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Ethical Trading-Take the time to read this.

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Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: October/20/2008 at 02:55
8shots View Drop Down
Optics Jedi Knight
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October 2008

Special Report

The International Trade Centre in Geneva (a division of the United Nations) invited me to attend the World Export Development Forum in Switzerland last week and address the audience on “Ethical Trade in Global Supply Chains”. I had just been closely involved with the week-long Tesco Ethical Trade Workshop in Gordon’s Bay. So this invitation into the Alpine resort of Montreux could not have been better timed.

I thought it may be of interest to you if I gave you a summary of my speech.

In 2002, after the Worldcom and Enron liquidations in the USA, President Bush announced that “We need men and women of character who know the difference between ambition and destructive greed, between justified risks and irresponsibility, and between enterprise and fraud.” He went on further to state that, “We’ve learned of some business leaders obstructing justice and misleading clients, falsifying records, and business executives breaching trust and abusing power. We’ve learned of CEOs earning tens of millions of dollars in bonuses just before their companies go bankrupt, leaving employees, retirees and investors to suffer.”

That was in 2002. Six years later, the situation is significantly worse. As a result, we have an unprecedented financial meltdown in the global economy. Investment bank megalomaniacs have used fancy financial instruments to stretch the world of mortgages, hedge funds and futures beyond their designed limits. Bad loans were unhesitatingly insured (by the likes of AIG) until the first defaults on mortgages started – and the house of cards inevitably came tumbling down. Shock and awe. The FBI has finally been sent in to investigate the conduct of senior officials in investment banks and mortgage lending institutions. Too little, too late. In the meantime, credit has dried up as trillions of dollars continue to be wiped off the world’s stock markets.

People have started asking why this ugly side of capitalism had not been checked or regulated in some way, since the writing had been on the wall back in 2002. Interestingly, Lehman Brothers, Bear Stearns, Merill Lynch, Goldman Sachs, J P Morgan and Morgan Stanley have all been run by CEOs who were also their companies’ Chairmen. Is this acceptable corporate governance? And have we not asked ourselves before, ‘who will guard the guards?’

Mr Paulson eventually convinced the American Senate and the House of Representatives to authorize, essentially, the privatization of profit and the nationalization of debt. But can a bail out of $US 700+ billion do the trick, or is the market force of excess credit that has been gathering momentum in the system for that last 15 years simply an unstoppable category 5 financial hurricane? I think that the latter is the case, so hold on tight to the rails, as the storm has only just hit. Two profound statements in a recent issue of The Economist describe our near future: (i) capitalism requires people to pay for their own debts; and (ii) naïve faith in regulators’ powers makes for ruinous false security.

How is this affecting our South African fruit export industry? As night follows day, so will a biting global recession follow this credit crunch. Retail sales will fall off sharply, affecting future sales of our fruits. In addition to this, back-to-back financial deals may well falter, as importers struggle to secure the necessary financing from banks to fund the supply chain transactions.

Does ethical trade then depend entirely on ethical politicians coming to the fore in a time of crisis? We need look no further than the failed Doha Round and farm subsidies to understand the answer to this. Politicans know that secondary and tertiary industries all ply their trade off that unit of agricultural product flowing through their countries’ value chains. It is no wonder that agricultural products are often described as the lifeblood of economies. More importantly, politicians understand only too well that paying farmers cash for their efforts buys votes. European and American farmers received a combined subsidy payout last year of over $US 100 billion. Is this ethical when South African farmers -and their developing country counterparts -are not subsidized a single cent? Clearly we cannot rely on politicans to make ethical decisions in this regard, and we are left to conclude that the phrase ‘ethical politician’ is a well-disguised oxymoron.

 

Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: October/20/2008 at 07:39
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Same problem the American farmer has to deal with in a differant place.  Ag is a buyers market because of the limited life of the product.
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: October/20/2008 at 09:01
8shots View Drop Down
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Originally posted by silver silver wrote:

Same problem the American farmer has to deal with in a differant place.  Ag is a buyers market because of the limited life of the product.
 
I think that his article can be applied in a more broader sense and not just to agriculture. The message I think is that if we do not deal more responsibily, then the capitalist world is in serious trouble.
Right now Dark Africa is laughing at the Western Economy, who for years and years have looked at Africa as corrupt, greedy and easily bribed etc. However, with the credit crunch scandal, the Western World seems more corrupt and greedy then Africa.
 
I think that this article has some very serious thoughts for all of us.
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: October/22/2008 at 21:14
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Originally posted by 8shots 8shots wrote:

Originally posted by silver silver wrote:

Same problem the American farmer has to deal with in a differant place.  Ag is a buyers market because of the limited life of the product.

 

I think that his article can be applied in a more broader sense and not just to agriculture. The message I think is that if we do not deal more responsibily, then the capitalist world is in serious trouble.

Right now Dark Africa is laughing at the Western Economy, who for years and years have looked at Africa as corrupt, greedy and easily bribed etc. However, with the credit crunch scandal, the Western World seems more corrupt and greedy then Africa.

 

I think that this article has some very serious thoughts for all of us.

It is true that corruption and greed have consumed the American economic system. However, complacency, which may be derived from ignorance, is a primary cause. What would you say is the cause in Africa??? It has been ingrained in the entire nation for centuries, while America has prospered. While i have great fears of an "ObamaNation", this IS AMERICA. We will get through and over this, stronger, better than we were before. I wonder where Dark Africa will be??
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