BEE and the Value Chain Project Cycle
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Consideration of the enabling environment should inform each stage of a value chain development project (see figure 1). BEE constraints or opportunities may influence the selection of value chains targeted for development; an analysis of policy constraints and opportunities, which is integral to value chain analysis, can be used during the development of a competitiveness strategy to identify where and how to compete in target markets; activities leading to policy reform are often a key component during implementation; and monitoring of progress in the area of reform may lead to a reassessment of the choice of value chain should BEE constraints be so binding as to prohibit or severely limit the return on investment.
The value chain provides both a context for assessing policy barriers and a framework for organizing and prioritizing reforms. The value chain framework facilitates the identification of binding BEE constraints and the “reform selection process” framework (figure XXX) aids in the strategic prioritization of these potential reforms and an assessment of their impact on the chain’s performance. Such an assessment helps avoid ad hoc decision-making and promotes a more thorough determination of which reforms will change investment behavior. Working within the context of a value chain allows the impact of a reform to be identified and quantified. This type of analysis contrasts with others, such as national policy studies, which do not necessarily reveal the contribution of a reform to the growth of specific industries.
By contextualizing policy reform within value chains, more closely aligned constituencies and coherent advocacy groups can be readily identified. This not only in-creases the speed of reform, but reduces risk by enabling advocacy groups to engage productively with government to achieve common goals: greater competitiveness, increased exports or economic growth. Established constituencies can monitor the reform process to ensure policies are not subverted. In addition, by aligning BEE interventions with value chain development programs, implementation resources can be leveraged. While indus-try-specific reforms are clearly not the only entry point for BEE interventions, they can increase the probability of success, and inform and lay the foundation for broader reforms.
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