5 ms·

If you find that interesting, you may want to look into why Switzerland is the 2nd largest exporter of coffee in the world, despite never growing a single bean

by grecy 3y ago

If you find that interesting, you may want to look into why Switzerland is the 2nd largest exporter of coffee in the world, despite never growing a single bean [1]. The powers that be absolutely will not allow countries like Ethiopia to process the coffee they grow any more than they will allow Ivory Coast to process cashews. [1] https://www.statista.com/statistics/1096413/main-export-countries-for-coffee-worldwide/ https://www.statista.com/statistics/1096413/main-export-coun...

foobarian 3y ago
But why do they allow Vietnam to process cashews? How is Vietnam different?
- deleted 3y ago
  [deleted]
- Maken 3y ago
  After they expelled the French and Americans, and then the Eastern Bloc collapsed, they were relatively free of foreign influence to develop their country as they saw fit.
  - alephnerd 3y ago
    > expelled the French and Americans And invited them back with the Moi reforms in 1986. > relatively free of foreign influence They got a massive FDI influx from Singapore, Thailand, South Korea, Japan, Taiwan, and China - especially after China began boycotting Korean, Japanese, and Taiwanese firms in the 2013-2017 period. This is why VN's first SEZ (Vietnam-Singapore Industrial Park) was devoted to food processing. A leadership crisis has also been brewing in the VCP for that reason, as the Southern cadre leans pro-SK and the Northern cadre leans pro-PRC.
    - foobarian 3y ago
      So maybe the difference with CdI then is not being adjacent to PRC and a few other industrial/financial powerhouses. Tough nut to crack.
      - alephnerd 3y ago
        The difference is CdI had a destructive civil war from 2004 to 2011, and failed political and economic institutions in the 1980s and 1990s. Félix Houphouët-Boigny created a command economy that rested on commodity extraction (yes, command economies aren't only a Communist thing). On the other hand, countries like Vietnam, China, India, Malaysia, Indonesia, and South Korea listened to the IMF in the 1990s and worked on reforming institutions. CdI's economy only recently started to get on track after Ouattara came to power. It didn't hurt that he is an actual trained economist who has worked at the IMF and WB. > being adjacent to PRC French investment in the CdI in the 1960-70s is similar to Chinese and Korean investment in Vietnam in 2023, and American, Japanese, and Korean investment in China in the 1990s and 2000s The PRC's GDP per Capita didn't catch up to CdI until 2005 when their civil war entered full gear. The only difference is CdI's institutional capacity was crap compared to plenty of similarly poor Asian countries in the 1990s (China, Vietnam, India) The Phillipines is a similar story as well btw. In 1990 Phillipines and Turkiye had the same standard of living. In 2023, Türkiye's HDI caught up with Hungary and most of Central Europe, while Phillipines fell behind Vietnam and Indonesia - two countries that have historically been much poorer than PH.
alephnerd 3y ago
> The powers that be absolutely will not allow countries like Ethiopia to process the coffee Yeah....no. Ethiopia doesn't do processing because there isn't enough capital or stability to justify a multimillion investment in processing. Vietnam was in the same position developmentally as Ethiopia today in the 1990s, but had a relatively stable government that began working on expanding credit and entrepreneurship. Ethiopia literally had a civil war barely a year ago, a massive civil war in the 90s, and multiple insurgencies in between.
- wolverine876 3y ago
  Maybe it's both. Western countries have long protected their domestic agricultural industries (while calling for free trade for the products they want to export).
  - alephnerd 3y ago
    How does it explain Kenya, Indonesia, Vietnam, and Tanzania's foray into food production? There just isn't capital in Ethiopia. It's literally one of the least developed countries on earth. The country had a civil war from 1974-1991 that killed 1.7 million people, a civil war/war of independence by Eritrea from 1961-1991 that killed 225k people, a second war with Eritrea from 1998-2000 that killed 300-500k people, a civil war from 2020 to today that has killed around 200k-600k people, 2 wars with Somalia that killed 35k people, and a number of ethnic insurgencies In 2000, it's HDI was 0.292 and in 2021 it barely reached 0.498, which is where Vietnam was in the 90s and barely above Afghanistan and the DRC (I'd have compared Ethiopian numbers from the 90s but those don't exist due to the wars above). It's human capital is some of the least developed in the world. They will get more development in food processing (and in general) because the UAE has been cultivating Abiy, but out of all commodities producers, they are one of the less developed ones. > protected their domestic agricultural industries Not at the processing level. Domestic agricultural tariffs are meant to protect commodity prices for farmers, not the processing capacity. Most low level food processing is now Asian and Brazilian, with multibillion conglomerates like CP Group (Thailand), IndoFood (Indonesia), Mayora (Indonesia), Golden Hope (Malaysia), Kulim (Malaysia), ITC (India), Hindustan Unilever (India), COFCO (China), Foshan Haitian (China), and dozens of SOEs from those countries. You need an industrial base to process food at an industrial scale.
mschuster91 3y ago
> The powers that be absolutely will not allow countries like Ethiopia to process the coffee they grow any more than they will allow Ivory Coast to process cashews. While there are still remnants of colonialism at play, in theory capitalism would prefer to do processing as near to production as possible... but that's hard to do in Ethiopia or most other African countries with a really unreliable electricity grid [1]. Ivory Coast has it different - they massively built out power generation [2], but it takes time and money for investments into processing facilities flow in. Additionally, political stability is one of the largest issues impeding many African countries. Many of them are actively at war, undergo civil war or separatist movements, are governed by dictators or went through prolonged periods of instability. All of this isn't exactly helpful when looking for investors that have to invest millions of dollars up-front - investors want the guarantee that there won't be some government nationalizing away their investment or war destroying it. [1] https://www.sinalda.com/world-voltages/africa/voltage-ethiopia/ https://www.sinalda.com/world-voltages/africa/voltage-ethiop... [2] https://www.worldbank.org/en/news/feature/2020/07/23/the-secret-to-cote-divoires-electric-success https://www.worldbank.org/en/news/feature/2020/07/23/the-sec...
inglor_cz 3y ago
This sounds like conspiracy theory. Plenty of "countries like Ethiopia" were able to bootstrap their economy since the 1950s, conditional on providing stable environment for investors. You yourself wouldn't invest your own money into an authoritarian country with an unreliable power grid and a penchant for useless wars, civil or external. Well, other people think along the same lines. No need to drag sinister powers that be into the calculation.
midasuni 3y ago
How do you explain kenya and coffee then?
doikor 3y ago
Ground coffee doesn't stay that good for very long so roasting and grinding it close to the end user is preferred. Beans do stay okish for a year or so if in a sealed package.
southernplaces7 3y ago
Why don't you specifically name these "powers that be" and show some evidence for their meddling? In reality, nobody's really stopping countries from doing these things locally except the economic dynamics of a given industry and their own bad internal policies. Contrary examples of countries bootstrapping themselves into enough sucess to make their economies more advanced for large investments in sophisticated crop and other industries abound. Your vague claim about the powers that be is (I suspect) a common and popular leftist trope even today that a vast global, neocolonial conspiracy of mysterious western power centers crushes the poor helpless third world into oppresion at every turn and is responsible for its many dysfunctions, while often conveniently ignoring contrary examples of success stories or internal sources of fault and problems. A curious detail of this notion is just how implicitly condescending its proponents assumptions about agency and self-administration with people and institutions in these developing country are.

by grecy 3y ago

foobarian 3y ago

But why do they allow Vietnam to process cashews? How is Vietnam different?

deleted 3y ago
[deleted]
Maken 3y ago
After they expelled the French and Americans, and then the Eastern Bloc collapsed, they were relatively free of foreign influence to develop their country as they saw fit.
- alephnerd 3y ago
  > expelled the French and Americans And invited them back with the Moi reforms in 1986. > relatively free of foreign influence They got a massive FDI influx from Singapore, Thailand, South Korea, Japan, Taiwan, and China - especially after China began boycotting Korean, Japanese, and Taiwanese firms in the 2013-2017 period. This is why VN's first SEZ (Vietnam-Singapore Industrial Park) was devoted to food processing. A leadership crisis has also been brewing in the VCP for that reason, as the Southern cadre leans pro-SK and the Northern cadre leans pro-PRC.
  - foobarian 3y ago
    So maybe the difference with CdI then is not being adjacent to PRC and a few other industrial/financial powerhouses. Tough nut to crack.
    - alephnerd 3y ago
      The difference is CdI had a destructive civil war from 2004 to 2011, and failed political and economic institutions in the 1980s and 1990s. Félix Houphouët-Boigny created a command economy that rested on commodity extraction (yes, command economies aren't only a Communist thing). On the other hand, countries like Vietnam, China, India, Malaysia, Indonesia, and South Korea listened to the IMF in the 1990s and worked on reforming institutions. CdI's economy only recently started to get on track after Ouattara came to power. It didn't hurt that he is an actual trained economist who has worked at the IMF and WB. > being adjacent to PRC French investment in the CdI in the 1960-70s is similar to Chinese and Korean investment in Vietnam in 2023, and American, Japanese, and Korean investment in China in the 1990s and 2000s The PRC's GDP per Capita didn't catch up to CdI until 2005 when their civil war entered full gear. The only difference is CdI's institutional capacity was crap compared to plenty of similarly poor Asian countries in the 1990s (China, Vietnam, India) The Phillipines is a similar story as well btw. In 1990 Phillipines and Turkiye had the same standard of living. In 2023, Türkiye's HDI caught up with Hungary and most of Central Europe, while Phillipines fell behind Vietnam and Indonesia - two countries that have historically been much poorer than PH.

alephnerd 3y ago

> The powers that be absolutely will not allow countries like Ethiopia to process the coffee Yeah....no. Ethiopia doesn't do processing because there isn't enough capital or stability to justify a multimillion investment in processing. Vietnam was in the same position developmentally as Ethiopia today in the 1990s, but had a relatively stable government that began working on expanding credit and entrepreneurship. Ethiopia literally had a civil war barely a year ago, a massive civil war in the 90s, and multiple insurgencies in between.

wolverine876 3y ago
Maybe it's both. Western countries have long protected their domestic agricultural industries (while calling for free trade for the products they want to export).
- alephnerd 3y ago
  How does it explain Kenya, Indonesia, Vietnam, and Tanzania's foray into food production? There just isn't capital in Ethiopia. It's literally one of the least developed countries on earth. The country had a civil war from 1974-1991 that killed 1.7 million people, a civil war/war of independence by Eritrea from 1961-1991 that killed 225k people, a second war with Eritrea from 1998-2000 that killed 300-500k people, a civil war from 2020 to today that has killed around 200k-600k people, 2 wars with Somalia that killed 35k people, and a number of ethnic insurgencies In 2000, it's HDI was 0.292 and in 2021 it barely reached 0.498, which is where Vietnam was in the 90s and barely above Afghanistan and the DRC (I'd have compared Ethiopian numbers from the 90s but those don't exist due to the wars above). It's human capital is some of the least developed in the world. They will get more development in food processing (and in general) because the UAE has been cultivating Abiy, but out of all commodities producers, they are one of the less developed ones. > protected their domestic agricultural industries Not at the processing level. Domestic agricultural tariffs are meant to protect commodity prices for farmers, not the processing capacity. Most low level food processing is now Asian and Brazilian, with multibillion conglomerates like CP Group (Thailand), IndoFood (Indonesia), Mayora (Indonesia), Golden Hope (Malaysia), Kulim (Malaysia), ITC (India), Hindustan Unilever (India), COFCO (China), Foshan Haitian (China), and dozens of SOEs from those countries. You need an industrial base to process food at an industrial scale.

mschuster91 3y ago

> The powers that be absolutely will not allow countries like Ethiopia to process the coffee they grow any more than they will allow Ivory Coast to process cashews. While there are still remnants of colonialism at play, in theory capitalism would prefer to do processing as near to production as possible... but that's hard to do in Ethiopia or most other African countries with a really unreliable electricity grid [1]. Ivory Coast has it different - they massively built out power generation [2], but it takes time and money for investments into processing facilities flow in. Additionally, political stability is one of the largest issues impeding many African countries. Many of them are actively at war, undergo civil war or separatist movements, are governed by dictators or went through prolonged periods of instability. All of this isn't exactly helpful when looking for investors that have to invest millions of dollars up-front - investors want the guarantee that there won't be some government nationalizing away their investment or war destroying it. [1] https://www.sinalda.com/world-voltages/africa/voltage-ethiopia/ https://www.sinalda.com/world-voltages/africa/voltage-ethiop... [2] https://www.worldbank.org/en/news/feature/2020/07/23/the-secret-to-cote-divoires-electric-success https://www.worldbank.org/en/news/feature/2020/07/23/the-sec...

inglor_cz 3y ago

This sounds like conspiracy theory. Plenty of "countries like Ethiopia" were able to bootstrap their economy since the 1950s, conditional on providing stable environment for investors. You yourself wouldn't invest your own money into an authoritarian country with an unreliable power grid and a penchant for useless wars, civil or external. Well, other people think along the same lines. No need to drag sinister powers that be into the calculation.

midasuni 3y ago

How do you explain kenya and coffee then?

doikor 3y ago

Ground coffee doesn't stay that good for very long so roasting and grinding it close to the end user is preferred. Beans do stay okish for a year or so if in a sealed package.

southernplaces7 3y ago

Why don't you specifically name these "powers that be" and show some evidence for their meddling? In reality, nobody's really stopping countries from doing these things locally except the economic dynamics of a given industry and their own bad internal policies. Contrary examples of countries bootstrapping themselves into enough sucess to make their economies more advanced for large investments in sophisticated crop and other industries abound. Your vague claim about the powers that be is (I suspect) a common and popular leftist trope even today that a vast global, neocolonial conspiracy of mysterious western power centers crushes the poor helpless third world into oppresion at every turn and is responsible for its many dysfunctions, while often conveniently ignoring contrary examples of success stories or internal sources of fault and problems. A curious detail of this notion is just how implicitly condescending its proponents assumptions about agency and self-administration with people and institutions in these developing country are.