OLC Final Project

1. How GVCs have Changed and are Changing the
International Trade and What Policies Sierra
Leone should Support to Start or Broaden
Participation in GVCs

2. What is GVCs?
• According to Michael Ferrantino, Lead Economist in the World Bank’s
Trade and Competitiveness Global Practice, Global Values Chains
(GVCs), represent the principle division of labour extended to
international or global scale. In GVCs production of goods and
services takes place by breaking up the production process into small
parts each of which takes place in a different country.
• According to the Organisation for Economic Co-operation and
Development (OECD),International production, trade and investments
are increasingly organised within so-called global value chains (GVCs)
where the different stages of the production process are located
across different countries. Globalisation motivates companies to
restructure their operations internationally through outsourcing and
offshoring of activities.

3. GVCs Evolution Over the Years.
• According to Melise Jaud and Michael Ferrantino of the World Bank,
trade has evolved from the old face where the division of labour in a
single place is very old, and now labour may be divided
internationally based on the availability of the required natural
resources and the specialized human capital to support the
production of the value added goods or services.

4. The Importance of GVCs for Development
• As indicated by Pinelopi Goldberg, GVC trade in the past 30 years
has accelerated economic growth and reduced poverty greatly. We
have seen under developed and developing countries that work
their way to be part of the value chains, gain significant economic
growths and began to compete with developed countries.
• Although challenges with regards the equitable distribution of
profits among firms in the under developed/developing and
developed countries still possess threat to the smooth
implementation of GVCs across countries, significant gains have
been realised in improving living standards as well.

5. Case Study Country.
• Sierra Leone is located on the west coast of Africa, north of the
equator. With a land area of 27,699 square miles (71,740 square
kilometres) .
• It has a population of 7.813 million and a GDP of $3.941 (2019).

6. Possible Areas to Participate in GVCs.
The country is endowed among others, with the below listed natural
resources which value can be added to for participation in the GVCs
Diamond
Bauxite
Coca

7. How Sierra Leone Can Participate in GVCs.
The development of the critical specialised human capital is
key to facilitate firms operating in the country produced goods
and services that can participate in the GVCs.

8. GVCs Macroeconomic Implications In Sierra Leone.
• It will facilitate the synchronization of Sierra Leone`s economic
activities across other countries that are part of the GVCs.
• GVCs established solid ties in price formation which means that if
inflation effect Sierra Leone is possible to effect the others in the
value chain.
• Also, Sierra Leone can be faced with adverse consequences to
managed a stable currency, as such would largely depend on their
export and import capacities

9. Policies Concern to Enhance Sierra Leone`s GVC Participation.
• Policies that would enables Sierra Leone to exploit their comparative
advantage and increase their participation in GVCs.
• Policies that enhance participation and promote upgrading.
• Policies that spread the gains of GVC participation across society,
especially to women, young workers, and lower skilled workers

10. Policies that would Enables Sierra Leone to Exploit their
Comparative Advantage and Increase their Participation in GVCs.
•Internal policy to mobilize capital labour and natural resources to attract
GVCs.
•To create the enabling environment to attract Foreign Direct
Investment(FDI), including the following:
political stability and security.
Legal and regulatory environment conducive to business.
Large domestic market.
Macroeconomic stability.
Supplies of educated and skilled labour
Good physical infrastructure

11. Policies that Enhance Participation and Promote Upgrading.
Among others, the key policies are as follows:
• Policy to invest in human capital.
• Policy to effectively manage the supply of land for business.
• Policy to connect small and medium enterprises to lead firms.
• Policy to ensure quality assurance in the production of goods and services.
• Policy to grant concessions to leads firms by the government.
• Policy to improve custom service
• Policy to improve transport and port infrastructure, and the management
of ports, break up transport cartels in order to improve connectivity across
cities and countries.

12. Policies that Spread the Gains of GVC Participation Across Society,
Especially to Women, Young Workers, and Lower Skilled Workers.
Among others, the policies includes the followings:
• Policy to promote the environment for access to quality child care, safe
transport, as well as ensuring that women are protected from unfair
treatment and discriminatory practices in the workplace.
• Policy to support women with access to information about employment
opportunities.
• Policy to breakdown social norms that inhibit women from working
outside the home.
• Policy to help students(formal and Informal) transition from study into
work.
• Policy to avoid low wage traps that can result from GVC participation.

13. Adjustment Policies for Workers Displaced by Technology, Trade,
and the Expansion of GVCs.
Among others, the policies include the followings:
• Policy to allow no trade-offs when it comes to protecting workers
and the environment.
• Policy to help to address GVC shift adjustment cost.
• Policy on aligning GVC activities with the competencies of your
country's workers especially poor workers.
• Policy to facilitate access to benefits from lead firms for displaced
women and youths.

14. Thank you.