Green Rubber: Can Indonesian rubber production supplant regional competitors?

Edward Wilson
24 min readMar 25, 2021

This is an essay that I submitted for my Political Economy of Development module for my Masters. I have since edited it to reflect feedback. The original mark for this piece was Distinction.

Introduction

Natural rubber (NR) has received limited attention in global value chain analysis (GVC) in contrast to other agricultural goods such as coffee and cocoa (Ponte, 2002 and Purcell, et al., 2018). That is surprising as NR has a wide range of commercial applications achieved through the vulcanisation of liquid latex, which gives NR its unique qualities (Gunasekaran, et al., 2007 and Südwind e.V., 2019). Arguably the most important of these commercial applications is in tyres. Of the 13.2 million tonnes of NR produced worldwide in 2017, more than three quarters were used in the tyre and automotive industry (IRSG, 2018). Although synthetic alternatives can replace NR when oil prices are low, these alternatives have failed to emulate the properties needed to become viable in the tyre industry, meaning that NR is essential in their production (Gunasekaran, et al., 2007 and Südwind e.V., 2019, p. 4). With the collapse of the Washington consensus and the rise of emerging economies with their automotive industries, the global demand for NR has been increasing rapidly (Krungsri Research, 2016). Therefore, the production of NR is vital for the world economy, and this is why it should receive more attention.

Additionally, more than 90% of the world’s NR comes from Southeast Asia, but the cultivation method varies to meet the growing demand. The more environmentally friendly approach known as agroforest cultivation produces smaller yields against monoculture production. That is problematic as most smallholders prefer monoculture production to maximise their yield as the margins are already tight. Despite having the largest area dedicated to rubber tree cultivation, Indonesia is the second-largest producer of NR behind Thailand (FAOstat, 2018). To further place pressure on farmers, the price of NR has been incredibly volatile over the past two decades. Smallholders in Indonesia make up just over 80% of Indonesian rubber production and the vast majority practice agroforest cultivation. However, because their yields are less than regional competitors, the environmental benefits gained from agroforest production put farmers are at a comparative disadvantage against regional competition. What this has resulted in is a shift away from environmentally beneficial cultivation methods to stabilise income. Some farmers have shifted entirely from NR for environmentally harmful crops such as palm oil to generate a stable income. Although some companies pay a surcharge for sustainable rubber, they do so on their own volition. Those farmers who continue cultivating NR often do so as they don’t have the financial means to pivot away from NR as they live below the poverty level and have sunk their finances in NR (Südwind e.V., 2019). Governance on the rubber value chain fails to regulate and economically incentivise producers across the region to pursue sustainable cultivation.

The argument that will be presented in this essay will be that GVC analysis provides a framework through which the production of NR can be analysed. I shall also that traditional upgrading analysis focuses too heavily on economic upgrading, resulting in neglecting the social aspect of upgrading (Barrientos, et al., 2011). Previously, assumptions with economic upgrading were that social upgrading would also occur. But, as global production network (GPN) analysis has demonstrated, this is not the case (Selwyn, 2013). Additionally, economic upgrading has consistently failed to consider the environmental impact of the product in question. It cannot be assumed that an increase in efficiency or production automatically results in upgrading if this challenges the long-term viability of the product and the surrounding environment. Therefore, the sustainability of how rubber is being produced, processed and then used is at a critical juncture. The demand for NR is continuing to rise. But, NRs fragmented production and unsustainable practices of regional cultivation is causing detrimental damage to the environment.

This essay will be divided into four core sections. The first section will review GVC literature. That will explain the benefits of using this approach to analyse commodities such as NR. It will also provide clear definitions for social and economic upgrading whilst also drawing on governance on the value chain both internally and externally. The second section will explain the importance of agroforest cultivation. This explanation will then be contrasted with monoculture production, distinguishing the two practices from one another. The third section will use the framework established in the first and second section to analyse the NR industry in Southeast Asia and China by using Indonesia as a case study. Finally, this essay will conclude that the sustainable practice of NR cultivation in Indonesia has to be implemented across South East Asia. However, this is unachievable with the current governance and upgrading issues across the rubber value chain.

A Global Value Chain Approach to Supply Chains

Globalisation has enabled a reshaping of global production and trade, radically changing industries and supply chains. To understand these complexities, the chosen method needs to encompass “the full range of activities that firms and workers do to bring a product/good or service from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer.” (Global Value Chains Initiative, 2020). That is what a GVC approach aims to achieve. This inclusive approach to a specific supply chain can understand and analyse the processes that occur and is also able to see how particular trends in production are developing. For example, how large international companies subcontract work that leaves them disconnected from the production of their goods. That results in the fragmentation of the supply chain making accountability difficult. However, using a GVC approach on this example, it is possible to see what impact this fragmentation has on both the economic and social conditions of production. Also, whether or not similar industries are replicating these practices in the drive for profit maximisation (Gereffi, 2005, 2018; Barrientos, et al., 2016)

Upgrading

The way upgrading has been defined in GVC literature refers to the process in which firms within the value chain seek to improve their position (Campling & Selwyn, 2018). Despite a consensus on this definition within GVC literature, scholars have argued how this can be achieved (Bair, 2005). That is because it has been assumed that economic upgrading will directly translate to social upgrading which Rossi (2011) and others have disproven. Furthermore, the way in which Gereffi (2014) outlines how firms can compete with one another to upgrade often neglects the environmental damage caused by economic upgrading.

For a firm to upgrade within the GVC, they have to improve in one of the four areas; “1) product upgrading, or moving to more sophisticated products; 2) process upgrading, which transforms inputs into outputs more efficiently by reorganising the production system or introducing superior technology; 3) Functional upgrading, which entails acquiring new functions (or abandoning existing functions) to increase the overall skill content of activities and 4) Chain upgrading, in which firms move into new but often related industries” (Gereffi, 2014, p. 19). However, in practice, that is much harder to achieve for supplier firms at the start of the value chain due to their inability to upgrade because of the lead firms influence. Lead firms have the ability to keep high skilled work onshore that reaps higher rewards while offshoring low skilled work in low-wage countries that prevents supplier firms from the ability to upgrade. Moreover, lead firms have the advantage that they own the intellectual property. As they are at the end of the supply chain, they can generate higher profits from this high skilled work. They also have the ability to access capital for research and development that will lead to further innovation and profits (Humphrey and Memedovic, 2003). With this innovation, lead firms can dictate the terms to supplier firms, which they have to follow, otherwise risk exclusion from the chain (Campling & Selwyn, 2018).

This cut-throat dynamic in the world economy where supplier firms adhere to the influence of lead firms has meant that many GVC scholars have shifted their interests to understand the consequences of economic upgrading (Bair, 2005). That has resulted in GPN analysis, where the impetus of upgrading shifted from assuming economic upgrading directly resulted in social upgrading. Often, the drive for profit maximisation led to a neglect of workers rights. Therefore, social upgrading can be understood as ‘the process of improvements in the rights and entitlements of workers as social actors, which enhances the quality of their employment… This includes access to better work, which might result from economic upgrading… But it also involves enhancing working conditions, protection and rights’ (Barrientos, et al., 2011, p. 324). By challenging the assumption that economic upgrading correlates to social upgrading, it has enabled a greater emphasis on working conditions, challenging the prioritisation of economic upgrading.

Although regular employment can provide better rights and protections for workers. It cannot be assumed that this will transfer to those in the same business but work irregularly. Often these workers are in marginalised communities where basic safeguards aren’t present. Rossi (2011) demonstrated this point by looking at the Moroccan garment industry. Through this case study, pressures placed on the supplier firms regarding low costing, quality and most importantly last-minute flexibility to orders emerged. The first type of worker would be those on permanent contracts, who would be paid better than minimum wage. In contrast, the second type of worker would not have these benefits. Rather they were employed short-term to meet the flexible demands of the lead firm and would not get the same treatment as regular employees. This example results in challenging the assumption that economic upgrading creates social upgrading By focusing on the workplace, a GPN approach can focus on workplace irregularities created by economic upgrading.

Furthermore, the environment is also important to consider as it binds economic and social upgrading together. It is an economic issue as product or process upgrading can often result in harm to the environment. For example, how lead firms in the garment industry may constantly change their designs which will mean that supplier firms will have to waste product that doesn’t sell. Or how a manufacturing process may require new chemicals but these chemicals may be more harmful than ones used previously. Socially, the impact of the environment comes in tandem with the economic. The economic consequences in the change of production could spill-over into the communities where the workers live, causing significant harm due to the chemicals leaking, for example (Hoskins, 2017). Therefore, GVC analysis is able to comprehend the complexities of the ever-evolving supply chain. Not only is it right to include the social aspect which GPN analysis provides. But also the inclusion of the environmental factors that could change during the upgrading process (Bolwig, et al., 2010).

Governance of Global Value Chains

Governance, in contrast to upgrading, focuses on the structures which organise the value chain, as opposed to how a firm can improve on its position (Gereffi, 2014). That, therefore, makes governance central to GVC analysis as the governance of the chain will alter the conditions of those participating. Moreover, supply chains are embedded in a wider societal context which are influenced by a wide range of social structures and processes (Polanyi, 2002). Therefore, actors within the supply chain can be profoundly influenced in the organisational and economic outcome by these interactions between firms (Uzzi, 1997).

The original distinction within the governance of GVCs was split between producer-driven and buyer-drive chains. Producer driven chains focused on the idea of exporting goods which the developing country had a comparative advantage into speed up the industrialisation process. Whereas buyer-driven chains would be a model of development which aimed to reduce foreign dependency in favour of domestic production (Gereffi, 1994). However, this understanding of governance within GVC analysis was considered too broad in encompassing the complexities that were emerging in supply chains (Selwyn, 2013)

Figure 1: Five Types of GVC Governance. Source: (Gereffi, 2014, p. 14)

That led to the emergence of the five-fold typology of GVC governance by Gereffi, Humphrey and Sturgeon (2005). What this managed to achieve is a consensus-based framework in which the entire value chain can be analysed whilst also noting that throughout the process the degree of coordination may differ. For example, a lead firm such as Tesco’s may require a specific agriculture product in which suppliers compete with one another to get this business. However, these competing firms may exhibit modular, relational, captive or even hierarchical sourcing of this good to meet the demand. Therefore, what makes this framework widely usable is the ability to apply these models throughout the GVC as it enables analysis to gain a better understanding of the complexities of the chain which previously would be difficult to achieve (Fernandez-Stark, et al., 2011).

Furthermore, this model is also able to find trends in the processes of governance within the value chain that make understanding upgrading or even downgrading possibilities easier. That is because each structure will exhibit different problems. For example, a captive chain may be limited by upgrading possibilities due to the dominance of the lead firm in the market. In contrast, the market approach may neglect social upgrading as pricing is the negotiating point between supplier firms and customers. With the pressures to meet low costs and profit maximisation, fair pay and workers’ rights may be neglected to achieve this (Gereffi, 2014).

What this framework can help GVC analysis achieve, is to what extent regulation, whether that be internal (firms own discretion to set standards) or external (governmental or NGO pressure) has on the value chain. Within many value chains across a spectrum of industries, often there is a hybrid of internal and external governance on the chain (Larsen, et al., 2018). As institutions embed the wider social structures in which they surround, their regulation will reflect the constraints of their activities but more importantly, the priorities of the regulators. Lead and supplier firms have different objectives, as does internal and external governance. The fragmentation of a value chain in the agriculture sector, for example, will be shaped by the leads firms ability to dictate the process. That is achieved by exerting pressure on supplier firms to meet standards that promote internal self-regulation whilst also complying with the eternal regulation. However, like Larsen, et al (2018) argue, this self-regulation and power which is exerted by lead firms can often constrain governments in their regulation as they depend on the business which is provided. That becomes problematic as the power dynamic can often be uneven with supplier firms as they often compete with one another in the same region, producing similar commodities. But what this fails to do sometimes is prioritise the interests of the actors within the supplier firm as the economic is assumed to be superior. Therefore, the role assumed by NGOs is to exert influence by challenging this power imbalance to recommended policy changes.

Agroforests

This next section will focus on agroforestry. Although short in comparison to other parts of this essay, it provides an essential bridge for the first to the third section of analysis. That is achieved because the arguments for sustainable practice challenge assumptions of upgrading and governance by prioritising the environment. That is because the former cannot be considered before the latter in relation to the rubber value chain.

Figure 2: Different types of agroforestry. Source: (Südwind e.V., 2019, p. 8)

An agroforest refers to the sustainable practice of cultivation in agriculture which for the case of NR includes the combination of other tree crops, rice and secondary food crops (Arifin, 2005). That contrasts with monoculture cultivation which is the agriculture practice of producing a singular crop in an area. What is unique with Hevea brasiliensis, the rubber tree, is that it is highly susceptible to rubber blight (Südwind e.V., 2019). Due to the genetic makeup of Hevea brasiliensis being near identical with one another, if one tree contracts rubber blight, the rest of the crop will develop the disease effectively wiping them out (Guyot & Le Guen, 2018). Whilst this is alarmist, it previously occurred in 1930. Henry Ford attempted to establish a large-scale rubber production for his automotive business in Brazil. But, because of the monoculture practice in which these trees were planted, the project failed. The trees contracted rubber blight and wiped out the population, with its prevailing legacy being that Brazil is now unable to produce NR on an industrial scale (Südwind e.V., 2019, p. 6).

Not only is agroforest cultivation a way to reduce the chance of rubber blight, but it also provides benefits to the environment. Rubber trees compared to other varieties of trees in Southeast Asia, such as oil palm, are significantly better at absorbing CO2 from the surroundings. With the 9 tonnes of carbon dioxide absorbed per hectare, just under half of this goes towards the tree itself, whilst the remaining amount is distributed by parts of the tree, such as leaves and branches which once rotten, are absorbed into the soil (Cheng, et al., 2007). That provides benefits to the secondary crops and any wildlife within the agroforests which would otherwise be wasted in a monoculture setting.

Case Study: Indonesian Rubber Production

With an understanding of agroforestry, this section will use Indonesian rubber production as a case study to understand the impact of this cultivation method. That is important as rubber cultivation varies. That can be demonstrated by contrasting the traditional regional players in the market: Thailand, Malaysia and Indonesia. Additionally, since the 1990s, Vietnam and China have challenged traditional NR producers in market share. The consequence of this has been a negative impact on the upgrading and governance of the rubber value chain.

Figure 3: Production output in thousand tonnes (1980–2016). Source: (Südwind e.V., 2019, p. 6)

Furthermore, what this section also aims to achieve is a clear understanding of the failures of upgrading and governance within the rubber value chain. In short, due to environmental neglect, economic and social upgrading opportunities have been limited. That is problematic as sustainable practices are not being rewarded, which then forces many farmers to monoculture production.

Cultivating rubber in Southeast Asia

Rubber trees have a relatively short life in which they are able to be harvested. They are first tapped after 5–7 years, and after about 25 years of tapping, latex yields dramatically fall. Additionally, the latex yield fluctuates based on the general conditions of the soil and the way in which the tree is cultivated (Joshi, et al., 2002). More lucrative trees, for example, those grown through monoculture cultivation can produce up to 9,000kg of latex per year. Whereas trees past the 25year threshold grown in agroforests produce as little as 1,000kg. Therefore, monoculture cultivation produces more latex than agroforests by a considerable margin, despite the environmental harm (Südwind e.V., 2019, p. 4).

That is important in understanding how traditional producers differ from market entrants. Not only is there is a difference in methods of cultivation (monoculture vs. agroforestry), there is also a difference in who producers the NR (Südwind e.V., 2019, p. 9). For traditional producers of NR, smallholders dominate the cultivation; Thailand 90% by area used with 80% of output; Malaysia, 93% by area and 80% in output and Indonesia, 85% in area and 81% in output (FAOstat, 2018). That contrasts to large agribusinesses dominating production in Vietnam and China, which controls 50–77% of production respectively (Fox, et al., 2018). That is problematic as the vast majority of these new plantations by agribusinesses across Southeast Asia are also monocultures as opposed to the Indonesian model of agroforestry (Ahrends, et al., 2015). With the increased risk of rubber blight associated with monocultures and the increase of demand of NR, larger quantities of NR are being produced on an industrial scale to maximise profits and meet demand, despite the concerns of sustainability.

For every 1% of land used by smallholders in Indonesia they produce 0.95% of NR, contrast this with Thailand and then Malaysia this figure drops to 0.88% and 0.86%. Whereas industrial-scale production in the respective nations results in 1.26%, 2% and 2.86% of output to land. That signifies how dramatic the production of NR is increased by industrial monoculture practices against smallholder agroforest cultivation (FAOstat, 2018). However, one of the benefits of smallholdings is that in the event of rubber blight only a small area of crops will be affected. But, on an industrial scale, the impact of rubber blight increases significantly. For Vietnam, since 1990–2016, there has been an increase of 1684% in land used for cultivation. It has been estimated that 61% of this land is unsuitable and extremely vulnerable to erosion and environmental damage. Although these industrial-scale operations are more lucrative and which meet the increasing demand, they also increase the risk associated with the production of NR (Ahrends, et al., 2015)

Reflections of Upgrading Within the Rubber Industry

The framework which was established on upgrading directly applies itself to the rubber value chain. The emphasis has been on improving the process to maximise latex yields which is achieved through pursing monoculture cultivation. However, those who work in smallholdings are earning far below the living wage and have been neglected. It shall be argued that within the rubber value chain, the failure to pay a surcharge for sustainable NR to encourage economic and social upgrading has resulted in the push towards monoculture cultivation which threatens the long-term stability of the industry.

Figure 4: Trends in rubber prices from 1960 to 2018. Source: (Südwind e.V., 2019, p. 16)

To understand the severity of the social conditions for many of these farmers in Indonesia, the Dutch foundation WageIndicator (2018) calculated that the living wage for a ‘typical’ family (2 adults, 2.5 children, and 1.7 household incomes) would be around 173.50 euros. Contrast this to the legal minimum wage within the NR producing regions at the same of this study, which was 89.35 euros. The discrepancy between the two sums is telling (Südwind e.V., 2019, p. 31). However, this is not an issue local to Indonesia. The same foundation did studies across Southeast Asia, concluding that low skilled workers earned significantly less than what’s needed to live off. Often this wage fell below the countries minimum wage. It is therefore paramount that although there is this growing demand for NR and that so far this demand is being met, smallholders who are living far below the poverty line don’t get forgotten about as they have limited agency in changing their circumstances.

Additionally, the pricing of NR has been unstable in the past couple of decades and has a downwards trajectory, as shown in figure 4. That is problematic as smallholders are already living below the poverty line, and with the current trend in prices, that will only continue. When prices are low, smallholders struggle to prioritise product upgrading activities such as applying fertiliser regularly as they cannot afford to do so. That results in many ‘overtapping’ their trees to make up the shortfall in pricing in order to live (Südwind e.V., 2019, p. 30). That shows the disconnected reality between smallholders who could upgrade economically, which would also result in social upgrading. But, they are prevented from doing so because of price fluctuations that are beyond their control (Ahrends, et al., 2015). In contrast, agribusinesses can invest large capital sums in their monoculture productions. That suppresses price and gives a comparative advantage with economic upgrading possibilities as they have the finances and agency to commit to new opportunities.

Figure 5: Example of prices along the rubber value chain. Source: (Südwind e.V., 2019, p. 29)

To overcome the disadvantages that smallholders have against large agribusinesses, scholars have argued the case for economic clusters to address this unbalance of power (Gereffi & Lee, 2016). An economic cluster is a network of companies within the same value chain that collectively work towards the groups’ interests. That is what figure 5 demonstrates. When prices are low, smallholders are already at a disadvantage. But, to sell the latex, which converts into NR, it would have to go through several intermediaries that are rent-seeking (Molenaar & Short, 2018). By forming an economic cluster, the network of producers can work together to eliminate these rent-seeking activities and readdress the imbalances. With these cooperatives, smallholders can get better prices for those within their network. Those smallholders that participate will have a minimum standard that encourages upgrading possibilities. Additionally, agency is enhanced for the smallholders through the cooperative as it results in better prices as a direct link to manufacturers can be made. Eliminating the need for rent-seeking activities between smallholder and factory. For smallholders, better pricing enables an improvement for their social conditions as the dichotomy between living and maintenance is no longer as prevalent.

That is why the environment in the rubber value chain is essential to the notion of upgrading. Rather than enabling the market to dictate prices, the ‘real’ value of the crop needs to be considered. As only when NR is cultivated sustainably, can economic and social upgrading really occur for smallholders. Although the use of a cooperative is one way of promoting the interests of smallholders. What is more beneficial is compensating for NR cultivated in agroforests. The objective of this reduces the risk associated with NR production whilst also promoting sustainable practices that allow smallholders greater agency in the livelihoods (Ahrends, et al., 2015; Südwind e.V., 2019).

Shortcomings of Governance on the Rubber Chain

For governance across the rubber value chain to ensure the long-term viability of sustainable practices, there is a need to regulate and promote greater agroforest cultivation. To achieve this is two-fold. The first way is through private companies that leverage their position to enforce and guarantee sustainability in their respective supply chains. Already companies such as the French footwear manufacture Veja pay a surcharge for rubber cultivated from agroforests (Südwind e.V., 2019, p. 7). But this is the exception. Secondly, governments, whether that be from the NR producing countries: Thailand, Indonesia, etc. or the purchasing governments: China, EU, the USA, etc. need to create collective standards for NR production to enable the demand of rubber to be met whilst also promoting sustainable practices. It is only through this act of hybrid governance that NR producers are presented with greater opportunities to make a fair living and remain part of the chain instead of diverting to palm oil and more environmentally harmful crops and methods.

That so far has received mixed results. There have been various attempts by lead firms within the rubber value chain to promote the sustainability of NR. That includes the 2009 Waseda-Bridgestone Initiative of Japan that granted financial assistance to smallholders in Indonesia, achieving an increase in the price of sustainably produced rubber by 40% for those involved in this initiative. Therefore, creating a set ecological standard for suppliers to meet (Villamor, et al., 2014). With this set standard required by a lead firm, the knock-on effects will permeate beyond the supply chain of Bridgestone tyres (Ahrends, et al., 2015).

However, the weakening of the Washington consensus after the 2008 financial crash with the rise of emerging economies has shifted consumer demand. Fung (2011) describes this as a “major inflexion point” where there can be dramatic changes to supply chains once again. That is particularly important in context with the production of NR as the leading consumer has changed. China has now become the largest consumer of NR (39%) in contrast to the second-largest consumer, the EU (9%) (ERTMA, 2019). Therefore, the governance of the rubber value chain has adapted to reflect this (Gereffi, 2014, p. 15).

Although asserting a strong state to govern the value chain is possible in countries with an established authority such as the EU with The European Tyre & Rubber Manufacturers Association (ETRMA) which commits to regulation and the sustainability of NR. But in NR producing countries like Indonesia and Vietnam, the state fails to have the authority to constrain lead firms. That then results in this hybrid method of governance where corporations can self-regulate within the confines of a weak state (Schouten, et al., 2012). Without this mutual respect between government and lead firms, cronyism prevails, and laws and regulations are simply bent to foster economic interests (IDI — Inclusive Development International, 2017). A prime example of this would be the land grabbing that occurred by the two Vietnamese companies Hoang Anh Gia Lai and Vietnam Rubber Group in Cambodia. With their network to the country’s political elites, they stole land for the purpose of NR cultivation, in which the parties involved in the deal would benefit considerably (Global Witness, 2013). That is why good governance is essential to promote sustainability within the value chain. Otherwise, corruption and exploitation enable bad practice to prevail whilst also undermining good practices seen elsewhere in the industry (Südwind e.V., 2019, p. 25).

Conclusion

To conclude, this essay has used a GVC approach to understand whether sustainable practices within NR production in Indonesia is viable for the long-term health of the industry across rubber producing countries. By providing a detailed understanding of GVC literature that defined economic and social upgrading, it argued that the latter doesn’t automatically result in the former enabling a reorientation of the analysis. In addition to this, the idea of governance within GVC analysis was also defined, as it is essential in understanding the organisation of the value chain. By including agroforestry in the analysis of the rubber value chain, this essay also emphasised the need to consider the environment. An often-neglected point in GVC literature. Finally, as NR production radically differs depending on the cultivation methods chosen, issues of upgrading and governance would emerge from this.

Therefore, Indonesian rubber production is vital for the long-term sustainability of this industry. However, throughout the chain, upgrading possibilities, economically and socially have been inhabited for smallholders preventing them from maintaining best practice. That is not to suggest that this won’t change. But, with the shifting power dynamics in the world economy, actors who previously had an influence on the governance on the chain have had this reduced. Therefore, it will be the emerging economies that will decide what direction this threatened industry will go in. It is of the author’s opinion that if the issues of sustainability in the rubber chain are not acknowledged, then one case of rubber blight across a large monoculture cultivation will have detrimental effects on the value chain and subsequently the world economy. That unnecessary risk should be avoided at all costs.

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