The First Deputy Prime Minister of Uganda and Minister of East African Community Affairs, Rebecca Alitwala Kadaga has asked member countries of the CommonWealth to redesign the Global Value Chains in the post-Covid-19 era so that each and every economy benefits.
Global value chains (GVCs) refer to international production sharing, a phenomenon where production is broken into activities and tasks carried out in different countries.
Speaking during the CommonWealth Business Forum, held at Intare Conference Arena in Kigali Rwanda on Wednesday, Kadaga said there is a need to redesign the Global Value Chains as a way of addressing the challenges such as trading systems, digital divide and many others, the entire ecosystem is facing.
“We need to make these Global Value Chains work for all of us. The CommonWealth could help spur the industrial revolution among her member countries. While some parts of the world are on the verge of the 4th Industrial Revolution, many parts of Africa have not yet entered the 1st Industrial revolution and hence cannot relate well with the Global Value Chains,” she said.
The former Speaker of Parliament added that Global Value Chains (GVCs) have played an essential role in driving recovery from the Covid-19-induced global trade collapse.
“It is true that many high-income countries are realizing the need to reshoring production but this approach is likely to hurt both advanced and developing economies alike and this might push further many into extreme poverty by 2030, yet on the other hand if there is lowering trade costs, over 200 million people will be lifted out of this extreme poverty. We, therefore, need to redesign the ecosystem to build resilience for equitable and fair distribution,” she said.
One of the solutions she raised included; Reinvigorating a trading system that serves and improves the lives of everyone and ensures that everyone gets a fair share of trade (Global Value Chain Development Report 2021).
Kadaga also noted that there is a need to address the Digital Divide, alluding that physical distancing policies brought to light the role of the Digital economy anchored on new ICT developments.
“UNCTAD 2021 estimates the value of online shopping, facilitated by a number of digital platforms, to steadily have grown in recent years, at $26.7 trillion in 2019. There is also a need to invest in structural transformation and building of productive capacities to fully harness the linkages in manufacturing, services and Agriculture.”
Another solution she urged was the Promotion of Regional Integration and Access to markets Building of regional economic blocs to expand market outreach.
“Like in Africa we have EAC, COMESA, and SADC are pragmatic solutions to promote intra-Africa trade including promoting import substitution and forging standards that are acceptable. The concept of the African Continental Free Trade Area (AfCFTA) is premised on bigger markets and trade on the continent and offers a good bargaining ground for future economic negotiations. I call upon the CommonWealth to exploit the common language to intensify trade among themselves.”
The Minister noted that there is also a need to maintain the integrity of ecosystems to minimize scenarios where a conducive environment that activates pathogens to pandemic levels, was originally not known to affect humans.
“There is a need to improve biodiversity conservation because this has the potential of providing a source of cure for emerging diseases. Research through bioprospecting by the different agencies is helping us to discover some of the useful genetic resources that the country can supply globally?” she asked.
However, she noted that notwithstanding, GVCs have proven resilient and will undoubtedly play a major role in the recovery for many African economies.
“They have played a key role in the production of personal protective equipment and vaccine components as COVID-19 recedes. But shall require a fit for purpose re-modification to be able to bring about the prosperity of those countries in most need without leaving anyone behind.”
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