Decent Work and GVC-based Industriatlization in Ethiopia

Abstract:

Sub-Saharan African (SSA) governments are looking for sectors that can drive inclusive growth in the context of large youth populations, high under- and unemployment, and previous growth trajectories that did not create enough jobs or catalyze economic transformation. At the same time, global apparel buyers are looking to SSA as the last ‘cheap labor’ frontier for labor-intensive apparel production given that Asia’s dominance in apparel exports is set to decline, driven by increases in production costs and a turn to higher technological sectors and domestic markets. The shift of apparel production to SSA is often described as a win-win situation for global buyers and African governments, firms and workers: finding new low-cost sourcing locations, and spurring inclusive industrialization and growth in SSA countries. Yet, evidence from other regions with apparel export industries shows that export firms face intense competitive pressures and that jobs are characterized by very low wages and problematic working conditions. The project examines whether SSA countries can harness the opportunities of participating in the apparel global value chain (GVC) to drive industrialization that is sustainable both from the perspective of supplier firms and workers.