The consequences of the vanilla boom: Madagascar Edition

Vanilla is currently rivaling the value of silver, per unit weight.

That has come with consequences for Madagascar, which accounts for 80 percent of the global production of natural vanilla. According to FT:

Madagascar, which supplies 80 per cent of the world’s natural vanilla, is in the grip of a vanilla boom. “People are saying, ‘I don’t care about growing food to feed myself. I only want to grow vanilla’,” says Eugenia Lopez, an agricultural expert with Swiss development agency Helvetas. Girls are dropping out of school to marry “vanilla barons”, and sales of televisions, alcohol and other luxuries are high. “People are buying cars and motorbikes that they won’t even be able to fill with petrol when the price of vanilla crashes,” says Ms Lopez.Screen Shot 2018-06-05 at 10.03.27 AM.png

Not all the value is trickling to farmers. And the sector remains highly volatile, but with minimal options for smoothing consumption among affected farmers.

While the likes of Coca-Cola, Unilever, the British-Dutch consumer goods group, or Danone, the French food company, are forced to pay inflated prices, farmers receive only 5 to 10 per cent of the value of their crop [!!!!], according to industry observers.Worse, they say, if farmers switch to lucrative vanilla and abandon food crops such as rice and manioc, they could be left in desperate straits when the vanilla market crashes, as it inevitably will. Vanilla has been through violent booms and busts before. Only five years ago, it was trading at $20 a kilogramme against some $515 now, down from a recent peak of $600 and compared to a silver price of $528/kg.

More on this here.

Meanwhile, Madagascar is in the midsts of a political crisis ahead of elections scheduled later this year.

… a dispute over electoral minutiae had spiralled into a full-blown political crisis. A month on, the situation seems intractable.

The original rally centred on some controversial laws that would have made certain opposition candidates ineligible for elections scheduled for November. Most notably, the changes would have barred both Marc Ravalomanana, president from 2002 until he was removed in a coup in 2009, and Andry Rajoelina, the coup leader who took over as president until 2013, from running.

….. On 3 May, the High Constitutional Court (HCC) rejected a number of clauses in the new laws as unconstitutional. This included those provisions that would have prevented Ravalomanana and Rajoelina from running.

According to Malagasy law, the next step should have been for the executive to send the legislation back to parliament for review. But instead, the president unilaterally amended the laws and published them on 11 May.

The military has threatened to intervene, again, if the politicians fail to resolve their differences.

H/T Pavel

Links I liked

I just discovered Chri’s Blog on Madagascar and other Africa-related issues.

For those with a flavor of finance and capital markets and the political economy of development be sure to read Frontier Markets.

Germany is on the hunt for the UN security council seat in Africa.

And lastly, Justice – Uganda style:

Vice president upsets the president during tenure, president fires vice after election. Former vice gets accused of corruption. President declares former vice innocent, but leaves the matter up to the “independent” Inspectorate of Government. Here’s a quote from the president:

“What I know is that there was a power struggle between Bukenya and some businessmen but I found no merit in the case. But since the Inspectorate of Government is an independent body, let them investigate thoroughly.”

Yeah right.

Rants and Raves / Thoughts on the African Union

The African Union (AU) has had a rough few months. The diplomatic failures in Zimbabwe, Cote d’Ivoire, and Madagascar exposed the organization’s incompetence. The misguided anti-ICC crusade continues to cement the image of the organization as nothing more than a club of out-of-date and tone deaf autocrats. To many observers, calls for “African  Solutions to African Problems” amid all this failure has been seen as a cover of impunity and mediocre leadership on the African continent.

It says a lot that the current chairman of AU is President Theodore Obiang’ of Equatorial Guinea; a man who leads an oil-rich country of under 0.7 million people, with a per capita income of more than 30,000; but with more than 70% of its population living on less than $2 a day.

The epitome of the organization’s woes was the total snub it got from NATO before the military campaign against Libya’s Gaddafi, one of the AU’s main patrons. The AU was created by the Sirte Declaration, in Libya. Mr. Gaddafi’s influence ranged from his “African Kings” caucus (in which he was the King of Kings) to investments from Libya’s Sovereign wealth fund. I bet Gaddafi had a hand in the organization’s green flag.

So what ails the African Union?

The AU’s problems are legion. In my view, the following are some of the key ones.

  1. Lack of a regional hegemon(s): The AU faces massive collective action problems. With no regional hegemon(s) to act as the rudder of the organization, most of the organization’s resolutions are not worth the paper they get written on. The rotating chairmanship is a distraction from the real leadership needed in the organization. For instance, I had to google it to find out who’s currently in charge of the presidency of the EU (Poland). Everybody knows that France and Germany run the EU. Their word has gravitas in the Union. In the AU on the other hand, there is no leader. Could it be Navel-gaving South Africa or serially under-performing Nigeria?
  2. Too much political control: Most successful international organizations, despite having political principals, tend to have technical agents that are to some extent shielded from the principals. The AU is political through and through. The key decision-making body is the assembly of heads of state. The council of ministers does nothing. And the commission is all bark and no bite. Cronies of dictators staff most of the key positions in the organization.
  3. Disconnect from the masses: Most Africans have no idea what exactly the AU does. What is the point of the organization? Is it to preserve Africa’s borders? Is it to defend the likes of Gaddafi when the ICC’s Mr. Ocampo comes calling? Giving the people a voice in the Union might force the organization to do the people’s bidding, instead of being a protector of impunity in the name of African sovereignty.

What would reforming the AU entail?

  1. Radical restructuring: Like all inter-state organizations, the AU’s leadership should reflect regional power differences. The current assembly – in which Chad has the same power as Nigeria – makes no sense. There should be a smaller assembly of sub-regional representatives (West – Nigeria; East-Ethiopia; North – Egypt; and South-South Africa) with veto power and the mandate to implement the organization’s resolutions.
  2. Competent staffing: The practice of presidents appointing their sisters-in-law as AU representatives should go. An injection of competent expertise into the organization would go a long way in making it appear to be a more politically independent, competent and respectable organization.
  3. Direct elections to the AU parliament or no parliament at all: Instead of having the members’ parliaments elect representatives to the AU parliament, there should be direct elections. If that cannot happen then the parliament should be scrapped all together. A toothless and unrepresentative parliament is a waste of resources.
  4. Constructive and focused engagement with the rest of the world: Who is the AU chief foreign policy person? Are there permanent representatives in Beijing, Brussels, Brasilia, New Delhi and Washington? Why aren’t they trying to initiate a collective bargaining approach when dealing with these global powers (even if it is at the sub-regional level)? And what with the siege mentality? Not every condemnation of African leaders’ incompetence and mediocrity is a neo-colonial conspiracy, you know. For instance, instead of whining against the ICC’s Africa bias, the AU should clean up its own house. It doesn’t matter that George Bush is not being tried for crimes against Iraqis. The last time I checked none of the leaders of Switzerland was being tried for crimes committed in the German cantons.
  5. A more consistent commitment to progressive ideals: The AU is the only organization in the world that includes in its charter the provision to intervene in its member countries under the principle of responsibility to protect. If the AU were slightly more serious, the disasters in Zimbabwe, Cote Ivoire and Madagascar could have been nipped in the bud. As things stand it is only tiny Botswana that keeps shouting about the organization’s commitment to proper governance and responsibility to protect.

I am not a fan of the idea of the United States of Africa. That said, I believe that a regional organization like the AU can be a force for good. But in order for it to fulfill its purpose, it has to change. The change must reflect the regional power balance; it must increase the competence quotient in the AU and it must increase the voice of the average African within the organization.

ushering in the new year

Happy new year to all readers.

2011 will be a crucial year for a few countries on the Continent. On January 9th Southern Sudan will vote for secession, creating the newest state in the world. The aftermath of that might be all out war with North Sudan (over borders and oil) and/or civil war in the south (ethnically motivated warfare over control of the new state). That is what most analysts predict. I think there is a glimmer of hope for peace due to heavy Kenyan investment in the south and the desire to build, link and orient the new nation towards the East African Community. Watch this space as it all unfolds.

Uganda will hold elections on February 18th. Yoweri Museveni will win big and dig in even more now that Uganda has oil in the west of the country. Also bolstering Mr. Museveni’s hold on power will be the LRA’s delusional insurgency in the north of the country and the continuing war on terror in the horn of Africa – Uganda’s troops form the core of the African Union (AU) forces in Somalia. Mr. Museveni has been in power since 1986.

The other major election will be in Nigeria, the continental behemoth in the west. President Goodluck Jonathan is favored to win, but his victory will most certainly be tainted with chaos and irregularities.

Other countries holding elections in the new year are Central African Republic, Benin, Madagascar, Cape Verde, Chad, Djibouti, Niger and Liberia.

Electoralism remains largely dysfunctional and inconsequential in Africa because of a myriad of structural impediments (poverty, weak institutions, monarchical presidentialism, etc). In the recent past events in Kenya, Zimbabwe and Cote d’Ivoire have shown how far the Continent is from being a liberal democratic paradise (may be democracy is not for everyone at all times?). 2011’s elections will no doubt fail to buck the trend.

coup claim in madagascar

UPDATE: The BBC reports that soldiers loyal to Rajoelina have stormed the barracks where the mutinying soldiers were ensconced to restore order and discipline. It is not clear how many casualties, if any, resulted from this operation.

 

Military officers in Madagascar have announced that they are in charge and have dissolved all government institutions on the day of a crucial referendum to lower the age requirement for president. Col Charles Andrianasoavina made the announcement. The country’s Premier, Camille Vital, has however denied the coup claim in a statement supported by the country’s top military brass. The situation is still unfolding.

Current president, former mayor of Antananarivo and DJ, Andry Rajoelina, took power in a 2009 coup and wants to lower the age limit to 35 so that he, 36, can legally be president.

Madagascar, the island nation off the east coast of continental Africa, has 21.2 million people, half of whom live below the poverty line. The country’s per capita income is US$ 1000 and life expectancy is just over 63 years. 80% of the country lives on agriculture, including fishing and forestry. Early this year, Antananarivo unfairly lost its duty free access to the US under AGOA* for hypocritical political reasons.

*Africa Growth and Opportunity Act

juvenile behaviour in madagascar costing lives

There is a lot of expensive childish behaviour going on in Madagascar. And no, I am not talking about the 2005 animated production by dreamworks. I am talking about the ongoing standoff between former mayor of Antananarivo, Mr. Andry Rajoelina and the president, Mr. Marc Ravalomanana. A few days ago the former mayor, who heads two communication firms, including a TV station, claimed to be in charge of the country – a treasonous act if you ask me. Reacting to this the president ordered the closing of his radio station. Mr. Rajoelina later ordered his supporters to storm the presidential palace, an act that resulted in the death of some 25 people.

It is unclear what the former mayor really wants. He is not eligible to be president on account of his age (He is 34 and must be 40 to be eligible to run in the 2011 elections). Although Mr. Marc Ravalomanana’s government is no efficiency machine, causing chaos and uncertainty in the manner that Mr. Rajoelina is doing will cause more harm than good. President Ravalomanana was elected in 2006 and should be allowed to serve his full term. If the former mayor wants him out of office he should use legal means. Using the poor people of Antananarivo as pawns in his attempt to grab power is a most heinous crime. More than 25 lives have been lost. How many more people does he want to die before he sees the folly of his actions? There has to be a better way of doing this.

Also, president Ravalomanana should wake up and smell the coffee. It is time he stopped the corruption in his government that precipitated the cancellation of much needed development assistance in December of last year (2008). The president should step up his government’s efforts to improve the lives of the people of Madagascar instead of just enriching himself. Otherwise trouble makers like Rajoelina will have every excuse (and every right) to send their supporters to the streets in order to disrupt constitutional order.