Redesign Global Value Chains to address post-COVID19 challenges –Museveni

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President Yoweri Museveni; Courtesy Photo

KIGALI, RWANDA: President Yoweri Museveni has told world leaders, there is a need to redesign the Global Value Chains in post-Covid19 period to address the challenges identified.

In a statement read for him by Uganda’s First Deputy Prime Minister and Minister for East African Community Affairs, Hon. Rebecca Kadaga, the President said the Commonwealth forum could be the starting point in these efforts.

“We need to make these Global Value Chains work for all of us. The Commonwealth could help spur an industrial revolution among its members; 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. Hence, we cannot relate well to the Global value chains. Let’s have a win-win for all by adopting the best approaches to deliver the best rewards,” he said.

Kadaga was speaking at the Commonwealth Business Forum held under the theme “Ecosystems: Redesigning Global Value Chains in a post –Covid World,” at Intare Conference Centre in Kigali.

“We have for long, lived with the Global Value Chains (GVCs), seeing the international production sharing, where production is broken into activities and tasks carried out in different countries dating back to Adam Smith’s time.
We are witness to production becoming fragmented into networks across many locations, with implications for industrial development,” he said, adding the famed example attributed to Smith, where the production of a pin was divided into a number of distinct operations inside a factory, each performed by a dedicated worker.

Museveni said in the Global value chain, we see a full range of activities (design, production, marketing, distribution and support to the final consumer, etc.) that are divided among multiple firms and workers across geographic spaces to bring a product from its conception to its end use and beyond.

“Cross-border production has been made possible by the liberalization of trade and investment, lower transport costs, advances in information and communication technology, and innovations in logistics (e.g. containerization). While cross-border production may not be new, it has expanded rapidly in many industries in recent decades,” he said.

Museveni however said the Covid-19 pandemic disrupted the GVC, adversely affecting the World economy and reversing the hard earned economic gains.

“In the thick of events, we recall that Governments across the World adopted mobility restrictions that have continued in one form or another as an alternative to containing the virus.
It became a stack reminder of the vulnerabilities associated with these global value chains. We saw countries coming up with vaccine nationalism tendencies to try to serve their people before others. African countries could not access the Vaccines, and they had to go through the EU, particularly the Covax Facility and other countries that bilaterally donated to us. Uganda could not be able to place an order even if we had the money! It created a dependency on those ready to donate! he said.

Museveni said GVCs have proven resilient and will play a significant role in the recovery and have played a vital role in producing personal protective equipment and vaccine components as COVID-19 recedes. Museveni also said the global response to climate change has also created challenges for low- and middle-income countries. As high-income nations implement policies to reduce carbon emissions, less developed economies dependent on carbon-intensive GVCs will have to adapt quickly. The EU’s Green Deal, for example, could result in a 75 per cent reduction in coal imports.

“I wish to state that Global Value Chains have played an essential role in driving recovery from the Covid-19 induced global trade collapse,” he said.

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