- By Kedar PavgiKedar Pavgi is an editorial researcher at Foreign Policy.
Coca Cola has recently been criticized by political activists for its ongoing support of Swaziland’s King Mswati III. The king has come under international and domestic scrutiny for his lavish lifestyle in a country cited as one of the poorest in the world. While the company states that the King doesn’t receive any direct benefit from the company’s operations, activists still say that its presence constitutes a vote of confidence for the regime. The company has flown the Mswati out to its headquarters in Atlanta, and has taken out ads in Swazi newspapers celebrating the monarch’s birthday.
According to activists cited by the Guardian, Coca-Cola alone contributes to nearly 40 percentof Swaziland’s GDP. Though a real figure is undoubtedly difficult to procure, (especially since Coke isn’t releasing any information), some studies have found that the number is a bit further from the truth.
Nearly half of Swaziland’s exports are based on sugar and drink concentrates, the vast majority of which belongs to Coca-Cola. It’s membership in several common markets, including the South Africa Customs Union (SACU) which includes South Africa and Botswana, has allowed it to ship hundreds of millions of dollars worth of product per year. As a result, Swaziland is the lead exporter of Coca-Cola products in Eastern and Southern Africa.
In a USAID Report from April 2008, researchers estimated that 35 percent of Swaziland’s foreign exchange earnings came from Coca Cola’s operations within the country. Foreign Exchange earnings are the proceeds from the exports of goods, and returns on investments in convertible currencies. From the report:
In 1987, Coca-Cola made one of the biggest capital investments in Swaziland to-date by establishing a plant dedicated to the production of concentrates used in Coca-Cola beverage products. Coca-Cola Swaziland, also known, as "CONCO" is the largest supplier of Coca Cola concentrates in Africa, with production plants also located in Egypt and Nigeria. Having recently celebrated 20 successful years of operations in the Kingdom, CONCO is by far the largest foreign exchange earner for the Kingdom, contributing to 35 percent of GDP21.
It’s a bit more difficult trying to figure out what portion of GDP Coca-Cola is actually responsible for. The World Bank estimated that exports contributed to 58 percent of Swaziland’s GDP in 2010, which in dollar terms would be approximately $2.1 billion. Assuming that 38 percent of exports were still drink concentrate as the USAID stated, Coca Cola would still be responsible for nearly 22 percent of Swaziland’s GDP, just by selling bottles of Coke to Eastern and Southern Africa. This of course doesn’t include the numbers from Coke purchasing Swazi sugar, labor, marketing and everything else that goes into making the nectar of college students everywhere. It’s certainly a bigger footprint than the 18 percent the Swaziland Sugar Association estimates, but a lot less than the 40 percent number going around in the media. It’s key to note that this number is not the amount that they pay in taxes to the Swazi authorities, as the number is being portrayed.
While it doesn’t help that statistics in Swaziland aren’t exactly easy to come by, having one company control such a large portion of a country’s total output in the 21st century is still striking.
Joshua Keating is associate editor at Foreign Policy and the editor of the Passport blog. He has worked as a researcher, editorial assistant, and deputy Web editor since joining the FP staff in 2007. In addition to being featured in Foreign Policy, his writing has been published by the Washington Post, Newsweek International, Radio Prague, the Center for Defense Information, and Romania's Adevarul newspaper. He has appeared as a commentator on CNN International, C-Span, ABC News, Al Jazeera, NPR, BBC radio, and others. A native of Brooklyn, New York, he studied comparative politics at Oberlin College.| Passport |