11 August 2006
According to a recent Reuters article, Ivorian Prime Minister, Charles Konan Banny, has publicly acknowledged that the privatization in 1999 of the country’s staterun cocoa stabilization fund, CAISTAB, at the behest of the World Bank and IMF, has been a failure and the situation for many of Cote d’Ivoire’s small farmers has worsened.
CAISTAB served to protect farmers from market shocks by setting an official price for cocoa, insulated from price fluctuations in the international cocoa market. Despite Bank and Fund promises of the benefits of a free market system, when the fund was dismantled, Ivorian farmers were exposed to a serious decline in world cocoa prices without the possibility of government intervention or assistance. The resulting economic instability in Cote d’Ivoire’s cocoa-dependent economy has contributed to a rise in child labor in the country’s cocoa fields, according to the International Labor Rights Fund.
At a recent press conference, Prime Minister Banny remarked that "poorly studied reforms, especially for liberalisation, lead to situations which have the opposite effects of those being sought. That is what we're seeing."
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