Costed Action Plan for SADC Industrialization Strategy and Roadmap than where the value chain partner is a quota- or island-hopper. Regionally embedded investors from Mauritius and South Africa have had a significantly greater positive impact in other SADC states, like Madagascar or Lesotho, than those from further afield. 3.4 Other considerations There are a number of considerations to be taken on board in situating effective value chain participation. These include: 1. Key Capabilities Capabilities that matter most for GVC participation are: (i) Fixed capabilities, which cannot be changed by a country such as proximity to markets and natural resource endowments; (ii) Long-term policy variables - capabilities that can be changed gradually over a relatively long time horizon (human, physical and institutional capital); and (iii) Short-term policy variables – capabilities that can be changed directly through a policy shift or negotiations (logistics connectivity, wage competitiveness, market access, access to inputs). 2. Bottlenecks and Obstacles to Value Chain Development The impact of constraints to production and trade, such as transport costs and cross-border delays, and the time and resources necessary to overcome them will influence policymaking. 3. SME Integration into Value Chains This is a high priority across the SADC region but extremely difficult to achieve with the enhanced focus on quality and delivery times that is fundamental to value chain participation. The recent trend towards shorter and tighter value chains also militates against SME involvement (See Section IV). 4. Potential Adverse Consequences An important element of Value Chain policymaking is the requirement to assess and cost potentially adverse circumstances – environmental impacts, implications for communities, as well as health and social considerations. 5. Competition Policy and Consumer Welfare Value chain selection will be influenced by competition policy considerations as well as those relating to consumer welfare especially in such sub-sectors as foodstuffs, beverages and pharmaceuticals. 32