Creating Political Stability in Yemen through Importing Yemeni Coffee to the United States: A Country and Market Analysis

Anda E !reeney

"inal Paper SSCI E#$$%b: !raduate &esearch Methods and Scholarly 'riting in the Social Sciences

(ar)ard Uni)ersity *ecember #+, -$#.

Abstract

Yemen/s coffee industry faces general economic and coffee specific challenges that impede its gro0th In this paper I apply the economic de)elopment models of 'illiam Easterly and Paul Collier to sho0 ho0 Planner solutions, a Conflict 1rap, a 2atural &esource 1rap, and a 3ad !o)ernance 1rap pre)ent de)elopment I sho0 ho0 a Searcher strategy, aid, military inter)ention, la0s and charters, and trade policy can create gro0th Applying my o0n analysis, I find inade4uate marketing and lack of protection of the Mocha name has kept the market for Yemeni coffee small 3y combining these general and specific findings, particularly Planner strategies and smart marketing, Yemen/s coffee economy can gro0 creating thousands of 5obs, thus encouraging economic de)elopment, supporting Yemen/s stability, and ad)ancing U S strategic interest

6ist of "igures

"ig # "ig "ig . "ig 9

Yemen/s Coffee !ro0ing &egions Mechanical Coffee *ryer Yemen/s !*P !ro0th and !*P per capita !ro0th USAI* Planner &ecommendations for Yemen/s Coffee Industry

7 #. #8 -9

# 'ith 3ordeau:, 0e think a heady "rench 0ine 'ith mocha, 0e think an espresso and hot chocolate blend, perhaps from Starbucks 1hough all is not as it appears 1his latter co;y be)erage 0ith kick, is a thief It appropriated the name Mocha in a linguistic legerdemain In #<th century Arabia, in 0hat is no0 Yemen, Sufi monks culti)ated a bush that produced seed%bearing red cherries, from 0hich they made a stimulating tea In a mar)elous disco)ery, the monks learned that the seeds contained in the cherries could be remo)ed and roasted, transforming a bitter, green seed into a carameli;ed, bro0n bean !rinding these beans and adding hot 0ater, the monks created a dark, smokey bre0, 0hich in)igorated their studies deep into the night =no0ledge of this hea)enly be)erage slo0ly spread, later de)eloping into a brisk trade in Yemeni beans 3uying and shipping from the port of Al Mokha, traders brought coffee first to Egyptians and 1urks, and by the #+th century, to *utch, English, and European peoples 3earing the name of the port from 0hich the beans departed, the name Mokha 0as tied to this ne0 be)erage, 0hich had dark chocolate undertones # 1oday, 0ith )arious strains of coffee gro0n 0orld0ide, some coffee continues to e:hibit darker fla)or profiles similar to this historic be)erage, 0hile others e:hibit acidic and floral fla)ors 'hile the heirloom Yemeni coffees gro0n today continue to e:hibit earthier and darker notes, 0ith less than #> of global trade?as opposed to #$$> <$$ years ago?the Mokha name has lost the geographic connection 1hough 0hile that 0as lost, the chocolate connection persists 1his paper is about Yemen and coffee and ho0 to e:pand Yemen/s global trade 1hough first, I share an illuminating anecdote
# Mark Pendergrast, Uncommon Grounds: The History of Coffee and How It Transformed Our World @2e0 York: 3asic 3ooks, -$#$A, <B#C

Mohammed (areth, a Yemeni entrepreneur for A4armap com, a real estate startup, li)es in Ale:andria, Egypt 'anting a taste of home, a sign in front of a coffee store tempted him It read, D'e ha)e E# Yemen coffeeF (e bought some 6ater communicating 0ith me )ia Skype and "acebook, he described the coffee as, D1he taste is GterribleH man I don/t think this is from Yemen but people are cra;y about it F Mr (areth returned to the store and told the proprietor that the coffee 0as not Yemeni As 0ay of e:planation, he noted he 0as from Yemen and that his family o0ns a coffee farm 1he o0ner said, DI 0ant to buy coffee from your farm F And in Mr (areth/s final 0ords to me, he said, DIt/s sad ho0 people are fooling others by selling coffee that is not from Yemen F'ith demand for Yemeni coffee outstripping supply, unscrupulous traders ha)e taken ad)antage of the situation Importing Ethiopian, Indian, and 3ra;ilian coffee into Yemen, the coffee is mi:ed 0ith Yemeni beans, repackaged, and sold as #$$> Yemeni, 0here it can sell for a <$> B #$$> premium Mr (areth/s attestation that the he bought fraudulent Yemeni coffee is 0ell supported, and highlights a key difficulty 0ith conducting business in Yemen 1he country lacks institutions, making business operations unreliable and e:pensi)e In this particular e:ample, imported coffee bypasses customs and enters the black market At the e:port and sale side, 0ithout institutions to authenticate the pro)enance of Yemeni coffee, dishonest sellers can easily adulterate their stock 1here are many difficulties impeding the e:pansion of Yemen/s coffee trade 'eak political institutions and bad go)ernance are only one of them In this paper I e:plore these difficulties, first by applying the de)elopment models of 'illiam Easterly
Mohammad (areth, DPersonal Inter)ie0 )ia "acebook Messenger,F Ictober -<, -$##

. and Paul Collier, de)elopment economists at 2e0 York Uni)ersity and I:ford Uni)ersity, respecti)ely . Using these analytical tools, I sho0 that Yemen contends 0ith unproducti)e Planner solutions and three po)erty traps 1hese retard all parts of Yemen/s economy, including its coffee industry *el)ing deeper, I sho0 ho0 the coffee industry faces particular additional challenges including poor marketing, a fragmented production chain, and an unprotected yet )aluable Mocha name 1he solution to these challenges are )aried, but most generally include market efforts that encourage Yemen/s gro0th &ather than implement policy, solutions should be disco)ered 0ithin the testing ground of the market 1his strategy 0ill find those solutions most suited for the political and economic climate Such solutions might include marketing that le)erages Yemen/s compelling coffee history Ir marketing that sho0s that the de)elopment of Yemen/s coffee sector 0ill ha)e outsides benefits in de)eloping and stabili;ing the country and deterring terrorism 1he premises of all these efforts are not preconcei)ed solutions but rather lithe, market%oriented disco)ery of 0hat is most effecti)e I call this a Searcher strategy 1hroughout this report I use the term Searcher and Planner I ha)e adopted these terms from 'illiam Easterly 0ho, in -$$C, coined this dichotomy9 (e did so in part as a reaction to Jeffrey Sachs, a Columbia Uni)ersity de)elopment economist Sachs, hea)ily in)ol)ed 0ith the United 2ations @U2A Millennium *e)elopment !oals, argues in The End of Poverty ! that the poorest countries suffered a po)erty trap, from 0hich they could not reach the bottom rung of the de)elopment ladder 1he purpose of aid 0as lifting those
.'illiam Easterly, The White "an#s $urden: Why the West#s Efforts to %id the &est Have 'one (o "uch Ill and (o )ittle Good, #st edition @Penguin Press (C, 1he, -$$CAK Paul Collier, The $ottom $illion: Why the Poorest Countries %re *ailing and What Can $e 'one %+out It, #st edition @I:ford Uni)ersity Press, USA, -$$+A 9Easterly, The White "an#s $urden, chap # <Jeffrey Sachs, The End of Poverty: Economic Possi+ilities for Our Time @6ondon: Penguin, -$$<A

9 nations, through efforts such as public health and infrastructure de)elopment, 5ust enough to escape po)erty and be on the ladder of prosperity 'illiam Easterly disparaged this model, arguing that po)erty/s causes 0ere not gi)en to such platitudes DA Planner belie)es outsiders kno0 enough to impose solutions A Searcher belie)es only insiders ha)e enough kno0ledge to find solutions, and that most solutions must be homegro0n FC Pre)ious efforts in Yemen ha)e been of the preconcei)ed, Planner )ariety 1he best e:ample of this, falling 0ithin the coffee industry, are efforts by the United States Agency for International *e)elopment @USAI*A In -$$< they published "oving ,emen *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade/0 1he scope of my report is the same, though my solutions are drastically different, of the Searcher )ariety 1he importance of effecti)e de)elopment strategies in Yemen are t0ofold "irst, the country is stuck in po)erty: per capita !*P rests at L#9$$, in sharp contrast to the L-<,$$$ of neighboring Iman and Saudi ArabiaK 9C> of the population li)es on less than t0o dollars per day, purchasing po0er parityK and 9.> of the population suffers from food insecurity 7 1his income disparity and food depri)ation is a political and moral challenge that demands solutions 3eyond this argument for assistance to Yemen, the United States has a strategic interest in the region 'ith the founding of Al%Maeda in the Arabian Peninsula, the U S has spent millions of dollars in aid, to stabili;e the region and fight terrorism Since late -$##, this economic assistance has totaled o)er LC$$ million,8
C + 7 8 'illiam Easterly, DPlanners )ersus Searchers in "oreign Aid,F %sian 'evelo-ment &eview, -$$C, -.: edition, . USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade @US Agency for International *e)elopment, *ecember -$$<A DYemen N '"P N United 2ations 'orld "ood Programme % "ighting (unger 'orld0ide,F accessed *ecember #+, -$#., http:OO000 0fp orgOcountriesOyemenOo)er)ie0 3ureau of Public Affairs *epartment If State 1he Iffice of 'ebsite Management, DYemen,F Press &eleaseN"act Sheet, U/(/ 'e-artment of (tate, August -7, -$#.,

< of 0hich about L-<$ million has gone directly to0ards fighting terrorism and )iolent e:tremism #$ In -$#-, U S military acti)ity included hundreds of drone flights and forty% t0o strikes 1he L.<$ million of non%military aid has been di)ided, 0ith L--# million supporting humanitarian assistance, L.8 million supporting an ongoing political transition, and L#$$ million supporting economic gro0th and de)elopment ## 'ith effecti)e de)elopment solutions, the United States can ad)ance its national security 0hile simultaneously alle)iating Yemeni po)erty Ineffecti)e solutions puts this in 5eopardy As an American and keeping 0ith the theme of Searcher solutions, I ha)e sought a 0ay to encourage Yemen/s de)elopment 0hile also securing American interests I see an opportunity to accomplish this through importation of Yemeni coffee Currently, the U S imports about fi)e million dollars of Yemeni coffee per year #-#. If this domestic demand could increase, Yemen/s economy 0ould gro0 And not only 0ould the economy benefit, 0hich 0ould pro)ide some stability and bolster the security situation, but coffee in particular could ha)e surgical benefits 2amely, coffee is labor intensi)e and pro)ides employment opportunities Yemen, 0ith a C$> young, male unemployment rate follo0ing the Arab Spring,#9 desperately needs 5obs 1he coffee industry, 0hich currently pro)ides income and support for o)er C<$,$$$ people,#< could pro)ide thousands, or e)en
http:OO000 state go)OrOpaOeiObgnO.<7.C htm #$ DInside YemenPs Shado0 'ar Arsenal,F accessed *ecember #$, -$#., http:OO000 foreignpolicy comOarticlesO-$#.O$7O$+OinsideQyemensQshado0Q0arQarsenalEsthash SIf:1R b' lCeC1I(r dpbs ## DU S Support for Yemen,F accessed *ecember #+, -$#., http:OO000 state go)OrOpaOprsOpsO-$#.O$7O-#-C98 htm #- USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, #< #. I ha)e been unable to find reliable data on 0ho imports this fi)e million dollars of coffee and 0here it is being sold Speaking 0ith coffee e:porters, importers, 0holesalers, coffee roasters, and coffee shops, it appears that many players deal Yemeni coffee in small 4uantities I surmise the U S market, like the Yemeni farmers, is highly fragmented #9 DInno)ati)e Approach for Youth Employment !eneration in Yemen N U2*P,F accessed *ecember #<, -$#., http:OO000 undp orgOcontentOrbasOenOhomeOpresscenterOarticlesO-$#.O$-O#7Ogo)ernment%of% yemen%0ith%undp%and%go)ernment%of%5apan%present%on%the%ground%to%support%5ob%creation%for%youthO #< USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to

C hundreds of thousands, of ne0 5obs for this unemployed demographic that foments instability #C 1his goal to e:pand U S demand for Yemeni coffee has a solid foundation in Yemen/s coffee production capacity *uring the #8<$/s, Yemen e:ported about three times as much coffee as today #+#7 And production bet0een #88C and -$$9?a)eraging #$,$$$ to #-,$$$ tons gro0n on -7,$$$ hectors?has been the smallest in recent history#8 1his contraction can be re)ersed 0ith increased demand USAI*, e:amining this production decline, argues that it is caused by 0ater shortages and an increase in farming of 4at-$, a mildly narcotic plant illegal in the 0estern 0orld In tandem, this is odd reasoning Although Yemen has 0ater shortages, described later, 4at is a 0ater intensi)e crop If 4at production can e:pand, there is certainly 0ater for coffee production In my e:amination of shrinking production, economic pressures seems to be the main dri)er Simply, 4at production pays more 1his is illustrated by the production e:plosion, bet0een #8+$ and -$$7, 0here +$$$ hectors under culti)ation soared to #9+,$$$ hectors -# A second cause, 0ithin coffee, affects farmers 'hile they recei)e a relati)ely high price for coffee compared to else0here in the 0orld, they are not remunerated for producing higher 4uality beans 'ith friction in the Yemeni supply chain, prices ha)en/t been high enough to encourage reform I see a nudge from higher demand pushing reform and increasing the competiti)eness of coffee )ersus 4at Undoubtedly capacity
(ustaina+ly Im-rove Incomes and E.-and Trade, #C 1herese " A;eng S 1hierry U Yogo, ,outh Unem-loyment and Political Insta+ility in (elected 'evelo-ing Countries @African *e)elopment 3ank, May -$#.A #+ &e-u+lic of ,emen Economic O--ortunities Programme @International "und for Agricultural *e)elopment, 2ear East and 2orth Africa *i)ision, n d A #7 'hether production 0as three times higher as 0ell is unclear #8 USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, + -$ Ibid , iii, +, -# -# &e-u+lic of ,emen Economic O--ortunities Programme, -

+ e:ists, it/s 5ust at a higher price In this paper I sho0 ho0 Searcher solutions can accomplish Planner goals of foreign in)estment and 5ob opportunities &ather than Planners telling Yemen 0hat to do and face lo0 adoption rate and 0asted assistance money, I flip the interaction Instead, I describe the problem, thus allo0ing the reader to find and pursue possible opportunities 3efore ad)ancing to my argument, I 0ill first introduce coffee and its status in the 0orld market According to legend, =aldi, a si:th century goatherd in Ethiopia, first disco)ered coffee 6ate one afternoon as he prepared to return home, he played his pipe to call his goats 2one came, so =aldi 0ent looking for them Upon coming to a clearing, =aldi sa0 his goats dancing about 0ith great energy Confused, he then noticed them eating both lea)es and berries from a s4uat shrub =aldi picked some lea)es and che0ed on them gingerly (e felt a bit of energy 3iting into some of the red berries he tasted a s0eet flesh, and soon felt further energi;ed 2ot long thereafter, =aldi began frisking about as 0ell 1he plant that =aldi ate from is 0hat is kno0n today as Coffea %ra+ica/ It gro0s at altitudes abo)e -$$$ feet, roughly bet0een the 1ropic of Capricorn and the 1ropic of Cancer !ro0ing to medium height, it is the si;e of a large shrub or small tree 1he plant bears small cherries that turn red 0hen ripe Inside are a pair of green, ra0 seeds 1o transform coffee cherries to a final product, there is a multi%step process "irst, berries are hand picked and then dehusked in either a dry or 0et process to remo)e the outer pulp, lea)ing the seeds free 1he seeds are then consolidated and passed along the supply chain to the end consumer 1his can in)ol)e consolidators, e:porters, importers, 0holesale sellers, roaster, and then your local coffee shop

7 In Yemen specifically, coffee has been gro0n nearly the same 0ay o)er the last <$$ years "armers in 0estern, mountainous regions terrace their property, gro0ing heirloom )arieties of coffee, many of 0hich are ancient and uncategori;ed by geneticists "arming methods, 0hile not certified organic, are essentially so -- Irrigation is generally absent, 0ith the e:ception of a small minority of 0ell%financed and larger farms -.

Al Mokha

"igure #: Yemen/s Coffee !ro0ing &egions, in bro0n U(%I' ,emen "oving ,emen Coffee
*orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade @US Agency for International *e)elopment, *ecember -$$<A, .+

'ith established fruit%bearing Arabica plants, the process for most of Yemen/s 88,$$$ farmers, 0ho produce an a)erage of ##< kg of green coffee-9, is as follo0s *uring har)est time, family and seasonal labors pick the crop o)er a period of 0eeks 1hese cherries are then spread on roofs for drying, taking ten to t0enty%one days Ince dry and no0 bro0n colored, farmers gather and store their crop Consolidators,
-- USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, iii B )i, < -. Ibid , 9B< -9 Ibid , 8

8 sometimes using pack mules, pass from farm to farm, buying this product 1he consolidators pass the unmilled coffee to middleman 0ho mill and remo)e the husk 1he green beans are then sold to internal distributors or e:porters -< 1his process of transforming a ra0 commodity to an e:port%ready product has many steps during 0hich the coffee can degrade in 4uality In Yemen, many mistakes are made "armers are not al0ays careful about picking only the ripest cherries !reen and orange ones are picked as 0ell And during the drying process, sometimes the cherries are not turned and aerated, 0hich can result in mold 3eans also deteriorate during storage that is at times o)erly long or in damp conditions Ince passed on to the mills, poorly sorted coffee and poorly calibrated mill stones result in many broken beans "inally, the e:porter recei)es the product If the original beans, only thirty to fifty percent meet international standards -C More personally, 0hile tasting fi)e Yemeni coffees in 3oston, *ecember 7, -$#., I sa0 and tasted some of these shortcomings 6ooking at the coffee, I could see a disproportionate number of fla0ed beans and poor sorting by si;e And tasting the coffee, one of them had slight fla)or contamination from the 5ute sack, 0hich the beans had been stored in 'hile part of the e:citement of Yemeni coffee is this more 0ild, unpredictable side, this forgi)ing attitude to0ards fla0s should not encourage their proliferation 1he pre)iously mentioned USAI* report describes Yemen/s coffee industry, much as I ha)e done "rom this backdrop, the report/s author, coffee consultant *aniele !io)annucci, dra0s a range of conclusions 'hile I belie)e the analysis of the

-< Ibid , -B+ -C USAI*, E.-anding ,emen#s (-ecialty Coffee Industry: (trengthening the &ole and Ca-acity of the ,emen Coffee %ssociation and Coffee Producer %ssociations, March -$$7, -B.

#$ shortcomings to be accurate, I strongly disagree 0ith the suggested solutions 'ith my report e:amining the same issue, it is natural for me to use this -$$< report as a starting point, to 0hich I 0ill later return In "oving ,emen Coffee *orward !io)annucci argues for a range of short, medium, and long term inter)entions at the farmer and market le)el I 0ould categori;e these inter)entions as the Planner )ariety An e:ample of this, in the short term, includes a recommendation for the establishment of a coffee board In -$$+ under encouragement of USAI*, e:porters, middlemen, and farmers created the Yemen Coffee Association 1he follo0ing year, 0ith the association hardly functioning, USAI* cataloged the problems and published a -$$7 report 3uried deep 0ithin 0as the insightful comment, D3oard members are unsure of benefits that could be deri)ed from an association F-+ 3ased on difficulty gaining traction, the irrele)ancy of the association 0as ob)ious 2amely, coffee players did not want it/ Yet, rather than focus on this critical piece on 0hich the success of the association rested, USAI* had only one sentence on this shortcoming in the si:ty%page report Ither recommendations to make the association more rele)ant ranged from increasing meeting fre4uency to once per 0eek to creating au:iliary producer associations 'ith such a Planner mentality, the gulf bet0een e:ternal recommendations and internal needs remains ya0ning It is no surprise that in -$#. the association continues to limp along -7 'hile I do agree that Yemen/s lack of a coffee board indicates the 0eakness of the coffee sector, rather than inter)ene and establish one, I belie)e a coffee board should only be encouraged Ultimately, the utility is a decision Yemenis must make for themsel)es
-+ USAI*, E.-anding ,emen#s (-ecialty Coffee Industry: (trengthening the &ole and Ca-acity of the ,emen Coffee %ssociation and Coffee Producer %ssociations, 7 -7 Risit their 0ebsite, http:OOyemencoffee orgOenglishOinde: html, to see its inaction

## &eturning to USAI*/s enduring 4uestion, ho0 to e:pand the coffee trade, I esche0 the Planner model of Sachs and instead, dra0ing on the 0ork of 'illiam Easterly and Paul Collier, apply a hybrid Searcher model 'illiam Easterly, 0riting in The White "an1s $urden spends nine chapters of ele)en detailing the failings of aid efforts In his final t0o chapters, he looks to the future and asks ho0 Searcher solutions can be encouraged Easterly/s first recommendations is Dhomegro0n de)elopment,F tailored to a particular country/s history, situation, and inclination Citing e:amples of Japan, China, East Asian 1igers, India, 1urkey, 3ots0ana, and Chile, Easterly sho0s ho0 these nations de)eloped through indigenous action Some 0ere democracies, some 0ere notK some had natural resources, some did notK others 0ere coloni;ed and one 0as landlocked *espite this range of starting points, all de)eloped, o)ercoming a )ariety of challenges 1he common thread among them 0as that Dall of them sub5ected their de)elopment searching to a market test, using a combination of domestic and e:port markets F-8 In contrast though, none implemented standardi;ed solutions, such as those eagerly pushed by institutions such as the International Monetary "und @IM"A and 'orld 3ank Structural read5ustment, floating currencies, and liberali;ed trade policies 0ere not part of the dialogue 1his lesson can be applied to Yemen in t0o 0ays "irst, Yemen does not need to conform to a preconcei)ed, 0estern model "or e:ample, democracy is not necessary for gro0th to occur Easterly cites China in this category Similarly, and pro:imate to Yemen, are Iman and Saudi Arabia, both go)erned by benign autocrats If Yemen is so inclined
-8 Easterly, The White "an#s $urden, .C.

#to such authoritarian, this 0ill not necessarily impede gro0th Second, 0ith si;able oil re)enue that comprises -<> of !*P and +$> of go)ernment re)enue,.$ this 0indfall could ad)ersely affects on de)elopment 1hough again, Easterly has an e:ample of success 0ith mineral 0ealth, citing 3ots0ana and diamonds And looking 0ithin the region, Iman and Saudi Arabia again are e:amples of nations that successfully manage oil riches A second lesson that can be dra0n from Easterly/s Dhomegro0n de)elopmentF recommendation is that any proposed efforts should be held against a market test, 0hich pro)ides feedback and accountability Applying this lesson to autocratic leaders and oil 0ealth, 0e must ask if the a)erage indi)idual benefits from this political system and from this mineral 0ealth 'hile the ans0er is not ob)ious, there is ample space for debate Among this ambiguity, 0e can dra0 the conclusion that political leadership and oil 0ealth does not necessarily re4uire reform (olding the Yemen Coffee Association up against this market test 4uickly indicates that perhaps is should be discontinued As detailed in E.-anding ,emen1s (-ecialty Coffee %ssociation board members had difficulty obtaining funding for the organi;ation 1his feedback indicates that the association is irrele)ant in this particular iteration .# More anecdotally, messaging 0ith Mohammed (areth in -$##, 0e discussed my idea of starting a business or 2!I that 0ould pro)ide 5ob opportunities in Yemen (e had this to say: DYour idea is great i 0ill tell you 0hy, most of 2!Is here training people
.$ CIA, D1he 'orld "actbook,F ,emen, accessed *ecember ##, -$#., https:OO000 cia go)OlibraryOpublicationsOthe%0orld%factbookOgeosOym html .# USAI*, E.-anding ,emen#s (-ecialty Coffee Industry: (trengthening the &ole and Ca-acity of the ,emen Coffee %ssociation and Coffee Producer %ssociations, 8

#. and in the end they get a certificate but they can/t find a 5obT GsicH people here sick of training they 0ant 5ust 5obsTF 1his is a telling e:ample of a Planner strategy that fails "irst, an 2!I sees unemployed youth and decides to pro)ide 5ob training 1he training occurs, but in the end, there are no a)ailable 5obs If the 2!I held its operations to a market test, they 0ould either charge for the training, 0hich if they obtained clients 0ould mean Yemen people found the training rele)ant, or 0ould train people for a 5ob 0ith 0hich they needed help Instead, the 2!Is run on outside funding and miss the mark Specific to the coffee industry, USAI* had the follo0ing Planner story in "oving ,emen Coffee *orward/ In the 1ai; area an 2!I obser)ed farmers drying cherries piled se)eral layers deep on their roofs Under this practice, 0ith more than one layer, cherries dried une)enly and occasionally molded or fermented 1he 2!I decided to sho0 farmers in the 1ai; area mechanical coffee dryers 1his seemed a reasonable solution that 0ould allo0 the farmer to produce a better product 3ut like so many Planner ideas, this one failed "igure -: Mechanical Coffee *ryer, 1ai;, Yemen
USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade @US Agency for International *e)elopment, *ecember -$$<A, C

"irst, the mechanical dryers, made from 0ood, cost an e:orbitant L#9$$ As the report notes, D1he de)ices appear simple and it is difficult to comprehend 0hy they cost L#9$$ each F I surmise the 2!I o)erpaid as they had ample funding but little market feedback

#9 Ince o)erpaying, the problem did not end there?and arguable it compounded 1he farmers did not adopt use of the dryers 1he report doesn/t e:plain 0hy, though else0here notes that farmers are not paid for the 4uality of the beans but for their 0eight 'hile it is not clear 0hy middlemen pay the same price for all beans, this simple fact encourages farmers to continue their imprecise methods .A possible e:planation for middlemen paying the same price for all dried cherries is the distance they are from e:porters, making it difficult to communicate standards &egardless of 0hether this is the specific reason or not, Searchers 0ill e:periment 0ith )arious strategies until finding one that 0orks If course neither Yemen nor the U S 0ants to 0ait and see if Searcher solutions lift the economy A desire to take concrete steps to acti)ely encourage de)elopment is natural Easterly pro)ides some Supplementing local Searchers 0ho e:periment and dri)e de)elopment, foreign aid Searchers can do the same Easterly argues that broad de)elopment schemes must be dropped, and targeted, measurable efforts must be the norm 2!Is and institutions, rather than 0orking 0ith kleptocrats and autocrats, must focus on the population and specific steps that ser)e and measurably reduce a need 1his could be )accines, bed nets or better seeds Progress and efficacy could be measured through randomi;ed control trials, as described by de)elopment economists Abhi5it 3aner5ee and Esther *uflo in Poor Economics .. 1hese measurable steps directed to0ards the poor 0ould not make them dependent on foreign aid &ather, this 0ould simply gi)e access to health, nutrition,
.- USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, C .. Abhi5it R 3aner5ee and Esther *uflo, Poor Economics: % &adical &ethin2ing of the Way to *ight Glo+al Poverty @2e0 York: PublicAffairs, -$#-A

#< and other basic human needs 1hese steps are not buying de)elopment?only internal Searcher efforts can accomplish that?instead, these steps are building a base from 0hich indi)iduals can focus on other pursuits .9 Easterly finds his recommendations reasonable only in light of the current system 0hich is unacceptable (e is not proposing a solution?that is a Planner mentality? rather he is a Searcher looking for incremental impro)ement 3ut his recommendations are not, The Way/ Inly one 0ay 1his incremental impro)ement argument and counterargument can be seen in 0hat he calls possible DCream SkimmingF Aid agencies, searching for measurable pro5ects that directly benefit the poor, may select only the most promising pro5ects 1hese same pro5ects may other0ise ha)e been accomplished by the go)ernment 'ith the fungibility of aid, this frees go)ernment dollars for other pro5ects, possibly something opposed by the 2!I, such as military armament Ir the funds are embe;;led Easterly 0isely notes that aid is part of a comple: system 1his fear of aid dollar leakage is 0ell founded 3ut if the poor at least benefit during Dcream skimmingF, they can demand change And 0ith a go)ernment 0ith so many other problems, it is unlikely that dollars 0ill flo0 from one cream pro5ect directly to the military or an autocrats purse .< In Yemen, these lessons can be applied in a )ariety of 0ays to coffee efforts sponsored by 2!Is 1o ensure rele)ancy of coffee associations, mechanical dryers, or any of the )arious efforts promoted by 2!Is, their operations must be sub5ected to either market forces or to specific, measurably steps I ha)e pre)iously discussed ho0 the former t0o efforts, 0hile reasonable, did not meet needs of farmers and thus suffered
.9 Easterly, The White "an#s $urden, chap 8 .< Ibid , .+#

#C from limited to no success 'ith a Searcher strategy, these pro5ects could be sold in multiple 0ays, until finding one that ultimately 0orked Ir 0ith a Planner strategy, if insisted, measurable steps that aided indi)idual farmers could be pursued In the case of the Yemen Coffee Association, did its e:istence increase prices paid to farmers for their beansT *id the association pro)ide better coffee )arieties that farmers eagerly adoptedT In the case of mechanical dryers, did farmers eagerly adopt and use themT If 2!Is paid L#9$$ for the dryers but farmers competed for their use, despite the absurd price, then the 2!I 0ould be achie)ing a useful and measurable outcome Applying Easterly/s concepts in a broader sense, I propose a market effort? importing and promoting Yemeni coffee in the U S ?to affect market tested solutions to Yemen/s coffee industry If demand for Yemen/s coffee goes up, the farmers, middlemen, and e:porters 0ill seek effecti)e 0ays to streamline operations and e:pand supply If mechanical dryers and a coffee association can do this, okay If better post%har)est milling is more )aluable than mechanical dryers, and coffee cooperati)es mo)e )aluable than a coffee association, e)en better 1he list of reasonable USAI* proposals to impro)e farmer outcomes is long &ather than pushing all, or an arbitrary selection of some, if a market demands reform, the producers are best positioned to select measures that 0ill ha)e the greatest impact 'ith this 0ider coffee industry encouragement, based on a U S business importing Yemeni coffee and founded on market principles is persuasi)e, such a business can seek 2!I funding to subsidi;e operations An 2!I, rather than pay for inter)entions in Yemen, can instead pay for inter)entions 0ith a broader outlook 3ut the 2!I can still demand specific outcomes as if they 0ere operating in country Are the farmers recei)ing higher prices for their coffeeT Are farmers eagerly adopting better post%

#+ har)est processesT 1he list of possible measurable outcomes are many E:ploring beyond the bounds of de)elopment economist 'illiam Easterly lies those ideas of Paul Collier Collier belie)es in four de)elopment traps that can trap a country in po)erty, 0ith limited hope of escaping I 0ill e:plore these four traps as they pertain to Yemen, and suggest 0ays they can be o)ercome As these traps are of the general sort, they apply to the coffee industry and other industries e4ually 3efore discussing the traps, I 0ill briefly introduce Collier, a professor of Economics at I:ford Uni)ersity and former director of de)elopment research at the 'orld 3ank Collier is a centrist economist 0ith Easterly to his right, and Jeffrey Sachs to his left, 0ithin the de)elopment debate.C Collier is 0ell%kno0n for his phrase, Dthe 3ottom 3illionF, 0hich he uses to describe the citi;ens of about si:ty of the 0ord/s poorest nations 1he people of these Dde)elopingF countries are trapped in po)erty and are not actually de)eloping 1his is in contrast to nearly si: billion citi;ens of other de)eloping nations 0hich are actually on the ascendency Consider a place like China or India, and 0e can e:pect them to be better off in thirty years 1ake the bottom billion countries collecti)ely, and they 0ere 0orse off in -$$$ than they 0ere in #8+$ In this list are countries such as (aiti, *emocratic &epublic of Congo, =enya, and Yemen If 0e look thirty%years ahead, these nations could impro)e or they could further decline .+ Colliers first trap is the Conflict 1rap Most generally, the poorer the society, the more likely it is to suffer from conflict And the more fre4uently conflict occurs, the less likely the economy 0ill gro0 Putting a number on this, se)enty%three percent of people
.C 2iall "erguson, D1he 6east Among Us,F The 3ew ,or2 Times, July #, -$$+, sec 3ooks O Sunday 3ook &e)ie0, http:OO000 nytimes comO-$$+O$+O$#ObooksOre)ie0O"erguson%t htmlK James ( Mittelman, D&e)ie0,F Po-ulation and 'evelo-ment &eview .., no 9 @*ecember #, -$$+A: 7-#B7-.+ Collier, The $ottom $illion, chap Introduction

#7 among the 0orld poorest billion ha)e recently been through a ci)il 0ar or are still in one 6ooking beyond a correlation bet0een po)erty and conflict, 0e see that slo0 gro0th, stagnation and decline also affect risk of ci)il 0ar As an appro:imation, a typical lo0%income country faces a risk of ci)il 0ar of about #9 percent in any fi)e%year period Each percentage point added to the gro0th rate knocks off a percentage point from this risk So if a country gro0s at . percent, the risk is cut from #9 percent to ## percentK if its economy declines at . percent, the risk increases to #C percent .7 Ince a ci)il 0ar starts, it last on a)erage si: to se)en years And once it is o)er, the future risk of conflict roughly doubles In the a)erage, only half of post%conflict countries manage to make it through a decade 0ithout relapsing into conflict .8 1he financial costs of 0ar are de)elopment in re)erse 1his is ho0 conflict can become a trap 1he a)erage ci)il 0ar tends to Dreduce gro0th by - . percent per year, so the typical se)en%year 0ar lea)es a country around #< percent poorer than it 0ould ha)e been F9$ (olding this model up to Yemen, 0e obser)e the follo0ing Since Yemen/s creation in #88$, the country has suffered from three intra%state conflicts according to Correlates of 'ar @CI'A data, current through -$$+ 1hose discrete conflicts began in #889, -$$9 and -$$+ Arguably, the -$$+ conflict and an additional one that began in -$## ha)e only been a continuation of the -$$9 conflict Paul Collier used the same data set "or my purposes, CI' may re)ise data, perhaps reclassifying the -$$9 and -$$+ conflicts as one &egardless of this ad5ustment, 0ith Yemen, 0e can see that Colliers assertion that conflict begets conflict holds true
.7 Ibid , -$ .8 Ibid , chap 9$ Ibid , -+

#8 6ooking at Yemen/s !*P 0e see annual gro0th has slo0ly declined o)er t0enty years And during the past decade it has ho)ered around 9>, 0ith an ob)ious e:ception during the Arab Spring 0hen gro0th plummeted to %#$> in -$## "actoring in population gro0th, !*P gro0th -er ca-ita has tracked annual gro0th, but about - <> to 9> lo0er *uring the past decade, this has ho)ered around #> 9# 3ased on Collier/s analysis, had Yemen been free of conflict, these gro0th rates 0ould ha)e been - .> higher I)er the last ten years, this difference 0ould ha)e engender a po0erful and different outlook &ather than obser)ing a nearly imperceptible increase in standard of li)ing, the typical Yemeni 0ould ha)e had reason for optimism, as gro0th marched for0ard

"igure .: Yemen/s !*P !ro0th and !*P per capita !ro0th. D1he 'orld 3ank
*ata3ank, accessed *ecember #-, -$#., http:OOdatabank 0orldbank orgOdataO)ie0sOreportsOchart asp:E

Collier/s second trap is a 2atural &esource 1rap It can occur in a nation 0ith
9# D1he 'orld 3ank *ata3ank,F accessed *ecember #-, -$#., http:OOdatabank 0orldbank orgOdataO)ie0sOreportsOchart asp:E

-$ natural resources 0ealth, 0hich parado:ically can impede de)elopment despite the 0indfall Appro:imately -8 percent of people in the bottom billion li)e in countries 0here this 0ealth dominates 1his includes Yemen, 0hich, as mentioned, deri)es .$> of !*P and +$> of go)ernment funds from oil 92atural resources create three main problems 1he first, *utch disease occurs 0hen a nation e:ports its oil, minerals or other natural resource 1his causes currency )alues to rise against foreign currencies, making e:ports more e:pensi)e and less competiti)e 1ake for e:ample a country 0ithout resource 0ealth 1o buy foreign goods, something must be e:ported to earn foreign currency 'hen a resource is disco)ered, selling that item abroad can earn foreign currency, discouraging the need for an e:port industry And 0ith currency )alues appreciating, those same e:ports become more e:pensi)e So 0hile the natural resource pro)ides easy 0ealth, it also discourages inno)ation and production for foreign markets 9. Collier e:plains it as, U*utch disease can damage the gro0th process by cro0ding out e:port acti)ities that other0ise ha)e the potential to gro0 rapidly F99 Easterly has argued that natural resources are not necessarily a curse 3ots0ana 0as one e:ample Paul Collier considers this an e:ception A second problem 0ith resource 0ealth is )olatility As prices of oil and minerals climb and plummet, go)ernments are forced to try adopting to a shifting and unpredictable bottom line 1his creates uni4ue budget difficulties, particularly 0hen prices fall

9- CIA, D1he 'orld "actbook F 9. Collier, The $ottom $illion, chap . 99 Ibid , 9$

-# 1he third problem is 0hat Collier terms, Dsur)i)al of the fattest F In resource rich economies patronage politics trumps honest politics Essentially, in a functioning political system, politicians stri)e to 0in )otes through pro)ision of public ser)ices In countries 0here politicians can embe;;le public funds, buying )otes is fre4uently easier 1he connection bet0een resource rents and corruption is comple: "or my purposes, I 0ill highlight one ma5or factor 'ith resource re)enue, ta:es are lo0er and the public is less likely to scrutini;e ho0 go)ernment funds are being spent 'ithout this accountability, checks and balances are gradually eroded 1his pa)es the 0ay to0ards corruption 9< In Yemen, petroleum products account for about 8$> of total e:ports 9C 'ith this causing the *utch disease, 0e can e:pect that coffee e:ports are more e:pensi)e than they other0ise 0ould be And based on price )olatility of petroleum and patronage politics, go)ernment institutions are 0eaker, 0hich 0ould ha)e a range of affects on coffee Most notable, the pre)iously mentioned illegal importation of Ethiopian, Indian and 3ra;ilian coffee that are used to adulterate Yemeni coffee 9+ 'ith better institutions, this practice could be reduced Another challenge in Yemen, thus far unmentioned, is a 0ater crisis, particularly acute in the capital 'ithin the ne:t ten years, scientists predict that Sana/a could become the first capital in the 0orld to run out of 0ater 97 3etter institutions could alle)iate this problem, 0hich has a direct affect on agriculture, in 0hich <$> of crops are irrigated and
9< Ibid , chap . 9C D1he Ibser)atory of Economic Comple:ityV:: Yemen E:ports, Imports and 1rade Partners,F accessed *ecember #., -$#., http:OOatlas media mit eduOcountryOyemO 9+ USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, #.K USAI*, E.-anding ,emen#s (-ecialty Coffee Industry: (trengthening the &ole and Ca-acity of the ,emen Coffee %ssociation and Coffee Producer %ssociations, 9# 97 A;mat =han, DYou ArenPt (earing About YemenPs 3iggest Problems B Al Maeda In Yemen,F *&O3T)I3E, accessed *ecember #., -$#., http:OO000 pbs orgO0gbhOpagesOfrontlineOforeign%affairs% defenseOal%4aeda%in%yemenOyou%arent%hearing%about%yemens%biggest%problemsO

-account for 8$> of 0ater usage 98 'ithin coffee, irrigation is largely absent, likely in part due to coffee farmers ha)ing small landholdings As noted pre)iously, only 0ell%funded farms ha)e irrigation 1hough small farms could benefit from drip irrigation, especially if there is increased demand for coffee Under the current political system, 0ater 0oes are likely to only 0orsen "inally, placing Yemen/s recent political history ne:t to Colliers Dsur)i)al of the fattestF model, 0e do see one slight di)ergence "rom #88$ to -$#-, President Abdullah Saleh go)erned Yemen and faced limited electoral competition So 0hile corruption e:isted, the lack of competition generally ob)iated patronage politics Colliers third trap is 6andlocked 0ith 3ad 2eighbors <$ 1his trap does not affect Yemen, 0hich has the ports of Aden, Al (udaydah, and Al Mukalla, and sits on the 3al el Mandeb strait, 0hich links the !ulf of Aden and the &ed Sea, one of the busiest shipping lanes in the 0orld <# Colliers fourth and final trap is 3ad !o)ernance in a Small Country I 0ill only briefly describe it, as Yemen is not considered badly go)erned per Collier/s criteria 2e)ertheless, Colliers recommendations can likely be applied to Yemen 0ith good effect 1hough this is an area for additional research 1o measure bad go)ernance Collier has t0enty go)ernance and policy criteria on 0hich he measures a state 3ased on this model, countries such as Angola, Central African &epublic and Sudan are considered failing 1he *emocratic &epublic of Congo is on the borderline <- 'ithin these failed states, Collier looked to see 0hat made a turnaround more likely (e found three characteristics:
98 <$ <# <&e-u+lic of ,emen Economic O--ortunities Programme, Collier, The $ottom $illion, chap 9 CIA, D1he 'orld "actbook F Collier, The $ottom $illion, C+BC8

-. Starting from being a failing state, a country 0as more likely to achie)e a sustained turnaround the larger its population, the greater the proportion of its population that had secondary education, and?perhaps more surprisingly?if it had recently emerged from ci)il 0ar Among the many characteristics that did not seem to matter one 0ay or the other 0ere democracy and political rights <. If 0e apply this lesson to Yemen, the one factor 0e can more easily affect is the proportion of the population 0ith a secondary education In -$$7, Yemen/s secondary !ross Enrollment rate 0as .7 .>, 0hich is lo0 by international standards <9 In my solution section I 0ill discuss a cle)er method for impro)ing this rate, beyond Planner education initiati)es In the preceding pages I ha)e described and applied Easterly/s findings and Collier/s four traps to Yemen, to better understand the countries de)elopment difficulties In some cases, I ha)e applied their model directly to the coffee sector I 0ill no0 mo)e beyond general ailments that affect all parts of Yemen/s economy, including the coffee industryK I 0ill no0 describe ailments s-ecific to the coffee industry In the follo0ing pages you may feel I am prescribing Planner solutions, though I 0ill note that I am simply raising possible solutions Searchers can be persuaded by my reasoning or not "rom my perspecti)e, as an indi)idual looking to import Yemeni coffee, I find all the follo0ing 0orthy of pursuit In the e:port, Yemen side, these same solutions may too be reasonably pursued In "oving ,emen Coffee *orward, *aniele !io)annucci, suggests a range of inter)entions (is summary chart is belo0 I encourage farmers, importers and e:porters alike to consider these measures I similarly ha)e recommendations 1hough rather than tell, I 0ill sho0 ho0 these could be )aluable
<. Ibid , +$B+# <9 1he 'orld 3ank, (econdary Education 'evelo-ment and Girls %ccess Pro4ect/, "ebruary 8, -$$7, -

-9

Figure 4: USAI* Planner &ecommendations for Yemen/s Coffee Industry USAI* Yemen,
"oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade @US Agency for International *e)elopment, *ecember -$$<A, -9

Possible Searcher Solutions 1he most basic failure and also opportunity to sell Yemeni coffee is through better marketing Currently, the Mocha name is unprotected and unconnected to Yemen Yet )irtually e)ery consumer kno0s the term It is on Starbucks menus across the United StatesK it is found on "olgers, Ma:0ell (ouse, *unkin, and !reen Mountain coffee bags in supermarketsK it is the name of the Museum of Children/s Art @MIC(AA in Iakland, CaliforniaK and it is part of the name 6i)emocha, the 0orld/s largest online language learning platform 0ith #C million members << In speaking 0ith indi)iduals, coffee lo)ers, and coffee roasters, it is only the rarefied connoisseur 0ho connects the Mocha name to Yemen 'ith branding, Yemeni Mocha could become the ne:t L<$Opound coffee like Jamaica 3lue Mountain or =ona Coffee Ir Yemeni Mocha could shift perceptions, such that consumers demanded Yemeni coffee in their mocha be)erages at o)er #C,$$$ Starbucks counters in C$ countries around the 0orld <C Another market segment, likely easier to enter, is that for Mocha%Ja)a coffee

<< D6i)emocha % About Us,F accessed *ecember #., -$#., http:OOli)emocha comOpagesOabout%usO <C DStarbucks Corporation 2e0s % 1he 2e0 York 1imes,F accessed *ecember #., -$#., http:OOtopics nytimes comOtopOne0sObusinessOcompaniesOstarbucksQcorporationO

-< blends 1his blended coffee, as the names indicates, combines coffee from Yemen and coffee from Ja)a As the 0orld/s oldest blend, it began in the years after #C88 0hen the *utch started culti)ating coffee in Ja)a *uring the #+$$/s these t0o regional coffees 0ere the most sought after and famous, and 0ere sometimes combined, creating an earthy and fruity coffee <+ In recent years, cheaper Ethiopian (arar coffee, 0hich tastes similar to Mocha, has been substituted In this market opportunity, the change is simply putting mocha coffee into the mocha half of the blend I surmise that this second opportunity may be easier, as the task is a matter of replacing one regional coffee?Ethiopian?0ith the correct Mocha coffee In contrast, the first opportunity re4uires redefining a 0ord for consumers, namely reclaiming the definition of Mocha from a coffee and chocolate blend, to a regional, Yemeni coffee As I ha)e alluded to, either strategy could be accomplished by educating consumers and ha)ing them demand Yemeni coffee for Mocha 1his effort could start today 1hough this is not the only strategy A perhaps ob)ious solution is legislation and establishing the Mocha name as a domain of origin 1his 0ould be akin to a 2apa 0ine coming from 2apa, California or a =ona coffee coming from the =ona *istrict of (a0aii 1he ob)ious difference, ho0e)er, is Mocha has taken on additional linguistic meaning A better comparison, perhaps, 0ould be to Champagne 'ithin the European Union, Champagne must come from the Champagne region of "rance, and meet appellation rules Abroad, though, rules )ary by country depending on trade treaties 'ithin the United States, most 0inemakers use the term sparkling 0ine to describe this ne0%0orld bubbly 1hough some 0ineries ha)e an e:ception if they used the term on their labels prior to -$$C In these 0ine cases, the 0inery can label their product by state,
<+ Pendergrast, Uncommon Grounds, +

-C such as California Champagne, under a semi%generic designation <7 1he protection of such nomenclature does not come easily 1he ComitW Champagne is a trade association established in #89#, 0ith the support of the "rench go)ernment, as a semi%autonomous public body 1oday, the ComitW has #C bureaus 0orld0ide to protect their name and promote their agenda, DChampagne only comes from Champagne, "rance F<8 'ith this brief e:ample, it is easy to see the difficulty Yemen 0ould face trademarking and protecting a Mocha name Unlike "rance, Yemen lacks political clout, e:pertise, gro0er associations, trade associations, and money Such challenges are reflected in their difficulty preser)ing the authenticity of coffee e)en 0ithin their o0n borders 2e)ertheless, Yemen could attempt to trademark Mocha, not so much for the end result, but for publicity, 0hich could help them put Yemeni Mocha back on the global stage Up to no0 I ha)e e:amined challenges facing Yemen/s coffee industry, and for some of those challenges, targeted solutions I 0ill no0 step back and discuss broad solutions that address a range of those problems Paul Collier, in part 9 of The $ottom $illion discusses four impressi)e instruments to fight po)erty I mention them belo0 1hough as the affects on the coffee industry s-ecifically are limited, I keep this section brief "or e:ample, 0hile Collier argues military inter)ention can help stabili;e a country, arguing military inter)ention

<7 D-C USC X <.77 % *esignation of 'ines N 1itle -C % Internal &e)enue Code N U S Code N 6II O 6egal Information Institute,F accessed *ecember #9, -$#., http:OO000 la0 cornell eduOuscodeOte:tO-CO<.77 <8 DChampagne 3ureau Champagne around the 'orld China &ussia United%States 3ra;il Europe Asia Australia,F accessed *ecember #9, -$#., http:OO000 champagne frOenOcomite% champagneObureausObureaus

-+ solely to help coffee farmers attain fair prices is absurd Second, I am brief as a nuanced application of these instruments re4uires e:pertise in economics, 0hich I lack 'hile the tools here 0ould assist Yemen/s coffee industry, this is ne)ertheless an area for further research 1he first instrument is simple aid Using statistical analysis, Collier sho0s 0hen aid hurts and 0hen it helps In countries prone to coup, aid dollars make it more likely In countries early in the reform process, aid is counterproducti)e and slo0s momentum In post%conflict countries, ho0e)er, it pro)ides stability and reduces the incidence of relapse In poorly go)erned countries aid can pro)ide incenti)es and de)elop human capital In applying these findings to the political situation in Yemen, 0e see that aid can ha)e targeted benefits C$ 1he second instrument is military inter)ention, 0hich can help restore order, maintain post%conflict peace and protect against coups Collier cites a range of e:amples, including 3ritish military inter)ention in Sierra 6eon in -$$$ In this instance, the Sierra 6eonean go)ernment and population asked for the inter)ention 3ritish troops arri)ed, ousted the &e)olutionary United "ront, and imposed peace C# 1he third instrument is la0s and charters, 0hich can be promulgated by any institution from the United 2ations @U 2 A do0n to a trade association 1his step creates and promote norms, and in some instances, enshrine them in la0 An e:ample of this is the U 2 *eclaration of (uman &ights 1he po0er of these charters is not so much forcing states to comply as it is to gi)e a country/s population something concrete to organi;e around and to demand And if a country refuses to adopt a charter, the
C$ Collier, The $ottom $illion, 88B#-. C# Ibid , #-9B#.9

-7 go)ernment leaders still must ans0er, D'hy notTF 1he fourth and final instrument is trade policy and using it to support the de)elopment of the bottom billion Collier cites a range of ad5ustments, from tariff policies to e:port di)ersification "or tariffs, he sho0s ho0 the typical, regional free%trade areas in Africa?on a)erage e)ery African nation is in four?harms bottom billion de)elopment "or e:ample, lo0 regional tariffs among de)eloping nations and high e:ternal tariffs against de)eloped nations create divergence/ 1his occurs as skill%intensi)e goods are e:cluded, so the most skilled and richest of the poor countries in the trade area benefit And the poorest remain poor Applying Colliers trade insights to coffee in Yemen could ha)e impressi)e outcomes 'ith my lack of e:pertise in economics though, this is a particularly important area for further research &egarding labor%intensi)e manufacturing, bottom billion nations re4uire preferential treatment China, for e:ample, has de)eloped manufacturing, such that Africa is at a competiti)e disad)antage, that is unlikely to be o)ercome until China mo)es from a manufacturing economy to a ser)ice economy Again, an insight such as this could be used to de)elop trade policies that 0ould assist Yemen CA final trade policy, directly applicable to Yemeni coffee and pre)iously unmentioned, is "airtrade In brief, "airtrade is a certification that promotes sustainability and fair 0ages for producers Collier argues against this measure as it amounts to 0hat is essentially a charity transfer encouraging 0hat has locked producers into po)erty C. 'hile I don/t take such an e:treme )ie0, I do 4uestion the merits of the program More persuasi)e and a reason against unnecessarily pushing "airtrade in Yemen,
C- Ibid , #<+B#+C. Ibid , #C.

-8 is the re4uirement that producers must be democratically organi;ed in cooperati)es 1his is a reasonable measure, though encouraging it smells of a Planner inter)ention Pre)iously, cooperati)es ha)e e:isted, but mostly in name only As !io)annucci obser)ed, Coffee farmer cooperati)es e:ist in many of the go)ernorates, but their functions and )iability appear to be 4uite limited All of those contacted or researched appear to ha)e been formed in order to manage some go)ernment or donor contributions Gthere isH lack of e)idence that these organi;ations are coalescing of their o0n )olition to pro)ide for the common needs of their farmer constituent C9 1o measure the utility of cooperati)es for Yemeni farmers, such initiati)es should be aligned 0ith the Searcher principle of Easterly If not, they 0ill likely continue to fail 2o0 that 0e ha)e obser)ed Yemen/s coffee industry from afar, scrutini;ed it up% close, and e:amined a range of inter)entions, I 0ant to combine these insights into specific, actionable steps And I 0ant these steps more effecti)e than the sum of their parts I call these cle)er solutions As a base, I 0ant to return to 'illiam Easterly/s concept of homegro0n de)elopment It has t0o parts: @#A tailored to a country/s history and situation, and @-A held against a market test to pro)ide feedback and accountability 1hese factors are the foundation of Searcher solutions and the key difference bet0een my coffee proposal and the proposal of USAI* 'ithin this frame0ork, I encourage market efforts so Yemen selects the most )aluable and appropriate strategies In "igure 9, some of the possibilities are seen 3ut the Yemeni coffee market can also be impro)ed as Collier/s traps are tackled 1his is 0here
C9 USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, #7

.$ the coffee industry can be part of cle)er efforts that ha)e outsi;ed effects !ro0ing the economy fights all four of Collier/s traps 3ut that is not all 1he conflict trap is e:acerbated by men 0ho are young, uneducated, 0ithout dependents and unemployed C< In Yemen today, C$> of young males are 0ithout 5obsCC, ha)ing a massi)e destabili;ing effect 1his is the opportunity and coup for la+or intensive coffee production 'ith 88,$<C farm households engaged in coffee production, and an a)erage rural family si;e of C <, that is nearly C<$,$$$ people directly impacted by coffee C+ 'ith industry gro0th, this number 0ould climb up0ards, pro)iding thousands of 5ob opportunities for lo0%skilled men In addition to farm%le)el 5obs, there 0ould also be an increase in demand for seasonal labor, middlemen, processors, and e:porters C7 1his e:pansion in 5ob opportunities 0ould stabili;e the country and reduce the probability of conflict relapse A second cle)er opportunity is encouraging coffee players to organi;e around marketing, branding, and reclaiming the Mocha name 'hile the chance that )arious parties 5oin such an effort depends on 0hether Searchers fa)or it, the opportunity seems e)ident 3y demonstrating a market for Yemeni coffee, this effort could find traction And then there/s the secondary benefit, beyond economic gro0th Such an organi;ation could transform and shift efforts to0ards ad)ocating for more fa)orable trade policies, possible international certifications, charters, or any other )aluable efforts that ha)e outsi;ed impacts on Yemen/s economic gro0th
C< Collier, The $ottom $illion, .$K 1herese " A;eng S 1hierry U Yogo, ,outh Unem-loyment and Political Insta+ility in (elected 'evelo-ing Countries, sec Abstract CC DInno)ati)e Approach for Youth Employment !eneration in Yemen N U2*P F C+ USAI* Yemen, "oving ,emen Coffee *orward: %ssessment of the Coffee Industry in ,emen to (ustaina+ly Im-rove Incomes and E.-and Trade, C7 A -$$- U 2 "ood and Agricultural Irgani;ation sur)ey reported that 0ere -<$ to .$$ middlemen, so 5ob creation there 0ould be minimal "or other positions, I could not find employment data among any of the USAI* or Yemen Ministry reports 1his is an area for further research

.# As I ha)e sho0n, Yemen has an established coffee industry 0ith capacity to e:pand 3y focusing on hybrid Searcher solutions in the mold of 'illiam Easterly and Paul Collier, rather than Planner solutions like those proposed by USAI*, the sector can place money and effort 0here most effecti)e 1here still remains many areas for further study 1his includes: 1o 0hat degree 0ill e:pansion of the coffee industry create 5obs for other0ise unemployed malesT (o0 many 5obs 0ill be createdT (o0 can lessons from Collier/s 3ad !o)ernance 1rap be applied to YemenT (o0 can Colliers four instruments be tailored to Yemen/s situation, particularly the fourth instrument, better trade policy 1he ans0ers to these 4uestions 0ill allo0 for more nuanced and cle)er solutions to fighting po)erty and ad)ancing U S strategic interest in Yemen 1he paradigm is Searcher but the strategy can be t0eaked to accomplish multiple goals 0ith singular efforts "inally, I lea)e you 0ith this thought: de)elopment aid 0ill ne)er create gro0th "or that, a country needs homegro0n solutions

.Bibliography D-C USC X <.77 % *esignation of 'ines N 1itle -C % Internal &e)enue Code N U S Code N 6II O 6egal Information Institute F -$#. Accessed *ecember #9 http:OO000 la0 cornell eduOuscodeOte:tO-CO<.77 3aner5ee, Abhi5it R, and Esther *uflo -$#- Poor Economics: % &adical &ethin2ing of the Way to *ight Glo+al Poverty 2e0 York: Public Affairs A persuasi)e argument for double blind randomi;ed control trials?like those conducted for testing ne0 pharmaceuticals?in the field of de)elopment "or e:ample, MI1/s Abhi5it and *uflo argue that bed nets ha)e an o)erall positi)e effect, despite leakage to unintended uses 1his is an argument that Sachs and Easterly fall on either side 'hile these MI1 economists ad)ance the field, they still do not respond to Easterly @and ColliersA assertion that efforts such as these may, in a greater sense, undermine go)ernmental institutions 1o learn more, be ad)ised that 3aner5ee and *uflo teach a course centered on their book at MI1K and this course is a)ailable for free through Ed:, a free, online, uni)ersity le)el learning platform I took this course in Spring -$#. DChampagne 3ureau Champagne around the 'orld China &ussia United%States 3ra;il Europe Asia Australia F -$#. Accessed *ecember #9 http:OO000 champagne frOenOcomite%champagneObureausObureaus CIA -$#. D1he 'orld "actbook F Accessed *ecember ## https:OO000 cia go)OlibraryOpublicationsOthe%0orld%factbookOgeosOym html Clemens, Michael A -$$+ DSmart Samaritans: Is 1here a 1hird 'ay in the *e)elopment *ebateTF *oreign %ffairs 7C @<A @September #A: #.-B#9$ Collier, Paul -$$+ The $ottom $illion: Why the Poorest Countries %re *ailing and What Can $e 'one %+out It #st edition I:ford Uni)ersity Press, USA An impressi)e middle 0ay for de)elopment, bet0een Searchers and Planners I read this in -$$7, as I searched for ans0ers to ho0 de)elopment ought to proceed (ere I found some ans0ers *epartment If State 1he Iffice of 'ebsite Management, 3ureau of Public Affairs -$#. DYemenF Press &eleaseN"act Sheet U/(/ 'e-artment of (tate August -7 http:OO000 state go)OrOpaOeiObgnO.<7.C htm Easterly, 'illiam -$$C The White "an#s $urden: Why the West#s Efforts to %id the &est Have 'one (o "uch Ill and (o )ittle Good #st edition Penguin Press (C, 1he A mandatory read 0ithin the de)elopment debate, populari;ed by blockbuster publications bet0een -$$< and -$$+ of Sachs, Easterly, and then Collier, in subse4uent years "erguson, 2iall -$$+ D1he 6east Among Us F The 3ew ,or2 Times, July #, sec 3ooks O Sunday 3ook &e)ie0

.. http:OO000 nytimes comO-$$+O$+O$#ObooksOre)ie0O"erguson%t html A great book re)ie0 arguing the 4uality of The $ottom $illion and placing it in conte:t among Sachs and Easterly "rancis, Marc "rancis and 2ick -$$+ $lac2 Gold Speak It "ilms in association 0ith "ulcrum Productions An arguably biased )ie0 on ho0 coffee farmers are disad)antaged in Ethiopia "riedman, 1homas 6 -$#. DPostcard "rom Yemen F The 3ew ,or2 Times, May +, sec Ipinion http:OO000 nytimes comO-$#.O$<O$7OopinionOfriedman%postcard%from% yemen html D(o0 to (elp the Poorest: Springing the 1raps F -$$+ The Economist, August http:OO000 economist comOnodeO8<7#<+C An illuminating introduction to The $ottom $illion, 0ritten in the Economist/s concise, 0itty prose DInno)ati)e Approach for Youth Employment !eneration in Yemen N U2*P F -$#. Accessed *ecember #< http:OO000 undp orgOcontentOrbasOenOhomeOpresscenterOarticlesO-$#.O$-O#7Ogo)er nment%of%yemen%0ith%undp%and%go)ernment%of%5apan%present%on%the%ground%to% support%5ob%creation%for%youthO DInside YemenPs Shado0 'ar Arsenal F -$#. Accessed *ecember #$ http:OO000 foreignpolicy comOarticlesO-$#.O$7O$+OinsideQyemensQshado0Q0arQa rsenalEsthash SIf:1Rb' lCeC1I(r dpbs &epublic of Yemen Economic Ipportunities Programme @International "und for Agricultural *e)elopment, 2ear East and 2orth Africa *i)ision, n d A 1his report lacked a date, though from the conte:t it must ha)e been authored in -$$7 6ike other reports coming out of Yemen, 4uality of data is an ongoing 4uestion 1his is in many 0ays reflecti)e or the instability in Yemen 1his report at times had different figures from USAI* for si;e of Yemen/s coffee industry 'ithin my paper, I largely a)oided putting precise numbers on the si;e =han, A;mat -$#. DYou ArenPt (earing About YemenPs 3iggest Problems B Al Maeda In Yemen F *&O3T)I3E Accessed *ecember #. http:OO000 pbs orgO0gbhOpagesOfrontlineOforeign%affairs%defenseOal%4aeda%in% yemenOyou%arent%hearing%about%yemens%biggest%problemsO =lingner, *onald -$$8 D&educing Po)erty: *o 'e (a)e the Means to &each 1his EndTF Pu+lic %dministration &eview C8 @CA: ##+7B##79 doi:#$ ####O5 #<9$% C-#$ -$$8 $-$+C : 1his essay appears that it 0ill re)ie0 four de)elopment books including Collier/sK instead, it is a 5ournal article on po)erty, ending 0ith a bibliography of thirty books D6i)emocha % About Us F -$#. Accessed *ecember #. http:OOli)emocha comOpagesOabout%usO

.9

Mittelman, James ( -$$+ D&e)ie0 F Po-ulation and 'evelo-ment &eview .. @9A @*ecember #A: 7-#B7-- In this re)ie0 of The $ottom $illion, Mittleman notes that Malaysia is actually a poor e:ample of a DheroFstate, as it e:hibits authoritarian practices Mittelman also raises a second reasonable ob5ection, namely that Collier only responds to celebrity economists @e g Sachs, EasterlyA rather than to others such as Claude Ake and Samir Amin Mohammad (areth -$## DPersonal Inter)ie0 )ia "acebook MessengerF, Ictober -< Ipoku, *arko =0abena -$$8 D1he 3ottom 3illion: 'hy the Poorest Countries Are "ailing and 'hat Can 3e *one about It Paul Collier F %frica Today << @9A @June #A: #.9B#.C doi:#$ -8+8OA"1 -$$8 << 9 #.9 1his re)ie0 of The $ottom $illion reads like a blog re)ie0, as the author stumbles from ob5ection to opinion Ystby, !udrun -$$7 D&e)ie0 F 5ournal of Peace &esearch 9< @#A @January #A: #-#B#-A concise one%paragraph re)ie0 of The $ottom $illion/ Paul Collier: 1he D3ottom 3illionF N Rideo on 1E* com -$#. Accessed Ictober + http:OO000 ted comOtalksOpaulQcollierQsharesQ9Q0aysQtoQhelpQtheQbottomQbillio n html P$(6 $lac2 Coffee Part7of8 6 The Irresisti+le $ean -$#https:OO000 youtube comO0atchT)Z11*y% 6$2=IgSfeatureZyoutubeQgdataQplayer 1his documentary is a)ailable in three parts on youtube @all of 0hich I 0atchedA It/s a great introduction to coffee and it/s history As a bonus, the authors Pendergest and 'einberg are among the e:perts inter)ie0ed Pendergrast, Mark -$#$ Uncommon Grounds: The History of Coffee and How It Transformed Our World 2e0 York: 3asic 3ooks An authoritati)e history of coffee Sachs, Jeffrey -$$< The End of Poverty: Economic Possi+ilities for Our Time 6ondon: Penguin Sachs has greatly influenced the de)elopment debate and reflects the general course of the Millennium *e)elopment !oals 1his book must be read to understand the current debate DStarbucks Corporation 2e0s % 1he 2e0 York 1imes F -$#. Accessed *ecember #. http:OOtopics nytimes comOtopOne0sObusinessOcompaniesOstarbucksQcorporationO D1he Ibser)atory of Economic Comple:ityV:: Yemen E:ports, Imports and 1rade Partners F -$#. Accessed *ecember #. http:OOatlas media mit eduOcountryOyemO 1he 'orld 3ank -$$7 DSecondary Education *e)elopment and !irls Access Pro5ect F D1he 'orld 3ank *ata3ank % Create 'idgets or Ad)anced &eports and Share F -$#.

.< Accessed *ecember #http:OOdatabank 0orldbank orgOdataO)ie0sOreportsOchart asp:E 1herese " A;eng S 1hierry U Yogo -$#. DYouth Unemployment and Political Instability in Selected *e)eloping CountriesF #+# African *e)elopment 3ank 1homsen, Stephen -$$+ D&e)ie0 F International %ffairs 9&oyal Institute of International %ffairs 7:;;6< 7. @<A @September #A: 87+B877 A probing re)ie0 of The $ottom $illion, 1homsen 4uestions Collier/s statistical methods USAI* -$$7 DE:panding YemenPs Specialty Coffee Industry: Strengthening the &ole and Capacity of the Yemen Coffee Association and Coffee Producer Associations F A report subse4uent to USAI*/s -$$< report @belo0A that follo0s progress on the effort to create the Yemen Coffee Association 1his report illuminates many 0eaknesses of the Planners strategy USAI*, Yemen Agricultural Support Program: "inal &eport Ictober -$$< % April -$$7, -$$7, http:OOpdf usaid go)OpdfQdocsOpdaclCC7 pdf USAI* Yemen -$$< DMo)ing Yemen Coffee "or0ard: Assessment of the Coffee Industry in Yemen to Sustainably Impro)e Incomes and E:pand 1radeF US Agency for International *e)elopment An introduction to the state of Yemen/s coffee industry, from a Planner perspecti)e 'einberg, 3ennett Alan, and 3onnie = 3ealer -$$# The World of Caffeine: The (cience and Culture of the World#s "ost Po-ular 'rug 2e0 York: &outledge 'illiam Easterly -$$C DPlanners )ersus Searchers in "oreign Aid F %sian 'evelo-ment &eview, -.: - edition 'orld 3ank -$#- D"acing the (ard "acts in Yemen F September -C http:OO000 0orldbank orgOenOne0sOfeatureO-$#-O$8O-COyemen%talking%points