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Connectivity and Supply Chain Performance
Connectivity and Supply Chain Performance
Connectivity and Supply Chain Performance
Performance
Presented by
Akhmad Bayhaqi
APEC Secretariat (Policy Support Unit)
Outline
Introduction
APEC connectivity blueprint
APEC supply chain connectivity framework
Infrastructure investment to support Supply
Chains
Global connectivity
Outlook and Key issues
Regional Integration
Integrating the region and ensuring that goods,
services and people move easily across
borders is at the core of APECs work.
Members facilitate this trade through faster
customs procedures at borders; more favorable
business climates behind the border; and
aligning regulations and standards across the
region.
For example, APECs initiatives to synchronize
regulatory systems is a key step to integrating
the Asia-Pacific economy. A product can be
more easily exported with just one set of
common standards across all economies.
Source: http://www.apec.org/About-Us/About-APEC/Fact-Sheets/RegionalEconomic-Integration-Agenda.aspx
Workstream 1:
Fostering a business
friendly environment
for infrastructure
development and
investment, through
a solid regulatory
framework, that
minimizes
uncertainty and
maximizes
transparency and
predictability.
Workstream 2:
Development
and Refinement
of an Integrated
planning system
mechanisms
Workstream 3:
Development of
government
capacity to
identify and
generate a
pipeline of
bankable
infrastructure
projects
Workstream 4:
Development or
further
improvement of
financing and
funding
environment to
encourage long
term investors
The goal of encouraging each member economy to develop its own Single Window system
by 2020
APEC Customs 3M Strategic Framework that encourages member economies to cooperate
through mutual assistance, mutual recognition, and mutual sharing (abbreviated as 3M)
The 2014 APEC MRT: the formulation of the Guidelines for APEC Customs Transit and
continuing work on the Time Release Study
Supply-chain connectivity
Finance:
The Asia Region Funds Passport provided the following common
objectives (among others):
a) A more diverse range of investment opportunities
b) Deepen the regions capital market to attract finance for growth
c) Grow the pool of funds available for investment in the region
Structural Reforms
Economic Committee also outlined the importance of establishing a
competitive market, by supporting and facilitating more open, wellfunctioning, transparent, and competitive markets.
Building
infrastructure
& capacity
Action Plan
Chokepoints
Infrastructure
Inefficient or inadequate transport infrastructure; lack of cross border physical linkages (e.g.
roads, bridges).
Logistics
capacity
Connectivity
Clearance
Inefficient clearance of goods at the border; lack of coordination among border agencies,
especially relating to clearance of regulated goods at the border
Documentation
Burdensome procedures for customs documentation and other procedures (including for
preferential trade).
Transparency
Lack of transparency/ awareness of full scope of regulatory issues of affecting logistics; lack
of awareness and coordination among government agencies on policies affecting logistics
sector; absence of single contact point or champion agency on logistics matters.
Regulations &
standards
Variations in cross-border standards and regulations for movements of goods, services and
business travelers.
Transit
Streamlining
procedures
Strengthening
rules &
institutions
Financing Gap
Global demand for the funding of infrastructure investments: $57
trillion by 2030.
Long-term investors: hold around $85 trillion in assets under
management
[Brookings Institute]
Importance of Infrastructure
Three aspects of (physical) infrastructure that are important for business and
trade:
1.
2.
3.
Base case
$57 trillion
Downside
$57 trillion
Upside
$57 trillion
3% of GDP
2% of GDP
3.5% of GDP
$8.4 trillion
$500 billion
$24.6 trillion
$1.5 trillion
Zero
Zero
Source: OECD; McKinsey & Co.; Global Insight in Standard and Poors.
Copyright 2013 APEC Scretariat
Importance of Infrastructure
Assessing the Gap in the Infrastructure between the APEC
Region and the OECD
Indicator
Quality of overall infrastructure
Quality of roads
Quality
of
railroad
infrastructure
Quality of port infrastructure
Quality of airport
infrastructure
Availability and quality of
transport infrastructure
Availability and quality of
transport services
APEC
4.96
4.86
4.2
OECD
5.48
5.17
4.48
Gap
0.52
0.31
0.28
4.91
5.18
0.27
0.52
5.20
5.41
4.62
4.69
(0.07)
4.89
5.16
0.27
Copyright 2013 APEC Scretariat
Indicator
Technological adoption, 1-7
(best)
Availability
of
latest
technologies
Firm-level
technology
absorption
FDI and technology transfer
ICT use , 1-7 (best)
APEC
OECD
5.18
5.41
5.44
5.91
5.23
4.88
4.62
5.46
4.86
4.69
Source: WEF (World Economic Forum): Global Competitiveness Report 20132014 data
Gap
0.23
0.47
0.23
-0.02
0.07
Source:
World Bank
2014.
Infrastructure needs
Infrastructure Expenditure Needs (%GDP)
Source: Yepes (2008) (quoted in Fay et al. 2011) in Inderst and Stewart 2014.
Trade Costs
Trade Costs for Manufacturing
Goods, APEC Economies,
excluding tariff costs, percent
ad valorem equivalent
Trade Costs
Trade Costs for Manufacturing Goods, selected Regional
Groupings, excluding tariff costs, percent ad valorem equivalent,
2009
Note: APEC LA: consist of Chile, Mexico and Peru; APEC NLA: consist of the remaining APEC economies where data is
available; ASEAN-4: consist of Indonesia, Malaysia, the Philippines and Thailand; EA-3: consist of China, Japan and Korea.
Source: ESCAP-WB Trade Costs Database (from ESCAP website: http://www.unescap.org/tid/artnet/trade-costs.asp) and
PSU calculation.
800
600
400
200
0
APEC Import APEC Import OECD Import OECD Import APEC Export APEC Export OECD Export OECD Export
(LPI)
(DB)
(LPI)
(DB)
(LPI)
(DB)
(LPI)
(DB)
2009
2013
Global Value Chains play a dominant role in global trade and business. The
increase in global trade has been attributed to the increased activity of GVCs,
with multinational corporations (MNCs) contributing around 80% of global
exports (WEF 2013). Growth in GVCs also encourages FDI.
Table 1 Selected key performance indicators, foreign affiliates of TNCs, 2013
2013 Level
71 million of employees
+5%
+9%
+8%
$8 trillion of exports
+3%
Thank You
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