Post 2015: Global Action for an Inclusive and Sustainable Future

Box 8.2 Political economy of commodity dependence – the case of Côte d’Ivoire
Although cocoa is no longer as economically
dominant as it once was, it continues to be a major
source of livelihoods in Côte d’Ivoire, along
with coffee and cotton. Its historical reliance
on cocoa has had major implications for the
country’s economic and political development,
underlining the effects of commodity dependence
on development trajectories. Continuous high
cocoa prices following independence in 1960
and the availability of land, led the government
of Houphouët-Boigny (himself originally a
cocoa farmer) to encourage immigration and
internal migration to exploit the land for cocoa
production, and Côte d’Ivoire experienced 15
‘miracle’ years.
But prices declined in the late 1970s, despite
attempts to withhold stocks and curtail supply.
The lack of new land for further planting,
declining productivity of existing cocoa trees
and spiralling debt set the scene for structural
adjustment, popular protest, multi-party
elections, the break-up of Houphouët-Boigny’s
‘grand coalition’ and the divisive ethnic politics of
later years. Unemployment and return migration
to rural areas added to land pressure, resentment
against immigrants, and the beginnings of
social instability. This undermined both the
economy and the political stability that cocoa
rent redistribution had permitted while prices
were high. Some argue (e.g. Boone, 2007) that
liberalisation policies have further decentralised
rents, retarding growth through a failure to
centralise and use rents productively. In the
more recent post-electoral crisis, the ban on
cocoa exports, which meant forfeiting export
tax revenues, was one of the measures that
contributed to the ousting of the president.
What role, then, for trade policy in encouraging
economic transformation in Côte d’Ivoire? The
West African Economic and Monetary Union
common external tariff was introduced in 2000
but Côte d’Ivoire’s trade with its co-members did
not increase due to remaining barriers to trade
in the region, including additional levies, import
bans and non-tariff barriers – which underscore
the need for trade policy to go beyond tariff
measures. The surge in trade with ECOWAS
is due mainly to imports of Nigerian crude oil
and return exports of refined petrol, which is
not transformational. To date the interim EPA
with the EU has not had a major impact on
Côte d’Ivoire’s trade patterns compared with
the previous Cotonou regime, although the
alternative of using the GSP might well have had
a negative impact on trade flows. While exports
increasingly include a degree of value-addition,
history suggests that trade policy will have a role
in promoting economic transformation only if
political and economic interest groups can align
on agendas that promote deeper structural
transformation
poSt-2015: Global actIon For an IncluSIvE anD SuStaInablE FuturE
153