False Economy - Alan Beattie [110]
Establishing a U.S. standard and then getting it adopted internationally took more than a decade. Indeed, not only did the United States Maritime Administration have to mediate in these various international rivalries, but it also had to fight its own turf battles with the American Standards Association, an agency set up by the private sector in the United States. The matter was finally settled by the power of federal money: the Federal Maritime Board, which handed out public subsidies for shipbuilding, decreed that only the eight-by-eight-foot containers in ten-, twenty-, thirty-, or forty-foot lengths would be eligible for handouts.
But containerization didn't just carry existing cargo more quickly and cheaply; it enabled a radical shift in the way that companies did business. One of the benefits of fast and reliable transport is that it enables companies to maintain smaller inventories, or spare stocks, as they have more certainty about being able to receive supplies faster. In the 1980s, the Japanese, and particularly innovative companies like Toyota, pioneered what was known as "just in time" production. Since the supply of inputs could respond quickly to shifts in demand, Toyota, rather than maintaining a monolithic supply chain within a huge company, started to contract out its component manufacture to a variety of smaller, more nimble businesses.
The original Asian tigers, today joined in varying degrees by Thailand, Malaysia, Indonesia, the Philippines, Vietnam, and, of course, China, now form what is essentially an internationally disaggregated manufacturing and assembly chain, sometimes known as "Factory Asia." The cheap and rapid transport of components and goods between these countries, which are, let's not forget, not all right on top of each other, has had a great deal to do with making "just in time" possible.
But why can't Africa do the same? As we saw at the beginning of this chapter, the continent is missing out on a lot of production and trade, and coca is one of the intriguing cases. Why, one has to ask, do Africans not grow coca and make cocaine? They certainly export it. The white powder that fuels Europe's media and financial-services industries comes from Colombia, Bolivia, and Peru, yet much of it is smuggled out of the West African countries of Nigeria, Guinea-Bissau, and Cape Verde.
Like coffee, coca grows well at high altitude, one of the reasons that so much of it is grown in the Andes. Africa already has large coffee-growing regions—Uganda, Ethiopia, Rwanda. So why does Africa not commit some of this land to growing this higher-value crop, and also take a place in the higher-value-added parts of the supply chain—the production and the intermediate transport? In the export trade to Europe, Africans are stuck occupying the relatively low-paid and high-risk part of the supply chain, the final cross-border smuggling.
Management-consultancy reports for an industry like cocaine are hard to come by—though, unlike with the asparagus trade, we can rule out preferential tariff policy as an explanation. Natural environmental imperfection provides a minor reason: Africa has somewhat less good climatic conditions, as compared with Latin America, and a relative shortage of large plateaus useful for growing coca. But the main explanation, according to the United Nations Office on Drugs and Crime, is that transport and logistics in Africa are so poor, and the politics so unstable, that it is simply more efficient to make it in South America and transport it from there.
Coca does not have a quick return: it is grown on plantations that take several years to bring to productive maturity. That, apparently, is too long a period to take the risk that political and logistical volatility will interrupt the business. (There are reports from the region that the opium poppy, which is much faster to grow and harvest, is beginning to be planted in West Africa.) In some ways, given the way that illegality multiplies the financial, logistical, and human-resource management challenges of production