Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), says the COVID-19 pandemic taught the world how important global value chains have become for job creation and inclusion.
Speaking at the World Bank/IMF (International Monetary Fund) Spring meetings in Washington DC, the WTO DG, said the COVID-19 vaccine supply chain gave a lot of insight as to how the redistribution of the global supply chain can be structured for more inclusive jobs across the developing world.
“Global value chains are the backbone of trade. Global value chains make up to 45 to 55 percent of world trade. And there are forces for inclusion, they create jobs and help to increase incomes,” Okonjo-Iweala said.
“Actually studies have shown that when you have global value chains spreading, per capita incomes go up.
“During the pandemic, when we had to deal with vaccines, we had these meetings with the CEOs of the vaccine manufacturers, Pfizer, Moderna, and so on. And what they said; the mRNA vaccine, the Pfizer one is spread over 19 countries.
“The supply chain is spread over 19 countries and manufacturing in 86 sites. It’s incredible the force they can be for creating jobs and employment; I see them as a force for inclusion.”
Advancing her argument on the role the global supply chain plays in driving employment and inclusion, Okonjo-Iweala, said the world needs to look beyond China and India/Indonesia for the expansion of global value chains.
“We are saying that at this time when global supply chains are trying to build resilience by not being concentrated in one country or the other, we need to see this as an opportunity to encourage them to spread to more developing countries as a force to bring even SMEs and women into the value chains,” she added.
“Let’s not just talk about China plus one when we’re thinking of diversification of supply chains, when they say plus one, it means Indonesia or India. Let’s talk about China plus Morocco, China plus India, China plus Nigeria, China plus Senegal, China plus Bangladesh, China plus Brazil, Costa Rica.
“With this kind of approach global value chains can really be a force for inclusion.”
Okonjo-Iweala: 75% of West Africa’s trade finance needs are not met
Citing a study by the World Trade Organisation (WTO) and the International Finance Corporation (IFC), Okonjo-Iweala added that 75 percent of the trade finance needs of West Africa are not being met.
The WTO DG said West Africa has only 25 percent of its trade needs met, “this is below the average of 40 percent for the whole of the continent”.
She said “If we were to bring access to trade finance within West Africa to the overall average of Africa,” that will drive eight percent growth across the continent.
Okonjo-Iweala said the WTO and IFC “are collaborating in a fantastic manner” to increase trade finance in Africa and across the developing world.
Source: Top Stories