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Tuesday 17th of December 2019 |
A river of lost souls: the extraordinary secrets of the Thames @spectator Africa |
If you spend enough time on the Thames, you will eventually come across human remains. It is a river of lost souls, filled with suicides, battles, burials, murders and accidents, with people so poor their families couldn’t afford to bury them, or so destitute they were never missed. Their bones wash up on the foreshore in the drifts of smooth, honey-brown animal bones, the remains of 2,000 years of dining and feasting. i know this because I am a mudlark and I’ve found my fair share of lost and forgotten Londoners. Mudlarking is best described as a hobby for the archaeologically curious. Twice a day, the tidal Thames falls low enough to search the riverbed for the city’s lost and discarded objects. I let the river dictate what I find; I don’t dig or use a metal detector, I merely take what is left for me on the surface of the mud and caught among the shingle. It is a giant lucky dip, with each tide delivering new treasures and random objects. In the 15 years I’ve been chasing the tides, I’ve found countless coins and buttons, Roman hairpins, a complete Iron Age pot, medieval buckles, Tudor shoes, Georgian wine bottles and modern wedding rings, but the most sobering are the human finds. A handful of teeth, eaten away by rot, and a dirty creamy-yellow cup, a section of human skull with faint grooves and ridges on the inside where someone’s brain once pressed against it. Pink rubber gloves, old coats packed with sand, and bedraggled wigs have all stopped me in my tracks over the years, but the grey plastic brick I once found seemed innocent enough, until I picked it up. It was heavier than I expected and when I shook it, it sounded like gravel mixed with sand. I turned it over and saw just enough of a soggy white label to read: ‘Remains of the Late…’ I had found someone’s ashes. What should I do? After much thought, I dropped them back into the river to continue their journey east, even if it meant they would eventually end up permanently marooned further downstream. People are drawn to the river as a means to an end. I have found two souls that were claimed by its fast-running water and every year the river police recover around 35 bodies, 90 per cent of which are attributed to suicide. If they are not retrieved, tides and currents sweep bodies away quickly, carrying them many miles from where they first entered the water. Some are never found; they are sucked down into the mud or washed out to sea. Those that are recovered are brought back in zipped bags to a riverside mortuary on a floating pontoon in front of Wapping police station. Such is the state of many river corpses that until recently police officers were given a special allowance to search drowned bodies for clues to their identity. It is unlikely that the bones I and a fellow mudlark found this summer will ever be identified. We were close to the estuary and had just dropped off the shoreline to begin our trudge across miles of sticky grey mud when my friend saw the skull resting upside down in a shallow dip. Winkles had set up home in its crevices and sinuses and a sprig of bladderwrack was growing out of it. A rough skin of barnacles over the rich brown bone showed it had been there some time, and close by we found a single long femur and the two lower bones of an arm. All the rest had been washed away. There are rules and regulations regarding mudlarking. Anyone searching the foreshore must have a permit from the Port of London Authority (pla.co.uk). Finds of historic note should be recorded on the Portable Antiquities Scheme database (finds.org.uk); anything qualifying as treasure has to be reported by law; and the police must be informed of human remains. We took a GPS reading and called it into the police. The next day the bones were retrieved and delivered to the coroner. A week or so later a policeman was on my doorstep with a DNA kit. They needed to rule me out of the investigation and assured me that anything they took would be destroyed when it was over, so I submitted to the swab. Meanwhile, my social media pages were buzzing. Through Facebook a specialist in barnacle colonisation of human remains from Murdoch University in Perth, Australia, contacted me. If the bones proved to be as old as I thought, she was keen to get her hands on them for further study. The bones travelled north to a lab in Scotland where tests confirmed that they are at least 200 years old. It is possible, therefore, that they are those of an inmate from a prison hulk — decommissioned warships that were turned into floating jails to hold Napoleonic prisoners of war and those awaiting transportation. Conditions on board the hulks were horrific — food was scarce and disease was rife. Those who died were treated with little more respect than in life. Their bodies were rowed to nearby marshland and buried in shallow graves next to the river, and it’s not uncommon to find their bones today. Water levels are rising by about a foot every 100 years, eroding their meagre graves. But it may be possible to give this individual some of the recognition he (or she) was denied in life. I have just heard that the police have agreed to release the bones to Murdoch University, where it hopes to find out as much as possible about the person they belonged to. If there’s a facial reconstruction, I may finally get to look into the face of one of the river’s lost souls.
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30-APR-2018 :: "A new history starts now. An age of peace, from the starting point of history." Law & Politics |
The Events that took place on Friday at the truce village of Panmunjom and during the Inter-Korean Summit were breathtaking for the Hollywood Optics. The Opening Shot of Kim Jong Un surrounded by a Phalanx of North Korean Officials [later replayed as Chairman Kim sat in his Presidential Vehicle surrounded by his Ninja bodyguards] was almost as good as the opening Sequence in PT Anderson's Boogie Nights [Steadicam operator Andy Shuttleworth]. This was Cinema of the highest level which is no surprise when You consider that Kim Jong-Il the Father was obsessed with Cinema and amassed arguably the world’s largest personal film collection: over 20,000 bootlegged 35mm screening copies. Kim Jong-Il also had a penchant for Hennessy Paradis cognac and for two years in the mid-1990s, he was the world's largest buyer of Hennessy Paradis cognac, importing up to $800,000 of the stuff a year. Kim Jong-Il began his career as the head of the state’s propaganda and agitation department and its clear that Kim Jong-Un's sister Kim Yo Jong who holds the same role and evidently handles all the optics, is a chip off the old Block. Friday was tip-top Geopolitical Optics. Mike Pompeo, the newly minted US Secretary of State [His predecessor was fired via Twitter] had visited Pyongyang the previous week and pronounced; that the young North Korean leader was "a smart guy who's doing his homework"
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The Chinese Navy Is Building An Incredible Number Of Warships @CovertShores Law & Politics |
While the U.S. Navy launches a handful of AEGIS destroyers each year, the single image below of a Shanghai shipyard shows nine newly constructed Chinese warships. China’s Navy, known as the PLAN (People’s Liberation Army Navy), is modernizing at an impressive rate. And on a vast scale. A key ingredient is the construction of a fleet of large destroyers, amphibious warships and aircraft carriers. The below photo, snapped from an airplane window on December 13, and shared on social media, captures the vast scale of this construction. Other developments are not visible in the photo. It is the same shipyard where China’s mysterious sailless submarine has been constructed. Although that submarine is not clearly apparent in the photograph, it may be present in the basin. This image paints an interesting picture of Chinese naval modernization. Yet the biggest takeaway is that this shipyard is not alone. There are many yards across China which are similarly impressive. The Chinese Navy of today, and the future, is changed beyond all recognition from the Chinese Navy of the past. The world naval balance is shifting.
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21-OCT-2019 :: The New Economy of Anger Law & Politics |
Venezuela where GDP is down from $350bn in 2012 to an estimated $60bn in 2019. People have been pushed to the edge and are taking to the streets. Paul Virilio pronounced in his book Speed and Politics, “The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), in other words, a producer of speed.’’
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$NFLX NFLX: cash content spend @themarketear World Currencies |
Bernstein: "most people think you can’t grow subs without spending a lot more on programs & films. If you look at the second chart below you can see that we disagree. At $20bn annual spend, they can release a new complete series every day. Even taking into account foreign language material and a percentage of duds, this feels like enough"
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23-SEP-2019 :: Streaming Dreams Non-Linearity Netflix World Currencies |
My Mind kept to an Article I read in 2012 ‘’Annals of Technology Streaming Dreams’’ by John Seabrook January 16, 2012. “This world of online video is the future, and for an artist you want to be first in, to be a pioneer. With YouTube, I will have a very small crew, and we are trying to keep focused on a single voice. There aren’t any rules. There’s just the artist, the content, and the audience.” “People went from broad to narrow,” he said, “and we think they will continue to go that way—spend more and more time in the niches— because now the distribution lands- cape allows for more narrowness’’. And this brought me to Netflix. Netflix spearheaded a streaming revolution that changed the way we watch TV and films. As cable TV lost subscribers, Netflix gained them, putting it in a category with Facebook, Amazon, and Google as one of the adored US tech stocks that led a historic bull market [FT]. Netflix faces an onslaught of competition in the market it invented. After years of false starts, Apple is planning to launch a streaming service in November, as is Disney — with AT&T’s WarnerMedia and Com- cast’s NBCUniversal to follow early next year. Netflix has corrected brutally and lots of folks are bailing big time especially after Netflix lost US subscribers in the last quarter. Even after the loss of subscribers in the second quarter, Ben Swinburne, head of media research at Morgan Stanley, says Netflix is still on course for a record year of subscriber additions. Optimists point to the group’s global reach. It is betting its future on expansion outside the US, where it has already attracted 60m subscribers. And this is an inflection point just like the one I am signaling in the Oil markets. Netflix is not a US business, it is a global business. The Majority of Analysts are in the US and in my opinion, these same Analysts have an international ‘’blind spot’’ Once Investors appreciate that the Story is an international one and not a US one anymore, we will see the price ramp to fresh all-time highs.
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16-DEC-2019 :: Saudi Aramco's $1.96 trillion Commodities |
Aramco raised $25.6bn in the biggest-ever IPO, selling shares at 32 riyals each and valuing the company at $1.7tn, overtaking Microsoft and Apple as the most valuable listed company in the World. At the latest valuation of $1.96 trillion, Aramco is a whisker shy of Crown Prince Mohammed bin Salman's Target of $2 trillion set some four years ago. At $2tn, it is worth more than technology giants Apple [which is 2nd and worth $1.19 trillion] and Microsoft, and bigger even than the top five oil companies — ExxonMobil, Total, Royal Dutch Shell, Chevron and BP — combined. The Saudi Stock Exchange Tadawul has elevated to the seventh largest exchange in the world after the successful listing and the Post IPO Pop in the price. “It’s a great day for Saudi Arabia and the leadership of Saudi Arabia and for the people of Saudi Arabia. It’s a D-Day for Aramco, it’s a day of reckoning and vindication,” Energy Minister Prince Abdulaziz bin Salman told Reuters in Madrid.Prince Abdulaziz predicted investors who didn’t buy into the offering would be “chewing their thumbs” after missing out.“I know he is proud,” his half-brother and oil minister, Prince Abdulaziz bin Salman, said in a TV interview after the shares were successfully allocated last week. “He made us all proud because he took good decisions. These decisions, you have seen it now, have brought us a 4.6 times over-subscription.”@Amena__Bakr tweeted [The] General mood in Saudi Arabia with regards to the Aramco IPO from people I spoke to can be summarized in 3 words: vindicated, triumphant, relieved. Notwithstanding some churlish International commentary ''At every turn, the crown prince and his advisers have sought to determine the price of the offering rather than leave it to the market: wealthy Saudi families have been pressured to buy shares; banks have had to issue loans to retail investors; funds in the kingdom and regional allies, including Abu Dhabi, were asked to bolster the sale after plans to market the listing globally were abandoned. The size of the original stake had to be scaled back to 1.5 per cent'' [Financial Times].The comments by the Financial Times counterintuitively speak to the sharp and smart moves by the Saudi Authorities. This is a singular triumph for the Kingdom, The Crown Prince and his Team. It was precisely correct to limit the supply of shares [1.5%] in order to maintain a structure where Demand outstripped Supply. This is Lesson 101 in the business of IPOs. It was precisely correct to sell shares into strong Hands. Your own Nationals and Sovereign Wealth Funds from the Neighbourhood represent Strong Hands. Affording leverage versus a security with a proposed $ dividend of 3.75% is a risk adjusted No-Brainer for the Banks. It would have been plain irresponsible to have done anything differently. Why on Earth would you sell more shares than the market could absorb into International Markets where Short Sellers would have a ''Boondoggle'' That would have been a little insane. The Saudi Authorities have captured the bulk of the value addition from the listing. Limiting transaction Fees to below $70m was also clever business and I am sure has been a Catalyst for some of the churlish commentary by those who were salivating at the prospect of hundreds of millions dollars of fees. This was optimal stewardship of the public Purse, plain and simple. Furthermore, selling shares in your home market and catapaulting the Tadawul to the seventh largest Exchange in the World is also optimal. No Country in the World is truly sovereign unless it has ownership of its own capital markets. The Kingdom has parlayed itself into the bulge-bracket via the Aramco listing. That is a significant achievement and a crystallising of a One-Off opportunity. @DaniloOnorino was quoted as follows “This is the Ferrari of the oil companies” and if you want to buy this Ferrari, You need to go to Riyadh and that's the final overarching point.
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"Clearly, this is not an ordinary slowdown. It is India's Great Slowdown, where the economy seems headed for the intensive care unit," Subramanian said @asiatimesonline Emerging Markets |
Subramanian said the Indian economy is now experiencing a “second wave” of the Twin Balance Sheet crisis, which is behind what he terms a “Great Slowdown.” He described the crisis as debts accumulated by private corporates becoming the non-performing assets of banks. According to Subramanian, the first wave of this crisis happened when bank loans extended to steel, power and infrastructure sector companies during the investment boom of 2004-11 turned bad. The second crisis is largely a post-demonetization phenomenon involving non-banking financial companies, or shadow banks and real estate firms. After high-value currency notes were banned, considerable amounts of cash made their way to banks, who lent a major part of that to shadow banks. They channeled this money to the real estate sector. By 2017-18, the shadow banks were accounting for roughly half the estimated 5,000 billion rupees (US$70.6 billion) of outstanding real estate loans. Subramanian said the collapse of the country’s largest shadow bank, IL&FS, in September 2018 was a “seismic event” which was responsible for “prompting markets to wake up and reassess the entire NBFC (non-bank financial company) sector.” What the markets discovered was profoundly disturbing. A lot of NBFC lending in the recent period was concentrated in one particular industry – real estate – which itself was in a precarious situation. At the end of June 2019, the total number of unsold houses and flats in the top eight cities was almost one million, valued at 8 trillion rupees ($113 billion), or the equivalent to about four years of sales. Once the extent of their exposure to real estate became known after IL&FS went belly-up, banks, as well as mutual funds, virtually stopped lending to NBFCs. “In some ways, this may have been India’s version of the US housing bubble,” Subramanian and Felman argue. Worse, it has created a new wave of stress for banks, some of whose credit to shadow banks amount to 10-14% of their loan books. With banks turning cautious – on top of fund-starved NBFCs that had emerged as a key source of lending for small businesses and consumer durable purchases in the post-demonetization period – the flow of commercial credit has collapsed from a peak of 20 trillion rupees in 2018-19 to “virtually nothing” in the first six months of this fiscal year. Subramanian and Felman say India is now facing a situation of an unresolved legacy balance sheet problem along with a fresh crisis, both of which have pushed the economy into a downward spiral. The paper says high rates and little credit are causing the economy to slow, thereby intensifying the stress on the corporate sector and on the financial system itself. This has made the financial sector exercise greater caution while lending. The current slowdown, they note, is worrisome, not only because gross domestic product growth has slowed to 4.5% in the second quarter of 2019-20. Even more distressing is the disaggregated data. “The growth of consumer goods production has virtually ground to a halt, production of investment goods is falling. Indicators of exports, imports and government revenues are all close to negative territory. These indicators suggest the economy’s illness is severe … [this] slowdown seems closer to the 1991 balance of payments crisis,” they stated. Second quarter growth of 4.5% was propped up by a 15.64% increase in government expenditure. If that component is left out from gross domestic product, the economy actually grew 3.05%. This non-government part – private consumption expenditure, investment and net exports – forms 87-92% of the economy. The crisis in 1991 mentioned by Subramanian is considered the worst in independent India’s economic history. The country ran large deficits, accumulated over a long period of time, and as a result faced the balance of payment. India had to pledge gold reserves, take loans from the IMF and carry other structural adjustments to its economy, sponsored by the IMF and World Bank. The country also changed its economic policies with a greater emphasis on private sector participation and did away with many controls. Various tax reforms were carried out with a view to promoting investment. Former prime minister Manmohan Singh, the finance minister during that period, was instrumental in framing the new economic policies, which helped the country come out of the crisis as a stronger and more resilient economic power.
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'Music to Putin's ears': Russian forces shoot down US drone @newscomauHQ Africa |
The Pentagon has accused Russian troops of targeting one of its surveillance drones close to the Libyan capital of Tripoli last month. The drone was watching on as a battle for control over the city began to unfold. The US Pentagon’s Africa Command has issued a statement saying an unarmed US surveillance drone was shot down near Libya’s capital on November 21 by Russian weapons. Now, it wants the highly sensitive wreckage back. US Army General Stephen Townsend says Russian troops are refusing to return it. “They say they don’t know where it is, but I am not buying it,” General Townsend told Reuters at the weekend. The circumstances of the incident are confused. But both General Townsend and his spokesman Colonel Christopher Karns have attempted to excuse it as accidental. Townsend said the Russians “didn’t know it was a US remotely piloted aircraft when they fired on it”. Colonel Karns stated the air-defence gunners opened fire after “mistaking it for an opposition aircraft”. This is possible. Libya has become a hive of combat drones in the past year. Cheap Turkish and Chinese-made devices are now swarming over the battlefields. Above them loiter larger, more powerful, machines controlled by US and French forces. Now, advanced Russian drones have joined the fray. It’s created a scenario where General Townsend is not just worried about his drones. He’s concerned at the impact fresh Russian forces are having on the civil war. “This highlights the malign influence of Russian mercenaries acting to influence the outcome of the civil war in Libya, and who are directly responsible for the recent and sharp increase in fighting, casualties and destruction around Tripoli,” he said. In recent months, Russia has surged state-backed mercenaries into Libya to assist the Libyan National Army. This Libyan faction is under the control of Field Marshal Haftar, who is also backed by the United Arab Emirates, Saudi Arabia, Egypt and France.
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Highest GDP per capita in current US$ (2018) - Sub-Saharan Africa: Source: World Bank Africa |
Seychelles 16,433.9 Mauritius 11,238.7 Equatorial Guinea 10,174.0 Botswana 8,258.6 Gabon 8,029.8 South Africa 6,374.0 Namibia 5,931.5 Eswatini 4,140.0 Cabo Verde 3,654.0 Angola 3,432.4 Source: World Bank
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Keeping Ethiopia's Transition on the Rails @CrisisGroup Africa |
Clashes in October 2019 in Oromia, Ethiopia’s most populous region, left scores of people dead. They mark the latest explosion of ethnic strife that has killed hundreds and displaced millions across the country over the past year and half. Why did it happen? Prime Minister Abiy Ahmed has taken important steps to move the country toward more open politics. But his efforts to dismantle the old order have weakened the Ethiopian state and given new energy to ethno-nationalism. Hostility among the leaders of Ethiopia’s most powerful regions has soared. Four fault lines are especially perilous. The first cuts across Oromia, Abiy’s home state, where his rivals – and even some former allies – believe the premier should do more to advance the region’s interests. The second pits Oromo leaders against those of Amhara, Ethiopia’s second most populous state: they are at loggerheads over Oromia’s bid for greater influence, including over the capital Addis Ababa, which is multi-ethnic but surrounded by Oromia. The third relates to a bitter dispute between Amhara politicians and the formerly dominant Tigray minority that centres on two territories that the Amhara claim Tigray annexed in the early 1990s. The fourth involves Tigray leaders and Abiy’s government, with the former resenting the prime minister for what they perceive as his dismantling of a political system they constructed, and then dominated, and what they see as his lopsided targeting of Tigrayan leaders for past abuses. An uptick of attacks on churches and mosques across parts of the country suggests that rising interfaith tensions could add another layer of complexity. Ethiopia’s transition may not yet hang from a precipice; indeed, it is still a source of hope for many in Ethiopia and abroad. But signs are troubling enough to worry top and former officials. Among the most alarmist suggestions made by some observers is that the multinational federation could break apart as Yugoslavia did in the 1990s. This worry may be overstated, but Abiy nonetheless should err on the side of caution as he walks a tightrope of pushing through reforms while keeping powerful constituencies on board.
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Ethiopia's dollar-denominated sovereign bonds jumped to the highest since January 2018 while the currency eased to a fresh record low after Addis Ababa reached a staff-level agreement with the International Monetary Fund (IMF). Africa |
The bond maturing in 2024 gained as much as 1.1 cents to 106.34 cents in the dollar, according to Tradeweb data. The birr currency extended its slide to 31.5088 to the dollar, having depreciated sharply in the past four weeks. The fund and the government reached a $2.9 billion preliminary agreement on Wednesday for a three-year financing package to support Ethiopia’s economic reforms. In its statement, the IMF outlined five pillars to its program with a “transition to a more flexible exchange rate regime” topping the list. Other items were more oversight of state enterprises, domestic revenue mobilization, financial sector and monetary policy reform, and improving supervision. It last devalued the currency by 15% in October 2017. The IMF agreement marked a big shift for Ethiopia, said Charles Robertson at Renaissance Capital, who calculates the currency is over-valued by 20-25%. On the black market, the birr traded at 39 to the dollar. “We assumed an IMF deal was off the agenda,” Robertson wrote to clients, adding any currency adjustment would also aid government privatization plans in the telecom and airline sectors and help attract investors nervous about being able to repatriate funds. “This immediately matters to bidders for telecom licenses in Ethiopia, holders of the illiquid single sovereign Eurobond ... and private equity groups who’ve already invested in the continent’s second largest country by population, attracted by two decades of very high growth.”
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@IMFNews Board Approves $368 Million Credit to Boost Congo's Reserves @markets Africa |
The executive board of the International Monetary Fund agreed Monday to a $368.4 million credit facility to boost Democratic Republic Congo’s falling reserves. The Washington-based lender will also send staff to the central African nation through the end of May to help prepare Congo for its first formal IMF loan program since 2012, the IMF said in an emailed statement. “The recent fall in commodity prices, new spending initiatives, and looser spending oversight during the political transition period have led to a weaker fiscal position mostly financed by the central bank,” the IMF said. Because of this, Congo’s international reserves “have fallen to critically low levels creating urgent balance of payment needs.” Congo is Africa’s largest producer of copper and the world’s largest source of cobalt. Its last IMF loan program was halted in 2012 amid concerns about corruption in the mining industry.
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The African farmers taking on big chocolate @FT @davidpilling Africa |
In a little clearing in a Ghanaian forest, not far from where grapefruit-sized cocoa pods hang heavily from the trees, 67-year-old Yaa Asantewaa breaks into song. Dressed in a threadbare skirt and purple T-shirt, she dances to her uplifting lyrics: “If you want to buy fine cloth — it is cocoa. If you want a meaningful life — it is cocoa.” Farmers have been singing variations of this song — about how planting cocoa will make you rich — for decades in Ghana, the world’s largest producer after neighbouring Ivory Coast. In the first decades of the 20th century, smallholders in west Africa rushed into cocoa farming as if it were the new gold. Today, between them, Ghana and Ivory Coast produce nearly two-thirds of the global supply of cocoa, the main ingredient in a chocolate industry worth more than $100bn a year in sales. On Christmas Eve, nearly all the chocolate treats hidden inside stockings by the tree will almost certainly contain cocoa from one of those countries. But Ms Asantewaa knows only too well that the words to her song are fanciful. Cocoa has not made her rich. Like most of the 2m cocoa farmers in west Africa, she is a smallholder — and extremely poor. She owns a tiny forest plot from which she harvests just four bags of cocoa beans a year. For that, at last year’s prices, she would have earned about £300. The mud houses in her village of Wawase in southern Ghana have no electricity or running water. The penury of many farmers at the bottom of the chocolate industry’s multibillion-dollar pyramid reflects a much broader issue: why is it so difficult for poor countries to break out of poverty by extracting higher prices for their raw materials and by climbing up the value-added ladder? Ghana supplies about one-fifth of all cocoa beans, for which it earns about $2bn a year, less than one-fiftieth of the value of the chocolate that is manufactured, branded and sold. Nana Akufo-Addo, Ghana’s president, says his country is locked in a colonial-style relationship with the world’s chocolate manufacturers in which it provides raw materials only to import finished goods. “Chocolate is a $100bn industry and we who produce 65 per cent of the raw material make less than $6bn from the sweat and toil of our farmers,” he says, referring to the combined sales of Ghana and Ivory Coast. What prevented these two countries, he asks, from earning more by turning beans into cocoa liquor and cocoa butter or even manufacturing finished chocolate bars? In practice, both Ghana and Ivory coast, which have high electricity costs and where little chocolate is eaten, have found it hard to wrestle a greater share of profits from an industry that keeps most of the added value near the western consumer markets it serves. The chocolate industry has been accused of more than keeping its adult farmers in poverty. As long ago as 2001, chocolate makers, including Mars, Nestlé and Hershey, signed an agreement to eliminate child labour from their supply chains in Ghana and Ivory Coast where the problem is most acute. Yet in 2015, the US labour department found that the number of children working on cocoa farms — some carrying out dangerous tasks such as spraying pesticide, lugging heavy sacks or wielding machetes — had actually gone up to 2.1m. The industry has since signed up to a less ambitious target of reducing child labour by 70 per cent by next year. Most observers think it will fail. As if that were not enough, cocoa farming has also been linked to rampant deforestation, particularly in Ivory Coast. Its cocoa production has nearly doubled to 2m tonnes over the past decade as farmers clear new forest land. After years of talk, African governments have decided to act to improve their leverage in the chocolate industry. In July, Ghana and Ivory Coast unilaterally announced a fixed premium of $400 a tonne over the benchmark futures price from October 2020. “If you look at Opec, they are only controlling about 30 to 40 per cent of the global oil supply and they control prices,” says Mahamudu Bawumia, Ghana’s vice-president, referring to the oil cartel. “If they have Opec, we can have Copec.” The determination of producer countries to squeeze more value from chocolate might appear to be putting them on a collision course with industry. Business logic suggests that manufacturers, such as Nestlé and Ferrero, and trading houses, including Cargill and Olam, are not keen to pay more for ingredients. Yet, in many ways, the rhetoric coming from Africa chimes with that of the chocolate industry itself. “We are a food business, so it is absolutely critical that our supply chains are sustainable,” says Victoria Mars, a fourth-generation member of the family and former chairwoman of Mars. “If we don’t have the raw materials, we can’t make our products.” A combination of self-interest and reputational risk is forcing manufacturers to clean up supply chains that are linked to grinding poverty, child labour and environmental degradation. Some, including Barry Callebaut, a Switzerland-based chocolate maker that is the world’s biggest cocoa buyer, have cautiously welcomed the $400 premium. Consumers are increasingly interested in the sourcing of their products and under what conditions they are produced. Non-governmental organisations have ratcheted up the pressure on manufacturers by exposing the darker side of chocolate and most of the big chocolate makers have responded with bold-sounding initiatives. Mars has committed to spending $1bn over 10 years on its “Cocoa for Generations” programme that, it says, will fundamentally overhaul a supply chain it admits is broken. Barry Callebaut has launched a “Forever Chocolate” initiative, which aims to hit four audited targets by 2025: lift 500,000 farmers out of poverty, reduce child labour to zero, become carbon- and forest-positive, and have fully sustainable ingredients. Companies say these efforts represent a step-change in their thinking. “It’s getting away from old-fashioned corporate social responsibility and creating real impact,” says Nicko Debenham, Barry Callebaut’s head of sustainability, who criticises what he regards as the piecemeal certification programmes such as Fairtrade and Rainforest Alliance. “We can’t just hit replay on what we’ve done and what other people have done. To create impact, we’ve got to do this at scale.” As well as protecting their reputations, chocolate makers worry that their supply of cocoa could dry up if farmers are destitute. “If our farmers are not able to thrive, if they are not able to make a decent living, if they are not able to educate their children, then they are not going to stay farmers,” says Ms Mars. “We all have to work this out together.” With industry and producer countries now purportedly on the same side, surely something can be done to improve cocoa-farming conditions that some compare to modern slavery? Mr Debenham has been banging his head against the problem for years. Since 2016, he has been overseeing Barry Callebaut’s “Forever Chocolate” initiative. He describes it as the industry’s best effort yet to tackle structural problems that, he says, can only be solved by co-operation between governments in producer and consumer countries as well as NGOs and the industry. “Everybody has to play their role, not just by telling industry we’re going to ban you, we’re going to punish you, we’re going to beat you,” he says. Barry Callebaut, he says, is rolling out a combination of initiatives that can be carried out at scale. In Ghana, it has bought a licensed buying company, Nyonkopa, to get around a ban on foreign firms purchasing cocoa directly from farmers, allowing it to distribute seedlings, shade trees and yield-enhancing advice to smallholders. After decades in which inherited plots have been split between children, farm sizes are simply too small, says Mr Debenham. “It’s not an acceptable living. It’s below the poverty line,” he says, adding that, in the long run, the answer is bigger farms and fewer farmers. If the overarching goal is alleviating poverty, defined by the World Bank as living on less than $1.90 a day adjusted for prices, Mr Debenham has concluded the key is diversification away from chocolate. Raising yields, say experts, is not the whole solution since, if too many farmers are successful, aggregate output will rise and prices inevitably fall. In 2017, cocoa prices tumbled by nearly 40 per cent, a disaster for farmers blamed partly on surging production in Ivory Coast. Instead, Barry Callebaut has collected data from 230,000 cocoa farmers and is offering tailor-made business plans to help them increase income by growing vegetables, making soap, selling honey or keeping livestock. One option is to raise hens whose eggs provide both protein and cash. Eggs sell for half a cedi each, or around $2.65 for a crate of 30. John Afful, a 43-year-old cocoa farmer in Ghana’s southern Ashanti region, says. “Before I had poultry, things were tough. It was even hard to send my kids to school.” Asked what ambitions he has for his five children, Mr Afful replies definitively: “I don’t want them to be cocoa farmers.” Barry Callebaut has also signed up to so-called Scope 3 carbon targets which means not only being carbon neutral in its energy and supply-chain footprint, but also accounting for historical land use changes. By 2025, it has pledged that none of its cocoa will come from farms that were converted from forest after 2005, a claim backed up through laborious farm-boundary surveys and satellite imagery. It has organised child protection committees to report violations on about one-quarter of its cocoa farms. According to PwC, which audits the programme, these actions are having some impact. Barry Callebaut has nudged 185,000 farmers above the $1.90 poverty threshold since 2016 and achieved a 6.7 per cent reduction in emissions in the year to the end of August. There were 3,867 cases of reported child labour in the period, though 2,200 are being dealt with. Many are sceptical about how effective industry programmes can be in tackling what campaigners consider a structural imbalance in power between huge multinationals and the poor farmers who supply them. “I think it’s bullshit quite frankly,” says Victoria Crandall, who is a Lagos-based former commodities analyst for five years in Ivory Coast. Paul Shoenmakers, head of impact at Tony’s Chocolonely, a niche Dutch chocolate manufacturer that aims to act as a catalyst for change in the industry, says: “It is like killing a forest fire with a glass of water.” Michiel Hendriksz, a former cocoa executive at commodities trader Archer Daniels Midland, says the attempt by Ghana and Ivory Coast to impose the $400 premium will fail. The premium, known as the “living income differential” or LID, is intended to increase farm-gate prices to levels high enough that farmers can send their children to school, eat healthily and pay medical bills. But campaigners doubt the ability of African governments to influence prices that are determined by traders buying and selling derivative contracts worth some 40 times physical supplies. Unlike oil wells, cocoa trees cannot simply be turned off to reduce supply. Even if prices go up, say traders, that will encourage farmers to grow more, sending prices back down again. “LID is a bad poker game by people who cannot play poker,” says Mr Hendriksz, who argues that the whole cash-crop model is a recipe for continued poverty. He has more radical advice for producers: “If they abandon cocoa, prices would go through the roof. Grow more food, produce less cocoa and push up the price.” As well as seeking to raise cocoa prices, Ghana wants to incentivise chocolate manufacturers to grind cocoa beans domestically. But highly mechanised factories employ few people and, thanks to generous tax breaks, contribute little to the treasury. Some entrepreneurs have tried to make chocolate in Ghana. But most have hit problems. Ghana has no sizeable dairy industry, forcing them to import milk. Electricity prices are high. So are temperatures, obliging them to spend heavily on refrigeration. “It’s hard to manufacture at origin,” says Ms Crandall. “Your production costs are always going to be more than in Europe or the US.” Manufacturers, she says, stay close to their consumers, which means the westerners who can afford chocolate. Like many, Ms Crandall sees no easy solutions. “There has to be a radical transformation of the whole industry,” she says. “If consumers want an ethical chocolate bar and they want farmers to be flourishing, they have to cut out the trading houses and they have to cut out big chocolate.”
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