Untapped Opportunities in Global Value Chains: the Case of ADD Countries

This paper offers a comprehensive framework for identifying and prioritizing opportunities for export diversification and Foreign Direct Investment (FDI) attraction in the Alliance for Democratic Development (ADD) countries. Utilizing quantitative methods grounded in product and country proximity, four distinct approaches pinpoint industries with untapped potential. The analysis underscores the im-portance of both upward and downward movements in complexity to enhance participation in global value chains, and highlights key obstacles hindering these countries from capitalizing on these opportunities. Findings suggest that while some opportunities are unique to specific ADD countries, others present potential for joint research efforts or collaborative strategies. The authors caution against vertical market interventions in ADD countries and advocate for flexible provision of public goods to sup-port emerging industries. Overall, this study offers valuable insights and actionable recommendations for informed decision-making and strategic planning to promote economic growth and development in Costa Rica, Panama, and the Dominican Republic.