Squeeze Gbagbo, and suddenly the price of chocolate is impacted
Thursday, January 27, 2011 at 8:21AM
Per the 11-01 Wikistrat CoreGap Report, international efforts to depose Laurent Gbagbo, who lost his bid for re-election but refuses to step down from the Ivory Coast presidency, now include the president-elect imposing a one-month ban on cocoa exports, the goal being to starve Gbagbo of revenue. To pay his supporters within the government and the forces loyal to him, he needs, about $150m, reports the FT. Gbagbo also has a small bit of oil production he controls WRT revenue.
The dependency is, as we pointed out in the bulletin, the Ivory Coast is the world's top exporter of cocoa, so turn off that spigot and suddenly you've got a different international market. So naturally, traders are braced for a significant price spike. The ban by the president-elect, Alassane Ouattara, consisted of a threatening letter to exporters. Some smuggling is expected in response.
Meanwhile, ECOWAS (Economic Community of West Africa States) continues to speak ominously of a joint military intervention to force Gbagbo's departure.
Why it's worth watching: This is basic stuff that Africa has always had a hard time enforcing, or just getting a leader to step down after he's lost an election. For ECOWAS to pull this off on its own would be a big thing and a very positive step forward for the organization, because when the next crisis surges, the players involved will need to take the organization that much more seriously.
If you do not want to take on every "imperial" project yourself, then this is how you do it.
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