Whether or not actively to promote GVCs is a strategic choice for policymakers

Countries need to carefully weigh the costs and benefits of proactive policies to promote GVCs or GVC-led development strategies, in line with their specific situation and factor endowments. Some countries may decide not to promote GVC participation. Others may not have a choice: for the majority of smaller developing economies with limited resource endowments there is often little alternative to development strategies that incorporate a degree of participation in GVCs. The question for those countries is not so much whether to participate in GVCs, but how. In reality, most are already involved in GVCs one way or another. Promoting GVC participation requires carefully tailored measures which are also coherent with a country’s overall development strategy.

If countries decide to actively promote GVC participation, policymakers should first determine where their countries' trade profile and industrial capabilities stand and evaluate realistic GVC development paths. Subsequently, gaining access to GVCs, benefiting from GVC participation and realizing upgrading opportunities in GVCs requires a structured approach that covers a number of policy dimensions, including:

· embedding GVC policies within the broader development framework, including policies aimed at supporting private sector development;

· creating a conducive investment environment and building productive capacities in local firms;

· putting in place a strong environmental, social and governance framework; and

· ensuring coherent trade and investment policies.

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