Economy
The extraction trap
A third of manufacturing value added sits on one East Asian coast. The extracting South exports ore raw and buys the finished good back many times more expensive.
The region that pulls raw material from the ground and the region that turns it into finished wealth are usually not the same. Nearly half of global manufacturing value added (world $16T) gathers on one East Asian coast, while the Global South that does most of the extraction exports ore raw and buys the finished product back many times more expensive.
Region by region: extraction share vs value-added share
The Layer 0 raw-material extraction share set beside the Layer 1 manufacturing value added (MVA) share. The gap between them is the “trap”: extract a lot, process little.
One chain: the journey of a tonne of iron
The same tonne of material gains value at each processing step. Multiplier from mine-mouth to finished product:
Mine-mouth to finished: ×41.
The physical mass comes out of the South; the place where value is set, where design and intellectual property sit, is the North. The inter-layer inflation is geographically uneven too.