Abstract
There is a growing literature on the impact of Covid-19 on commercial and labour conditions at suppliers in apparel global value chains (GVCs). Yet much less is known about the implications for suppliers operating in regional value chains (RVCs) in the global South. In this article, we focus on Eswatini, which has grown to become the largest African manufacturer and exporter of apparel to the region. We draw on a combination of firm-level export data and interviews with stakeholders before and after the Covid-19 lockdown to shed light on the influence of private and public governance on suppliers’ economic and social upgrading and downgrading. We point to the coexistence of two separate private governance structures: the first characterised by direct contracts between South African retailers and large manufacturers (direct suppliers); the second operating through indirect purchasing via intermediaries from relatively smaller producers (indirect suppliers). While direct suppliers enjoyed higher levels of economic and social upgrading than indirect suppliers before Covid-19, the pandemic reinforced this division, with severe price cuts for indirect suppliers. Furthermore, while retailers provided some direct suppliers with support throughout the crisis, this was not the case for indirect suppliers, who remain comparatively more vulnerable. In terms of public governance, the negative consequences of the lockdown on firms’ income and workers’ livelihoods have been compounded by the state’s ineffective response. Our paper contributes to the research on RVCs in the global South, enhancing our understanding of how different governance structures and external shocks affect firms’ and workers’ upgrading and downgrading prospects.
Highlights
The outbreak of the Covid-19 pandemic is having major implications for the governance of apparel global value chains (GVCs)
With a focus on Eswatini’s apparel sector, we address three main questions: (1) How do South African lead firms govern their interaction with Eswatini’s apparel suppliers? (2) What have been the implications of such governance for suppliers’ economic and social upgrading before and during the Covid-19 pandemic? And (3) what has been the role of the state’s public governance in shaping the latter? To answer these questions, we draw on interviews conducted with suppliers and key stakeholders before and during the Covid-19 pandemic
In the first part of the paper, we focus on question (1) and provide an overview of the Eswatini apparel industry in relation to its participation in regional value chains (RVCs) connected to South African retailers
Summary
The outbreak of the Covid-19 pandemic is having major implications for the governance of apparel global value chains (GVCs). While increasing attention is being paid to the implications of the pandemic for firms in the global South supplying retailers in Europe and the USA (Devnath 2020; Kelly 2020; Mirdha 2020), we know less about its impact on regional production networks connecting buyers and suppliers in developing countries In this context, scholars have used the concept of regional value chains (RVCs) to indicate inter-firm networks coordinated and governed by lead firms ‘primarily operating within one world region’ “Eswatini Apparel Value Chain During Covid-19” illustrates the impact of the pandemic on firms’ economic and social up- and downgrading, and further describes the role of public governance in shaping it.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
