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Working Paper

Is a ‘Factory Southern Africa’ Feasible? : Harnessing Flying Geese to the South African Gateway

TARIFFS CAPITAL MARKETS AUTOMOBILE ECONOMIC GROWTH POLICY ENVIRONMENT AIRPORT TRANSPORT INFRASTRUCTURE TRANSPORT CORRIDORS INTERNATIONAL AIRPORT TRANSPORTATION COSTS PRODUCERS PROPERTY RIGHTS ECONOMIC PROCESSES POLITICAL ECONOMIES TRANSPORT INFRASTRUCTURES POLITICAL ECONOMY REVENUES INCENTIVES EQUILIBRIUM LORRIES MODELS EMPIRICAL STUDIES RAILWAY LINES TRAFFIC TAX AIRPORTS WEALTH AIR FLIGHT CONNECTIONS OLIGOPOLY DEVELOPED COUNTRIES EMPIRICAL ANALYSIS ECONOMIC ACTIVITY DEVELOPMENT ECONOMIC DYNAMICS ROAD REGIONAL TRANSPORT COSTS RAIL TRANSPORT OIL TRAINING RAIL LINK TRANSPORT POPULATION GROWTH CAPITAL FORMATION MOBILITY AIR CONDITIONING OPTIONS RAIL COMPANY QUOTAS TRANSPORT OF GOODS MARKETS AIR CARGO TECHNOLOGY TRANSFERS ECONOMIC CHANGE ECONOMIC POLICIES NATURAL RESOURCES METALS TRANSPORT POLICY EFFICIENCY INFRASTRUCTURE TAXES AUTOMOBILES INFRASTRUCTURE INVESTMENT RESOURCES UNEMPLOYMENT TRANSPORT NETWORK DRIVING CONGESTION TRANSPORTATION TRANSIT WAGES POLICIES TRANSPARENCY CHEMICAL INDUSTRY VALUES CARS VALUE LAND TRANSPORT POLICY MAKERS CREDIT QUALITY STANDARDS TRAINS MINES SURFACE TRANSPORT POPULATION DENSITY INTERMEDIATE GOODS PROPERTY TRANSACTION COSTS ENVIRONMENT INFRASTRUCTURE PROJECTS RAILWAY PORT INFRASTRUCTURE ECONOMICS AUTOMOTIVE SECTOR BASIC METALS BRIDGE ROADS ECONOMIC DEVELOPMENT TRADE MARITIME TRANSPORT RAILWAYS AIR TRANSPORT LAND ECONOMIES OF SCALE INVESTMENT COMPARATIVE ADVANTAGE COAL HIGH TRANSPORT RAIL LANES HIGH UNEMPLOYMENT INVESTMENTS RISK MANAGEMENT RECYCLING AIRWAYS INTERMEDIATE INPUTS TRANSPORT COSTS ENVIRONMENTAL POLICY INSTRUMENTS ROAD TRANSPORT STRUCTURAL UNEMPLOYMENT INFRASTRUCTURES DEMOGRAPHICS PRICES ECONOMIES BOTTLENECKS PRODUCTION PROCESSES COMPETITION
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World Bank, Washington, DC
Africa | Southern Africa
2016-03-01T20:16:36Z | 2016-03-01T20:16:36Z | 2016-01

The countries comprising the Southern African Customs Union (SACU) are currently not very integrated into global value chains (GVCs), potentially missing out on important development opportunities. Accordingly, we explore high level options for promoting their integration. Given East Asia’s spectacular success with integrating into GVCs, we first assess the probability that SACU can copy their flying geese pattern. That was initiated by Japanese multinational corporations (MNCs) investing in successive East Asian countries thereby becoming the lead geese, to be joined subsequently by MNCs from other countries. We argue that the conditions for pursuing a flying geese approach are difficult to replicate in SACU. Therefore, we proffer and explore the proposition that South Africa could serve as the gateway for harnessing MNC geese flying from third countries into the SACU region, in time propelling regional development through knowledge and investment spillovers, and serving as a conduit into GVCs. However, there may be substantial obstacles to deepening this integration potential. Other African gateways are emerging as alternatives to South Africa. And some SACU governments would prefer to build regional value chains (RVCs) rather than prioritize GVC integration. We argue that RVCs are complements to GVCs. SACU countries, excluding South Africa, may not attract many world leading MNCs since their markets are small, but could attract smaller regional players from South Africa or elsewhere. Thus building RVCs in the short run could assist with integration into GVCs in the longer run. Overall, this requires harnessing South African and MNC geese to the South African gateway, in a mutually complementary strategy.

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