Chapter 1 immerses the reader into the Za'atari refugee camp. Situated in Jordan just seven and a half miles south of the Syrian border, the camp – a two-square-mile rectangle divided into twelve districts – is nestled in the very heart of the Middle East. Here, in the desert heat, a community was born in the swell of crisis. The reader is immediately introduced to the book's three featured Syrian women entrepreneurs – Yasmina, Asma, and Malak – in their elements. Yasmina, a salon and wedding dress shop owner, is relaxing in the salon with her family as her client celebrates a beautiful wedding a couple of districts away. Asma, a social entrepreneur and teacher, is reading a story to a group of children – including three of her own – in her trailer, which she has converted into a magical hideout for the children. Malak, an artist, is putting the finishing touches on a series of drawings for an event at a youth center that is meant to encourage the girls in Za'atari to push against the harmful practice of child marriage.

This chapter explores the relations between the structure of global value chains (GVCs) and labour employment in developing countries where downstream suppliers are largely concentrated. As laid out in the introduction to this book, this starts with knowledge, usually protected under intellectual property rights (IPRs), creating oligopolies or monopolies with degrees of monopoly in the product markets in the headquarter economies of lead firms. In an unequal world—unequal in the distribution of knowledge, incomes, and wages—there is the possibility of utilizing these differences to increase the profits of product monopolies through the disintegration of production in GVCs.

GVCs have embedded within them a distribution of knowledge among different GVC segments: knowledge-intensive segments in pre- and post-production tasks, which are protected under IPRs in lead firms; and production knowledge distributed among many suppliers in developing economies that is not protected under IPRs. The monopolies on the product market then appear as monopsonies in input markets, where a few buyers can bargain with many suppliers to the buyers’ advantage. In the resulting distribution of value within the value chain, the lead firms earn rents (or super profits), while the suppliers just earn competitive profits.

Before proceeding, let us revisit our terminology, as clarified in the introduction, once again. The technical term for a market with a few buyers and many suppliers is an oligopsony, while that for a market with a few sellers and many buyers is an oligopoly. Not only is oligopsony a somewhat clumsy word, but it is not very commonly used. The term ‘monopsony’ can be extended to describe a market where a few players on one side deal with many players on the other side. In this way, there are brands with degrees of monopoly in the product market and also degrees of monopsony in the input market.

The relationship between lead firms and suppliers has been analysed under the rubric of value chain governance (Gereffi, Humphrey, and Sturgeon 2005). The theory of supplier firm governance divides them into three types of governance, in which we emphasize differentiation based on the knowledge level of the tasks performed. Suppliers in captive governance are characterized by the low-knowledge level of tasks performed, as seen in the manufacture of garments or shoes. There is an intermediate level of knowledge in supplier firms in modular governance, as seen in automobile and electronics assemblies.

The Statute of 13 Elizabeth originally appeared merely to prohibit a debtor from fraudulently conveying assets in order to defeat creditors, but it served as the fountainhead of many important principles in American commercial law. Chapter 1 shows how this law came to be applied to negotiations among creditors and their common debtor. This chapter explores how it operated in the wake of the financial failure of Robert Morris at the end of the eighteenth century. Robert Morris had been one of the richest and most prominent men in the country, but he failed spectacularly and pulled many other once successful merchants down with him. This financial catastrophe drew parties to the courthouse, where the judges began with first principles.

INTRODUCTION

Even with all the progress made over the last few decades, the United Nations Development Programme (UNDP) has reported that widespread disparities remain in human development and continue to widen across many dimensions and regions (UNDP, 2019). The digital divide, or lack of universal affordable digital connectivity, is one manifestation of this trend. As depicted in Figure 3.1, gains have occurred in basic capabilities (UNDP, 2019). As with other measures of human development, those at the bottom have made advances in the basics of Internet access, such as basic mobile connectivity and limited Wi-Fi kiosk access. However, divergence appears in enhanced capabilities, including unlimited data consumption on high-speed mobile and fixed connections at home and access to cloud-based productivity tools. Gaps in enhanced capabilities exceed those in the basic ones, and gaps have continued to rise.

With rapid progress in technologies, digital inequality runs the risk of widening at an accelerating pace over time. This undermines the achievement of fundamental freedoms to make life choices. As with income inequality and other indicators of human development, reversing trends towards digital inequality calls for urgent steps in the near future. The foundational role of connectivity in human development has found wider recognition in recent years (UNDP, 2019; Broadband Commission, 2020a). Universal connectivity now appears as a fundamental element of an inclusive and sustainable world – for improving the quality of education and health care, standards of living, personal safety, freedom of choice and overall life satisfaction. One cannot achieve the United Nations (UN) Sustainable Development Goals (SDGs) without universal affordable broadband availability. The global COVID-19 pandemic has only amplified the importance of connectivity for social and economic inclusion, including access to education, healthcare, remote work and political participation. COVID-19's impact on childhood education has proven particularly acute.

With its tremendous economic and cultural diversity, the Asia and the Pacific Region (APR) very much exemplifies what we see globally on broadband availability and adoption. The data show that the APR has made significant progress over the last decade increasing the availability and affordability of Internet connectivity, but more than half of people in the APR remain offline, and fixed and mobile broadband remains unaffordable in most APR countries.

This chapter focuses upon retail merchants and their suppliers at the start of the twentieth century. When small retailers at the start of the twentieth century encountered trouble, it fell to the credit professionals who worked for their faraway and unpaid suppliers to sort things out. These credit men, as they called themselves, did not tolerate debtors whom they deemed unworthy, but they believed that it was appropriate to give some debtors a second chance. Their solicitude for these “worthy debtors” combined notions of honor and decency with self-interest. They pressed for legal reforms to provide a check against the forces that interfered with their efforts to reach a “friendly adjustment” of debt. In the process, they changed what behavior between debtor and creditor was acceptable and what was not.

Chapter 12 features the three entrepreneurs discussing their hopes for the future. Despite its progress, Za'atari still faces significant challenges in terms of basic resources and opportunities. So each entrepreneur represents a different hope. Yasmina, as the oldest of the group, discusses the ultimate hope within residents: that there will be lasting peace in Syria and they can return home. Asma considers another hope many have: resettlement to new communities. She talks about her potential resettlement to Canada after recently being interviewed at the embassy in Amman, and what it would mean for her children to have more consistent, higher quality education. Malak discusses the hope that, even if she is to remain in Za'atari for long, it will be better resourced so all children will have the opportunity to realize their God-given gifts. Her most recent painting of a woman, covered in vibrant colors and looking upward, represents this hope – as she accepts her life in Za'atari for now and sees her purpose as living out her gifts boldly as a role model for the children around her. In this spirit, the book ends with a poem by Asma about the hopes and dreams of Za'atari.

INTRODUCTION

The first generation of East Asian newly industrializing countries and territories (NICs-1), including Hong Kong SAR (China), the Republic of Korea, Singapore and Taiwan (Province of China), like Japan in the post-war period, and China and India since 1980, have raised the bar for other developing economies. Second-tier Southeast Asian NICs (NICs-2), including Indonesia, Malaysia, Thailand and Viet Nam, have not yet been able to replicate the NICs-1 long-term growth of gross domestic product (GDP) or labour productivity, partly because – barring Viet Nam – they never properly recovered from the 1997 Asian financial crisis. If Malaysia and Thailand, for example, had been able to sustain their pre-crisis growth rates into the 21st century, output per person could have reached US$18,900 and $17,000, respectively, ranking them among the most successful developing economies of the post-war period. However, because of slower growth from 2000 to 2019, Malaysia's GDP per capita was 70 per cent lower and Thailand's 50 per cent lower than prospective numbers, leaving both NICs-2 well below the $20,000 per capita threshold (Figure 5.1). Is it possible that Indonesia, Malaysia and Thailand are showing signs of an economic and productivity growth slowdown similar to the slowdowns in Argentina, Brazil, and Mexico?

The term ‘middle-income trap’ was coined by Gill et al. (2007), who predicted that growth in Asia would inevitably taper off as capital–labour ratios rose as economies approached the global technological frontier, which they define as the most advanced technology currently in use (Kharas and Gill, 2015). In countries with few or no natural resources, the trap manifests when middle-income countries are priced out of labour-intensive activities by cheap-labour competitors, but cannot yet challenge more technologically advanced countries because of lagging productivity levels. In countries rich in natural resources, the trap tends to manifest when they exhaust their merely extractive development model and do not move to processing their commodities.

Operating within mainstream new growth theory, Gill et al. view increasing returns to scale as a positive externality that stems from research and development activities outside of the firm. Although these growth models posit that research-intensive activities generate increasing returns, as single sector models they do not associate increasing returns with the level of output or investment in manufacturing.