries

Year Eastern EU Other Japan North Others Total Africa Latin South & West Total

Europe WesternEurope

America America EastAsia

Asia

1980 9.1 35.2 1.7 13.6 23.9 2.0 85.5 0.9 6.7 5.2 1.7 14.5

1985 9.5 32.3 1.6 15.4 23.9 1.8 84.5 1.0 5.9 6.6 2.0 15.5

1990 8.3 31.4 1.5 16.8 23.4 1.7 83.1 0.9 5.3 8.8 1.9 16.9

1995 3.5 31.0 1.4 15.8 25.2 1.8 78.7 0.9 5.4 13.4 1.6 21.3

2000 3.3 29.0 1.4 14.1 26.8 1.7 76.3 0.9 5.4 15.7 1.7 23.7

2001 3.7 28.5 1.3 14.6 26.3 1.6 76.0 0.9 5.3 16.1 1.7 24.0

Table-2.2-B Distribution of MVA and Population among developing countries in 1985-2001 (Percentage)

Country groups MVA at constant 1990 prices Population

1985 1990 1995 2000 2001 1985 1990 1995 2000 2001

Low income 14.4 15.7 15.5 14.5 14.5 49.2 49.9 50.8 51.7 52.0Middle income 53.2 46.2 37.5 33.6 33.0 18.8 18.8 18.9 19.0 19.0High income 19.1 22.3 22.2 22.4 22.3 2.7 2.7 2.7 2.6 2.6China 13.3 15.8 24.8 29.5 30.2 29.3 28.6 27.6 26.7 26.4Developing countries 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Africa 6.2 5.4 4.1 3.9 3.9 13.7 14.3 14.9 15.6 15.7Latin America 38.0 31.5 25.5 22.6 22.1 11.2 11.1 11.1 11.0 11.0South and East Asia 43.0 52.0 62.6 66.2 66.8 71.4 70.8 70.2 69.4 69.3West Asia & Europe 12.8 11.1 7.8 7.3 7.2 3.7 3.8 3.8 4.0 4.0Developing countries 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Memo Item:Least dev. countries 2.4 2.0 1.6 1.6 1.6 11.7 12.1 12.6 13.1 13.3

Source: The International Yearbook of Industrial Statistics 2002, UNIDO.

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Table-2.3 Distribution of World Value Added: Selected branches and year (Percentage)

Branch (ISIC) Industrialized countries Developing Countries

1985 1990 1995 2000 1985 1990 1995 2000

1. Food products andbeverages (311-313)

84 83 81 80 16 17 19 20

2. Tobacco (314) 71 70 66 61 29 30 34 39

3. Textiles (321) 77 75 70 67 23 25 30 33

4. Wearing app., leather,footwear (322-324)

77 75 75 72 23 25 25 28

5. Wood and cork products (331)

89 88 88 89 11 12 12 11

6. Paper (341) 90 90 88 88 10 10 12 12

7. Printing and publishing(342)

94 94 92 93 6 6 8 7

8. Chemicals (351-352) 86 85 82 81 14 15 18 19

9. Petroleum inc. coalproducts (353-354)

69 64 60 57 31 36 40 43

10. Rubber and plasticproducts (355-356)

86 86 85 84 14 14 15 16

11. Non-metallic mineralproducts (361-2, 369)

85 83 79 78 15 17 21 22

12. Basic metals (371-372) 86 83 79 77 14 17 21 23

13. Metal products (381) 91 91 90 90 9 9 10 10

14. Non-electricalmachinery (382)

92 93 93 96 7 7 7 4

15. Electrical machinery(383)

91 89 87 90 10 11 13 10

16. Transport equipment(384)

89 90 86 84 11 10 14 16


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Table 2.4-A Annual Growth of Value Added of Selected branches in developing regions (Percentage)

Branch (ISIC) Developing regions

All countries South and EastAsia

West Asia andEurope

Latin America North America Sub-SaharanAfrica

1980-1990

1990-2000

1980-1990

1990-2000

1980-1990

1990-2000

1980-1990

1990-2000

1980-1990

1990-2000

1980-1990

1990-2000

1. Food productsand beverages(311-313)

2.7 3.8 5.3 6.7 1.5 0.6 1.6 2.6 3.2 3.2 2.0 1.3

2. Tobacco (314) 1.9 6.7 2.7 10.3 1.7 6.2 1.4 2.9 2.4 2.7 0.5 0.3

3. Textiles (321) 2.6 0.9 3.1 1.8 5.0 0.7 0.7 -0.7 1.7 -0.4 1.6 0.7

4. Wearing app.,leather, footwear(322-324)

2.0 -1.4 6.3 -1.8 2.2 -2.7 -1.5 -1.0 2.2 1.3 -2.1 0.8


2.6 -0.4 4.4 -0.9 -1.3 -0.4 1.6 1.6 6.0 -1.7 0.2 -1.0

6. Paper (341) 4.9 4.0 7.9 6.3 3.8 0.6 3.4 2.8 2.6 1.6 3.2 -0.7

7. Printing andpublishing (342)

3.6 2.9 7.9 3.8 1.8 -1.6 1.7 3.1 -4.2 -1.4 3.7 1.2

8. Chemicals (351-352)

5.1 5.4 9.7 8.0 6.4 2.2 2.5 3.8 6.6 4.3 -0.5 2.7

9. Petroleum inc.coal products(353-354)

4.6 3.8 5.3 6.2 7.6 3.4 3.2 1.7 0.2 0.9 2.3 1.3

10. Rubber and plastic products(355-356)

5.5 3.5 9.0 3.2 2.1 5.1 2.5 3.6 5.8 2.4 4.0 2.4

11. Non-metallicmineral products(361-2, 369)

3.8 4.1 7.4 5.7 5.5 3.2 0.4 2.6 4.0 2.8 1.1 2.7

12. Basic metals(371-372)

5.0 5.2 7.7 6.7 7.2 1.3 2.3 4.2 6.0 2.9 0.2 5.0

13. Metal products(381)

3.7 2.8 7.8 3.3 3.5 -0.6 0.7 3.2 0.6 1.2 1.3 1.1


3.6 3.5 8.1 5.1 1.3 2.2 0.9 1.4 4.6 1.9 -2.6 -0.6

15. Electricalmachinery (383)

7.6 7.6 15.2 9.5 2.7 4.8 1.5 3.8 6.9 1.5 -5.7 -0.9

16. Transportequipment (384)

3.1 6.8 7.6 9.3 5.6 -0.8 0.3 4.8 -2.5 -0.8 -8.3 -1.6

17. Prof. Scientificequipment (385)

4.8 1.7 9.1 1.4 3.9 0.3 1.2 2.2 15.1 -0.2 6.6 -4.0

18. Other manuf. Inc.furniture (390and 332)

2.5 1.2 7.5 0.4 -2.1 1.8 0.6 2.4 0.9 0.6 -7.1 2.0


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Table 2.4-B Distribution of MVA of Selected branches among developing regions (Percentage)

Branch (ISIC) Developing regions LeastdevelopedcountriesAfrica Latin America South and East

AsiaWest Asia and

EuropeAll countries

1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000

1. Food productsand beverages(311-313)

10.9 9.8 45.7 44.1 31.7 37.4 11.7 8.7 100 100 5.8 6.7

2. Tobacco (314) 9.0 6.9 40.9 37.0 39.4 43.6 10.7 12.5 100 100 4.8 5.7

3. Textiles (321) 8.5 7.7 23.1 20.7 54.2 59.4 14.2 12.2 100 100 4.6 4.3

4. Wearing app.,leather, footwear(322-324)

6.5 8.2 34.3 35.7 43.4 43.6 15.8 12.5 100 100 3.1 5.4


9.3 9.2 20.9 24.1 55.2 54.7 12.6 11.0 100 100 2.6 3.2

6. Paper (341) 4.7 3.3 46.3 44.3 37.9 45.1 11.1 7.3 100 100 1.7 1.0

7. Printing andpublishing (342)

4.9 3.5 41.3 43.7 42.6 46.1 11.2 6.7 100 100 2.2 2.0

8. Chemicals (351-352)

4.3 3.3 47.1 40.5 36.3 47.6 12.3 8.6 100 100 1.5 1.2

9. Petroleum inc.coal products(353-354)

8.2 6.6 33.8 27.2 33.8 44.0 24.2 22.2 100 100 1.4 1.2

10. Rubber and plastic products(355-356)

3.2 2.7 33.4 33.0 54.4 54.4 9.0 9.9 100 100 0.6 0.6

11. Non-metallicmineral products(361-2, 369)

9.4 8.1 33.0 28.8 40.2 48.0 17.4 15.1 100 100 2.2 1.8

12. Basic metals(371-372)

4.3 3.9 39.0 34.5 45.0 54.1 11.7 7.5 100 100 0.6 0.5

13. Metal products(381)

6.8 5.9 34.3 36.8 45.7 49.3 13.2 8.0 100 100 1.4 1.4


2.4 1.7 38.2 31.0 48.0 58.7 11.4 8.6 100 100 0.4 0.3

15. Electricalmachinery (383)

2.6 1.3 29.0 18.6 60.1 74.8 8.3 5.3 100 100 0.5 0.2

16. Transportequipment (384)

3.1 1.4 40.9 35.8 47.2 58.9 8.8 3.9 100 100 0.6 0.3


(c) Leading producing countries of agro and resource based industries

Tables 2.5-A to 2.5-J indicate the 15 leading producing countries of agro and resource-based products in the world and in developing countries in 1990 and 2000. It may be

observed from the tables that Asian developing countries have improved their position inmost of the products during 1990s. Within the developing countries (excluding China)their progress in significant in production of food products and beverages, tobacco,textiles, leather and footwear, wood products, paper, and rubber and plastic products.Table 2.5Kon the position of China in its main export products also indicate that Chinahas significant share in world trade in exports of agro-based and resource-basedindustries such as toys and sporting goods, footwear, knitted outer and under garments,textiles, travel goods, apparel and clothing, textiles, radios, watches and clocks.

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Table 2.5-A Leading Producers of Food Products and Beverages (ISIC 311-313) in 1990 and 2000

World leading producers* Leading producers in developing countries**

1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

USA 22.6 USA 22.6 Brazil 12.9 Brazil 12.2Japan 15.7 Japan 13.4 Mexico 9.2 Mexico 9.8Germany 8.3 Germany 8.7 Argentina 8.9 Argentina 9.6France 5.6 France 5.4 Korea, Rep 5.9 India 6.1U.K. 5.2 U.K. 4.7 India 5.1 Korea, Rep 5.7Italy 4.1 Italy 4.0 Yugoslavia 4.3 Philippines 5.7Spain 3.8 Spain 3.5 Turkey 4.0 Indonesia 4.7Brazil 2.6 Brazil 2.8 Philippines 3.8 Turkey 4.1Canada 2.5 Canada 2.5 Thailand 3.8 Thailand 3.9Mexico 1.9 Mexico 2.2 Taiwan, China 3.4 Taiwan, China 2.6

Netherlands 1.8 Argentina 2.2 Indonesia 2.5 Myanmar 2.4Argentina 1.8 Netherlands 1.9 Colombia 2.3 Malaysia 1.9Australia 1.4 Australia 1.6 Puerto Rico 1.8 Peru 1.8Belgium 1.3 India 1.4 Peru 1.6 Colombia 1.7Korea, Rep 1.2 Belgium 1.3 Venezuela 1.5 Egypt 1.5

Sum of above 79.8 Sum of above 78.2 Sum of above 71.0 Sum of above 73.7

Table 2.5-B Leading Producers of Tobacco (ISIC 314) in 1990 and 2000


1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

USA 26.6 USA 21.1 Argentina 11.5 Indonesia 19.0Germany 18.9 Germany 17.2 Indonesia 10.1 Argentina 14.0Argentina 3.6 Indonesia 7.6 Korea, Rep 9.8 Turkey 9.4

Netherlands 3.2 Argentina 5.6 Cuba 9.7 Korea, Rep 7.3Indonesia 3.1 Turkey 3.8 Brazil 6.9 Mexico 6.6

Korea, Rep 3.0 Netherlands 3.4 Mexico 6.8 Cuba 6.4Cuba 3.0 Austria 3.2 Turkey 6.4 Brazil 4.6Japan 3.0 Korea, Rep 3.0 India 4.8 India 3.8U.K. 2.8 Mexico 2.6 Thailand 3.3 Bangladesh 2.7France 2.5 Japan 2.6 Morocco 2.6 Philippines 2.5Austria 2.3 Cuba 2.6 Philippines 2.5 Morocco 1.8Brazil 2.1 Spain 2.1 Hong Kong 1.9 Thailand 1.8Mexico 2.1 Brazil 1.8 Pakistan 1.9 Pakistan 1.7Turkey 2.0 U.K. 1.8 Yugoslavia 1.5 Hong Kong 1.3Spain 1.7 France 1.6 Bangladesh 1.5 Venezuela 1.1


* Excluding Eastern Europe, the former USSR and Mainland China.** Excluding Mainland China.


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Table-2.5-C Leading Producers of Textiles (ISIC 321) in 1990 and 2000


1990 2000 1990 2000

Country Share

(%)

Country Share

(%)

Country Share

(%)

Country Share

(%)USA 16.3 USA 18.9 India 12.9 India 22.5Japan 16.0 Italy 12.3 Brazil 11.3 Taiwan, China 8.8Italy 10.5 Japan 9.4 Korea, Rep 9.7 Brazil 8.8Germany 7.0 India 8.1 Taiwan, China 9.0 Turkey 8.0France 4.0 Germany 5.2 Turkey 7.2 Korea, Rep 6.2India 3.9 France 3.4 Yugoslavia 5.3 Iran 4.0Brazil 3.4 Taiwan, China 3.2 Thailand 5.1 Indonesia 3.9U.K. 3.3 Brazil 3.2 Hong Kong 3.5 Mexico 3.6Korea, Rep 2.9 Turkey 2.9 Pakistan 3.3 Pakistan 3.4Taiwan, China 2.7 U.K. 2.6 Iran 3.2 Thailand 3.0Spain 2.5 Spain 2.2 Argentina 3.2 Hong Kong 2.6Turkey 2.2 Korea, Rep 2.2 Mexico 3.1 Peru 2.2Yugoslavia 1.6 Canada 2.1 Indonesia 3.1 Argentina 2.0Thailand 1.5 Iran 1.4 Egypt 2.2 Egypt 1.9

Canada 1.4 Indonesia 1.4 Bangladesh 1.8 Colombia 1.8Sum of above 79.2 Sum of above 78.5 Sum of above 82.2 Sum of above 76.3

Table-2.5-D Leading Producers of Wearing app., Leather, Footwear (ISIC 322-324) in 1990 and 2000


1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

USA 18.3 USA 20.8 Brazil 18.9 Brazil 15.8Japan 11.9 Italy 13.9 Korea, Rep 10.1 Hong Kong 7.1Italy 11.1 Japan 10.4 Thailand 8.8 Thailand 7.0Germany 6.2 Brazil 5.0 Yugoslavia 7.6 Indonesia 6.9

France 5.8 Spain 3.7 Hong Kong 6.9 Argentina 6.2Brazil 5.4 U.K. 3.5 Taiwan, China 5.2 Korea, Rep 5.4U.K. 4.0 Germany 3.4 Argentina 4.8 Mexico 5.2Spain 3.6 France 3.1 Mexico 3.5 Turkey 4.1Korea, Rep 2.9 Canada 2.4 Turkey 3.3 Philippines 3.4Thailand 2.5 Hong Kong 2.2 India 3.0 Bangladesh 3.1Yugoslavia 2.2 Thailand 2.2 Iraq 2.8 India 2.8Canada 2.0 Indonesia 2.2 Indonesia 2.3 Taiwan, China 2.7Hong Kong 2.0 Argentina 1.9 Philippines 1.9 Iraq 2.7Portugal 1.7 Korea, Rep 1.7 Puerto Rico 1.6 Tunisia 2.0Taiwan, China 1.5 Mexico 1.6 Algeria 1.5 Puerto Rico 1.9


* Excluding Eastern Europe, the former USSR and Mainland China.

** Excluding Mainland China.


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Table-2.5-E Leading Producers of Wood and Cork Products (ISIC 331) in 1990 and 2000


1990 2000 1990 2000

Country Share(%) Country Share(%) Country Share(%) Country Share(%)

USA 22.1 USA 24.6 Indonesia 17.5 Indonesia 16.7Japan 18.9 Japan 10.5 Brazil 9.6 Thailand 12.3Germany 8.3 Germany 9.6 Thailand 8.7 Malaysia 11.2France 5.0 Canada 5.7 Yugoslavia 7.8 Brazil 10.3

Canada 4.8 France 4.8 Malaysia 7.7 Argentina 5.9Italy 3.7 Italy 4.6 Korea, Rep 6.7 Korea, Rep 4.9Spain 3.7 Sweden 3.9 Taiwan, China 6.0 Turkey 3.7Sweden 3.6 Spain 3.8 Argentina 4.7 India 2.4U. K. 3.5 Finland 2.9 Algeria 2.9 Philippines 2.2Switzerland 2.8 Switzerland 2.7 Turkey 2.3 Sudan 1.6Indonesia 2.3 U. K. 2.7 India 2.2 Taiwan, China 1.5Finland 2.1 Austria 2.4 Philippines 2.2 Chile 1.4Australia 1.7 Australia 2.1 Chile 1.8 Honduras 1.4

Austria 1.3 Indonesia 2.0 Cameroon 1.4 Ghana 1.4Brazil 1.2 Thailand 1.5 Iran 1.4 Mexico 1.3


Table-2.5-F Leading Producers of Paper (ISIC 341) in 1990 and 2000


1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

USA 31.3 USA 31.3 Brazil 22.0 Brazil 20.4Japan 15.5 Japan 14.2 Korea, Rep 10.0 Korea, Rep 10.7

Germany 9.4 Germany 8.3 Mexico 9.4 India 9.9Canada 4.8 Italy 4.9 India 7.5 Mexico 8.3Italy 4.6 Canada 4.8 Taiwan, China 7.1 Taiwan, China 6.5U.K. 4.5 France 4.3 Argentina 5.6 Argentina 6.0France 4.2 U.K. 3.4 Yugoslavia 4.6 Indonesia 5.8Sweden 2.8 Finland 3.1 Turkey 4.1 Turkey 3.2Finland 2.5 Sweden 2.9 Indonesia 3.7 Thailand 3.0Brazil 2.4 Brazil 2.6 Chile 2.2 Philippines 2.5Spain 1.9 Spain 2.2 Colombia 1.9 Chile 2.5

Netherlands 1.3 Korea, Rep 1.4 Hong Kong 1.8 Colombia 2.0Korea, Rep 1.1 India 1.3 Philippines 1.5 Hong Kong 1.6Mexico 1.0 Netherlands 1.2 Venezuela 1.4 Iran 1.4Austria 1.0 Austria 1.2 Malaysia 1.3 Peru 1.3




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Table-2.5-G Leading Producers of Printing and Publishing (ISIC 342) in 1990 and 2000


1990 2000 1990 2000Country Share

(%)Country Share

(%)Country Share

(%)Country Share

(%)

USA 35.7 USA 33.8 Brazil 16.4 Argentina 17.6

Japan 21.1 Japan 20.4 Korea, Rep 12.9 Brazil 13.2U.K. 6.9 U.K. 6.5 Argentina 12.8 Korea, Rep 10.4France 4.9 Italy 5.6 Hong Kong 6.1 India 6.8Italy 4.6 Germany 4.9 Taiwan, China 5.6 Thailand 6.3Germany 4.5 France 4.8 Yugoslavia 5.0 Taiwan, China 5.3Canada 2.7 Spain 2.7 India 4.8 Singapore 4.4Spain 2.5 Switzerland 2.0 Singapore 3.6 Hong Kong 4.0Switzerland 1.7 Canada 1.9 Turkey 3.5 Malaysia 2.4

Netherlands 1.7 Netherlands 1.8 Mexico 2.5 Mexico 2.3Australia 1.3 Australia 1.4 Malaysia 2.3 Turkey 2.1Sweden 1.2 Argentina 1.3 Thailand 2.3 Philippines 2.0

Brazil 1.0 Sweden 1.1 Colombia 1.5 Peru 2.0Finland 0.9 Brazil 1.0 Indonesia 1.3 Chile 1.7Korea, Rep 0.8 Denmark 0.9 Puerto Rico 1.1 Iran 1.4



Table-2.5-H Leading Producers of Rubber and Plastic Products (ISIC 355-356) in 1990 and 2000


1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

Japan 22.7 USA 25.8 Taiwan, China 17.4 Korea, Rep 15.9USA 21.5 Japan 16.6 Korea, Rep 15.4 Brazil 12.2Germany 12.8 Germany 11.8 Brazil 14.7 Taiwan, China 10.9Italy 6.5 Italy 6.3 Mexico 6.5 Malaysia 10.7U.K. 4.8 France 5.1 India 6.4 India 6.5France 4.8 U.K. 4.3 Argentina 5.2 Argentina 6.4Spain 2.7 Spain 3.4 Malaysia 3.6 Mexico 6.1Taiwan, China 2.6 Canada 2.7 Turkey 3.3 Turkey 6.1Korea, rep 2.3 Korea, Rep 2.6 Indonesia 3.2 Indonesia 3.7Brazil 2.2 Brazil 2.0 Yugoslavia 3.0 Peru 1.9Canada 1.8 Taiwan, China 1.8 Hong Kong 2.8 Philippines 1.8Belgium 1.1 Malaysia 1.7 Singapore 1.3 Singapore 1.3

Netherlands 1.0 Belgium 1.2 Colombia 1.3 U.A. Emirates 1.3

Mexico 1.0 India 1.1 Iran 1.2 Iran 1.2India 0.9 Argentina 1.0 U.A. Emirates 1.2 Thailand 1.1



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Table-2.5-I Leading Producers of Non-metallic Mineral Products (ISIC 361, 362, 369) in 1990 and 2000


1990 2000 1990 2000

Country Share

(%)

Country Share

(%)

Country Share

(%)

Country Share

(%)Japan 20.7 USA 17.3 Mexico 10.9 India 14.9

USA 15.3 Japan 15.9 Korea, Rep 10.8 Korea, Rep 10.0Germany 10.0 Germany 9.5 Brazil 10.7 Mexico 9.9Italy 8.2 Italy 7.8 Turkey 8.1 Turkey 9.4France 5.5 Spain 4.8 India 7.8 Brazil 8.6U.K. 5.5 France 4.8 Taiwan, China 6.1 Taiwan, China 5.1Spain 4.4 U.K. 4.2 Argentina 4.5 Thailand 4.2Mexico 2.0 India 3.5 Thailand 4.3 Malaysia 3.8Korea, Rep 2.0 Korea, Rep 2.3 Yugoslavia 3.0 Argentina 3.6Brazil 1.9 Mexico 2.3 Iran 2.9 Iran 3.0Canada 1.5 Turkey 2.2 Saudi Arabia 2.3 Philippines 2.4Turkey 1.5 Brazil 2.0 Malaysia 2.1 Indonesia 2.2India 1.4 Canada 1.6 Algeria 2.0 Egypt 1.8Switzerland 1.3 Austria 1.2 Indonesia 1.9 Saudi Arabia 1.7

Austria 1.2 Taiwan, China 1.2 Egypt 1.8 Morocco 1.5Sum of above 82.4 Sum of above 80.6 Sum of above 79.2 Sum of above 82.1


Table-2.5-J Leading Producers of Metal Products (ISIC 381) in 1990 and 2000


1990 2000 1990 2000

Country Share(%)

Country Share(%)

Country Share(%)

Country Share(%)

Japan 23.3 USA 23.8 Korea, Rep 14.3 Brazil 13.1

USA 20.6 Japan 17.2 Brazil 14.0 Korea, Rep 12.7Germany 14.6 Germany 16.2 Taiwan, China 11.7 Mexico 12.2France 6.6 France 6.6 Mexico 7.5 Taiwan, China 11.9Italy 5.1 Italy 4.6 Argentina 6.8 Malaysia 6.1U.K. 4.5 U.K. 3.4 India 4.8 India 5.5Spain 2.6 Spain 2.5 Yugoslavia 4.6 Argentina 5.2Canada 1.9 Canada 2.1 Turkey 4.0 Thailand 4.0Switzerland 1.5 Switzerland 1.7 Thailand 2.9 Singapore 3.0Sweden 1.5 Sweden 1.6 Singapore 2.8 Turkey 2.6Korea, Rep 1.4 Brazil 1.4 Hong Kong 2.8 Iran 1.9Brazil 1.4 Korea, Rep 1.4 Algeria 1.9 Indonesia 1.5

Netherlands 1.3 Austria 1.4 Indonesia 1.9 Saudi Arabia 1.3Australia 1.1 Belgium 1.3 Iraq 1.6 Peru 1.3Taiwan, China 1.1 Mexico 1.3 Iran 1.6 Chile 1.2




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Table 2.5-K

China's Position in World Trade in its main export products

Average of 1997 and 1998

SITC

code

Product groups Product

category

Percentage share of

product group inChina's total exports World exports

894 Toys and sporting goods B 4.5 24.5851 Footwear B 4.4 23.0845 Knitted outergarments B 3.7 16.7843 Women's textiles outergarments B 3.6 16.1752 Computers E 3.4 3.9842 Men's textile outergarments B 3.3 19.0764 Telecom equipment, and parts E 3.2 4.3846 Knitted undergarments B 2.7 17.3893 Plastic articles D 2.1 7.0831 Travel goods B 1.8 31.0

778 Electrical machinery D 1.8 4.2848 Apparel and clothing accessories B 1.7 26.4759 Computers and office machines E 1.6 2.8899 Miscellaneous manufactures F 1.6 8.8755 Household equipment D 1.6 8.8652 Woven cotton fabrics B 1.6 12.3762 Radios E 1.5 18.9658 Made-up textile articles B 1.5 18.6821 Furniture and parts thereof B 1.5 5.0653 Woven man-made fibre fabrics B 1.4 8.5771 Electric power machinery D 1.2 8.6844 Textile undergarments B 1.2 17.0

651 Textile yarn B 1.2 6.5776 Transistors and semiconductors E 1.2 1.1333 Crude petroleum A 1.2 1.0772 Electrical apparatus D 1.2 2.9699 Base metal manufactures C 1.0 4.4885 Watches and clocks E 1.0 12.0

Total shares of above items 59.7

Note: The classification of products into product categories in this table follows that in thischapter. The categories are as follows: A=primary commodities; B=labour-intensive andresource-based manufactures; C=manufactures with low skill and technology intensity;D=manufactures with medium skill and technology intensity; E=manufactures with high skill and

technology intensity; F=unclassified manufactured product.


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(d) Concept of Small and Medium Enterprises (SMEs)

The focus of this study is on the resource based and export oriented small and mediumenterprises (SMEs). But, the concept of small and medium industries differs from countryto country. The single criterion for defining small-scale industry (SSI) units in India ishistorical value of plant and machinery. Workforce as a criterion for defining SSIs inIndia was discontinued in 1960. Another distinc

role of agro-based and resource-based small and medium enterprises (smes) for export promotion,...

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