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South Africa's weak post-apartheid trade performance has been a significant factor in its inability to create more jobs and achieve higher growth and productivity. Exports and inbound foreign direct investment as a share of gross domestic product have lagged other middle-income countries and both have declined in absolute terms in the past five years. South Africa is losing market share in many of its core export products, both because it is being outcompeted by more dynamic economies in East Asia and owing to its own supply-side and institutional constraints. This loss of global competitiveness in manufacturing has meant that more South African firms have turned to the domestic economy and to less demanding export markets in the rest of sub-Saharan Africa. While South Africa can continue growing through a primarily regionally focused strategy, these markets are small, and defaulting to the lower levels of productivity required to compete in the rest of Africa could undermine South Africa's competitiveness in the long term. This paper provides an overview of South Africa's recent trade outcomes, as well as its trade policy framework, and assesses the causes of its disappointing performance. In turn, it suggests changes to trade-related policies as well as the governance and management of these policies. The paper focuses in depth on three specific trade-related constraints: transport costs, the institutional governance of trade tariffs and export promotion, and overall economic policy uncertainty. The paper proceeds to argue that the South African government would benefit from aligning its trade strategy, commercial and economic diplomacy and industrial policy with the dual objective of providing both the engine for a "Factory Southern Africa" that encompasses the rest of the SADC region, and of being the region's gateway to the rest of the world. Since South African firms will not be able to drive this approach on their own, this necessarily means forging policies and institutions that encourage investments into South Africa and the SADC region, and working with neighbors to maximize the development of regional value chains that result from such investments.

Competitiveness and competition policy --- Export competitiveness --- Global value chains and business clustering --- Logistics --- Private sector development --- Trade facilitation --- Trade policy

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Global value chain participation affects the exchange rate pass-through to export prices and export volumes. The paper develops a partial equilibrium model of international trade with cross-border production and shows that higher participation in global value chains reduces the elasticities. Specifically, a higher share of foreign value added in exports reduces the exchange rate pass-through to export prices and export volumes. A greater share of exports that return as imports also reduces the responsiveness of export volumes to changes in bilateral exchange rates. Finally, exports of inputs that are further re-exported increase the responsiveness to the trading partner's effective exchange rate. Using a novel sector-level panel dataset with 40 countries, the analysis tests and finds strong empirical support for the theoretical predictions. The paper further shows that some sectors in some countries can even experience a decline in gross exports when their currency depreciates.

Currency Unions --- Exchange Rate --- Export Competitiveness --- Export Elasticities --- Finance and Financial Sector Development --- Global Value Chains --- International Economics and Trade --- Private Sector Development --- Private Sector Economics --- Substitution

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The paper is structured in six further sections following this introduction. Section two develops a conceptual framework, and reviews the literature on the relationship between trade integration and labor market outcomes. Section three outlines the empirical framework and data used in the analysis. Section four presents results on the relationship between overall trade integration (through exports) and labor market outcomes. Section five then focuses specifically on GVC trade, and assesses the relationship between labor market outcomes and GVC integration as a buyer and as a seller. Section six tests if select policy indicators mediate these relationships between trade integration and labor market outcomes. Finally, section seven concludes, with a summary of results and areas for future research.

Economic Theory And Research --- Export Competitiveness --- Global Value Chains And Business Clustering --- Labor Market --- Labor Markets --- Macroeconomics And Economic Growth --- Offshoring --- Private Sector Development

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Smallholder production predominates in many areas of primary food production in Indonesia. Yet, outside of oil palm and poultry, contract farming is rare as are other forms of collective action or vertical coordination. Fragmented production and market interfaces give rise to high transaction costs and problems in matching supply with downstream or consumer requirements. Yet, there is a growing body of international experience promoting multiple models to help realize some economies of scale within smallholder-based production systems and effectively addressing the aggregation and market-matching problems. These include different forms of joint farming operations, shared services, farmer organizations, contracting arrangements or partnerships with agro-enterprises, and other models. Their suitability and need for public enabling support varies depending upon the underlying circumstances. This note synthesizes experiences, lessons learned, and success factors with potential relevance for Indonesian staple food crop and horticultural production.

Agricultural Productivity --- Agricultural Sector Economics --- Agricultural Trade --- Agriculture --- Crops and Crop Management Systems --- Food Security --- Global Value Chains and Business Clustering --- Private Sector Development

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As the World Bank's 2012 Golden Growth report emphasized, the European Union, since its founding, has been a 'convergence machine,' generating wealth and a higher quality of life for the poorest in the 28 EU member states. More recently, the Growing United report highlighted that while the convergence machine still works, it is not working for everyone. And among the fault lines emerging in the convergence machine, regional inequality represents a potent threat to Europe's economic well-being, and to its social and political cohesion. In this context, Rethinking Lagging Regions highlights the nature and implications of regional inequalities in Europe and recommends how cohesion policy can be leveraged to maximize its impact on lagging regions, and on the businesses and people in these regions. The report has several key messages: regional inequalities are high and likely to rise; Europe's lagging regions are going in opposite directions, but face common challenges; cohesion policy can maximize its impact on lagging regions by explicitly targeting regional potential and equality of opportunity rather than convergence; cohesion policy priorities can be rebalanced to help deliver on regional potential; and delivery of regional policy needs to engage ever more deeply at the ground level. This report aims to contribute to the debate on the future of cohesion policy, with a specific focus on lagging regions. It calls for a further shift in the objectives of cohesion policy towards an increasingly 'region-centered' approach that aims to maximize potential in all regions, while seeking convergence of opportunities for individuals, no matter where they live.

Agricultural Productivity --- Business Environment --- Competitiveness and Competition Policy --- Demographics --- Export Competitiveness --- Global Value Chains and Business Clustering --- Inequality --- Innovation --- Labor Markets --- Macroeconomics and Economic Growth --- Poverty --- Poverty Reduction --- Private Sector Development --- Social Protections and Labor