Money Makes the World Go Around?

Ethical Financing: A Backbone of Sustainable Business Practices.

At Cora + Spink, our approach to life and business is deeply rooted in making a positive impact on everyone we interact with. While many businesses have made strides in sustainability by reducing waste and using recycled materials, there are deeper, often overlooked practices that can significantly affect workers and communities. One such practice is the ethical financing of our suppliers.

The Unconventional Path: No Credit Terms

In the world of business, using credit is the norm. It’s seen as a necessary tool for growth and expansion. However, at Cora + Spink, we’ve taken a different path. We do not demand credit terms from our suppliers in India. These partners are more than just suppliers; they are the backbone of our business. Enforcing credit terms would put undue pressure on them, making it difficult for them to pay their workers fairly and on time.

The Hidden Costs of Conventional Credit Practices

Many large businesses are fully aware of the impact of their financial practices but choose to ignore them for the sake of profit margins. By delaying payments to suppliers, these companies force smaller businesses into financial strain, which often results in reduced pay or delayed wages for workers. This can perpetuate cycles of poverty and financial slavery, where workers are unable to break free from their economic constraints.

High Street Fashion: A Case Study in Supplier Exploitation

Recently, we discovered a troubling practice among major high street fashion retailers. These companies use hundreds of suppliers to stock their shelves, and the quality of products can often indicate the length of the supplier relationship. New suppliers, eager to secure a contract, will produce high-quality items, often at the expense of their profit margins and workers’ wages. To achieve this, they cut costs, typically by reducing the pay of their workers.

Over time, as these suppliers become established, the quality of their products declines to the lowest acceptable level, but the wages of their workers remain stagnant. This drive to the bottom for pricing leads to a continual reduction in quality and a perpetual cycle of underpaid labor.

Ethical Financing: A Path to Real Sustainability

Our decision not to use credit with our suppliers has a ripple effect throughout our business. It means that product development and stock replenishment are slower, and sometimes our products are out of stock. However, this philosophy ensures that our suppliers are paid promptly and fairly, allowing them to maintain a sustainable business model and provide for their workers.

The Broader Impact of Fair Payment Practices

If more businesses adopted fair payment practices, the benefits would extend beyond individual suppliers and workers. There would be less corner-cutting in production, leading to higher quality products and less environmental damage. Moreover, fair payment practices can reduce the prevalence of issues such as child labor and financial slavery, as suppliers would not be forced to cut costs at the expense of ethical standards.

Looking Forward

We are excited to announce that new stock is on its way, including favorites like Tiger Bums and Poly and Vyns. While our approach may take longer, we believe it is the right path for our business, our partners, and the environment.

At Cora + Spink, we are committed to ethical financing and sustainable business practices. By making these often hidden aspects of business more transparent, we hope to inspire others to consider the broader impact of their business practices.

For more information, visit our website at coraandspink.com. We are always here for a chat and welcome any questions or discussions on this topic.

References and Further Reading

1. Ethical Trade Initiative – Provides guidelines and resources for businesses to implement ethical practices.
2. Fair Trade Certified – Learn more about fair trade standards and certifications.
3. Sustainable Business Network – Offers insights and support for businesses looking to adopt sustainable practices.

By embracing ethical financing, we believe businesses can make a significant positive impact on both society and the environment. Let’s strive to create a world where business practices uplift everyone involved.

10 Interesting Financial Facts About World Trade

1. The World’s Oldest Trading Route: The Silk Road, established during the Han Dynasty around 130 BCE, facilitated trade between China and the Mediterranean. It wasn’t just for silk; it also saw the exchange of spices, grains, and even ideas.

2. Tea and Opium Wars: In the 19th century, the British traded opium from India for Chinese tea, leading to the Opium Wars. This trade imbalance and subsequent conflict significantly impacted China’s economy and politics.

3. Cocoa’s Journey: About 70% of the world’s cocoa, the key ingredient in chocolate, is produced by four West African countries: Ivory Coast, Ghana, Nigeria, and Cameroon. The global chocolate market is worth over $100 billion.

4. Banana Republic: The term “Banana Republic” originated from the American company United Fruit (now Chiquita), which controlled large areas of Central America in the early 20th century. Their influence over local economies and politics was profound, demonstrating the power of a single commodity in world trade.

5. Spices that Changed the World: The spice trade, particularly in the 15th and 16th centuries, was a driving force behind the Age of Exploration. Spices like pepper, cinnamon, and nutmeg were so valuable that they were often used as currency.

6. Dutch Tulip Mania: In the 1630s, the Netherlands experienced one of the first recorded speculative bubbles with tulip bulbs. At its peak, a single tulip bulb could be worth more than a house in Amsterdam. The bubble burst in 1637, leading to economic turmoil.

7. Global Shipping Giants: The largest container ship in the world, the Ever Ace, can carry over 23,000 twenty-foot equivalent units (TEUs). This massive capacity highlights the scale and efficiency of modern global trade.

8. Coffee’s Global Footprint: Coffee is the second most traded commodity in the world, after oil. It is grown in over 70 countries, with Brazil being the largest producer, supplying about a third of the world’s coffee.

9. The Role of Ports: The port of Shanghai is the busiest in the world, handling over 40 million TEUs annually. Efficient port operations are crucial for maintaining the flow of global trade, impacting everything from electronics to apparel.

10. Trade Routes in the Sky: The most valuable export route by air is between Hong Kong and the USA. Air freight is essential for high-value and time-sensitive goods, making up about 35% of global trade by value, despite being less than 1% by volume.

These facts illustrate the complexity, history, and quirky nature of world trade, showing how interconnected and impactful global commerce is.

Here are some insightful articles that discuss the power of money in developing countries and how trade dynamics can influence and control these nations:

1. International Financial Institutions and Great Power Competition: This article explores how multilateral development banks (MDBs) like the World Bank and regional development banks exert influence over developing countries. It highlights how these institutions, often led by major powers like the United States, provide financial support that can shape the economic policies and development priorities of recipient countries. The article also discusses the role of good governance and domestic rule of law in leveraging financial aid effectively​ (CSIS)​.

2. Trade Overview by the World Bank: This piece provides an overview of how the World Bank helps developing countries access global markets and integrate into the world economy. It emphasizes that trade is a significant engine of growth, creating jobs and reducing poverty. However, it also notes the challenges faced by developing countries, such as anti-competitive practices, poor infrastructure, and unfavorable regulations. The World Bank’s role in overcoming these obstacles is crucial for these countries to fully benefit from global trade​ (World Bank)​.

3. Geopolitics and International Trade: This article delves into the geopolitical aspects of international trade, explaining how countries use trade relationships to exert influence and control over others. It discusses the concept of “weaponized interdependence,” where global economic networks are used as tools for state coercion. The piece also explores the impact of trade agreements and tariffs on the global supply chain and the strategic maneuvers by countries to secure their economic and political interests​ (SpringerLink)​.

4. The Role of Trade in Economic Development: This World Bank overview explains how trade liberalization has historically boosted economic growth in developing countries, raising incomes and reducing poverty. It underscores the importance of integrating into global markets and the benefits that come with it, such as higher female participation in the labor market and improved living standards. However, it also points out the inequalities and challenges that remain, particularly for countries that are landlocked or have inadequate trade infrastructure​ (World Bank)​.

5. Influence of Multilateral Development Banks: This article from the Center for Strategic and International Studies (CSIS) examines the influence of MDBs like the World Bank and Asian Development Bank on developing countries. It discusses how these institutions, while providing necessary financial support, also shape the policy directions of the countries they assist. The article highlights the balance between providing financial aid and ensuring that the development projects align with the needs and priorities of the recipient countries​ (CSIS)​.

These articles provide a comprehensive understanding of how financial power and trade dynamics shape the economic landscapes of developing countries, often influenced by the strategic interests of more powerful nations. For further reading, you can access the full articles through the provided sources.