[HN Gopher] Ghana will no longer sell cocoa to Switzerland
       ___________________________________________________________________
        
       Ghana will no longer sell cocoa to Switzerland
        
       Author : DanBC
       Score  : 379 points
       Date   : 2021-03-18 08:57 UTC (1 days ago)
        
 (HTM) web link (face2faceafrica.com)
 (TXT) w3m dump (face2faceafrica.com)
        
       | lmm wrote:
       | Feels like a pretty confused article, diving back and forth
       | between cocoa and coronavirus vaccines even while saying they're
       | unrelated.
       | 
       | Building up local industry sounds like a good approach for the
       | long term (though, contra the article, inevitably at a short term
       | cost); the simplistic free trade arguments discount the value of
       | developing industry within the country. A ban is a very blunt
       | instrument though; a tariff (perhaps gradually increasing over
       | time) seems like a better approach that would help the country
       | gradually transition while avoiding shocks.
        
         | Laforet wrote:
         | Until someone shows me actual evidence of a ban being applied
         | or at least some concrete plan with penalities for violations,
         | what I have just read are nothing more than rhetoric and
         | posturing.
         | 
         | Banning the export of a commodity is very hard. It works when
         | the supply could be drastically reduced in the short term (1973
         | Arab oil embargo), or when the product has already failed in
         | the market and they need government intervention to save face
         | (recent Russian ban on raw timber export). In any other case,
         | the goods will always find a way through the controls to meet
         | the demand.
        
         | jeromegv wrote:
         | That was indeed a very confusing article to read, I couldn't
         | finish it.
        
       | Shivetya wrote:
       | Explain LID [0] which is effectively a tax applied to every ton
       | of cocoa sold of which most is paid to the farmers.
       | 
       | However I think Ghana is in the wrong here because extorting
       | other nations to give them anything free of charge by withholding
       | trade goods will simply means that the trade goods will
       | eventually be sourced elsewhere.
       | 
       | Regardless what you think about rich vs poor, medicine vs goods,
       | and such, IP is property and using a world wide organization to
       | deprive another of their rights is never a good idea. (no
       | whataboutism please). Yes it is medicine, yes it is important,
       | but that does not mean it has to be free. It should be something
       | that can be negotiated but going nuclear in trade never benefits
       | anyone and usually affects the poorest of world the most.
       | 
       | My suggestion, just up the LID
       | 
       | [0]https://www.uncommoncacao.com/blog/2020/10/20/the-lid-in-
       | gha...
        
         | bildung wrote:
         | _> to deprive another of their rights is never a good idea. (no
         | whataboutism please)._
         | 
         | What about access to cocoa not being a right?
        
           | djohnston wrote:
           | I think OP is talking about access to the COVID vaccines. As
           | much a human right as access to cocoa really.
        
           | meepmorp wrote:
           | they said no whataboutism, fam
        
             | stan_rogers wrote:
             | I can't tell whether or not your response was meant to be
             | in jest, but "whataboutism" is a variety of _tu quoque_
             | involving a third party.
        
               | meepmorp wrote:
               | What about my post makes you think I don't know that?
        
       | tziki wrote:
       | I wish them success, but my prediction is that in a few years
       | they'll have no successful products and the world's chocolate
       | makers have found new suppliers. You can't just make a decision
       | to create successful products.
        
         | KuzMenachem wrote:
         | You can incentivize the creation of certain types of businesses
         | that aid in the economic development of the country though.
         | Many countries, especially in Asia, have "decided" to become
         | successful producers of industrial goods. For example, the
         | automotive and electronics industry in South Korea were heavily
         | supported by national policy, after the government decided that
         | these areas were critical for the development of the country
         | [0]. This actually worked incredibly well - many companies are
         | still around today (e.g. Hyundai, Samsung, LG).
         | 
         | [0] https://en.wikipedia.org/wiki/Five-
         | Year_Plans_of_South_Korea
        
         | vagrantJin wrote:
         | Inter African free trade is increasing sharply, so their
         | primary market would likely be other African countries. Maybe
         | that was their trumo card if worst comes to worst.
        
         | jelling wrote:
         | Same. I am concerned they are overlooking how much marketing
         | mind-share Switzerland has globally for chocolate. Ghana could
         | get there but it will not happen overnight, more like a
         | generation. Distribution will also take time.
         | 
         | Give that cocoa is their number 3 export - and I suspect most
         | of that is in raw form - I really hope this doesn't backfire.
         | They need foreign currency.
         | 
         | A wiser path might be to build up global chocolate brands in
         | parallel to raw exporting, sort of like we're seeing China move
         | up the value chain from value-added manufacturing to consumer
         | brands.
        
           | sct202 wrote:
           | They can process the beans and no one will notice. There are
           | a lot of cocoa processors who produce bulk chocolate for
           | other brands who melt that down to form their own products.
           | Companies like Barry Callebaut or Valrhona primarily supply
           | other companies with chocolate.
        
             | ars wrote:
             | I will notice - it's not easy obtaining Kosher
             | certification in Ghana.
        
             | bogomipz wrote:
             | Sure but processing cocoa into chocolate at the scale
             | quality of Callebaut and Valrhona is a massive undertaking
             | of both production and skill. Callebaut and Valrhona
             | produce chocolate for high end consumers such as pastry
             | chefs in high end restaurants or artisanal bakeries. I'm
             | not saying Ghana can't get there but it's going to a long
             | time. Certainly long enough that it would be very much
             | noticed.
        
           | KaiserPro wrote:
           | You're missing a step here. Yes brand recognition is powerful
           | for consumers.
           | 
           | But I don't think ghana is going to be doing B2C stuff just
           | yet. I'd assume that they are going to export cocoa products,
           | as it would allow them to charge a much higher price, keeping
           | more money in the country
        
       | acdha wrote:
       | We recently enjoyed some chocolates made in Ghana from a company
       | founded by a Ghanaian-born American immigrant:
       | 
       | https://us.midunuchocolates.com/
        
       | [deleted]
        
       | htatche wrote:
       | Is this rather a ban on Ghana suppliers themselves in order to
       | trigger a shift in the country's manufacturing so they're forced
       | to step up their processing and break away from just sending the
       | crops at whatever price the market sets?
        
       | kleiba wrote:
       | I guess they will have to sell the beans to some other state
       | then, from whom Switzerland will then buy it?
        
         | ramraj07 wrote:
         | If you read the article you would have gotten the answer - they
         | want to make the chocolate themselves. Godspeed Ghana!
        
           | kleiba wrote:
           | I read the article. Want to bet?
        
       | standardUser wrote:
       | It's called industrial policy and it's pretty much the only way
       | nations can make the leap from developing to developed. The thing
       | is, industrial policy and mostly-free trade can and do work
       | really well together, but for about a generation the "Washington
       | Consensus" of free trade absolutists didn't allow it. Those
       | countries that did so anyway, like China, were able to thrive,
       | while smaller nations got stuck as resource exporters.
        
       | marcodiego wrote:
       | Cocoa as most raw food are just like commodities with little
       | value added. Developing countries should make efforts to sell
       | products with grater value added if they plan to become less
       | dependent on richer nations.
        
       | m12k wrote:
       | I'm reading the book The Divide at the moment. It makes the
       | argument that it takes time and the right conditions to build up
       | an industry - infrastructure needs to be built, education and a
       | skilled labor pool with the necessary know-how as well. To begin
       | with, a fledgling industry in a developing country cannot compete
       | with those of already industrialized countries - these are
       | already so effective that they can undercut newcomers before they
       | have time to become competitive. So the book argues that when
       | developing countries are pressured into free trade agreements
       | (for example by making aid dependent on this), these countries
       | are also forced into a position where they get stuck at the low
       | end of the production value chain, selling raw materials, while
       | buying processed goods from others (often the same role they were
       | forcibly assigned when they were colonies). So much like we allow
       | children time to learn in school before we expect them to compete
       | in the job market, we should allow developing countries to employ
       | protectionistic policies like tariffs, in order to protect and
       | build up their fledgling industries nationally, before fully
       | entering the world market in a couple decades when they are
       | ready.
        
         | conjectures wrote:
         | If you've not read it, 'Kicking Away the Ladder' by Ha-Joon
         | Chang is a great book on this topic.
         | 
         | It has a good deal of historical detail on what developed
         | countries did themselves to become developed with respect to IP
         | and protection.
        
         | emodendroket wrote:
         | This was Alexander Hamilton's idea and was in fact largely the
         | US strategy in large part.
        
         | enriquto wrote:
         | > So much like we allow children time to learn in school before
         | we expect them to compete in the job market, we should allow
         | developing countries to employ protectionistic policies
         | 
         | This sounds a bit paternalistic and condescending. I guess that
         | first and foremost the "first world" should stop financing
         | horrible dictatorships and wars in the ex-colonies. That would
         | be a good, honest start.
        
           | flavius29663 wrote:
           | > should stop financing horrible dictatorships
           | 
           | When you do that and even take down the dictator (Gadafi),
           | you end up with a worse government, or no government at all.
           | We can all agree Saddam Hussein was a horrible dictator
           | supported by the US, look at Iraq now, is it better off
           | without Saddam?
           | 
           | There is no clear cut, and it seems like whatever the west is
           | doing or abstaining from doing it's going to attract hate. We
           | all hate that the Saudis are free to be horrible, but what is
           | the alternative? A new Iraq?
           | 
           | What if you just let them be, you might say? Then you end up
           | with 8 year long wars like Iran-Iraq. Or with genocide like
           | in Yugoslavia in the 90s.
           | 
           | I think we can all agree China is a horrible dictatorship,
           | how exactly can we stop financing it, since we rely so much
           | on their factories?
        
             | dane-pgp wrote:
             | > We all hate that the Saudis are free to be horrible, but
             | what is the alternative? A new Iraq?
             | 
             | That's a false dichotomy. I think that many people who
             | oppose the war in Yemen would settle for an end to military
             | support and arms sales to Saudi Arabia, and possibly other
             | economic sanctions.
             | 
             | Whether that would lead to a positive outcome for Yemen,
             | though, is another question, and highlights your point
             | about the problems of abstaining.
        
             | enriquto wrote:
             | I suppose you are being sarcastic. In that case I agree
             | with you.
        
         | zfs wrote:
         | Is the difference between developing and developed countries
         | really the lack of tariffs or is it due to poor governance? I
         | feel like the reason why countries are always so pro-tariff is
         | because the benefits of tariffs go towards a small group of
         | people, whereas the cost of tariffs are diffused. But small
         | costs add-up and if you start applying the tariffs to other
         | industries then you start seeing the impacts in the cost of
         | goods.
         | 
         | What are the examples where protecting a country from exports
         | for a few decades then opening it up to competition actually
         | produced a world-class industry? Singapore is an example of a
         | country that has been pro free-trade and has benefited as a
         | result.
        
           | devdas wrote:
           | South Korea. China. The US. The UK. Singapore has pretty much
           | no manufacturing.
        
           | devdas wrote:
           | In fact, if you want actual free trade, then trade in labour
           | must also be freely allowed.
           | 
           | Freedom of movement to everyone, as inside the EU, would make
           | even more sense. Every country is rather protective of that
           | though.
        
         | tim333 wrote:
         | When I was younger tariffs were popular in developing countries
         | but they seldom seemed to produce much prosperity - quite the
         | contrary really.
         | 
         | Maybe if you apply the tariffs very intelligently but most
         | developing countries are not blessed with great non corrupt
         | governments.
         | 
         | The
         | 
         | >pressured into free trade agreements (for example by making
         | aid dependent on this)
         | 
         | is kind of telling. A lot of the long time free trading
         | countries like HK and Singapore don't need aid. It's often the
         | tarrifs that make places poor enough to need that.
        
           | marcosdumay wrote:
           | Things are even more problematic than tariffs keeping the
           | people poor.
           | 
           | Developing countries do not have hugely diverse domestic
           | industries with top of the line offerings. How can one create
           | a successful business if every niche or high quality product
           | you have around costs a lot more for you than for your
           | compettitiors in developed countries?
        
           | Mauricebranagh wrote:
           | And even today you can see NH users in south America facing
           | eyewatering taxes on computer hardware.
        
             | tim333 wrote:
             | Which is the kind of thing that hobbles the economy - it's
             | not like those counties are building their own Intels and
             | Apples as a result of the tariffs.
        
             | [deleted]
        
         | throwaway9870 wrote:
         | Perhaps, but Asia does pretty well. Korea, China, Taiwan,
         | Vietnam, etc. all did amazing development in the last 30-60
         | years. The reality is that some cultures are better at it than
         | others. Compare China to India for example.
        
           | throwaway776543 wrote:
           | What's also interesting is South Korea and Taiwan developed
           | during their authoritarian phase. You can probably throw
           | Singapore into that group too.
        
           | triceratops wrote:
           | > The reality is that some cultures are better at it than
           | others
           | 
           | That's extremely lazy reductionism. You're talking about
           | countries of wildly different sizes (Taiwan is tiny, Japan is
           | medium-sized, China is gargantuan), starting from wildly
           | different levels of development (Japan was developed pre-WW2,
           | India and China were in abject poverty), with wildly
           | different levels of homogeneity and diversity (Japan is
           | highly homogenous, China less so, India not at all),
           | diplomatic alignments (Japan with the US, China with the
           | Soviets, India in the third world), resources (Japan with
           | zero, India with quite a fair bit), availability of capital
           | (Japan, Taiwan and South Korea with quite a fair bit, India
           | with very little, don't know about China), political systems
           | (government-managed free market in Japan, autocracy
           | transitioning to a democracy in Taiwan and S Korea, socialism
           | in India, full communism until 1980s-1990s in China).
        
           | jeffreyrogers wrote:
           | They followed the policies the OP is talking about though.
           | That's their point: you need to protect your exporting
           | industries early on so they can develop and become efficient.
           | Then you can protect them less as they become higher
           | quality/more productive. All of the countries you listed did
           | this. India has a bunch of economic problems, many of which
           | are self inflicted.
        
         | sam1r wrote:
         | This is well written. Nice metaphors and thank you.
        
         | ClumsyPilot wrote:
         | >"we should allow developing countries"
         | 
         | Not to pick on you, but I often hear this frasing in the 'first
         | world' and surely you dont 'allow' or 'disallow' internal
         | policies to an sovereign nation?
         | 
         | It sounds like a Freudianslip or something, the reality is that
         | its easy to bully or bribe officials in developing nations.
        
           | throwaway210222 wrote:
           | "I often hear this [phrasing] in the 'first world' and surely
           | you don't 'allow' or 'disallow' internal policies to an
           | sovereign nation?"
           | 
           | Forget about the third-world, right now the USA is not-
           | allowing Germany the right to build a pipeline with Russia!
           | 
           | First-world - check, sovereign - check, allies - check.
        
             | dahfizz wrote:
             | > the USA is not-allowing Germany the right to build a
             | pipeline with Russia!
             | 
             | The USA is threatening trade sanctions if Germany builds
             | the pipeline. I would not call that "not-allowing".
             | 
             | That seems to be OP's whole point. The US is responding as
             | a sovereign nation to actions of other sovereign nations.
             | Phraseology like "allow" and "disallow" are not accurate.
             | If Germany does the cost-benefit analysis and decides to
             | cancel the pipeline because they don't want trade
             | sanctions, that was their decision as an independent
             | nation. It is not as if we are threatening war.
        
               | throwaway210222 wrote:
               | Nonsense. The USA would not have gone to all the trouble
               | to pass legislation to sanction Nordstream2 if they
               | didn't think it would be effective.
               | 
               | The USA didn't just do it to voice their displeasure:
               | they could have done that with an email.
               | 
               | They truly think its enough of a hammer to stop the
               | pipeline.
               | 
               | Hence "won't allow"
        
               | ClumsyPilot wrote:
               | The law is threatening fines if you exceed the speed
               | limit. By that logic.
               | 
               | Are allowed to break the law? Are you not?
        
               | dahfizz wrote:
               | My landlord raised my rent this year. Are they not
               | allowing me to live in my apartment?
        
               | ClumsyPilot wrote:
               | Are you with a straight face equating consequences of
               | breaking the law (fines and jailtime) with paying rent?
        
               | dahfizz wrote:
               | No, I'm making it obvious that collecting fees does not
               | constitute forcing someone to do something.
        
               | nytgop77 wrote:
               | stop dating this girl or i will raise the rent x10. my
               | english is not that good, but 'forcing' does not seem
               | far.. maybe 'coercing' fits better, but the idea is very
               | similar, make somebody do stuff against their will.
        
               | dane-pgp wrote:
               | You're not allowed to break the speed limit even if you
               | pay the fine. You are allowed to live in your apartment
               | if you pay the demanded rent.
        
               | dahfizz wrote:
               | > You are allowed to live in your apartment if you pay
               | the demanded rent.
               | 
               | ding ding ding. Germany is allowed to build whatever
               | pipelines they want, they just also might have to pay US
               | trade sanctions. Without a threat of force, we are not
               | forcing them to do anything.
        
               | rsj_hn wrote:
               | There is no right to trade with the US, or with anyone
               | else.
               | 
               | If the US wants to impose a tariff to nations that do X,
               | that does not mean that the US is forcing these nations
               | to do anything. They can pay the tarrif, change their
               | behavior, or sell their goods elsewhere. Or they can
               | charge a counter-tarrif -- oops, not if they are an
               | export-dependent economy they can't. That's the crux of
               | the issue.
               | 
               | Germany needs to pay their own workers enough so the
               | German economy is not dependent on exporting a 1/3 of
               | their GDP each year just to maintain domestic employment.
               | 
               | Obviously when you create an economy that crashes the
               | moment others stop letting you run massive trade
               | surpluses, then you are effectively handing your
               | sovereignty over to your trading partners.
               | 
               | Whining about that and blaming your trading partners for
               | using the power Germany has given them seems a bit naive.
               | 
               | Germany will never be sovereign as long as it is an
               | export-dependent economy.
        
               | DiogenesKynikos wrote:
               | The US is exploiting its centrality in the international
               | financial system, though. No other country uses secondary
               | sanctions so extensively to dictate to other countries
               | who they may and may not trade with.
               | 
               | When the US pulled out of the Iran nuclear deal, for
               | example, it essentially ordered European companies not to
               | trade with Iran. Even European companies that have no
               | business in the US are afraid to do business with Iran,
               | because American secondary sanctions will still hit them.
               | No European bank will lend to a European company that
               | does business with Iran, out of fear of American
               | sanctions.
               | 
               | These sorts of actions will eventually provoke a
               | reaction: either the establishment of alternate financial
               | systems or retaliatory sanctions.
        
             | madengr wrote:
             | The USA is not allowing the USA to build a pipeline.
        
           | grecy wrote:
           | > _Not to pick on you, but I often hear this frasing in the
           | 'first world' and surely you dont 'allow' or 'disallow'
           | internal policies to an sovereign nation? _
           | 
           | Oh, it's much simpler than that. If an undeveloped (or
           | developing) country doesn't place nice with the "Developed"
           | rules, the IMF will just bankrupt their currency and send
           | them back to the dark ages.
           | 
           | Why do you think Switzerland is the world's 3rd biggest
           | exporter of Coffee [1], while not growing a single bean ? ..
           | and Germany is number 5.
           | 
           | The IMF doesn't let coffee growing countries like Ethiopia or
           | the Ivory Coast export processed beans, because they want the
           | immense profits going to developed countries. Also the WTO
           | plays a role and just doesn't tax unprocessed raw coffee
           | beans coming out of those poor countries, but taxes processed
           | coffee (and chocolate) goods at astronomical rates.
           | 
           | [1] http://www.worldstopexports.com/coffee-exports-country/
        
           | jariel wrote:
           | WTO has rules, as do nations with agreements in place.
           | 
           | 'Allow' implies some degree of forgiveness or allowance of
           | entity on the other side of the table.
           | 
           | In this case, Ghana may probably face trade sanction/scrutiny
           | for their protectionism. It will have to play out in terms of
           | other agreements.
        
             | luxuryballs wrote:
             | collusion for thee but not for me
        
           | andrepd wrote:
           | The point is that yes, economically strong countries can and
           | do dictate internal policies of a sovereign nation.
        
           | bluepizza wrote:
           | > Not to pick on you, but I often hear this frasing in the
           | 'first world' and surely you dont 'allow' or 'disallow'
           | internal policies to an sovereign nation?
           | 
           | Not exactly. Between forcing their hand on disadvantageous
           | trade deals, lodging complaints and enforcing restrictions
           | with the WTO, and outright installing dictators and funding
           | militias - allowing or disallowing is all what the first
           | world ever does.
        
           | tsimionescu wrote:
           | I get where you're coming from, but in this case they are
           | completely right to use this phrasing, with exactly the
           | connotation you are talking about: the status quo is that the
           | first world is NOT allowing these countries to run their
           | affairs as they want internally.
           | 
           | That is, any developing country is presented with 2 options
           | by the developed world: either accept 'free trade' (allow
           | foreign investors to buy up the local industry, commit to IP
           | laws, don't apply tariffs) or no one will be allowed to trade
           | with you or send you aid.
           | 
           | In the meantime, powerful countries are taking numerous
           | protectionist measures in their key industries, since that is
           | the only way to actually be prosperous.
        
             | btown wrote:
             | > either accept 'free trade' (allow foreign investors to
             | buy up the local industry, commit to IP laws, don't apply
             | tariffs) or no one will be allowed to trade with you or
             | send you aid.
             | 
             | Do multi-national trade agreements (which I believe are the
             | core mechanism for this) actually penalize signatories for
             | trading with non-signatories? Or is it more that trade
             | between signatories is so advantaged that no company within
             | a signatory state would be competitive were it to trade
             | with a counterpart in a non-signatory state?
        
           | edflsafoiewq wrote:
           | Free trade is usually done on a tit-for-tat basis. I think
           | the GP is saying they should allow protectionist policies
           | without "tatting".
        
             | pydry wrote:
             | This is effectively how the US built up the industries of
             | Japan, Taiwan and South Korea.
             | 
             | The reason these countries were allowed to do it where
             | others are not was because the US wanted strategically
             | placed powerful allies in the region.
             | 
             | There probably wouldn't be a Japanese electronics/car
             | industry, for instance, if the Soviets hadn't spooked the
             | the US in the 40s.
        
               | jbay808 wrote:
               | The US built those industries only in the same sense that
               | they built Germany's.
               | 
               | Japan's industrial base was built before the 40s, with an
               | extensive domestic supply of machine tools and industrial
               | equipment, rail infrastructure, and finished manufactured
               | goods. Or else who do you think was building the planes,
               | ships, and submarines that the allies were fighting on
               | the Pacific front? Their industries were temporarily
               | damaged by the war but it's no surprise that they'd be
               | back to building cars within a couple decades.
               | 
               | They, rather than the US, were the ones who built up much
               | of the initial industrial base of Taiwan and Korea, as
               | part of their own colonization efforts. Not out of so
               | much benevolence, of course.
        
               | pydry wrote:
               | They weren't building walkmans or cars for export.
               | 
               | Their skill base was intact but their industry was razed
               | by WW2.
               | 
               | Either way they needed raw materials and markets to
               | develop their industrial base and that required favorable
               | American trade policy, $$$ and military support.
        
               | [deleted]
        
               | Mat342 wrote:
               | That's absolute BS, asians are smart and hardworking, US
               | didn't build them
        
               | dominicl wrote:
               | I'm curious about this argument. Haven't heard the "tiger
               | states" growth attributed solely to US policies. Any
               | links/pointers to those advantages that were granted
               | these states but not other developing countries at the
               | time?
        
               | sct202 wrote:
               | I don't know about solely developed, but South Korea,
               | Taiwan, and Japan did receive substantial amounts of
               | foreign aid in the post-war period. In addition, some of
               | this aid financed land reforms that forced large land
               | owners to break up large holdings and sell to the tenant
               | farmers who previously rented the land. The notoriously
               | small farms in Japan are not a natural free market
               | development.
        
           | pietrovismara wrote:
           | That's what the west does all the time.
           | 
           | Blackmail poor countries into selling all of their assets to
           | foreign capital, just to gain access to foreign credit.
           | 
           | See what's happening in Cuba. See what Vietnam had to do
           | after the war with the US, see Greece with Europe recently,
           | see countless more.
           | 
           | The WTO, IMF and the World Bank are the colonizing arm of
           | capitalism.
           | 
           | It's a relatively new form of supernational economic warfare
           | that turned out to be very effective, especially when
           | combined with embargoes and economic sanctions. It's the
           | famous "offer one can't refuse".
        
             | Blackstone4 wrote:
             | The way you phrase it, makes it sound like theft...surely,
             | they have to buy the assets and that goes to the
             | owner...the owner then can chose to re-invest locally if
             | they choose to...the capital doesnt just disappear...
        
               | pietrovismara wrote:
               | > the owner then can chose to re-invest locally if they
               | choose to
               | 
               | Only at the conditions imposed by the IMF. Usually that
               | means the state has to steer away from anything that
               | could be profitable and focus only on what is not
               | palatable to foreign capital.
               | 
               | It also means states can't apply import taxes, thus
               | making their industries instantly obsolete. It's pretty
               | much a huge transfer of wealth from inside to outside.
        
               | Blackstone4 wrote:
               | so are you mainly refering to state-owned assets rather
               | than privately owned assets? State-owned companies are
               | notorious for being badly run...no wonder they are
               | overrun by foreign competition. Would it not be possible
               | for a state to IPO these assets or give shares directly
               | to the population rather than sell?
        
               | viro wrote:
               | > Only at the conditions imposed by the IMF. Usually that
               | means the state has to steer away from anything that
               | could be profitable and focus only on what is not
               | palatable to foreign capital.
               | 
               | Im going to need a direct example please
        
               | pietrovismara wrote:
               | Just check the IMF page on "Conditionality"[0]. Check the
               | "Prior actions" sections and see "Elimination of price
               | controls" there.
               | 
               | Also see this video[1] about Vietnam, around halfway
               | through it explains pretty well how it works.
               | 
               | Edit: I realize now you asked about the "forced
               | privatization of industries" sentence. That's thoroughly
               | stressed accross all IMF literature, and you can see it
               | happen in pretty much every country that takes IMF "aid".
               | 
               | -[0]: https://www.imf.org/en/About/Factsheets/Sheets/2016
               | /08/02/21...
               | 
               | -[1]: https://www.youtube.com/watch?v=mMubOw5H-yo
        
               | viro wrote:
               | I just want to note nationalized industries have an
               | incredibly unfair advantage over private industry. Since
               | nationalized industries have no real need to make money
               | at all. Widget A cost $65 to make? Nah, let's sell it at
               | $5. Most of the fund comes from capitalist states. It
               | wouldn't make much of sense for them to fund an economic
               | system that is often antagonistic to capitalism.
        
         | msg3 wrote:
         | The Korean economist Ha-Joon Chang makes similar arguments in
         | his book Bad samaritans. He argues that this model was
         | successfully followed by Korea (Samsung, Hyundai, etc), Japan,
         | and even Henry VII in 15th century England - well worth a read.
        
         | rsj_hn wrote:
         | This is called the "infant industry" argument, and it has been
         | made since at least the 16th Century, most famously by Antonio
         | Serra, a proto-mercantilist.
         | 
         | This idea of raising tarrifs on imports and then using the
         | money to protect domestic industries has been tried in Latin
         | America in the 60s and 70s, in Africa, and in many places.
         | 
         | The results are mixed.
         | 
         | The problem with infant industry is that you get a group of
         | local monopolies protected by the government who sell expensive
         | low quality goods to the public, people get sick of it, they
         | want the lower priced better foreign goods as it will increase
         | their quality of life, and at some point there is sufficient
         | political pressure to force a regime change.
         | 
         | Another way of saying this is that the infant industries often
         | fail to grow up, they remain protected infants forever.
         | 
         | On the other hand, if you don't protect your infant industries,
         | then you have no chance against mature foreign competitors, as
         | you point out.
         | 
         | Then there is a third aspect to this, which is that foreign
         | governments, especially East Asian governments (not only China,
         | but China is the biggest offender) massively subsidize domestic
         | industries and so you have to subsidize and protect your
         | industries in return, or they will be destroyed by competitors
         | who never need to turn a profit, or repay a loan, or meet any
         | environmental regulations, or deal with unions, etc.
         | 
         | So it's a tough call. All these theories have valid points, but
         | they all have fatal flaws. For the last few years, I've come
         | around to the following mantra, which is my own development
         | philosophy:
         | 
         | * every country should have a long run balance of payments.
         | That means all trade should be balanced.
         | 
         | * countries should make investments in local productive
         | capacity, but not subsidize industries per se
         | 
         | * countries should not allow foreign companies to set up
         | factories or purchase capital or land. Each nation's assets
         | should be owned by their own citizens only.
         | 
         | * With the above caveats, there should be free trade and no
         | industry protection.
         | 
         | What this means, in practice, is banning foreign capital
         | inflows. Have your own currency, borrow only in your own
         | currency from your own people, and don't allow foreigners to
         | purchase you bonds, stocks, land, or factories.
         | 
         | But trade all you want with them. As long as you do that, your
         | currency will depreciate sufficiently to prevent any flood of
         | cheap imports, and your domestic industries will have a chance.
        
         | ReadFList wrote:
         | >To begin with, a fledgling industry in a developing country
         | cannot compete with those of already industrialized countries
         | >these countries are also forced into a position where they get
         | stuck at the low end of the production value chain, selling raw
         | materials, while buying processed goods from others (often the
         | same role they were forcibly assigned when they were colonies
         | 
         | Basically what Friedrich List [1] wrote in 1841 [2], and being
         | proven correct time and time again while we completely
         | disregard it.
         | 
         | Now you can even go further and ask yourselves if what is
         | happening in the West by moving all the factories and
         | manufacturing to China and neighbouring countries isn't exactly
         | like the Colonization of the Americas by the British.
         | 
         | It wasn't _luck_ that made the USA Great. It was the best stock
         | from Europe who come up with the American School [3], and we
         | can now see the tragic consequences of abandoning it for
         | "free" trade.
         | 
         | If a country imports manufactured goods and exports raw
         | materials, it is a colony.
         | 
         | [1] https://en.wikipedia.org/wiki/Friedrich_List [2]
         | https://archive.org/details/nationalsystemp00nichgoog [3]
         | https://en.wikipedia.org/wiki/American_School_(economics)
        
           | devdas wrote:
           | It was a lot of luck. Today, you would need access to oil for
           | energy (which needs USD), and far more complex technology,
           | which needs money to acquire.
           | 
           | The US could also support massively extractive industries
           | internally. Most countries can't do that.
        
           | Mat342 wrote:
           | Honestly I don't think americans can outcompete Japan, Korea
           | Taiwan or China. Maybe they keep accepting fake printed USD
           | for real stuff in the future
        
             | ReadFList wrote:
             | Lot's of people said the same about the USA becoming
             | economically independent of the all powerful British
             | Empire. And yet the USA did it.
             | 
             | Alexander Hamilton's influence goes way beyond inspiring a
             | ridiculous musical for an attempt to capture that
             | historical personality and distort his positions so nobody
             | would read his writings.
             | 
             | There is a vast difference between not being possible, and
             | the interlopers we call "the elites" not wanting to do it
             | because they have other interests that don't overlap with
             | the Nation's interests.
        
         | zhdc1 wrote:
         | The Commanding Heights by Yergin and Stanislaw is another good
         | book that makes a similar argument.
        
         | jariel wrote:
         | So Saudi Arabia, UAE, Canada and Saudi Arabia are 'stuck'
         | selling natural resources?
         | 
         | I think it's probably a much better plant to extract a good
         | deal of wealth from the natural resource and invest it in other
         | areas of higher value creation, even in the same vertical.
         | 
         | There's a good chance that Ghana's policies are needlessly
         | constrained.
         | 
         | More obviously there are 100 things Ghana could do to improve
         | living conditions in more obvious areas i.e. corruption etc..
         | 
         | Consider the immediate situation:
         | 
         | Ghana's exporters have just been banned from exporting. They
         | are going to go out of business very soon.
         | 
         | Ghana doesn't have all of the layers of industry necessary to
         | support development and export of products i.e. there are no
         | market buyers at any reasonable price.
         | 
         | Result: collapse of the industry - unless somehow the
         | Government of Ghana can artificially inflate prices and keep
         | them alive for a very long time while domestic partners somehow
         | magically are able to get off their feet.
         | 
         | This plan feels not very well conceived.
         | 
         | I'll bet something is lurking under the surface.
        
           | jeffreyrogers wrote:
           | It's called the Dutch disease for a reason. When Holland
           | discovered large natural gas deposits the entire rest of
           | their economy became less competitive. High wages from
           | natural resources (and oil is the worst for this because it
           | is so valuable) raise wages in the rest of the economy. This
           | makes your exports less competitive. It also shifts
           | employment into the natural resources sector (due to high
           | wages), when many of those people would maybe be better
           | allocated elsewhere.
           | 
           | They only country that has been able to do what you're
           | talking about successfully is Norway and maybe the US and
           | Canada, which have much better institutions than anywhere in
           | Africa and the Middle East.
        
           | TeMPOraL wrote:
           | Other points are already addressed in different comments, but
           | to address this one:
           | 
           | > _Ghana doesn 't have all of the layers of industry
           | necessary to support development and export of products i.e.
           | there are no market buyers at any reasonable price._
           | 
           | Per the article, they literally control half of the world's
           | cocoa. This means they get to define what "a reasonable
           | price" is, as long as the rest of the world wants to keep its
           | chocolate plentiful.
           | 
           | I'm not a politician or economist - but to me, it seems
           | obvious the plan here is to bootstrap domestic cocoa
           | processing industries, get the current exporters to sell
           | cocoa to domestic producers, and export processed products
           | (like chocolate). They're not going to just stop cultivating
           | cocoa - being in control of half of the supply of raw
           | materials for a highly prized product is their one big
           | leverage on the international market.
           | 
           | As to not having the necessary industry base to pull it off -
           | the question is, how fast can they build one? I'd guess a
           | couple of years, if no foreign powers try to make it hard for
           | them.
        
             | Chris2048 wrote:
             | The first question is: where are the main markets for
             | chocolate? If Ghana loses access to a large percentage of
             | the global chocolate market, controlling half the supply is
             | as much a liability.
             | 
             | The second question is: Is there any reason cocoa can't be
             | grown elsewhere, or the _second_ biggest producer can 't
             | increase production?
        
               | rob74 wrote:
               | Yeah, I already see other tropical-zone countries cutting
               | down even more rain forest to make space for cocoa
               | plantations (in addition to the rain forest they are
               | already cutting down or burning for e.g. palm oil
               | plantations). That's not really the desirable outcome
               | here I think...
        
               | devdas wrote:
               | That's not really any different from what the developed
               | world did when they were in the same state of
               | development.
        
               | brodock wrote:
               | There is a location/clima reason. Cocoa grows (well) only
               | in a certain part of the world around the equator line as
               | it requires tropical weather with regular rains and small
               | dry seasons.
               | 
               | It may be possible to use artificial techniques to grow
               | it elsewhere, but I'm assuming it's not economically
               | viable or you get a product with worst quality in the end
        
             | true_religion wrote:
             | The last time Ghana blocked cocoa sales, the European
             | powers responded by creating plantations in other countries
             | to break Ghanas monopoly of the supply. Then they went a
             | step further in researching and marketing low cocoa
             | chocolate so their domestic population would be less
             | reliant on cocoa.
             | 
             | Agricultural luxury goods are one area where it's hard to
             | continually push a monopoly advantage.
             | 
             | That said, I think that if Ghana can take the short term
             | repercussions, then the country will come out ahead. It can
             | become to chocolate, what France is to wine. But that would
             | require heavy marketing in order to change people's
             | perception about what kind of chocolate is most delicious.
        
           | msg3 wrote:
           | By itself, it's probably not a good idea.
           | 
           | If the government supports the development of a chocolate
           | production industry, including support for cocoa exporters,
           | then it has every chance of success.
        
             | jfim wrote:
             | It might, and it might not. Even though Japan also makes
             | some fine watch movements, Swiss ones command a premium
             | over the Japanese ones. I'd assume that this would be
             | similar for chocolate.
        
               | rout39574 wrote:
               | If Ghana were to position itself as the 'Casio' or
               | 'Seiko' of chocolate, I expect they'd tolerate the fact
               | that there was a still an Omega out there.
               | 
               | And with the Casio profits, they could make a reasonable
               | run at unseating Swiss chocolate in another century or
               | so.
        
           | zorked wrote:
           | Do you have any specific knowledge about Ghanaian industry or
           | is this just your opinion? Can you provide some sources for
           | your claims?
        
             | barry-cotter wrote:
             | Why would the Ghanaian government be any better at economic
             | planning than the Argentinian or Indian ones? Sometimes
             | industrial policy "works", as in South Korea or Japan. But
             | we have no strong reason to believe either would have
             | failed to develop without government help. Hong Kong didn't
             | need it. People talk about the successes of industrial
             | planning a lot but Argentina and India aren't the only
             | countries to piss away enormous resources propping up
             | domestic industries that vanished in a puff of smoke as
             | soon as they stopped being protected by tariffs or non tax
             | trade barriers.
        
               | hindsightbias wrote:
               | SK's recovery from the war was very sluggish for a decade
               | until a military coup, protectionist economic polices,
               | nationalization and multi-$B US economic donations.
        
               | andrepd wrote:
               | Maybe you would want to research what Japan and South
               | Korea have in common and what Argentina has different.
               | Hint: it involves something that starts with U and ends
               | with SA
        
           | rory wrote:
           | Maybe the government is trying to pressure Swiss companies up
           | the value chain to move processing operations to Ghana? That
           | seems like a reasonable way to increase income to Ghanaians
           | and build local human capital, without having to start
           | industry from scratch.
           | 
           | I don't know the fine details of how chocolate is made, but a
           | chocolate bar seems like a fairly straightforward industrial
           | product. Why should it be made in somewhere as high-cost as
           | Switzerland, if not just because of operational and brand-
           | value momentum?
        
             | bingbong70 wrote:
             | The story of this century, "cut off useless middlemen",
             | Europe has a lot of comfortable useless middlemen left over
             | from the colonization period.
        
           | luckylion wrote:
           | > So Saudi Arabia, UAE, Canada and Saudi Arabia are 'stuck'
           | selling natural resources?
           | 
           | Canada maybe not so much, but Saudi Arabia and the UAE? Yeah,
           | and I think they understand that as well. If we have a fusion
           | breakthrough next year, what will Saudi Arabia export besides
           | Wahhabism?
        
             | m12k wrote:
             | The Saudi royal family is busy buying as much of Silicon
             | Valley as they can, to ensure they can still live atop a
             | mountain of cash once the oil runs out. As for the rest of
             | the country - yeah, they are royally fucked (pun intended)
             | since no other industry than oil was ever developed.
        
               | arethuza wrote:
               | They seem to be trying to develop their tourist industry
               | - I keep getting adverts for holidays there!
        
               | andrepd wrote:
               | It's possibly one of countries in the world I'm least
               | interested in visiting.
        
               | nasmorn wrote:
               | Where else to go to a good oldfashioned lashing?
        
               | arethuza wrote:
               | Saudi Arabia apparently has stopped using flogging:
               | 
               | https://www.theguardian.com/world/2020/apr/25/saudi-
               | arabia-t...
               | 
               | However, plenty places still use corporal punishment,
               | including Singapore:
               | 
               | https://en.wikipedia.org/wiki/Judicial_corporal_punishmen
               | t
        
             | TeMPOraL wrote:
             | Or more likely, what happens when the oil wells eventually
             | run dry? Or even, what happens in the years before, when
             | those wells start producing less and less oil?
        
           | fakedang wrote:
           | > Saudi Arabia, UAE, Canada and Saudi Arabia are 'stuck'
           | selling natural resources?
           | 
           | Actually yes. The trend happening there is reminiscent of the
           | spice trade. The UAE will stay afloat because of its massive
           | externally invested wealth fund and Canada's liberal policy
           | will keep the talent coming (although imo destroying the
           | local population's affordability). But Saudi Arabia has a
           | huge problem right now, since they squandered a lot of their
           | oil wealth and are in no position to rely on immigrant growth
           | - especially when native Saudis are not employable at all. I
           | know for a fact that the UAE actually monitors intelligence
           | in Saudi Arabia to make sure that a revolt or an insurgency
           | doesn't happen there. OPEC annual meetings are literally a
           | mercantilist exercise.
        
         | sandworm101 wrote:
         | >> a fledgling industry in a developing country cannot compete
         | with those of already industrialized countries
         | 
         | Except that often they do. With lower safety/environmental
         | standards, lower wages, and lower expectations many
         | "developing" countries can undercut the labor markets of
         | developed countries, operating advanced manufacturing at far
         | reduced costs. Many would ague that is exactly how China has
         | risen to power.
         | 
         | A reliance on export of raw resources is also no telltale of a
         | country still "developing" its economy. Canada is heavily
         | dependent on resource extraction and export. Canada is also a
         | former colony. But would anyone here dare say Canada is a
         | "developing" economy?
        
           | pietrovismara wrote:
           | > With lower safety/environmental standards, lower wages
           | 
           | Well, no, thanks. I'd rather not be forced to enslave my
           | people in order to compete with western capitalism.
        
             | ISL wrote:
             | The people of some countries are already enslaved by
             | poverty and corruption. The pragmatic question is: will
             | attracting outside capital improve the situation of the
             | populace or not?
        
             | Mauricebranagh wrote:
             | Its not like those countries would have had higher labour
             | standards in the first place.
        
         | oblio wrote:
         | > So the book argues that when developing countries are
         | pressured into free trade agreements
         | 
         | This should have been obvious since the Opium Wars and the
         | Opening of Japan (see Commodore Matthew Perry).
         | 
         | All developed countries are pro free trade for markets where
         | they are strong and fiercely protectionist where they are not
         | (or they consider those markets strategic priorities).
         | 
         | I'm from Romania. Romania joined the EU in 2007, so we had to
         | liberalize everything. It has generally been good for us
         | (higher wages, economic growth, overall development), but I
         | know all the German, French, Belgian supermarket chains.
         | 
         | Do you know why I know them? Because there are 0 (zero!) local
         | supermarket chains left. They've all been bought by foreign
         | companies.
         | 
         | Similar story for banks, car companies, whatever.
         | 
         | During the 2008 economic crisis Erste, Austrian banking group,
         | repatriated all the local profits (from BCR, former major
         | Romanian bank) to Austria so that the local banks would not be
         | impacted. Similar story for OMV, Austrian oil and gas group
         | (from Petrom, former major Romanian oil and gas company).
         | 
         | It's a mixed bag, really. You need some foreign investment to
         | kickstart things, but if you don't start blocking stuff off,
         | you'll never go over the middle income barrier, at best. At
         | worst you practically become someone else's colony, or in the
         | olden days, you actually were their colony (and what happened
         | in Bengal in 1941 and Ireland in the 1800s comes to mind).
        
           | kar1181 wrote:
           | Similar things are happening in Croatia.
        
             | pjmlp wrote:
             | To the point that when I traveled around a couple of years
             | ago along the coast, most people I met along the way seemed
             | to be more confortable speaking German than English.
        
               | Mediterraneo10 wrote:
               | Serbian/Croatian/Bosnian/Kosovar familiarity with German
               | is something that dates from the era of Yugoslavia, it
               | has little to do with corporate sway in the modern EU.
               | 
               | Yugoslavia 1) allowed its people to freely work in the
               | West, and many people chose to go to West Germany, and 2)
               | Yugoslavia built up extensive tourist infrastructure in
               | Croatia and Montenegro that drew predominantly German-
               | speaking holidaymakers (and not so many English-speaking
               | ones -- UK holidaymakers went for e.g. Spain or Greece
               | during this era). All this made German seem like the
               | language for communicating with foreigners, though among
               | younger generations it is already giving way to English.
        
               | pjmlp wrote:
               | Yeah this was about 10 years ago. Thanks for the
               | overview.
               | 
               | Althought I did see enough Lidl and Aldi around.
        
               | mrkramer wrote:
               | As far as I know the history of my country Croatia
               | familiarity with Germanic nations dates from Habsburg
               | Monarchy[1] meaning 300+ years.
               | 
               | [1] https://en.wikipedia.org/wiki/Habsburg_Monarchy
        
               | Mediterraneo10 wrote:
               | In Hapsburg times, only a fairly small elite outside of
               | Austria knew German. Most people in the Empire knew only
               | their own language (or sometimes e.g. their own language
               | and some degree of Hungarian). It wasn't until after the
               | fall of the Austro-Hungarian Empire that the average
               | person - due to modern state-schooling curricula,
               | business contacts with German speakers, or going to work
               | in Germany - began to know German.
               | 
               | There is quite a body of scholarship on the
               | sociolinguistics of the Austro-Hungarian Empire, if you
               | are curious.
        
               | mrkramer wrote:
               | Public/state workers had to know German, military
               | personnel had to know German and as the education system
               | was building in Habsburg Monarchy and Austro-Hungarian
               | Empire children and university students were learning
               | German. There are more than 2000 German words in Croatian
               | language today dating back from Habsburg Monarchy and
               | Austro-Hungarian Empire.
               | 
               | You don't build a bond with some nation and culture over
               | the course of one century it takes more than that. For
               | example like you probably know Ottoman Empire was ruling
               | and controlling south-east Europe for 500 years and
               | impact of that is very much visible and present today.
        
               | foobarian wrote:
               | Speaking of the Ottoman empire, when I watched a Turkish
               | show recently I was surprised to hear a number of words I
               | had no idea were Turkish origin. (Well, could be the
               | other way around too I guess. But they sounded Turkish.)
               | Sanduk, cizma, budala, paramparcad, kapija, sandzak,
               | inat, kutija, ajde just off the top of my head.
               | 
               | The German connection is definitely there. There was even
               | a transliterated word used for people working abroad:
               | "gastarbajter," from German Gastarbeiter. And it was used
               | for anyone working abroad, no matter where :-)
               | 
               | Edit: https://en.wiktionary.org/w/index.php?title=Categor
               | y:Serbo-C... . I can't believe "boja" is borrowed.
        
               | Mediterraneo10 wrote:
               | Public/state workers and university students _were_ a
               | small elite until the 20th century, as were
               | schoolchildren until a fairly late date. Also, the
               | demographics you speak of were males, meaning that you
               | are leaving out a half of the population.
               | 
               | Certainly German words in Croatian testify to contacts at
               | some level of the population. Romanian, too, abounds in
               | German words in some domains, for example, but this
               | doesn't mean the average Romanian would have been able to
               | speak any German. But in Croatia knowledge of German
               | varied greatly from the country's northwest to its south.
               | Again, the sociolinguistics of the Austro-Hungarian
               | Empire are well-described.
        
           | paganel wrote:
           | Fellow Romanian here, a person very close to me died of
           | heart-failure in the middle of the street in downtown
           | Bucharest 10+ years ago, not a block away from her employer's
           | HQs at the time. She was in her early 40s, her employer was
           | BCR (the bank that had just been acquired by Erste), and said
           | close person had had a few fights with the new Austrian
           | rulers to be, she was part of the bank's trade-union body,
           | she didn't want her colleagues' jobs to go away after the
           | purchase. The jobs did go away after the purchase, in droves.
           | 
           | A person even closer to me used to work for OMV immediately
           | after they had purchased Petrom (our former State-run oil
           | company). The stories I could hear back then could fill many
           | pages, I still remember seeing the papers with hundreds of
           | people's names on them, people who were supposed to be laid
           | off the following days. And that was just from one company
           | division. To say nothing of the fact that the Austrians had
           | no oil drilling operations, no oil drilling specialists,
           | nothing of the sorts, while Petrom had been in the oil
           | drilling business for decades. Or how OMV had (I think it
           | still has) as its major shareholder the Austrian State, so in
           | fact we managed to sell our oil state company to basically
           | another state.
        
           | leto_ii wrote:
           | Also a Romanian here. My take is similar to yours, but I
           | would go even further in saying that the 90s were even more
           | catastrophic in terms of privatization and liberalization.
           | Remember the 'shock therapy' years? Prices doubling every few
           | months? Entire industries collapsing, prized factories being
           | sold for scrap metal? Millions losing their jobs etc. - a lot
           | of that stuff didn't have to happen that way. A lot of it was
           | forced via Washington Consensus type reforms.
           | 
           | To my mind the EU was our salvation not so much because of
           | its economic nature, but because of its political one. The
           | free market was the price we had to pay in order to be able
           | to travel, work, study abroad, earn real wages that we could
           | use to invest back into our own country etc. The EU also
           | insured a decent degree of geo-political, strategic
           | stability. Without the EU we may have ended up like our
           | neighbors to the North/East.
        
           | starfallg wrote:
           | >I'm from Romania. Romania joined the EU in 2007, so we had
           | to liberalize everything. It has generally been good for us
           | (higher wages, economic growth, overall development), but I
           | know all the German, French, Belgian supermarket chains.
           | 
           | That's already known factor though. The reason of the free
           | movement of labour to make up for capital movements like
           | these.
        
           | lostinquebec wrote:
           | Do you have a counter factual?
           | 
           | It seems to me too early to predict a lot about Eastern
           | Europe. < 20 years is not a long time. 2007 means that the
           | first children born after Romania joined the EU are 8 years
           | away from leaving university.
           | 
           | You could very well be correct, but I'd want to see some
           | countries that tried this a lot longer ago.
        
             | oblio wrote:
             | It's hard to say, but...
             | 
             | Almost all the cases of countries going from
             | underdeveloped/developing to developed did it through
             | various forms of protectionism: Japan, Singapore, Taiwan,
             | South Korea, China, Hong Kong.
             | 
             | I'm trying super hard to think of a country that did it by
             | liberalizing fully. Eastern European countries might be the
             | examples you're looking for, but it's too early to say.
             | 
             | If you think about any sport, or any activity in general,
             | it makes sense. You never expose the hard parts, you only
             | expose what you can easily defend or what can defend
             | itself. Or if you're China, you fake exposing the soft
             | parts and then you catch everyone in your tar pit :-))
        
           | jopsen wrote:
           | Are those supermarkets really all that French or Belgian
           | anymore?
           | 
           | In practice, many large companies are owned by investors from
           | all over the world looking for diversification.
        
             | skocznymroczny wrote:
             | The specific ownership and the details are irrelevant, what
             | matters is that a large chunk of their profits is extracted
             | out of the country and doesn't get reinvested.
        
               | viro wrote:
               | Thats not how the economy works. Walmart profits don't
               | get "invested" in the States. They get invested into
               | Walmart. The wages and taxes those wages fuel always gets
               | applied locally. Nothing is being "extracted". Thats just
               | nationalist bullshit used to fuel protectionism.
        
               | oblio wrote:
               | If the very well paid jobs stay in the home country, how
               | do you call that?
               | 
               | If the interesting work all stays in the home country,
               | how do you call that?
               | 
               | We like to kid ourselves that multinational companies are
               | truly multinational, companies of the world. What's the
               | percentage of non-American top managers, for example,
               | working for American based multinationals? It's probably
               | in the low 1-digit percentages.
               | 
               | There is a definite advantage to bejng an early investor.
               | For these companies the risk is comparatively small and
               | the rewards they reap are huge and on very long time
               | horizons.
               | 
               | It's not super clear cut that it's all nationalist BS.
        
               | labawi wrote:
               | AFAIU, neither wages nor investments count as profits -
               | those are paid to owners / shareholders.
               | 
               | As far as returning the earnings to workers and local
               | economy via taxes - yes there are expenses, you can't
               | take 100% of income as profits, but there is a lot of
               | leeway to direct the funds pretty much wherever the
               | company chooses. Corporate headquarters in tax friendly
               | countries are popular for a reason.
        
               | TheButlerian wrote:
               | Fucking dumb Eastern European gypsy.
        
               | Blackstone4 wrote:
               | Is that really true? The international supermarkets may
               | chose to invest by open new stores....secondly, they had
               | to buy the local supermarkets in the first place...that
               | went somewhere...maybe that was reinvested locally. It is
               | not clear cut.
        
               | labawi wrote:
               | > they had to buy the local supermarkets in the first
               | place
               | 
               | When foreign owners extract profits to recover their
               | investment or pay whomever, wealth is in fact leaving the
               | country - because they still own the capital (stores) yet
               | get money back.
               | 
               | It's not clear cut based on this. They could have
               | invested beyond price, brought knowledge, improved
               | efficiency ... It's also possible they are in effect
               | extracting wealth colonialist style, which is something
               | to beware of - at scale it can have severe consequences
               | for local economies.
        
             | oblio wrote:
             | The top management for sure is French/German/Belgian. At
             | least big chunks of it. And the owners
             | (individuals/companies) are French/German/Belgian.
             | 
             | If push comes to shove, they will for sure prioritize
             | French/German/Belgian interests.
             | 
             | Can't really blame them but strategically it's not a
             | position you want to be in, looking at it from the other
             | side.
        
               | killtimeatwork wrote:
               | Yep. The story about large corporations being totally
               | nationeless is a pure fantasy. For example, just a couple
               | years ago Fiat-Chrystler decided to move production from
               | one of its best factories in Poland to one of its worst
               | (in terms of quality and costs per unit), located in
               | Italy. It made zero sense for the business and was only
               | made as a favor to Italian politicians.
               | 
               | In more general sense, all global companies have some
               | originating country and most of them keep the HQ and most
               | of the high-paying jobs there. They expand to other
               | countries mostly as a cost-saving measure and they have
               | zero loyalty to them, while they have a lot of loyalty to
               | the mothership.
        
               | toyg wrote:
               | _> It made zero sense for the business_
               | 
               | No, it makes perfect sense when you factor in that
               | FIAT/FCA/Stellantis was and is the receiver of massive
               | subsidies, in various guises, from the Italian state.
               | Losing those would be more harmful to the business than
               | losing any foreign factory (with the exception of US
               | ones, which were also beneficiaries of massive state
               | support). FCA stopped being a "national champion" ages
               | ago, they are just a hardened global business now; they
               | just know which side their bread is buttered.
               | 
               |  _> They expand to other countries mostly as a cost-
               | saving measure and they have zero loyalty to them_
               | 
               | Believe me, they have zero loyalty to "the motherland"
               | too. Many of them have long relocated their HQ too, for
               | fiscal reasons. FCA/Stellantis, for example, is now based
               | in Amsterdam. The chance that they'll ever expand again
               | their manufacturing bases in Italy or France is minimal.
               | 
               | Honestly, the issue is that national champions don't
               | exist anymore. Greed-is-good is all that matters.
        
             | cycomanic wrote:
             | Aldi the 3rd (or 4th) biggest supermarket chain is still
             | owned essentially by the Aldi families (there are in fact 2
             | Aldi chains, because the brothers could stand each other.
        
           | foobarian wrote:
           | I've been in Massachusetts for a while, which is a small
           | American state. And guess what? 20 years ago there used to be
           | many more local supermarket chains, that over time were
           | increasingly absorbed or destroyed by massive national
           | chains. I feel like this same story plays out all over the
           | world, except that when you have countries like in Europe it
           | feels like a more personal type of event e.g. "those foreign
           | superchains are out to get our local wholesome stuff." But in
           | reality maybe it's mostly just business.
        
           | killtimeatwork wrote:
           | That's where China was smart I guess. They didn't sign any
           | treaty which forced them into free trade or IP protection,
           | but instead slowly allowed their industries to build up via
           | IP theft and strong protectionism. Now they have giant
           | companies on par with the West's. Whereas everyone who joined
           | the EU in the decade of 2000 (and the Washington Consensus
           | before that in the nineties) is now a pawn of the Western
           | capital with no clear path of escaping the trap of
           | mediocrity.
           | 
           | So far, the standard of living in post-Soviet EU countries is
           | still higher than in China, but that's because of the much
           | better starting point and also because it's just hard to
           | provide wealth for over a billion people in a modern, heavily
           | automated economy. However, even with their gargantuan
           | population size, I see China potentially overtaking Poland or
           | Czech Republic in terms of quality of living in the next
           | 50-100 years.
        
             | thereddaikon wrote:
             | Funny you say that because exactly the opposite thing
             | happened to China. They were completely taken advantage of
             | in the 19th century and didn't fully recover from that
             | until a 100 years later when Nixon and Kissinger in one of
             | their "4D chess" moves restarted diplomatic relations as a
             | way to limit the Soviets.
             | 
             | From that point on they had a pretty clever long view
             | policy but it would have been surprising if they hadn't.
             | They spent the previous century getting fucked by foreign
             | invaders, if they hadn't learned how to resist it by the
             | 1970's then Chinese culture as we know it would have been
             | doomed to collapse by the 90's.
             | 
             | And truth be told they almost did in 1989. If the CCP was a
             | little less organized, if the military was a little less
             | loyal and if the protesters had their shit together a bit
             | more it could have turned into a full popular revolution.
        
             | khuey wrote:
             | They did sign those treaties (e.g. with WTO membership),
             | they just ignored them.
        
               | yorwba wrote:
               | They didn't exactly ignore them.
               | 
               | A WTO member can either comply with their treaty
               | obligations (e.g. reducing barriers to trade) or have
               | other members apply their own remedies (e.g. punitive
               | tariffs.)
               | 
               | If the effect of compliance is worse than the punishment
               | (e.g. underdeveloped industry eliminated by foreign
               | competitors vs. continuing to operate despite high
               | tariffs) they'll not comply.
               | 
               | If the punishment is worse (e.g. industry is basically
               | competitive, but tariffs would make products hard to sell
               | in foreign countries) they'll choose compliance.
               | 
               | At the bilateral level, there's not much difference to
               | the pre-WTO situation, which might make you wonder
               | whether it's all pointless. The advantage of the WTO is
               | that it provides a shared target for compliance: if a
               | country follows WTO rules, pretty much every other member
               | will be happy with that. Which is a bigger incentive than
               | having to please every trading partner individually.
        
               | oyashirochama wrote:
               | And no one cared, it something that needs to be reckoned
               | with.
        
             | audunw wrote:
             | I really think China is making a huge mistake actually. See
             | how TSMC (Taiwan) and Samsung are free to buy ASMLs EUV
             | machines, while China is blocked. Part of that is due to
             | their rampant IP theft. Why sell machines to China if
             | they're just going to copy them?
             | 
             | China also messed up big time by enforcing their 1 child
             | policy, and taking so long to open up and industrialize.
             | They're far behind economically compared to where other
             | countries were with their demographic. Now they're on the
             | verge of the biggest wave of senior citizens reaching
             | retirement the world has ever seen, with crumbling
             | infrastructure and housing, relatively low GDP/capita and
             | no clear path to manufacturing/export of truly high value
             | goods and services. They're screwed.
             | 
             | China really wants to get out of low-value manufacturing,
             | and in some ways they're encouraging pushing that out to
             | south-east asia and africa. But at the same time they don't
             | have the positive image and reputation needed to be a big
             | exporter of high-value goods. Who is going to trust Chinese
             | companies with things like 5G infrastructure and CPS, when
             | they're all basically an extension of the CCP when it comes
             | to security? Who wants to live and work in China now, when
             | you have no real justice for foreign citizens and the CCP
             | can arrest you at a whim? If anything even close to
             | Shenzhen is replicated elsewhere in the world, I think
             | companies and individuals will gladly develop their
             | products elsewhere. Will a giant Chinese company ever gain
             | the reputation of Samsung or Sony? DJI I guess? But that's
             | a bit niche.
             | 
             | Poland is growing healthily last I checked. The proof is in
             | immigration numbers in other European countries. It seems
             | to be reversing. In Norway there's a clear downward trend
             | in immigration from Poland.
        
               | mrkramer wrote:
               | IP theft allowed China to acquire much needed technical
               | know-how and to build up their manufacturing industry.
        
               | mytailorisrich wrote:
               | > _See how TSMC (Taiwan) and Samsung are free to buy
               | ASMLs EUV machines, while China is blocked._
               | 
               | That's because of geopolitics: These countries are small
               | enough that they cannot be a threat to the US. In fact
               | they are dependent on the US.
               | 
               | China, on the other hand, is a strategic adversary
               | irrespective of their IP laws (and enforcement of those
               | laws) or even of their political regime.
        
               | yorwba wrote:
               | > See how TSMC (Taiwan) and Samsung are free to buy ASMLs
               | EUV machines, while China is blocked. Part of that is due
               | to their rampant IP theft. Why sell machines to China if
               | they're just going to copy them?
               | 
               | ASML's machines aren't something you can just copy by
               | buying one of them. (You'd do better by hiring ex-ASML
               | engineers to teach you how to do it.) And ASML would've
               | sold their EUV equipment (just as they continue to sell
               | previous-generation machines) if their export license had
               | been extended by the Dutch government, but the US applied
               | pressure to make sure that didn't happen.
               | 
               | You say China took too long to open up and industrialize.
               | Well, they are open to buy from ASML and industrialize
               | with their help, but others are closing that door...
        
               | tablespoon wrote:
               | >> See how TSMC (Taiwan) and Samsung are free to buy
               | ASMLs EUV machines, while China is blocked. Part of that
               | is due to their rampant IP theft. Why sell machines to
               | China if they're just going to copy them?
               | 
               | > You say China took too long to open up and
               | industrialize. Well, they are open to buy from ASML and
               | industrialize with their help, but others are closing
               | that door...
               | 
               | There's also the elephant in the room: China is
               | controlled by the Communist party, which holds values
               | that are antithetical to those of many of its trading
               | partners
               | (https://www.nytimes.com/2013/08/20/world/asia/chinas-
               | new-lea...). Neither Taiwan nor South Korea have that
               | kind of incompatibility. It was kind of naive and
               | arrogant for Western trade policy to focus on stuff like
               | IP theft and market access while ignoring that elephant.
        
               | brutus1213 wrote:
               | I think people who think China can be contained are being
               | naive. As an academic, I am extremely impressed with the
               | improvement in scientific publications in CS out of China
               | of late. In 10 years, they are now killing it on a
               | consistent basis (personal anecdote: a paper from
               | Tsinghua or Shanghai Jiao Tong on average is as good as
               | one from Berkeley, Stanford or MIT). I have a feeling it
               | has to do with the reality that Chinese nationals (or
               | people with some ethnic/language connection) are an
               | integral part of cutting edge science globally. It is
               | extremely do-able to entice these individuals back.
               | Western countries have severely under invested in
               | research .. even back when I got my PhD (like a decade
               | ago), my job packages were far superior in Asia (not just
               | China) than in the West.
               | 
               | I think in 5G, some top level planners in the West have
               | realized the error of their ways, and are investing
               | heavily in basic research. I think it is too late.
        
               | 908B64B197 wrote:
               | > (personal anecdote: a paper from Tsinghua or Shanghai
               | Jiao Tong on average is as good as one from Berkeley,
               | Stanford or MIT)
               | 
               | Wait until Berkeley Stanford and MIT get better network
               | security! [0][1][2]
               | 
               | [0] https://www.nytimes.com/2019/12/31/us/chinese-
               | scientist-canc...
               | 
               | [1] https://www.latimes.com/california/story/2020-06-11/c
               | hinese-...
               | 
               | [2] https://www.cbc.ca/news/canada/manitoba/chinese-
               | researcher-e...
        
               | klmadfejno wrote:
               | > I really think China is making a huge mistake actually.
               | See how TSMC (Taiwan) and Samsung are free to buy ASMLs
               | EUV machines, while China is blocked. Part of that is due
               | to their rampant IP theft. Why sell machines to China if
               | they're just going to copy them?
               | 
               | Because China can waggle a huge target market to tempt
               | people into repeating well documented mistakes
        
               | newswasboring wrote:
               | > See how TSMC (Taiwan) and Samsung are free to buy ASMLs
               | EUV machines, while China is blocked. Part of that is due
               | to their rampant IP theft. Why sell machines to China if
               | they're just going to copy them?
               | 
               | You seem a bit misinformed. ASML CEO has repeatedly
               | showed extreme desire to sell in china (it already
               | comprises the fastest growing DUV market)[1]. It's the
               | american pressure, indirectly or directly exerted which
               | is causing issues. If it were upto ASML SMIC would
               | already be establishing it's EUV fabs.
               | 
               | [1] https://www.caixinglobal.com/2020-10-16/dutch-tech-
               | giant-asm...
        
               | nytgop77 wrote:
               | fact remains, that there are dificlties.
        
               | babesh wrote:
               | The 1 child policy is probably a big issue but IP theft
               | is partly how the US industrialized. The textile mills of
               | the North that kicked off industrialization in the US was
               | based off of IP stolen from Britain. In fact, many of the
               | practices that the Chinese are using were also used by
               | the Americans: smuggling plans, hiring key employees,
               | tariffs, etc.
               | 
               | https://www.realclearmarkets.com/articles/2018/07/30/ip_t
               | hef...!
               | 
               | http://web.mit.edu/heikki/www/antebellum_tariff_draft1.pd
               | f
        
               | thereare5lights wrote:
               | It's really interesting what some of the similarities
               | there are in China's rise vs the US's rise.
               | 
               | * Genocide
               | 
               | * Colonialism
               | 
               | * IP Theft
               | 
               | * Promotion of an ethnostate
               | 
               | * Manifest Destiny
               | 
               | * Monroe Doctrine
               | 
               | I'm sure there's more.
        
               | jkepler wrote:
               | Isn't the underlying problem here the idea of
               | Intellectual Property doesn't really correspond to real
               | property? If I have an ax I use to provide lumber to our
               | town and you steal it physically from me, that's theft.
               | But if you see my ax, understand how it works, and make
               | your own to also cut lumber, is that really theft? Or is
               | it net beneficial to the town, as now people have more
               | cut lumber to choose from and perhaps lower prices?
               | However, if I lobby to get an IP law, how does that serve
               | the community? It only protects me from competition.
        
               | mpoteat wrote:
               | The theory is that nobody will invest in e.g. researching
               | how to build a complicated lumber cutting machine if they
               | don't have protections against their competitor copying
               | the results.
               | 
               | Let's say this research costs 1 million dollars, and the
               | company bankrolls this via a loan. They build it and are
               | successful, and begin paying it off.
               | 
               | Their competitor copies their idea, and exploits the fact
               | that they have more capital and less debt to buy up more
               | of the market, and end up the winner.
               | 
               | So, under a zero protection scheme it is optimal to wait
               | until your competitor invests in research, and then just
               | steal it. Which is what happens on a geopolitical level
               | where there is no feasible enforcement possible.
        
               | fragmede wrote:
               | Even domestically, the reason Hollywood is the center of
               | the film industry is because California was too far from
               | the East coast for patents on moving picture cameras to
               | be effectively enforced.
        
               | Andrew_nenakhov wrote:
               | I thought it has more to do with weather, particularly
               | ~300 sunny days per year.
        
               | the_af wrote:
               | It was a bit of both. I think I first read about this in
               | Lessig's _Free Culture_ [1], but even Wikipedia mentions
               | some of this: somewhat ironically because of the MPAA 's
               | current heavy-handed tactics, Hollywood was founded on
               | piracy and patents infringement. Some moviemakers moved
               | West to explore new territories and climates (Wikipedia
               | mentions D.W. Griffith) but others soon followed suit in
               | order to avoid Edison's patents. It can be argued that
               | _Hollywood was made possible_ by people who broke the law
               | [2]
               | 
               | So Hollywood and the MPAA, who so aggressively pursue
               | what they deem "IP infringement", have more than one
               | skeleton in their closets.
               | 
               | Bear this in mind whenever someone tells you -- as often
               | witnessed here on HN -- "but without copyright there will
               | be no writers" or "art isn't possible without IP laws".
               | 
               | ----
               | 
               | [1] https://en.wikipedia.org/wiki/Free_Culture_(book)
               | 
               | [2] https://en.wikipedia.org/wiki/Cinema_of_the_United_St
               | ates#Ri...
        
               | Andrew_nenakhov wrote:
               | > "without copyright there will be no writers"
               | 
               | Just recently had a bit of a good laugh about this. I
               | decided to read Caesar's notes on Gallic wars, and
               | downloaded some random .fb2
               | 
               | It turned out to be a preview fragment, which ended with
               | a stern warning that it is illegal to break copyright
               | laws and that this book can be legally purchased via
               | provided link. I'm sure Gaius Julius is very happy with
               | how these guys protect his interests.
        
               | throwaway776543 wrote:
               | > Part of that is due to their rampant IP theft
               | 
               | Weren't South Korea, Taiwan, and even Japan once known
               | for their rampant IP theft?
        
               | Mauricebranagh wrote:
               | The US was to and not that long ago.
        
               | nix23 wrote:
               | >Japan once known for their rampant IP theft?
               | 
               | Yes they stole even IBM Mainframe OS's repeatedly....and
               | sold it.
        
               | medium_burrito wrote:
               | Nowhere near as bad. The sheer scale and reach of Chinese
               | counterfeits/crap quality is epic. If there's an olympics
               | for this, China wins all the medals in every event.
               | 
               | - Fake apple cables
               | 
               | - Fidget spinners
               | 
               | - Remember fake Apple stores?
               | https://www.reuters.com/article/us-china-apple-fake-
               | idUSTRE7...
               | 
               | - Remember the milk scandal?
               | https://en.wikipedia.org/wiki/2008_Chinese_milk_scandal
               | 
               | - And don't forget the Three Gorges Dam, where the
               | grifters building it used so much concrete building it
               | (causing a global concrete shortage), but didn't worry
               | about the problems non-homogeneous concrete causes in
               | large load-bearing structures, and skimping on quality
               | and every which way. The CCP has basically admitted the
               | dam is useless for flood control. And it has some cracks,
               | and the weather changes are going to cause more issues.
        
               | nytgop77 wrote:
               | probably legaly i am wrong. but apple cables and figdet
               | spinners.. not much _intelectual_ property there. there
               | should be separate term for brand infrigment.
        
               | throwbacktictac wrote:
               | I think it's healthy to have a diverse set of mid and
               | upper market companies. Chinese companies will ultimately
               | buy their way into up market businesses. One antidote
               | that I can readily think of is the acquisition of the
               | street wear company Bape buy a the Chinese/Hong Kong
               | manufacturer I.T Group. Forbes magazine is another
               | company that was acquired by a Chinese company.
               | 
               | Furthermore, Hong Kong has some international appeal and
               | most people think of it as a nation separate from China.
               | In reality, companies from China incorporate in HK to
               | escape the aurora of being a Chinese compnay
        
               | babesh wrote:
               | Hong Kong companies have better brand reputations than
               | Chinese companies but gradually there are more Chinese
               | brands gaining better reputations.
               | 
               | I would expect this to continue. In fact, there are
               | probably a few brands that are Chinese that you don't
               | realize are Chinese.
        
               | [deleted]
        
               | Nimitz14 wrote:
               | Uuh have you not heard of xiaomi or oneplus? They're
               | already creating high value goods.
        
               | klipklop wrote:
               | Indeed. My 4 year old Oneplus phone taught me that China
               | can make a phone just as good as anyone else. It's a
               | quality product and was at a great price.
               | 
               | With that said, my next phone will be an iPhone. I am
               | trying to de-china whenever I can when it comes to buying
               | stuff.
        
               | OrbitRock wrote:
               | DJI drones is another example
        
               | jfengel wrote:
               | _Who is going to trust Chinese companies with things like
               | 5G infrastructure and CPS, when they 're all basically an
               | extension of the CCP when it comes to security?_
               | 
               | They're going to try to compete on price and quality. If
               | customers think that the Xiaomi phone is good and cheap,
               | the governments will have a hard time banning it.
               | Customers don't really care about turning over huge
               | amounts of information to Tiktok as well as to Facebook.
               | That puts the western governments in a bind, to either
               | ban wholesale or piecemeal, and it looks bad for them
               | either way.
               | 
               | That's not a guaranteed win for China. It's hard to
               | compete on both price and quality, and they're going to
               | have to work hard to win a reputation for the latter.
               | It's possible: both Japan and South Korea have done it.
               | But they did so with a friendly US, not a hostile one.
               | 
               | They have the advantage of an enormous internal market,
               | but it's not a wealthy one. They're going to look to
               | Africa, which is also not wealthy, but there is money
               | there, with less focus on privacy and more on price.
               | Perhaps India and Latin America as well.
        
               | jorblumesea wrote:
               | I think it's also fair to note that "Africa" is a huge
               | place with huge income distributions. I can see South
               | Africa and North Africa aligning more with the West, and
               | East Africa going more to China.
        
             | [deleted]
        
             | haspok wrote:
             | How can you compare China (population ~1.4bn) to any EU
             | country (population average ~10mn - several orders of
             | magnitude less, even in the case of the largest country)?
             | Size is an advantage, not a disadvantage!
             | 
             | Pretty much none of the tactics would have worked for a
             | small country that China played successfully. If you are
             | small you can choose to be independent and protectionist -
             | and remain very poor, or join the party, but be pushed into
             | the corner, hoping that with time the playing field will
             | level out somewhat.
        
           | zz865 wrote:
           | I'm from a country where there are several locally owned
           | supermarkets. They're all very nice but eye wateringly
           | expensive. I'd love if Aldi/Carrefour/Costco moved in.
        
             | treis wrote:
             | This is the counter argument. By protecting an inefficient
             | sector you make it harder for every other sector to
             | operate. If Ghana moves to protect their Chocolate
             | manufacturing that will likely come at the expense of their
             | Cocoa growers.
             | 
             | The best way seems to start with low level work and move up
             | the chain.
        
           | Mediterraneo10 wrote:
           | Romania still has at least one local supermarket chain I can
           | think of: Oncos. I'm not sure how many locations they have
           | outside of Transylvania, though.
           | 
           | Sadly, Romania's competitiveness in building its own
           | businesses in Europe is weakened by being left out of
           | Schengen. Considering that Mark Rutte's party just won
           | reelection in the Dutch elections, sadly nothing is likely to
           | change on that front for years - he is the biggest force
           | vetoing Romanian accession to Schengen.
        
             | oblio wrote:
             | That's on our government.
             | 
             | We should just start vetoing some of those important
             | treaties or other big agreements. We need to start
             | pressuring the other EU members into pressuring the
             | Netherlands for us.
        
               | Florin_Andrei wrote:
               | Well, it's a matter of leverage, isn't it?
        
           | AdrianB1 wrote:
           | In 2002-2005 I worked with all the supermarket and
           | hypermarket chains in Romania, I still have a couple of
           | friends in CxO positions in the top 5 companies; you are
           | missing the full picture on what happened there, but the
           | story is too long for a comment here; the 2007 change had
           | zero impact of what already happened in the early 2000s.
        
             | oblio wrote:
             | I wanted to keep it simple for non-Romanians. The process
             | started as Romania was implementing the EU acquis, after
             | 1999.
             | 
             | I'd be interested in the story, if you have time, but my
             | only comment for everyone else reading this, these are
             | technicalities, regarding the gist of my comment. They only
             | change the timeline, but the main idea is the same.
        
               | AdrianB1 wrote:
               | That is the point, the main idea is wrong. The 2 major
               | factors were lack of experience of the Romanian owners (I
               | had very close friends that worked at the failed
               | Univers'all chain, it was total chaos) and capital to
               | build the right format at the right quality.
        
           | DSingularity wrote:
           | WW3 was fought with soft power and economics. Now some
           | countries own other countries and nobody is complaining.
        
             | smolder wrote:
             | I hear quite a lot of complaints from all sorts of people
             | about their economic victimhood. I've got complaints myself
             | about what global economics are doing for our prospects as
             | a species.
        
             | baryphonic wrote:
             | Considering that at the end of WWII, large swathes of
             | global population were subject to colonial rule,
             | particularly in Africa and Asia, I wonder how the current
             | situation you describe compares.
        
             | permo-w wrote:
             | Soft power and economics have been used as weapons for
             | centuries Do you really think that their current or recent
             | use is enough to warrant the moniker "WW3"?
             | 
             | I don't
        
           | WalterBright wrote:
           | As a counterexample, the US has 50 states, and no internal
           | protectionism. Yet there are no "colony" states.
        
             | nytgop77 wrote:
             | puerto rico?
        
             | oblio wrote:
             | The starting point for the US states is/was much closer
             | than that of random countries around the world, to each
             | other.
             | 
             | US states, despite what Americans tell themselves, are
             | culturally/socially/economically a lot more homogeneous
             | than random countries around the world are to each other.
             | 
             | And US states are all protected by the same federal
             | government. None of them can really be abused by outside
             | forces with little/no repercussion.
             | 
             | They really can't be compared (US states vs countries
             | around the world).
        
           | jldugger wrote:
           | > Do you know why I know them? Because there are 0 (zero!)
           | local supermarket chains left. They've all been bought by
           | foreign companies.
           | 
           | It depends on your perspective really. When I lived in
           | Oregon, there were Fred Meyers all over the place, but
           | they're all owned by Kroger (HQ in Ohio) now. Are they
           | 'foreign' because they're from another state inside the USA?
           | 
           | AFAIK, Kroger keeps the local brands, so IDK why none of the
           | local Romanian brands were kept. If it's anything like China
           | or USSR, probably not a lot of faith in the local brands I
           | guess?
        
             | DubiousPusher wrote:
             | Sort of yes. While a lot of the benefits of the development
             | that comes with the growth of the grocery industry in
             | Oregon will stay local, the surplus will not. It ends up in
             | Ohio or inside pensions or investor pockets.
             | 
             | But this isn't a great analogy because the U.S. federal
             | government keeps interstate trade much more homogeneous
             | than the EU.
        
         | mrkramer wrote:
         | Developing countries lack proper legal system where laws are
         | based on property rights and market economy. That's why
         | mentality of African people for example can not change and can
         | not embrace capitalism.
         | 
         | I would suggest you to read Hernando De Soto - The Mystery Of
         | Capital: Why Capitalism Triumphs In The West And Fails
         | Everywhere Else
         | 
         | The book argues "it actually has everything to do with the
         | legal structure of property and property rights. Every
         | developed nation in the world at one time went through the
         | transformation from predominantly informal, extralegal
         | ownership to a formal, unified legal property system. In the
         | West we've forgotten that creating this system is also what
         | allowed people everywhere to leverage property into wealth."
         | [1]
         | 
         | Book is in the public domain: [1]
         | https://archive.org/details/Hernando_De_Soto_The_Mystery_Of_...
         | 
         | Once the China for instance embraced capitalism and changed
         | their legal system to allow private property ownership and
         | allow market economy they thrived. Plus allowing American
         | companies to come and exploit cheap work force they acquired
         | "know-how" by now widely known and familiar stealing of
         | intellectual property and copying literally everything they put
         | their hands on.
        
         | valuearb wrote:
         | This is of course silly. Slowing your rate of growth now does
         | nothing to make you grow faster later.
        
         | totalZero wrote:
         | > when developing countries are pressured into free trade
         | agreements (for example by making aid dependent on this)
         | 
         | "forced" is probably not the right word. "baited" is better.
         | 
         | The developed world uses aid/loans to manipulate policy in the
         | developed world, by targeting desperation. Make loans that the
         | recipient cannot repay, then offer to restructure if they will
         | comply with certain conditions.
         | 
         | This is why the IMF exists.
        
           | bingbong70 wrote:
           | "The developed world uses
           | aid/loans"/coups/assassinations/currency-debasement-attacks
        
         | Siira wrote:
         | Theory is not trustworthy. Here in Iran, we have had extreme
         | protectionist policies for decades in, e.g., cars, and all it
         | has done is made the car factory owners rich while car quality
         | stagnates and regresses, and prices keep rising.
        
         | tashoecraft wrote:
         | The book "How Asian Works" touched on this as well. A
         | combination of promoting/subsidizing local industries whilst
         | pushing them to be competitive on the global stage can do great
         | things
        
         | nickik wrote:
         | I don't think this is actually true. IF you go threw all the
         | history of development economics, sure its easy to point out 'X
         | government did X and look at that, now they are successful at
         | X'.
         | 
         | However that is selection bias, government and international
         | development agencies tried literally everything, many things 10
         | times, often over years and years. Often wasting resources that
         | then didn't go into their successful part of the economy.
         | 
         | Quite often governments also do lead following, they do
         | something, something else is successful, then more money flows
         | into that and then a few years later all the bureaucrats
         | congratulate themselves on their success.
         | 
         | We actually have pretty good and very clear numbers on what
         | actually works. Basically it boils down to 'don't be a shit
         | government' and if you manage that you will have some amount
         | pretty good amount of growth. Avoid a few idioitic policies,
         | implement the basic of law and business (property rights),
         | don't punish successful people, don't be ultra protectionist.
         | 
         | Any country that manages that usually manages to get a fair
         | amount of growth. It might not be growth in Steel industry but
         | better more efficient framing, mining, tourism, labor intensive
         | industry and stuff like that are still very helpful base to
         | build up the basic infrastructure and business environment.
         | 
         | The old Post-WW2 version of 'lets not import steel, invest many
         | billions in building our own steel industry' kind of plans
         | actually have a terrible history of success.
         | 
         | But this debate has been raging for 3000 years now, in modern
         | history mercantilism vs free market debate, then the socialism
         | vs capitalism debate (calculation debate), then Post-WW2
         | development of 'Development economics' that had all these
         | debates again. Look at India, and its strange 'Indian
         | Socialism' based on many British ideas.
         | 
         | > So much like we allow children time to learn in school before
         | we expect them to compete in the job market
         | 
         | Mostly what we are actually doing for most jobs is kids
         | basically showing that they can be good little workers and have
         | basic social skills.
         | 
         | For a country this would basically be, show that you respect
         | basic property rights, don't have polices that make creating a
         | business impossible, be reasonable accessible to global market.
         | If you can do that, welcome to being adult, you will likely be
         | reasonably successful.
         | 
         | > we should allow developing countries to employ
         | protectionistic policies like tariffs
         | 
         | Allow them sure, who are we to deny them. But that doesn't mean
         | its a good idea most of the time.
        
         | osacial wrote:
         | That's a complete nonsense on how things work in reality. The
         | biggest problem for Africa is that MARKET of anything that they
         | are selling is in Europe and US. They can demand anything they
         | want(which is simple racket and anyone despises these things in
         | business), and it all will simply end with some startup in Cali
         | who will start to grow cocoa beans in vertical farms or some
         | other African country will become cocoa exporter Nr1 in the
         | world.
         | 
         | ANY developing European country in history started with
         | offering raw materials and very quickly invested into
         | manufacturing and producing good quality products. There are no
         | obstacles for Ghana to do the same. At the moment you can see
         | some poor European countries with industry and skilled
         | workforce and they all have poor results because of corruption.
         | Something tells me, that it will be the same for Ghana.
        
           | nerdponx wrote:
           | Demanding a greater % of the final value of a good is a
           | racket?
           | 
           | And you really think that Ghana's cocoa superiority will be
           | upended by some American startup? That's laughable, and
           | certainly not enough of a credible threat to keep Ghana under
           | the boot of economic imperialism.
        
         | vlan0 wrote:
         | Life and Debt is another good example.
         | 
         | http://lifeanddebt.org/
        
         | lr4444lr wrote:
         | Okay, but if local goods can't be produced at a price that is
         | commensurately low, then the fledgingly country's wage earners
         | have their purchasing power reduced, with less discretionary
         | income to further their own educational and business pursuits.
         | I think this thesis you are referring to takes for granted that
         | the tariffs are going to be responsibly used by the governing
         | class setting them to invest in the long term prospects of
         | their people and not siphoned off into corrupt ends. That's a
         | pretty tall assumption.
        
           | m12k wrote:
           | Correct, the lower priced international goods help give the
           | population of developing countries more purchasing power with
           | their low wages, but at the cost of those wages never going
           | up significantly. They get stuck in a local optimum - and
           | unfortunately, yes, in order to escape from one of those, the
           | first steps will always be toward something less optimal.
        
           | pydry wrote:
           | >if local goods can't be produced at a price that is
           | commensurately low, then the fledgingly country's wage
           | earners have their purchasing power reduced
           | 
           | If the industry they work in can't compete their _entire_
           | income is reduced to zero.
           | 
           | That can knock out related industries as well and ultimately
           | leave the country exposed to currency collapse and
           | hyperinflation as the exporting countries decide that this
           | country has nothing it really wants any more while they still
           | desperately need imports.
           | 
           | This happened to Venezuela (after local industrialists
           | declared war on Chavez in 2002 he effectively set out to
           | destroy them) and Zimbabwe (when Muagabe dispossessed farmers
           | from their land, rendering it unproductive).
           | 
           | The US is also exposed to this risk. It's steadily but very
           | slowly losing hi tech manufacturing capabilities - something
           | that takes decades to get back once lost (due to the network
           | effect and loss of skills).
        
             | tshaddox wrote:
             | > If the industry they work in can't compete their entire
             | income is reduced to zero.
             | 
             | But I thought we're talking about a time period before that
             | industry even exists.
        
       | mxcrossb wrote:
       | The nerve of that website to beg for donations while being
       | plastered with advertisements
        
         | tgsovlerkhgsel wrote:
         | I know HN prefers not to discuss site misbehavior, but since
         | there is already is a thread...
         | 
         | This site had it all. I think I had something like 4 or 5
         | overlaying popups/infocards, plus ads. When I tried to scroll
         | it redirected me to the next page, and then it hijacked the
         | back button on top of that.
         | 
         | Revisited to count the garbage: Donation beg, cookies, sticky
         | ad on the bottom, "Add to home screen", "install our app",
         | notification bell button. White space in the content area, with
         | an ad underneath. No content visible at all.
        
       | dgellow wrote:
       | I'm not sure I follow the argument. Surely Ghana could sell some
       | cocoa to Switzerland, while at the same time building their own
       | chocolate brands. Maybe reduce your export, but keep a strong
       | influx of money and at the same time invest in your own line of
       | products.
        
         | eloisant wrote:
         | Easier for them to compete internationally as Nestle, Lindt,
         | etc. will have to either reduce their production or find other
         | (possibly more expensive) cocoa sources.
         | 
         | Also it prevents from having internal competition between
         | exportation and internal refining, as exportation is easy
         | "right now" money while refining will take time and
         | investments.
        
       | dalbasal wrote:
       | Wait... Swiss diplomats still wear jack sparrow hats?!
        
         | dgellow wrote:
         | No. The people you can see in the first picture aren't the
         | diplomats themselves, it's just part of the tradition when
         | welcoming country leaders. Watch the video, you will see that
         | our current president has completely normal clothes.
        
           | andimm wrote:
           | They are called Bundesweibel, took me a while to find them:
           | 
           | https://en.wikipedia.org/wiki/Huissier
           | https://de.wikipedia.org/wiki/Weibel_(Amtsdiener)
        
             | dgellow wrote:
             | Et pour les romands:
             | https://fr.wikipedia.org/wiki/Huissier_(Suisse)
             | 
             | :)
        
       | prepend wrote:
       | I think it's good to see raw producers start working up market to
       | make their own chocolate. I think a Ghanaian chocolate brand
       | actually owned by Ghanaians and made for export would market very
       | well.
       | 
       | It's interesting to me how much tasty and interesting stuff in
       | Africa has not been marketed internationally and there's lots of
       | room for them to grow and develop.
       | 
       | For example, fonio [0], is a grain native to west Africa that
       | I've never seen in the US but was eaten every day when I was
       | there, as common as rice. It's gluten-free and could be the next
       | quinoa and a great opportunity to develop a new brand and export
       | finished products rather than just commodities.
       | 
       | One of the big opportunities of all this digitization, I think,
       | is that it's now easier for remote locations to get more value
       | out of their commodities than just exporting raw and having
       | someone else add most of the value.
       | 
       | I'm surprised the Swiss aren't trying to do more joint ventures
       | to develop chocolate making capabilities in Ghana.
        
         | valuearb wrote:
         | Or they just opened the door for other countries to get in the
         | cocoa business, while their chocolate business fails because
         | they don't have the expertise, brands or market access to
         | succeed.
        
         | [deleted]
        
         | hanche wrote:
         | I satisfy my chocolate cravings with chocolate from fairafric
         | now. Chocolate produced all the way from the tree to packaged
         | chocolate bars in Ghana. They ran a couple kickstarter projects
         | to get going. It's excellent chocolate too! At least the dark
         | variants, which are the only ones I care about.
         | 
         | https://fairafric.com/en/home/
        
           | kzrdude wrote:
           | Very cool. Just note (since it's on topic here) that their
           | team is mostly German, not from Ghana
           | https://fairafric.com/team/
        
             | hanche wrote:
             | True. However, they seem to be working hard - and with some
             | success, I believe - at transferring ownership and
             | responsibility to their partners in Ghana.
        
         | auiya wrote:
         | There's a smoked chili pepper which I believe is native to the
         | area that is labeled as "ghana pepper" for export, and is hard
         | to find elsewhere. It is _incredible_.
        
           | zymhan wrote:
           | AFAIK peppers are native to the Americas, I'm not sure there
           | is a "native" African pepper. Though they certainly could
           | have been cultivating them for 400-500 years.
           | 
           | https://en.wikipedia.org/wiki/Chili_pepper#Origins
        
             | nix23 wrote:
             | >AFAIK peppers are native to the Americas
             | 
             | You are right, the oldest proven use and origin of pepper
             | is from Mexico, exported from the portugese all over the
             | world...but the chinese and india peppers are still a bit
             | of a mystery.
             | 
             | https://en.wikipedia.org/wiki/Chili_pepper
        
             | exhilaration wrote:
             | Thanks, another item to add to my list: corn, tomatoes,
             | potatoes, and peppers. All are now staples worldwide but
             | were unknown outside of the Americas until ~500 years ago.
        
               | oh_sigh wrote:
               | Cacao seems like a highly relevant addition while you're
               | at it...
        
               | xeromal wrote:
               | Really?!?!
        
               | devdas wrote:
               | https://en.wikipedia.org/wiki/Columbian_exchange has a
               | whole list.
        
               | nix23 wrote:
               | You can add Tobacco too ;)
        
         | simonh wrote:
         | I found this article about the developing domestic Ghanaian
         | Chocolate industry much more informative than the OP.
         | 
         | https://foodtank.com/news/2018/08/ghanaian-chocolate-revolut...
        
       | solidsnack9000 wrote:
       | In the long run, it wouldn't make sense for so much finished
       | chocolate to be from places like France and Switzerland, where
       | cocoa doesn't grow.
       | 
       | There is a parallel with tea. At one time, people thought in
       | terms of "English tea" or "French tea". In recent decades,
       | western people are much more acquainted with Japanese and Chinese
       | tea directly. It is no coincidence that this stuff is fresher,
       | more varied, more affordable...
        
       | bsanr2 wrote:
       | This is similar to the situation with Global South coffee
       | exports, wherein actual growers only receive a fraction of the
       | revenue from consumer sales (despite the relatively cheap and
       | easy value-add of roasting or conversion into instant coffee)
       | because of logistical concerns, and because Europeans and
       | American just plain do not buy African roast coffee when it
       | appears on their shelves. If these countries were to decide to
       | restrict exports, a billion-dollar market would collapse.
        
         | ClumsyPilot wrote:
         | I think people buying fairtrade are under impression they are
         | solving the issue, whereas in reality it doesnt do much
        
         | jariel wrote:
         | Coffee is a commodity. Marketers will re-brand their roasts
         | pretty quickly and convince us all that 'it's better'.
         | 
         | Coco is special in that production is limited.
        
           | brodock wrote:
           | Good coffee is not abundant. Not the crap you will find in
           | local supermarket, that will almost always taste the same.
           | It's like cheap wine.
        
         | [deleted]
        
         | unwind wrote:
         | This is a pretty minor point, but any proper coffee geek will
         | tell you that the shelf life of roasted coffee is pretty bad.
         | 
         | Thus it makes sense to roast closer to the time when the coffee
         | is made available for sale; shipping from African countries up
         | to Europe, would increase the "latency" a great deal.
         | 
         | I'm sure modern packaging gives a decent shelf life, and TBH I
         | don't worry much about the use-before label on coffee around
         | here, but that's generally because it doesn't last long on the
         | shelf anyway. :)
        
           | fogihujy wrote:
           | Not to mention that many prefer one specific blend. If you
           | want me to buy another brand/blend then you first have to
           | convince me that the new one is at least as delicious as the
           | previous one.
        
       | ggm wrote:
       | If the raw cocoa had attracted a price closer to the final
       | products value, this wouldn't have happened. Sure, the value add
       | is significant and so this is not just "chocolate is the value
       | inherent in the beans" but really? This is happening because
       | chocolate consumable production underpays the farmers.
       | 
       | This response is a good thing. I hope they succeed, its as steep
       | hill to climb making good chocolate from cocoa.
        
       | tyingq wrote:
       | _" With Ghana's move towards processing its own cocoa, the world,
       | and not just Switzerland, will experience a massive shortage
       | since Ghana is responsible for about 45% of the world's cocoa."_
       | 
       | That seems like bigger news than the headline.
        
         | redisman wrote:
         | They can outbid the local companies if they want to. The whole
         | point is that Ghana wants to move up the rung from a producer
         | of raw goods to more value add to their exports
        
         | Shadonototro wrote:
         | they'll move production elsewhere, problem solved
         | 
         | why people do not think nowadays?
        
           | tyingq wrote:
           | I'm no expert, but there are articles from many different
           | sources saying that the transition will result in a crisis,
           | and will take a long time to resolve.
        
             | Shadonototro wrote:
             | i doubt it, they anticipated that many years ago, they only
             | import 1/3 from ghana, easy to replace
             | 
             | source: https://ec.europa.eu/eurostat/web/products-
             | eurostat-news/-/E...
        
         | ISL wrote:
         | It may encourage the major chocolate processors to build
         | processing plants in Ghana.
         | 
         | This must be done with caution. Crashing the internal chocolate
         | price will hurt Ghanaian farmers in the short term even as the
         | country attempts to negotiate the country to a better place.
         | 
         | "Governing a country is like frying a small fish" -- Tao te
         | Ching 60
        
         | JoeAltmaier wrote:
         | My local shop got its chocolate from Honduras and Nicaragua.
         | They visited the farms and arranged to have the beans processed
         | there. Meant they could import a liquid and not an agricultural
         | product. So it didn't have to be fumigated. A big win.
        
         | amelius wrote:
         | They could also ask Switzerland to pay 30% of their revenue,
         | similar to what Apple does.
        
         | arcticfox wrote:
         | It's also a massive assumption... first of all that Ghana won't
         | be able to process & export chocolate in significant
         | quantities, and second of all that other nations that are
         | paying the LID won't be able to pick up the Swiss slack.
         | 
         | Surely the cocoa won't just be burned, someone will find a way
         | to process it.
        
         | laraph wrote:
         | That 45% figure in the article is wrong; Ghana produces about
         | 18% of the world's production. They hold a lot of the world
         | market because they have low prices. If they raise their price,
         | their market share will drop, and other countries could move in
         | and take their position. There's simple market economics at
         | play.
        
         | SamBam wrote:
         | If Ghana is able to process its own cocoa at the same rate as
         | the Swiss, or at least accelerate to such productions soon,
         | then the world won't see a massive shortage of chocolate, just
         | of raw cocoa.
         | 
         | It seems reasonable to me. My understanding is that the ones
         | adding the value, by turning the raw material into chocolate,
         | are the ones making the majority of the profits.
        
       | aritmo wrote:
       | Here says[0] that Ghana and China are about to sign a $2b deal to
       | build schools, roads, hospitals and other infrastructure. In
       | exchange of cocoa products.
       | 
       | Did this work out for Ghana? There are no newer posts since 2018
       | on this.
       | 
       | [0]: https://archive.is/CPFhC
        
       | fmajid wrote:
       | Divine Chocolate is owned by Ghanaian cacao farmer:
       | 
       | https://www.divinechocolate.com/products
       | 
       | A much better model than the Fairtrade scam by which white-savior
       | consultants jet off to poor countries to lecture locals whose
       | backs their fat salaries are extracted off.
        
         | vmilner wrote:
         | It's about twice the price of Cadbury's in the UK, but
         | significantly better quality. I often buy it when I see it, and
         | it has fairly good shop distribution now.
        
         | mpol wrote:
         | How i fairtrade a scam?
         | 
         | Please be aware that the market of cocoa is not an easy one and
         | not very transparent. The Dutch TV maker Teun van der Keuken
         | was devastated by what he saw in Ivory Coast with a lot of
         | child slavery going on. He started his own slavefree brand Tony
         | Chocolonely, but even they have to admit they can not guarantee
         | it is slavefree made, they can only strive for that. By the
         | way, the people from Nestle just shrugged over the issue of
         | child slavery.
         | 
         | I am very happy to see good policy being applied in Africa,
         | they need to do this more often and strongly. Europe and the
         | US, governments and companies, have been pulling their strings
         | far too long. I hope China can give them a sense of how they
         | can fend better for themself.
        
           | devdas wrote:
           | https://www.linkedin.com/pulse/fairtrade-scam-when-comes-
           | pri...
           | 
           | https://www.forbes.com/sites/timworstall/2014/05/25/surprise.
           | ..
        
           | DetroitThrow wrote:
           | I didn't realize Tony Chocolonely was intended to be a slave
           | free brand, I had bought it in Europe thinking it had a
           | hilarious name and large size - the background of traditional
           | brands sold in the US sounds horrific if he decided to make
           | his own company based on what he saw, which haven't even
           | penetrated our domestic market.
        
             | pudhbithyftdti wrote:
             | You can purchase Chocolonely at Natural Grocers and Sprouts
             | in the US, if they're in your area. It's the best quality
             | chocolate I've ever purchased that didn't come from a
             | chocolate shop, highly recommend it.
             | 
             | Coco is sold on world markets as a commodity good.
             | Suppliers can't know what country the beans originated. To
             | get guaranteed slave-free chocolate you effectively have to
             | create your own logistics for that specific purpose. Any
             | chocolate producers that haven't done that will have some
             | amount of slave-produced coco mixed into their supply
             | chain.
        
       | JulianMorrison wrote:
       | I wonder what Ghanaian chocolate will be like? I will be happy to
       | buy it and try.
        
       | refraincomment wrote:
       | Hopefully they also stop exporting unsolicited people.
        
       | jkaljundi wrote:
       | Netflix series Rotten has a good episode on cocoa lifecycle and
       | the problems involved: https://www.netflix.com/ee/title/80146284
        
       | m000 wrote:
       | I really hope Ivory Coast will join Ghana on this, as they did
       | for the LID bonus case. Together they account for over 2/3 of
       | cocoa production. So, they can pretty much reshape the
       | cocoa/chocolate market and break out of colonialistic trade
       | agreements for the benefit of their people.
        
         | m_mueller wrote:
         | As a Swiss, I hope the same. I find this IP waiver blockage
         | horrid - it should be in the interest of everyone to try to
         | extinguish this disease worldwide, as quickly as possible, to
         | reduce the mutation risk as much as possible. Hats off to
         | Ghana!
        
         | barry-cotter wrote:
         | If the Swiss can buy from 1/3 of global producers that's still
         | plenty to satisfy the demand. And it's not like the world is
         | short of areas where cocoa would grow. It's not so long since
         | Vietnam went from not growing coffee to being one of the
         | world's largest producers in under 20 years. I bet they could
         | do it with cocoa too.
        
           | throwaway1916 wrote:
           | Yep. It would probably take another 20 years to develop
           | another Cocoa producer as prolific as Ghana and Ivory Coast.
           | Also, Cocoa only grows within 20 degrees north and south of
           | the equator.
        
           | jeromegv wrote:
           | There's actually a worldwide shortage of cocoa, it's
           | apparently not that simple.
        
             | jjcon wrote:
             | Due to COVID yes, but there are shortages of everything
             | right now - cocoa isn't unique in any way in that regard
        
               | BoorishBears wrote:
               | ... except it's actually relevant to the thread's point
               | about exercising greater control over _cocoa_
        
               | jjcon wrote:
               | The above was in a response saying they could take 20
               | years to invest in cocoa elsewhere - the shortage is very
               | temporary in comparison
        
               | BoorishBears wrote:
               | ... no it didn't. Didn't even imply it. Literally there
               | was an aside that used "20 years" and that's it.
               | 
               | Why would you lie about a comment I can literally just
               | scroll up to read?
               | 
               | The pandemic and its effects doesn't need to last 20
               | years for Ghana and the Ivory Coast to take greater
               | control of their cocoa crop.
               | 
               | We're literally watching it happen right now.
        
               | jjcon wrote:
               | > It's not so long since Vietnam went from not growing
               | coffee to being one of the world's largest producers in
               | under 20 years. I bet they could do it with cocoa too.
               | 
               | It's right here... maybe do a read through before
               | breaking HN rules and assuming poor intent
        
               | BoorishBears wrote:
               | The sweet irony, read the comment you just replied to
               | 
               | > Literally there was an aside that used "20 years" and
               | that's it.
               | 
               | Which aside do you think I was referring to? An aside
               | about a different crop in a different period of time,
               | which might I add didn't involve a global pandemic?
               | 
               | Saying someone said something they didn't is... a lie. Or
               | would you rather I just interpret it as you breaking HN
               | rules and assuming poor intent on their part?
        
               | saiya-jin wrote:
               | Issues with coca shortage were way before any covid hit
               | the distribution channels. Its not trivial plant to get
               | good crop, not ruined by pests, fungus etc. Quality
               | matters a lot.
        
               | jjcon wrote:
               | There were rumors that minor disruptions could cause
               | shortages but supply was still having no trouble meeting
               | demand (that is until COVID)
        
       | aaron695 wrote:
       | > Ghana will no longer sell cocoa to Switzerland
       | 
       | This is not true.
       | 
       | He only said they are going to _try_ and process _some_ cocoa in
       | Ghana.
       | 
       | "we intend to process more and more of our cocoa in our country"
       | https://youtu.be/gs_dD7qKfX8?t=317
       | 
       | It'll take decades and they will grow more to supply both
       | markets, if their market is successful.
       | 
       | What's with the hysterical headlines - "Awkward moment when
       | President of Ghana says they intend to process cacao", "Ghana
       | will no longer sell cocoa to Switzerland", "Ghana President shuts
       | down Swiss President", "Ghana President Publicly Denied Cocoa
       | Export to Switzerland."
       | 
       | I thought maybe short sellers, but I can't see a link.
       | 
       | Is it just some addictive meme, I guess the random covid bits are
       | like an attack vector or something?
        
         | sschueller wrote:
         | Yes, this is garbage news. I dont see anything in the top Swiss
         | papers.
        
       | 1MachineElf wrote:
       | Having worked in Whole Foods and been surrounded by family who
       | prefer organic, free/fair type foods, I must say I do understand
       | there is a market for the chocolates we usually see marketed as
       | non-European. There's an emphasis on dark chocolate, "artisanal
       | blends" with spices, etc. The kind of chocolate people pay extra
       | for because they think it's special, then don't touch because
       | they paid extra for and want to preserve it, only for it to
       | expire in the pantry.
       | 
       | Let me be honest. I prefer European-style chocolate. Milk
       | chocolate. White chocolate. They're much richer, and I hope there
       | will continue to be a great supply of this type of chocolate.
       | Maybe that Swiss brand recognition has more to do with the fact
       | that it actually tastes really good versus what's being
       | attributed to hand-wavy concepts about colonialism and power
       | structures.
        
         | saiya-jin wrote:
         | As for Lindt, milk and white chocolates are rather small
         | portion of their portfolio [1], and at least here in
         | Switzerland it looks accordingly in the shops - these
         | 'artisanal' types take 80-90% of the shelves and overall are
         | bought more than basic milk/white ones. Personally, these days
         | if I buy then only dark one with sea salt.
         | 
         | Fun fact - there is stark difference between Lindt made in
         | Switzerland and the ones made in EU (had ones from France and
         | Germany, you have to look for fine print in the back since
         | overall design is same). Swiss-made I found unsurprisingly only
         | in Swiss supermarkets, with the price being 50-100% higher than
         | the same in EU supermarkets, but the taste is much, much
         | better. I guess higher quality coca beans are used but not sure
         | here.
         | 
         | They are so good that I don't seek out local/foreign artisanal
         | chocolate anymore, since every single one of them simply
         | doesn't compare (apart from price which can be even
         | significantly higher). Over the years, I've tried many. But
         | this is obviously highly subjective and true only for variants
         | of dark chocolate, I don't buy other types.
         | 
         | [1] https://www.chocolate.lindt.com/our-chocolate/our-
         | brands/exc...
        
         | samatman wrote:
         | I might have a bad attitude about people's food preferences as
         | well, if I had worked at Whole Foods.
         | 
         | I assure you, a bar of dark chocolate with "fancy" spices has
         | never expired in my pantry. The Swiss stuff is ok, if your
         | palate reached maturity at seven years old+.
         | 
         | + this is not my actual opinion. I'm ribbing you.
        
         | rory wrote:
         | Hey I actually like that dark, spiced chocolate! I'm also
         | skeptical it's any more expensive than the Swiss chocolate sold
         | in gaudy mall stores like Lindt and Teuscher.
         | 
         | There's obviously a market for these sort of "non-European-
         | style" chocolates, which, as you said, are marketed
         | specifically as being associated with countries like Ghana. In
         | NE Asia there's actually a chocolate bar just called Ghana
         | (made in Japan..)! So why shouldn't Ghana try to capture more
         | of the value of that market? I'm sure Swiss chocolate makers
         | can source their cocoa elsewhere, and milk chocolate needs far
         | less actual cocoa anyway.
        
         | reducesuffering wrote:
         | > "I prefer European-style chocolate. Milk chocolate. White
         | chocolate. They're much richer"
         | 
         | And also much unhealthier. They contain copious amounts of
         | added, refined sugar. Cocoa can be healthy given it's nutrient
         | profile, but only outweighs the damage added sugar causes if
         | the chocolate is >90% cacao.
        
       | someonehere wrote:
       | I read their reasoning why they're stopping, but my gut tells me
       | China is behind this. They're actively tapping Africa for natural
       | resources and I wouldn't be surprised if there's some dealings
       | behind closed doors to hand over cacao to China.
        
         | rhplus wrote:
         | Playbook:                   1) Ghana needs capital to build
         | cacao processing plants         2) Foreign investors loans
         | capital and plant is built with skilled foreign labor
         | 3) Once running, plants are staffed by unskilled local labor
         | 4) Ghana has an unrelated financial crisis and defaults on
         | loans         5) Foreign investors take ownership of cacao
         | processing plants through liens         6) Foreign investors
         | threaten to close plants unless they get a free-trade zone
         | 7) Cacao is now processed in Ghana with cheap labor and no
         | export duties
        
           | sgt wrote:
           | This is terrible. How did it get that far, so quickly?
        
       | igammarays wrote:
       | I wonder if we would go to war over chocolate, like we would over
       | other brown sticky stuff.
       | 
       | Wouldn't be surprised if there's a coup in Ghana soon, not least
       | because a lot of rich exporters will be angry.
        
       | runawaybottle wrote:
       | Just flexing that geopolitical hot take:
       | https://www.bloomberg.com/news/articles/2018-11-22/ghana-see...
       | 
       | China's influence over Africa to secure it's own cocoa
       | production?
       | 
       | Article from 2017:
       | https://mobile.reuters.com/article/amp/idUKL8N1K35R1
       | 
       | So looks like China paid up this year and got exclusives, and not
       | Switzerland.
       | 
       | What's the game, I must know. Ghana is Lord Baelish?
        
       | jeffreyrogers wrote:
       | Seems like a good decision. Would be good for other African
       | countries to do similarly, but they are largely hindered by
       | corrupt governments whose officials benefit from exporting the
       | raw materials.
        
       | williesleg wrote:
       | No more swiss piss? Thanks china!
        
       | amelius wrote:
       | In other news, Switzerland begins militarization process
       | 
       | https://infobrics.org/post/31420
        
       | sadmann1 wrote:
       | How will Switzerland counter this change of events
        
         | fogihujy wrote:
         | The first response will probably be for the chocolate producers
         | to try to source the raw materials from other sources. This may
         | or may not result in production ramping up elsewhere, or even
         | new producers appearing as increased prices could make
         | production financially viable in places it previously wasn't.
         | 
         | Depending on how the markets react, prices may go up, and many
         | of the really cheap brands could disappear from the shelves, or
         | just have their fat/sugar contents increased. There's also a
         | non-zero chance that new African brands will grab a part of the
         | low-end of the market, with protectionist measures implemented
         | to respond to them.
        
           | eloisant wrote:
           | Considering Switzerland is less than 9 millions people, their
           | total consumption is a drop in the ocean of the global market
           | so I'm don't think protectionist measures would change much.
           | 
           | And I don't see why the big markets (EU, US) would want to
           | protect Swiss companies.
        
             | fogihujy wrote:
             | The big markets won't care about Swiss chocolate. It's far
             | more likely that Swiss chocolate producers will simply
             | focus on the high-end market and leave it at that.
             | 
             | Now, if other African countries tried doing this to the EU
             | and re. other raw materials on the other hand...
        
           | ArkanExplorer wrote:
           | CO2 tariffs: https://www.bcg.com/publications/2020/how-an-eu-
           | carbon-borde...
           | 
           | Ghana's electricity supply is 51% fossil fuel, whereas
           | Switzerland is 2.5%.
           | 
           | But its a lot easier to build solar plants in Accra than in
           | Bern...
           | 
           | I think that Europe is at a fundamental disadvantage over the
           | medium/long-term, due to the burden of its welfare states.
           | 
           | Its surprising to see that taxes over basically all
           | categories are lower in Ghana than in Europe (except
           | corporate taxes).
           | 
           | The minimum monthly aged pension is EUR6.60 in Ghana, vs
           | EUR1,080 in Switzerland. Life expectancy is 20 years longer
           | in Switzerland than Ghana, but the retirement age is only 4
           | years later.
           | 
           | The end effect of these extremely early and generous pensions
           | is that economies become stratified, to ensure that these
           | pension payments are maintained, and taxes are heaped on
           | individuals to pay for it.
           | 
           | Europe needs a widespread increase of the aged pension age to
           | 70, cease all migration from regions with high usage of
           | welfare state service, and begin a large, multi-generational
           | modular nuclear power plant building plan.
        
             | kwere wrote:
             | maybe we need a individual capitalization pension plan
        
             | csomar wrote:
             | I think Switzerland is doing, overall, fine. France is the
             | biggest abuser. They have a large bloated-welfare system
             | that encourages people _not_ to work; and they have a
             | combination of impossibly high taxes and bureaucracy.
             | 
             | If you look at this list, you'll know something is horribly
             | wrong with these economies: https://en.wikipedia.org/wiki/L
             | ist_of_countries_by_tax_reven...
             | 
             | The ones at the top are all European except for Cuba...
        
             | ISL wrote:
             | My experience with corruption in Ghana suggests that the
             | Swiss have some other key advantages. It is impossible to
             | imagine a swiss policeman stopping every third car on the
             | country's main highway and asking, "Where's my Christmas?"
             | 
             | That said, the potential for Ghanaians to thrive is
             | astounding. Incremental improvements will yield incremental
             | gains. It is a tropical paradise emerging from the weight
             | of poverty.
             | 
             | Also, the mangoes are hands-down the finest I have ever
             | tasted.
        
         | WestOaklandfan wrote:
         | How will Ghana counter the loss of a high quality cocoa buyer ?
        
       | staticelf wrote:
       | Good for them I guess or is it? I don't understand how you cannot
       | have prosparity from selling raw materials?
       | 
       | If you think you're not being paid enough, increase the price
       | along with creating your own products. It seems weird to me to
       | not let foreign countries buy your raw materials just because you
       | want to produce more stuff yourself.
       | 
       | It's not like I will start buying chocolate made in ghana because
       | they don't want to sell their cocoa anymore. I will still buy
       | from the brands I like and are used to most of the times, which
       | is a local brand.
        
         | sokoloff wrote:
         | I feel like for every measure of progress this might give
         | Ghana, it will give other exporters of cocoa beans 10x as much
         | advantage, at least in the short-term.
        
         | austincheney wrote:
         | > If you think you're not being paid enough, increase the price
         | along with creating your own products.
         | 
         | Who makes that decision? Cocoa slavery is a thing because the
         | economics of raw material pricing is complicated by many
         | factors but the demand is very simple and very high.
        
           | sokoloff wrote:
           | The (effective) demand for beans produced in Ghana just went
           | way down with this policy enactment though, right?
        
             | austincheney wrote:
             | I doubt it. If anything it will restrict market
             | availability which will only increase demand, but the best
             | way to know is watch the price for beans.
        
               | sokoloff wrote:
               | I agree that watching the market is the best way to judge
               | the balance.
               | 
               | I'd expect the price for beans as-delivered to
               | Switzerland is likely to go up. The price for beans as-
               | offered in Ghana is likely to go down. The latter matters
               | more to Ghana cocoa farmers.
        
           | Mat342 wrote:
           | It's 2021, africans can abolish slavery if they want to
        
         | macspoofing wrote:
         | >I don't understand how you cannot have prosparity from selling
         | raw materials?
         | 
         | Depending on how big the export is in relation to your economy,
         | it can certainly have a negative effect:
         | https://en.wikipedia.org/wiki/Dutch_disease
        
         | vmilner wrote:
         | >If you think you're not being paid enough, increase the price
         | along with creating your own products.
         | 
         | That seems to be what happened with Mars and Hershey (i.e. a
         | price increase) though put in the terms of not paying farmers
         | enough and trade war. It's unclear to me whether Mars and
         | Hershey are now getting less cocoa than they did because cocoa
         | is being diverted to domestic production, or the same amount
         | and paying more.
        
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       (page generated 2021-03-19 23:01 UTC)