Are Private Sustainability Standards Obstacles To, Or Enablers of, SME Participation in Value Chains?

Global Economic Governance and IEA Kenya

Are Private Sustainability Standards Obstacles To, Or Enablers of, SME Participation in Value Chains?    |   File Size: 0 kB Downloads: 371   |   Post Date: 16 October 2017

This discussion paper examines the roles of South Africa and Kenya as regional gateways for global value chains (GVCs) coordinated by multinational corporations (MNCs), and the obstacles small and medium enterprises (SMEs) face in entering those value chains, owing to the voluntary sustainability standards (VSS) enacted by MNCs. As SMEs play a significant role in the formal and informal sector, both of which are crucial to the two countries’, and their neighbours’, economies, integrating them successfully holds developmental gains. 


Informing the approach of multilateral development banks to use of country systems

Global Economic Governance and IEA Kenya

Informing the approach of multilateral development banks to use of country systems    |   File Size: 0 kB Downloads: 384   |   Post Date: 02 October 2017

Most countries consider infrastructure development as a key enabler of development, as it spurs job creation, trade and investment. For many developing countries, multilateral development banks (MDBs) are important in addressing their infrastructure financing deficits. MDBs have historically dictated the terms of financing by prescribing rules on financial management and environmental and social safeguards, despite the presence of similar systems in the relevant countries. Increasingly, however, both MDBs and their borrowers are seeking to eliminate such extra requirements in favour of the full utilisation of countries’ own domestic systems and processes, broadly referred to as the ‘use of country systems’ (UCS). The defining benefit of greater UCS to MDBs is that it respects the sovereignty of countries by not imposing external conditionalities. UCS also promotes national ownership of development projects by increasing the involvement of domestic actors, institutions and processes, and hence increasing projects’ sustainability. At the same time, UCS can strengthen domestic systems through greater utilisation, thereby exposing deficiencies that can be corrected and eliminating the duplication of costs and efforts engendered by parallel systems. Ultimately, UCS gives developing countries a greater stake in their own development trajectory, as well as the tools to manage the process better. Yet the greater uptake of an UCS approach by MDBs and borrowers has been hampered by a number of key challenges.


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