Gainfully Linking into Global Value Chains: Experiences and Strategies

Global value chains (GVCs) have spread rapidly, accounting for more than 70 per cent of the international trade. But have developing countries benefitted from the rise of GVCs? To answer this question, the book estimates domestic value-added in exports of different developing countries and finds that this has been declining overtime. It highlights that under this fragmented pattern of international trade, exporting more can no longer be necessarily associated with producing more. Linking into GVCs is likely to delink exports from domestic value-added chains and subsequently can adversely impact on domestic production and employment. It is argued that the associated gains of GVCs are no longer automatic and need targeted policies and strategies. The book shares successful experiences of some developing countries in linking and initiating GVCs and Regional value chains (RVCs). It further identifies potential RVCs in leather and leather products in Africa and in food processing industry in South Asia. It highlights the capacities that need to be built to gain from GVCs/RVCs and outlines the associated action plans, along with the required strategies and policies.