ЦЕНЗОРА.NET

The world’s biggest chocolate producers are enjoying large profits while failing to pass on the benefits to cocoa farmers, many of whom are suffering falling incomes and worsening poverty, according to a report from the charity Oxfam.

The report was published ahead of World Fair Trade Day on May 13.

Falling incomes

The analysis focuses on Ghana, the world’s second-largest producer of cocoa. The charity says farmer’s incomes in the country have fallen since the start of the coronavirus pandemic in 2020.

“An Oxfam survey of more than 400 cocoa farmers supplying chocolate corporations across Ghana found that their net incomes have fallen on average by 16 percent since 2020, with women’s incomes falling by nearly 22 percent. Nine out of ten farmers said they are worse off since the pandemic,” the report says.

The authors add that up to “90 percent of Ghanaian cocoa farmers do not earn a living income, meaning they cannot afford enough food or other basics such as clothing, housing and medical care. Many of the 800,000 farmers in the country survive on just $2 a day.”

Several local and global factors have driven down farmers’ wages, said Uwe Gneiting, a co-author of the Oxfam report.

“COVID, of course, was a big disruption. But then also the war in Ukraine and the resulting economic crisis, coupled with some more longer-term challenges, like the impacts of climate change and aging farms, which is a big issue in Ghana,” Gneiting told VOA, adding that there are widespread social and environmental consequences.

“Lower incomes really have shown to facilitate the use of children on farms, so child labor, which is a big problem of course in Ghana and other cocoa producing countries. But also deforestation – that farmers are more likely to go out and cut down more trees and or to expand their farms and to make a living.”

Bumper profits

At the same time, Oxfam says profits for the world’s biggest chocolate firms have increased.

“The world’s four largest public chocolate corporations, Hershey, Lindt & Sprüngli, Mondelēz and Nestlé, have together made nearly $15 billion in profits from their confectionary divisions alone since the onset of the pandemic, up by an average 16 percent since 2020. They paid out on average more than their total net profits (113 percent) to shareholders between 2020 and 2022,” the report said.

Oxfam also analyzed the wealth of the two biggest private chocolate corporations, Mars and Ferrero, which has risen by $39 billion since 2020, giving them a combined net worth of around $157 billion.

Ghana and Ivory Coast – the world’s two biggest cocoa producers – signed a deal in 2021 to try to get a bigger share of the chocolate industry’s profit. The two governments set a minimum market price or living income differential for cocoa and also insist on a premium payment – an extra sum of money paid directly to farmers per ton of cocoa.

But Oxfam says the payments have failed to meaningfully increase farmers’ incomes.

Declining yields

“Oxfam analyzed the sustainability programs of ten of the top chocolate manufacturers and traders operating in Ghana… None of the programs achieved their stated goal of increasing cocoa production and, consequently, boosting farmer income. In fact, the crop yields of farmers in the corporations’ supply chains declined by 25 percent between 2020 and 2022,” the report said.

“Cocoa farmers surveyed by Oxfam said they are being paid a premium of $35 to $40 per ton of cocoa. The average cocoa farmer in Ghana produces about one ton of cocoa annually. They need to earn $2,600 more per year to get a living income,” according to the Oxfam report.

The entire supply chain is unbalanced, argues author Uwe Gneiting.

“If you as a company are profitable, at the same time as the producers of your most critical raw material are falling deeper into poverty and there’s something wrong with your business model,” he told VOA.

Response

In an email, Lindt & Sprüngli told VOA it pays Ghanaian farmers a $60 per ton premium and has invested over $20 million in cocoa sustainability programs in 2021.

“The Lindt & Sprüngli Farming Program aims to contribute to building resilient livelihoods for farmers, their families, and farming communities by taking a holistic approach to increasing farming household incomes. We are addressing this through a combination of measures,” the email said.

Hershey told VOA in an email that the company “has had a long-term commitment to supporting increased incomes for cocoa farming households. We are investing in proven approaches such as cash transfers and village savings and loan associations, implementation of sustainable and regenerative farm management practices and creating greater access to education in cocoa growing communities.”

Mondelēz and Nestlé did not respond to VOA requests for comment.
…

The world’s biggest chocolate producers are enjoying record profits – but are failing to pass on the benefits to cocoa farmers, many of whom are suffering falling incomes and worsening poverty, according to a report from the charity Oxfam. Henry Ridgwell reports.
…

Bank runs, cybersecurity and supply chain reliability were among items on the agenda of closed-door financial talks Friday in Japan by the Group of Seven advanced economies. 

Tensions with China, and with Russia over its war on Ukraine, loomed large on the wide horizon of issues the G-7 is tackling this year in Japan, its only Asian member. 

But while G-7 finance ministers and central bank chiefs discussed ways to protect the international rules-based order and prevent what they are calling “economic coercion” by China, Beijing lashed back, accusing the club of wealthy nations of hypocrisy. 

China is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday. 

“If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing. 

China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions that the United States says are needed to protect American economic security. 

Speaking before the talks began, U.S. Treasury Secretary Janet Yellen said such measures are “narrowly targeted” and focused on national security. 

“It’s not focused on undermining China’s economic competitiveness or preventing them to advance economically,” Yellen said. 

Asked what G-7 countries mean by trying to prevent “economic coercion,” namely by China, Yellen cited trade actions by Beijing against Australia as one example. 

“There have been examples of China using economic coercion on countries that take actions that China’s not happy with from the geopolitical perspective,” she said. “We in the G-7 share a common concern with this kind of activity and are looking to see what we can try to do to try to counter this kind of behavior.” 

China’s relations with the 27-nation European Union, which is also a member of the G-7, have also been frayed by friction over trade and over its tacit support for Russia. 

Leaders attending the talks in Niigata said they would be considering ways to prevent countries from skirting sanctions against Moscow meant to hinder its ability to continue the war. 

Both the U.S. and European Union maintain they are not advocating “decoupling,” or dismantling extensive economic ties with China, but support “de-risking” relations to avoid becoming too dependent on China. 

For its G-7 presidency, Japan has prioritized launching a partnership with low- and middle-income countries to build “robust supply chains” to help cut carbon emissions. One key area of concern for all G-7 countries is the heavy concentration in China of suppliers of rare earth materials needed in many high-tech products. 

Meanwhile, recent failures of banks in the U.S. and Europe have added to the complexity of steering the world economy toward a sustained recovery from the pandemic while cooling inflation that surged to multidecade highs in the past year. 

“It’s become clear that financial worries can spread in an instant via social networking sites, and online banking, allowing money withdrawals outside business hours, can cause bank runs,” Japanese Finance Minister Shunichi Suzuki said Thursday. 

The collapses of Silicon Valley Bank and other lenders stemmed largely from the pressure of interest rate hikes that, by making borrowing more expensive, are designed to slow business activity and cool inflation. 

The meetings in Niigata are a good chance to “compare notes and to see how we can make the world a little bit more stable and reach the price stability that we very much want to arrive at in short order,” Christine Lagarde, head of the European Central Bank, said in videotaped comments posted online. 

Overhanging the financial experts’ talks is the question of whether U.S. President Joe Biden and Congress will agree to raise the ceiling on the national debt before the U.S. government runs out of money to pay its bills. Yellen said a default on the national debt would be catastrophic and was “unthinkable.” 

A meeting between Biden and lawmakers on the issue was pushed back to May 18 to allow staff talks to continue over the weekend. Administration officials portrayed it as a positive step, and it did not appear to indicate a breakdown in talks. 

The three days of talks in Niigata, a port city on the Sea of Japan, are the last in a series of ministerial meetings to prepare for a summit of G-7 leaders next week in Hiroshima.
…

Apple will launch its first online store in Vietnam next week, the company said Friday, hoping to cash in on the country’s young and tech-savvy population.

The iPhone maker is among a host of global tech giants including Intel, Samsung and LG, that have chosen Vietnam for assembly of their products.

But up to now, the Silicon Valley giant has sold its products in Vietnam’s market of 100 million people via authorized resellers.

“We’re honored to be expanding in Vietnam,” said Deirdre O’Brien, Apple’s senior vice president of retail in an online statement in Vietnamese.

The country’s communist government says it wants 85 percent of its adult population to have access to a smartphone by 2025, up from the current 73 percent.

Less than a third of the country’s mobile users have an iPhone, according to market research platform Statista.

Through online stores, “clients in Vietnam can discover products and connect with our experienced experts,” O’Brien said in the statement.

The production of accessories and assembly of mobile phones account for up to 70 percent of electronics manufacturing in Vietnam. Products are mainly for export.

Official figures said Vietnam’s mobile phone production industry reported an import-export turnover of U.S. $114 billion last year, a third of the country’s total import-export revenue.
…

A renewed political dispute between the federal government of Somalia and the Puntland federal member state, and a failure of the fragile reforms to boost revenue collection and fiscal transparency, could endanger Somalia’s hope for full debt relief from the International Monetary Fund and other multilateral lenders by the end of the year, officials and experts warn.

“Strengthening fiscal transparency is a requirement for Somalia to secure not only debt forgiveness but also more loans from the International Monetary Fund,” said Hussein Abdikarim, Somalia’s former presidential adviser.

“If Somalia fails to continue the steady progress it has made so far on its financial reforms, it could lose hope of paring its debt to around $550 million from $5.2 billion by 2023,” he added.

In February 2020, the executive boards of the IMF and the World Bank announced that Somalia was eligible for debt relief following economic and institutional reforms.

In October 2022, the IMF said its staff reached a staff-level agreement with Somalia that would allow the release of $10 million to the East African country, once reviewed and approved by the board.

Economic and financial experts are concerned about challenges that could reverse the hard-earned gains of the poor and heavily indebted tiny horn of Africa Nation.

“Lack of competitive procurement, lack of agreement(s) between the levels of government and its federal member states on fiscal federalism, and lack of transparency in several oil and gas deals are the main current challenges that could jeopardize and hinder Somalia’s progress towards winning reliable financial credibility,” Hussein Siad, an independent economic consultant and Somalia’s former vice minister of finance, told VOA in a phone interview.

“A government cannot work without the necessary mechanisms to operate, including laws, regulations, manuals and trained or skilled staff members that can implement government policies,” Siad said.

The debt owed by Somalia to external creditors is estimated to be more than $5 billion. Somalia owes the single biggest debt — $1 billion — to the United States.

Countries that become eligible for the Heavily Indebted Poor Countries (HIPC) Initiative of the IMF and World Bank have to commit to economic and financial reforms, as well as poverty reduction and political stability.

Corruption

In response to the concerns, Somali President Hassan Sheikh Mohamud on Thursday signed a set of anti-corruption directives aimed at boosting the legitimacy and credibility of the country’s financial institutions, a government statement said.

In the early morning Cabinet meeting, Somalia’s Council of Ministers approved the anti-corruption directives before the president endorsed them.

Reading a statement, government spokesman Farhan Jimale said, “The key directives, eight in number, included combating corruption, fostering accountability, strengthening public financial management systems and meritocracy, as well as improving the efficiency and effectiveness of government institutions.”

The statement also said, “The announced steps seek to increase transparency and accountability through financial disclosures by public officials, enhanced enforcement capacity, and expanded merit-based recruitment.”

The IMF’s board is expected to review the staff-level agreement reached with Somalia in early December.

Mohamud has urged an immediate implementation of the directives.

In 2019, his predecessor, Mohamed Abdullahi Mohamed, signed the country’s anti-corruption bill into law, but critics say the implementation of the law has been a challenge.

The nonprofit Transparency International ranks Somalia as one of the most corrupt countries in the world.

In its 2022 Corruptions Perceptions Index, Transparency International put Somalia at the bottom, saying, “Along with constant violence, Somalia’s President Hassan Sheikh Mohamud dissolved two very important anti-corruption bodies with a ‘wave of the hand’ decree.”

According to Somalia’s Criminal Code, active and passive bribery, attempted corruption, extortion, bribing a foreign official and money laundering are crimes.

“The debt relief is a big hope for Somalia to reclaim its financial position within the international community and allows our country to rejoin global economy after a 30-year exile,” a senior government economist told VOA on the condition of anonymity because he was not authorized to speak.

The official said if corruption and unnecessary political disputes remain, Somalia will miss a golden opportunity to clear its debts.

Somalia’s outlook remained clouded, with GDP growth for 2022 projected at 1.9%, down from 2.9% in 2021, and inflation projected to reach 9% from 4.6% in 2021, the IMF said.

Political dispute

The concerns grew following tension over a long-simmering dispute between the leaders of the federal government of Somalia and the northeastern semi-autonomous region of Puntland.

For months, Puntland has been reluctant to collaborate with the federal government on national issues, including debt relief programs, accusing Mogadishu of refusing to share power and foreign aid with the regions in line with the country’s federal system.

The political dispute took a turn for the worse this week when the leaders exchanged strong verbal accusations.

Puntland President Said Abdullahi Deni on Tuesday accused Mohamud and Somali Prime Minister Hamza Abdi Barre of “attempting to destabilize the relatively stable region.”

“The president and his prime minister have agreed to refuse the Puntland democracy and its willingness to hold one man, one vote elections,” Deni told his supporters.

Deni’s accusations came a day after Barre accused Puntland of jeopardizing the country’s debt relief efforts.

“Somalia’s debt relief program is in danger because Puntland has been refusing to participate in national meetings on the issue,” Barre warned. “If this fails because of Puntland, it will be a black scar on Puntland’s history, and its leaders will be responsible.”
…