Unpacking state-led upgrading: empirical evidence from Uzbek horticulture value chain governance

Abstract

This paper brings together the Global Value Chain/Global Production Network (GVC/GPNs) and the Developmental State (DS) literature to analyze state-led upgrading. By triangulating primary and secondary data on Uzbekistan’s horticulture value chain, it provides a micro-meso analysis of how the state, by creating vertical and horizontal linkages, shaped the pace and direction of agro-industrial upgrading. It discusses how targeted macroeconomic policies enabled upgrading and argues that the state should be seen not only as a regulator, facilitator, buyer and producer within GVC/GPNs, but also as a coordinator of strategic developmental objectives beyond and across the GVCs. Drawing on a strategic-relational approach and using the concept of organisational upgrading, it shows how the state articulates the institutional context of GVC/GPNs through the establishment of financial and political partnerships with international actors to avoid predatory competition; the coordination of inter-sectorial spillovers for short and long-term collective learning and capacity building; and the creation of linkages to enable multi-dimensional and inter-temporal developmental objectives. Coordinated state interventions and a gradual approach to market reforms were instrumental in ensuring the sustainability of the economic transformation.

Keywords:

• state
• upgrading
• governance
• industrial policy
• trade
• agri-business
• GVC/GPN

Acknowledgements

I would like to thank my PhD supervisors Professor Deborah Johnston and Dr. Hannah Bargawi, Professor Ben Fine, Professor Grazia Ietto-Gillies and Les Levidow for their precious comments. I also appreciate the support I received during my fieldwork from the Agrarian University of Samarkand. A special thanks goes to the two anonymous reviewers whose comments greatly improved this manuscript.

Notes

1 Horizontal spillovers occur between firms in similar or related production. Vertical spillovers occur between firms in contractor- supplier relationships. Backward linkages take place when there is flow of information and resources between a firm and its suppliers. Forward linkages take place when investment in higher-value production is enabled.

2 For orchards, ‘returns to investment in the first year of harvest are low, as the trees produce only 4 tonnes of fruit, but it increases to 8 tonnes in the second year, 15 tonnes in the third, 20-25 tonnes in the fourth (to arrive to a maximum of 40 tonnes).

3 Presidential decrees № УП-3860, dated 14.03.2007 and № UP-4354, dated 24.08.2011.

4 According to the World Investment Report (WIR, 2012), Uzbekistan was ranked 78th/181 by the FDI Inward Attraction Index in 2011, significantly improving its 2000 position of 143.

Additional information

Funding

This research was supported by the Economics department of The School of Oriental and African Studies, University of London. The fieldwork was also supported by CEELBAS-UCL.

Notes on contributors

Lorena Lombardozzi

Dr. Lorena Lombardozzi is a Lecturer in Economics at The Open University, UK. She received her PhD from the Economics department of SOAS, University of London. Her research focuses on the role of the state in the global economy with particular reference to Transition Economies, the future of work, and social reproduction.