Most scholarship that examines how economic upgrading has been pursued within global value-chains has taken a pessimistic tone, owing much to the world-systems roots of the ‘commodity studies’ literature (Cramer, 1999). Several examples of successful economic upgrading have emerged in agro-processing sectors in developing countries (Pipkin & Fuentes, 2017). The role of the state in influencing such change is often recognized yet there remains little attention to analyzing the role of state-business relationships, with some exceptions (Cramer, 1999; Whitfield, 2012). This paper seeks to fill the gap in the existing literature by focusing on how the Rwandan state has been relatively successful in value-addition strategies in its coffee and tea sectors. It demonstrates how the Rwandan government has been influenced by historical vulnerabilities to global commodity price fluctuations to develop a variety of strategies to achieve economic upgrading.
Such strategies have included centralizing resources through state-led investments, using its party-owned enterprises (Bourbon Coffee) or companies closely linked to the RPF government (Rwanda Trading Company), linking up with lead buyers within value-chains (Starbucks) and partnering with charitable funds (Clinton-Hunter Development Initiative). Though the government remains reluctant to trust foreign investors to lead value-addition attempts, it also struggles to achieve benefits from using its own closely-tied firms. Rather than breaking into already-developed markets, the highest potential within these sectors lies in breaking into niche markets and in diversifying export destinations.
The paper examines the Rwandan government’s strategies to achieve successful value-addition in the coffee and tea sectors. In doing so, it engages and makes a contribution in the growing literature on the state’s role in navigating global production networks. By combining insights from the political settlements and commodity studies literature, it demonstrates the limits of political commitment in an altered international trading environment and the blind spots of existing commodity studies scholarship.