Open AccessEndogenous Obstacles to Development in Global Value Chains: Insights From the Oil and Gas Sector
Author(s) -
Sören Scholvin
Publication year - 2020
Publication title -
afrikaspectrum/africa spectrum
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.782
H-Index - 20
eISSN - 1868-6869
pISSN - 0002-0397
DOI - 10.1177/0002039720937024
Subject(s) - upstream (networking) , oil reserves , developing country , investment (military) , work (physics) , value (mathematics) , resource (disambiguation) , fossil fuel , petroleum , economics , business , economic system , natural resource economics , economic growth , political science , engineering , mechanical engineering , telecommunications , paleontology , computer network , machine learning , politics , law , computer science , biology , waste management
The World Bank promotes integration into global value chains as the path towards development. By liberalising their respective national economies, African countries are expected to benefit from economic impulses, with more and more activities beyond resource extraction being relocated to peripheral locations and generating so-called linkages there. This analytical report focuses on the upstream oil and gas sector, showing that Africa’s hydrocarbon-rich countries do not achieve economic progress merely because of being part of global value chains. The reason for this is endogenous obstacles to investment. Services – especially in engineering and logistics – are carried out by South African firms, which bring their own equipment and staff or work in South Africa. The emerging economy therefore benefits from linkages that exploration and extraction of oil and gas in developing countries generate.