Cotton Prices In Mali Case Study

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Cotton Prices in Mali on the Continuing Decline
Mali is one of the poorest countries in Africa with two thirds of the population living on less than a dollar a day. The per capita income was $242.00 in 2005. However Mali is one of the largest producers of cotton in sub-Saharan Africa (Baden, 2007).

Describe the project and what the negative outcomes were.
The cotton industry in Mali has is one of the cornerstones of its economy and is part of the strategy to build and grow Mali’s economy. In recent years the price has dropped due to wild pendulum swings in value. The US has also played a role because of subsidy pricing. The commodity prices has fallen as well (NASDAQ, 2016).
According to Baden (2007) “ To address these problems, Mali …show more content…

However this seems to be seldom happen. The World Bank is influenced greatly by many industrialized nations and the influence always seems to be at the expense of the end user, in this case the Mali cotton farmers. In this specific case the World Bank required the cotton farmers to accept lower prices tied to the world prices. Rather than sharing the risk of the volatile prices between the traders, ginning companies, and the farmers (Baden, 2007), the World Bank insisted that the Mali cotton farmers bear the greatest risk, which is also the group least likely to be able to sustain the risk. I feel this approach could have been avoided. In nearby Burkina Faso, they went through a similar problem earlier in the 1990’s and developed a producer managed support fund which help stabilize the price of cotton. Why wasn’t the World Bank aware of these successful practices from a neighboring country or why didn’t Mali use this as an example of growth potential for their country in negotiations with the World Bank. One of two parties must have been aware of this …show more content…

Why or why not?
During my research
Jalloh (2007) stated “The International Monetary Fund (IMF) and the World Bank are the major cause of poverty in African countries today. Despite claims that they will reduce poverty in Africa, it is widely accepted that most of the debts, as a cause of poverty in Africa, are due to the policies of the International Monetary Fund (IMF) and the World Bank.
The World Bank is funded 51% by the US Treasury. The US has a 17% stake in the voting rights. The required percentage to make a decision is 85%. This gives the US veto power over any decision. In addition also according to Jalloh (2007):
Pressure from the US government made IMF start offering loans based on strict conditions. Critics have said that these policies have reduced the level of social safety and worsened labour and environmental standards in developing

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