Shift in global demand and effects on employment, skills, and labour standards

Transcription

1 Shift in global demand and effects on employment, skills, and labour standards Raphael Kaplinsky Development Policy and Practice, The Open University Joint ILO-GTFA conference: Globalization and Employment: Global Shocks, Structural Change and Policy Response Geneva, 21 st June 2010

2 Commodities-Manufactures Terms of Trade

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4 China s demand for agricultural commodities 20% world population, 7% arable land Biofuels Industrial inputs 22% global rubber consumption (2006) Imports 27mt cotton vs 7mt domestic production(2008) Pork, other meat and animal feeds Switch domestically from grains to fruit and vegetables

5 World Manufacturing Export Price, Annual price change (%) IMF, World Economic Outlook Database

6 Commodities-Manufactures Terms of Trade

7 The 2 nd Industrial Divide from Fordism to post-fordism From supply-push to demand pull Critical success factor in supply-push Price Volume Price Critical success factor in demand pull Quality Differentiation Price

8 The centrality of standards in Global Value Chains Private sector standards QCD Quality as in parts per million Cost price reductions by suppliers Delivery more frequent, smaller and on-time deliveries Govt standards Health and safety in work Product safety Civil society Labour standards Organic standards

9 The increasing globalisation of VCs Services Services Design Production Marketing Competitive pressures

10 ? V U

11 Is this a V recovery or a W? I think it s the latter (CEO HSBC Bank, Financial Times, 5 th Oct 09) `

12 Perhaps its an L

13 OR, MAYBE

14 Households according to disposable income bracket in BRIC countries: 2002/2007 '000 households

15 Two core impacts as markets shift to the south What role will standards play in global value chains? What will the impact be on the intercountry division of labour in global value chains

16 Thailand s Share in World Cassava Exports, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Starch Dried cassava

17 Low VA Farmers Chips producers Native starch factories Export (ethanol) China Modified starch factories Domestic (feed) Pellet plants Export (feed) EU, etc Food industry domestic / export Non food industry domestic / export High VA Starch derivatives domestic / export

18 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Thai Dried Cassava: The shift in export destination 0% Share EU Share China Share Korea

19 Thai Dried Cassava Export: The shift in product composition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Chips Pellets

20 Thailand s Cassava Starch Exports Share in Thailand cassava starch export 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 1,800 1,600 1,400 1,200 1, Thousands Metric tonnes 0% Total volume China volume 0

21 Thai Starch Export Composition to China 80% 70% 60% 50% 40% 30% 20% 10% 0% Native starch Modified starch

22 Standards in the Cassava Value Chain Into EU HACCP ("Hazard Analysis Critical Control Point") as cassava pellets part of the animal feed-food chain. GMP ( Good Manufacturing Practice ) sanitary and processing China None other than starch content

23 Low VA Farmers Chips producers Native starch factories Export (ethanol) China Modified starch factories Domestic (feed) Pellet plants Export (feed) EU, etc Food industry domestic / export Non food industry domestic / export High VA Starch derivatives domestic / export

24 Timber in Gabon Untapped minerals Tropical timber 13 th largest producer 3 rd largest exporter (16% market share)

25 Gabon s Domestic Timber VC China / EU EU and others

26 Gabon: Exports to China and EU logs sawnw. veneer plyw. logs sawnw. veneer plyw. China EU-27 Source: FAO ForesSTAT, accessed December 2009

27 Gabon: Buyers Standards Critical Success Factors (1=not important, 5=very important) Logs EU CN Variety tree species Products EU CN Product design Volume 0.0 Price Volume 0.0 Price Quality Quality

28 Gabon: Buyers Standards International regulations and private standards (1=not important, 5=very important) Private EU CN ISO standards Legality certification requirements GPP International EU CN Building codes Formaldehyde emissions Phytosanitary requirements Sustainability certification requirements Product testing requirements

29 Gabon s Domestic Timber VC China / EU EU and others

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31 Some questions How generalisable across sectors? Is this a moving frontier Northern markets will reappear? China becomes a quasi-northern market? What about India and other emerging economies? Distributional implications? Static or dynamic comparative advantage? South-South win-win or win-loose.?