Global value chains have had some tough years.
First, the COVID-19 pandemic created barriers and bottlenecks, especially in manufacturing. Then, Russia’s war in Ukraine further disrupted GVCs, particularly those involving agriculture and energy. With the fragility of globally dispersed supply networks now fully exposed, countries around the world are seeking to strengthen domestic or regional networks instead.
For developing economies, especially middle-income countries, the advent of deglobalization poses a new challenge. After all, some of the most successful development strategies have relied on GVCs. How can economies continue to develop — and even to reach high-income status — if that strategy is no longer viable?