Sustainability-Related Implications of Competitive Advantages in Agricultural Value Chains: Evidence from Central Asia—China Trade and Investment

Vasilii Erokhin,Peiran Du,Li Diao

doi:10.3390/su12031117

Vasilii Erokhin, Peiran Du + Show 1 more

Open Access

https://doi.org/10.3390/su12031117

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Journal: Sustainability	Publication Date: Feb 4, 2020
Citations: 23	License type: CC BY 4.0

Affiliation: Wuhan University, Harbin Engineering University

Abstract

More stable value chains in agriculture allow countries to take the best advantage of their factor endowments and thus achieve the UN Sustainable Development Goal on ending hunger. It is, however, difficult to interpret such advantages properly due to the multivariate effects of natural, technological, and economic variables on agricultural output and food supply. The authors attempt to tackle this challenge by developing the approach to the identification of competitive advantages and matching them with the production capabilities of agricultural sectors in Central Asia. The application of Revealed Comparative Advantage (RCA), Relative Trade Advantage (RTA), Lafay Competitive Advantage (LI), and Domestic Resource Costs (DRC) indexes to the array of 37 products results in the revealing of comparative, trade, competitive, and production advantages of five Central Asian economies for labor-intensive horticultural products and grains. Capital and technology-intensive sectors of animal husbandry and food processing are recognized as low competitive. Taking Central Asia–China collaboration as a model, the authors elaborate policy measures aimed at support, promotion, or establishment of competitive advantages. The application of the measures facilitates the concentration of the resources toward competitive and conditionally competitive products, allows to protect fragile advantages in marginally competitive sectors, and contributes to the overall improvement of stakeholders’ performance across agricultural value chains in the region.

Highlights

With the dissolution of the Soviet Union in 1991, five countries of Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) along with other Soviet republics gained independence and entered a period of transition from planned to market-based economies [1]
In Soviet times, each country of Central Asia specialized in the production of particular agricultural products according to the general plan [6]
Command allocation took into account available natural resources and capabilities of particular countries but created mono-specialization and did not allow diversification, which negatively affected both the competitiveness positions and flexibility of Central Asian economies when transitioning to the market-based principles of competition

Summary

Introduction

With the dissolution of the Soviet Union in 1991, five countries of Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) along with other Soviet republics gained independence and entered a period of transition from planned to market-based economies [1]. Underdeveloped transport infrastructure oriented on central parts of Russia (Soviet heritage), as well as landlockedness and remoteness from major economic centers and trade hubs, contributed to the degradation of the competitiveness of the Central Asian countries [2] and increased economic and social instability in the entire region. Agriculture was among those sectors where production capabilities, trade links, and competitive advantages were cut in the most severe way. Command allocation took into account available natural resources and capabilities of particular countries but created mono-specialization and did not allow diversification, which negatively affected both the competitiveness positions and flexibility of Central Asian economies when transitioning to the market-based principles of competition

Results

Discussion

Conclusion