1. Legend holds that an Ethiopian farmer by the name of Kaldi ‘discovered’ coffee when he noticed that his flock had increased energy after eating the red berries of this strange-looking plant. Coffee is now grown around the world, from the subtropics of Indonesia, to the highlands of Colombia. Is this globalisation? What are its pros and cons?
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by technology innovation. An excellent example of globalization is the growth of coffee around the world originating from Ethiopia and dispersing to other nations around the world like Indonesia and Columbia.
Grown in three continents (Africa, Asia, and the Americas), coffee is closely linked to the economic development of many nations. In Ethiopia and Uganda, it is the primary source of income for the country.
International laws regulate the industry and aim to prevent price dips and spikes. Farmers around the world are part of cooperatives supported by international NGOs, to obtain better prices for their crops, as well as to deliver social services for their communities. This has helped many of these poor countries and their citizens develop economically and raise their standard of living.
Another key benefit is that FDI interests into these countries raises government standards reducing corruption and making their economies more stable and effective.
Not all of the impacts are positive though, environmental degradation and greedy commodity traders can certainly hurt the industry and its supply chain.
Also, opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world such as Starbucks and McDonalds at the expense of local enterprises, local cultures, and common people.
While coffee is the second largest commodity in the world, its globalization has not been kind on the third world. Although firms like Starbucks and Illycaffè have experienced phenomenal growth, the price impact of growing demand has not cascaded down to the farmers in these countries. In fact, while coffee consumption has rocketed up in the last five years by over 700%, the price paid to growers for raw coffee beans has dropped from $3 a pound to barely 50c a pound. This is a key disparity that international regulations like FairTrade are aimed at correcting.
2. Italy has always enjoyed a reputation for its luxury products which are designed and manufactured by highly-skilled artisans. Illycaffè is a good example. What would explicate this reputation? Can Italy continue to enjoy it?
The Chairman and C.E.O. of Illycaffè, Andrea Illy is the grandson of espresso-innovator Francesco Illy, who started this slick and highly-regarded coffee company in Trieste back in 1933. This is a classic example of an Italian family owned company with...