Developing countries are increasing their share in the export of manufactured goods but they are reaping little benefit, according to a UN report released yesterday.
High-tech goods may look like they're coming from poorer countries, but in fact those nations only provided the low-skill labor needed to assemble items produced elsewhere, said the 178-page Trade and Development Report 2002.
"Goods travel across several locations before reaching final consumers, and the total value of recorded trade far exceeds the value added," said the report by the UN Conference on Trade and Development.
UNCTAD said up to 30 percent of world exports are produced in this manner by large international corporations, almost all based in developed countries.
"Although the industrial countries have seen their share in global manufacturing exports reduced from 80 percent to 70 percent in recent years, the developed countries were able to increase their value added and their participation in manufacturing income. The opposite happens in developing countries," said UNCTAD Secretary-General Rubens Ricupero.
The report also said that developing countries have been hit hard by the global economic slowdown. International trade has transmitted the situation in richer countries to developing nations, with a number of poorer countries going into recession.
"After growing by 14 percent in 2000, export volumes for developing countries grew by less than 1 percent in 2001. For developing countries as a whole, growth was 2.1 percent, down from 5.4 percent the previous year," it said.
Ricupero said that the success stories of a few countries, mostly in Asia, are skewing figures that suggest improvement across all poorer nations.
"Many of the developing countries still remain highly dependent on the export of products that are based either on natural resources or on labor," he told reporters.
Large developing countries such as China and India also need to expand their domestic markets in order to overcome deep-seated problems of unemployment and poverty, the report said
In a chapter devoted to China, UNCTAD said the country might not benefit as much from its membership in the WTO as had been expected.
Although China is a strong competitor in some traditional labor-intensive goods such as clothing and footwear, and in assembly of high-tech goods, it is facing a surge of imports of goods such as textiles, electrical items and motor vehicles.
"China's desire to move forward on both the industrialization and integration fronts will require a full range of policies to encourage an important part of its skilled labor force to shift into new manufacturing activities," the report said.
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