Posts Tagged ‘Ethiopia World Bank’

Ethiopia: Shadowboxing Smoke and Mirrors

Monday, May 6th, 2013

 shadowMeles Zenawi when he was alive and his apostles today (“Melesistas”) keep playing us in the Diaspora like a cheap fiddle. They make us screech, shriek, scream and shout by simply showing their mugs in our cities. How do they do it? Every now and then, the Melesistas suit up a few of their bumbling and bungling zombies from central casting and unleash them into the Ethiopian Diaspora to “sell bonds” for the “Grand Meles Dam” to be built over the Blue Nile. Anytime these zombies show up to panhandle chump change from their supporters, a welcoming committee of defiant and patriotic Ethiopian activists show up to chase them out of town like campers at a national park chasing coyotes scrounging at the trash bin. For the past several weeks, Diaspora activists have been routing these imposters across European and American cities; but incredibly, these brazen con artists show up in the next city like snake oil salesmen at a carnival. That really piqued my curiosity. Why do these scammers show up in city after city knowing that they will be confronted and chased out by young patriotic Ethiopians? Are they really fundraising by “selling bonds” in the Diaspora or are they using “fundraising” as a cover for something altogether different? Ummm!!! 

First, the irrefutable facts about the Meles Dam hogwash.  As I demonstrated in my March 11 commentary, “Rumors of Water War on the Nile?”, the Meles Dam on the Blue Nile (Abay River) was  the exquisite figment of Meles’ imagination, and now the phantasmic idol of worship for his discombobulated apostles. Anyone who bothers to study the facts of this so-called dam project will readily conclude that it is pie in the sky. It is “self-funded” because the multilateral lending institutions and private investors who normally bankroll such major infrastructure projects wouldn’t touch it with a ten foot pole standing a mile away. They have determined it is a white elephant. Egypt has also used its leverage to block funding sources.  Egypt has contingency military plans to undam the dam if it ever comes on line.

The fact of the matter is that it is impossible for the bumbling regime in Ethiopia, which sustains itself  through international panhandling, to raise the USD$6-10bn needed from the people of the second poorest country in the world. The regime does not even have sufficient foreign reserves to cover the cost of imports for three months. Its foreign debt exceeds USD$12bn; and despite windbagging about an 11 percent annual growth, the “fifth fastest growing economy in the world”, yada, yada, unemployment, inflation, mismanagement and corruption have put on life support an economy addicted to international handouts. The idea that nickels and dimes collected from Ethiopians in the country by staging “musical concerts, a lottery and an SMS campaign” and a buck or two from Diaspora Ethiopians could build such a project is simply nutty. Because the dam builders live in a fool’s paradise, they think Diaspora Ethiopians are all “fools and idiots” who will buy fantasy dam bonds. (Just as an aside, those who are buying Meles Dam junk bonds should first consider buying the Brooklyn Bridge in New York City.)  Anyway, the Diaspora “bond sales” effort has been a total failure. The regime recently announced that it had collected $43,160 from its latest bond sales in San Diego, CA. Yeah! Right!

For domestic public relations purposes, the Melesistas’ strategic objective in pushing the Meles Dam hoax is to create patriotic fervor and galvanize the entire population around an object of national pride while deifying Meles and generating political support for themselves to prolong their lease on political power. The Meles Dam would at once be a hydrological temple to worship  “Meles the Great Leader and Visionary” and a symbolic object of national unity that could rally massive support for the regime. The Melesistas have convinced themselves that by talking about the Meles Dam 24/7, 365 days, they can convince the people that the dam is actually under construction.  They blather about building the “largest dam in Africa” and Ethiopia becoming a middle income country and a formidable regional economic power in just a few years. They talk about their “visionary leader” and how they will blindly follow his vision to the end of the rainbow where they will collect their pot of gold in the form of Meles Dam bonds. They march on chanting their mantra: “We will follow Meles’ vision without doubt or question.”

They must really think the people are “fools and idiots” (to borrow a phrase from Susan Rice) to be fooled by their silly dog and pony show and talk of pie in the sky.  The Ethiopian people may not know about a “pie in the sky”, but they certainly know about the “cow they have in the sky whose milk they never see.”  But careful analysis shows the Melesistas have pulled this one right out of Joseph Goebbel’s bag of tricks: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” Isn’t this exactly what the Melesistas  are doing in Ethiopia now – repeat the dam lie, development lie and repress dissent and persecute journalist who tell the truth?

The Melesistas think they are so smart that they can hoodwink not only Ethiopians in the country but also those in the Diaspora. They put on a dam “bond selling” show to convince Diasporans that the Meles Dam is real and that it is the panacea to Ethiopia’s economic woes. “Buy dam bonds! Ethiopia will be rafting on a river of milk and honey once the Blue Nile is dammed.” But only a damned fool would believe that.  According to the World Bank, Ethiopia’s “power sector alone would require $3.3 billion per year to develop” in the next decade. Currently, power tariffs are so underpriced that they range between “$0.04-0.08 per kilowatt-hour” and are “low by regional standards and recover only 46 percent of the costs of the utility.” For every dollar they spend supplying power, they lose 54 cents! In other words, these guys hawking the Meles Dam junk bonds and promising billions in profits are losing their shirts on the power they are selling right now! Why would anyone trust and buy dam bonds from those who can’t even make a damn profit from existing dams? Why would anyone buy dam junk bonds when the outlook for the energy sector in Ethiopia is so damn bleak? The Melesistas fantasize that they can pay off bondholders by selling power from the dam to the Sudan, Egypt and the Arabian peninsula. Why the hell would Egypt or the Sudan buy power from a dam that damns them by effectively reducing their water supply for agriculture and their own production of power?

The real aim of the Meles Dam is not the construction of a dam over the Blue Nile but to use the specter of the construction of a gargantuan dam on the Nile to inspire fear, loathing and dread of an imminent regional water war. Simply stated, the dam idea is an extortion scheme to scam the international community and downstream countries for more aid and loans as a price for continued regional stability, avoidance of conflict and maintenance of the status quo. Suffice it to say, one has to be a damned “fool and an idiot” to believe the Meles Dam will ever be built or buy Meles Dam junk bonds and expect a return. (Buying the Brooklyn Bridge is a much better investment.)

Shadowboxing Smoke and Mirrors

So, why do the Melsistas send zombies into the Diaspora on a fool’s errand? They know they will be shamed and disgraced and chased out of every American and European city like stray dogs at a bazaar. They know they will be lucky to squeeze a few hundred dollars at a Diaspora “bond selling” event. Do they do it because they are professional beggars and panhandlers?

There is a deceptively simple method to their madness. They send their zombies in the Diaspora to make us shadowbox smoke and mirrors. They are playing a simple but clever psychological game.

The Melesistas are getting hammered everyday by bad publicity. Hardly a day passes without some report by an international human rights, press or research organization documenting their monumental crimes against humanity. Just in the past few months, there have been numerous reports and press releases by Human Rights Watch, the Committee to Protect Journalists and a host of newspaper and television outlets, including Al Jazeera and CNN, on massive human rights violations, land grabs, ethnic cleansing, suppression of religious freedom and other issues in Ethiopia. Recently, the World Bank made public a 448-page corruption report on Ethiopia. A couple of weeks ago, the U.S. State Department released its annual Human Rights Report on Ethiopia documenting the regime’s “arbitrary killings, torture, beating, abuse, and mistreatment of detainees by security forces, harsh and life-threatening prison conditions, arbitrary arrests and detentions, detention without charge and lengthy pretrial detention, illegal searches, “villagization” (pillagization) program, restrictions on freedom of assembly, association, and movement, interference in religious affairs…” This past week, they got clobbered in the international press for a kangaroo appellate court affirmance of the 18-year sentences of the internationally-acclaimed journalist Eskinder Nega and dynamic opposition leader Andualem Aragie.

The Melesistas have become international pariahs and desperately want to change the topic from Eskinder Nega, Reeyot Alemu, Woubshet Taye, Andualem Aragie…, corruption, ethnic cleansing, land giveaways, suppression of religious freedom and interference in religious affairs and critical human rights reports. They want to take control of the international public relations agenda. They want to shed off their international image as corrupt thugs who trample on human rights and steal elections. They want to reinvent themselves as anti-poverty warriors and statesmen of economic development. They want to be seen as the new “new breed of African leaders” toiling indefatigably to eradicate poverty and promote economic development and democracy.

In a Machiavellian maneuver, they have, to some extent, succeeded in getting Diaspora Ethiopians, particularly the activists, to promote their “dam development” agenda for them in America, Europe and elsewhere. Every time Diaspora activists confront the zombie junk bond dealers and brokers, they are seen talking (but saying nothing) about development, growth, infrastructure projects and how the Meles Dam will transform Ethiopia into an economic powerhouse. (They never mention the massive foreign debt, the USD$12bn that has left the country illegally since 2001, the massive youth unemployment, accelerating population growth, etc.). They always sheath their bloody hands in the glove of development talk. When activists protest and confront these zombies, they appear to be anti-development obstructionist agitators. That’s is the exquisite trick of the Melesistas. They want the world to see Diaspora  Ethiopians as a bunch of rowdy, wild, disorderly, loudmouthed, raucous, uncivil and intolerant bunch who will not even allow civil discussions of “development”. They aim to create and nurture the image of a few combative “Diaspora extremists” and an overwhelming number of silent (as a church mouse) regime supporters who are afraid to come forward (or attend their “bond selling” events) and show their support for fear of attack by the “extremists.” In the mix are the hapless Diasporans who have to go back and forth to Ethiopia to secure their property and business interests. Those guys are toast; either they pay protection money (buy dam bonds) or get jacked up on some trumped up charge and lose their properties or worse.

The Melesistas’ strategy to counter bad publicity and capture the domestic and international public relations commanding heights is based on three principles: Distract, distract and distract some more. Distract Ethiopians inside the country from critical political, social and economic issues by bombarding them with inane development propaganda. State television (which is watched by virtually no one in the country) is filled with ceaseless barrages of nauseating and mind numbing amateur development propaganda. It is vintage police state propaganda aimed at convincing a largely illiterate population that famine is plenty, decline is development, poverty is wealth, dictatorship is democracy and the man who destroyed the country is its savior.

The second strategy is to distract Diaspora Ethiopians from vigorously pursuing an agenda that promotes democracy freedom and human rights. They unleash a few smooth-talking empty suits with empty heads and let them wander from one city to another in the U.S. and Europe just to get Ethiopian activists emotionally worked up about a fantasy dam and lose their focus on issues of  human rights violations, abuse of political prisoners, ethnic cleansing, suppression of religious freedoms, and myriad economic problems.  Some Diaspora activists react vigorously whenever they see these hapless empty suits at “bond selling” events believing they are confronting the master criminals. Therein lies the trick. The Melesistas are so clever that they have succeeded in making some of us believe that the puppets are actually the puppet masters. We need to be aware that the empty suits they send into the Diaspora to sell the dam bonds are just schmucks and buffoons who do what they are told; or “zombies” as the great African musician Fela Kuti would have called them (“Zombie go… zombie stop…zombie turn…zombie think…” ) They are bait and are offered as scapegoats to the Diaspora.  By chasing the puppets out of town, some of us feel we have chased out the puppet masters. But the puppet masters laugh at us because our victory is the victory of the shadow boxer who knocked out the shadow.

The third strategy of the Melesistas is to distract donors and human rights organizations from criticizing them on their atrocious human rights record. They want to justify and convince them that the masses of ordinary Ethiopians are interested in the politics of the belly and not the politics of the ballot. Meles declared, “My view is that there is no direct relationship between economic growth and democracy historically or theoretically.” They want to convince donors and human rights organizations that the masses do not care about human rights or democracy; they are concerned only about filling their bellies. To them, the masses of poor, illiterate, hungry and sick Ethiopians are too dumb and too damn needy to appreciate “political democracy.”

Legacy of the great manipulator

Manipulation of the Diaspora is one of the chief legacies of Meles. Wikileaks cablegrams portray Meles as a slick, scheming, crafty and cunning hombre. He could have achieved greatness but undid himself because he was unable to tame his voracious appetite for extreme vindictiveness and revenge and could not bridle his bottomless capacity for maliciousness, viciousness and obduracy. Those who claim to know Meles say he knew his opposition better than the opposition knew itself. Distraction, diversion, misdirection, hoodwinking, chicanery, paralogy and sophistry were the hallmarks of Meles’ strategy. The cunning dictator was able to shroud his corrupt empire for two decades by pursuing a propaganda policy of mass distraction and by staging one farcical political theatre after another. As I have long maintained, Meles’ “attitude was that he can outwit, outthink, outsmart, outplay, outfox and outmaneuver boatloads of Ph.Ds., M.Ds., J.Ds. Ed.Ds or whatever alphabet soup of degrees exist out there any day of the week. He seemed to think that like the opposition leaders, Ethiopian intellectuals are dysfunctional, shiftless and inconsequential, and will never be able to pose a real challenge to his power.” In a rare moment of candor responding to a journalist’s question about Diaspora Ethiopians protesting his overseas visits,  Meles confessed, “We may be at fault in some way. I am sorry. That maybe we didn’t communicate well enough to those Ethiopians living abroad what is happening, what we are doing here.” Meles’ apostles keep making the same mistake. Like shepherd, like sheep!  Like Meles, like Melesistas!

Criminal violations in selling unregistered securities in the U.S.

There have been questions raised about the legality of the sale of Meles Dam bonds as “securities” in the U.S.  Under federal and most state laws, a “security” is broadly defined and includes stocks, bonds, debt and equity securities, notes, investment contracts, etc. Unless exempted, all securities must be registered with the Securities and Exchange Commission (SEC) and/or relevant state agencies prior to selling or offering for sale to the public. A security which does not have an effective registration statement on file with the SEC and/or the relevant state agency is considered an unregistered security. Buying or selling unregistered securities is a crime under federal and state laws. The SEC can prosecute issuers and sellers of unregistered securities under section 20(b) of the Securities Act of 1933 (which regulates original issuers) and seek injunctions if the Securities Act has been violated, or if a violation is imminent. Section 8A also allows the SEC to issue orders to issuers of unregistered securities to cease and desist and seek civil penalties under Section 20(d) if an issuer violated the Securities Act, an SEC rule, or a cease-and-desist order.

Like most states, California Corporations Code sections 25110-25118 set strict guidelines for any securities sold in that state. Any person or entity who willfully sells or transports unregistered securities through interstate commerce or buys such securities  could face serious criminal liabilities under California Corporations Code section 25540, subd. (a) with penalties of incarceration for up to three years and a fine up to $1 million. California prosecutors, like their federal counterparts, could also seek injunctive relief and civil penalties.

There are a few limited  exemptions to the registration requirement. One of them is an exemption “for certain foreign government securities brokers or dealers”.  Pursuant to 17 CFR 401.9, “A government securities broker or dealer (excluding a branch or agency of a foreign bank) that is a non-U.S. resident shall be exempt from the provisions of sections 15C(a), (b), and (d) of  the Act (15 U.S.C. 78o–5(a), (b) and (d)) and the regulations of this subchapter provided it complies with the provisions of 17 CFR 240.15a–6…” In other words, the bond “brokers and dealers” sent to the U.S. to sell the Meles Dam bonds must meet the multifarious requirements of  federal securities law and other regulatory requirements including full disclosure, proof of maintenance of required books and records relating to the bond issues and written consent to service of process for any civil action arising from disputes in bond related transactions. It is highly unlikely that the “brokers and dealers” selling the Meles Dam bonds in the United States qualify under 17 CFR 240.15a–6 and 15 U.S.C. 78o–5(a).

Fight the Power, not the smoke and image in the mirror

Diaspora activists should keep their eyes on the prize, not on the smoke and mirrors of the Melesista Road Show, Carnival and Circus.

Ethiopian Americans are fortunate to live under a Constitution that guarantees our right to free expression and peaceful protest. As citizens, it is our moral duty to exercise our constitutional rights. We have recently seen Americans using their right to protest by launching the “Occupy” protest movement. Historically, the civil rights movement relied on sit-ins, sit downs, teach-ins, rallies and marches as a form of direct nonviolent action to bring about change. Nonviolent mass protests eventually led to passage of the Civil Rights Act of 1964 which ended racial segregation, and the Voting Rights Act of 1965 which removed barriers to voting. The anti-war and free speech movements relied on non-violent protests to defend expressive freedoms and end the war in Vietnam. Nonviolent protests were also used in the anti-Apartheid movement in the U.S. resulting in boycotts, divestments in corporations  and spurring legislative and diplomatic action which hastened the end of Apartheid.

The main point is that Diaspora Ethiopians should be laser-focused on the prize and make sure that democracy will in the end triumph over dictatorship in Ethiopia; human rights are vindicated and human rights abusers are held accountable and any government in Ethiopia shall fear the people and the people shall never fear their government. We should not be distracted by empty suits with empty heads lurking in and out of town to scrounge up chicken feed. We should not be angry at programmed zombies at “bond selling” events because they are just wretched flunkies and bootlickers, who given the opportunity will make a beeline to the immigration office to file for political asylum. We should not mistake the puppets for the puppet masters. We should not confuse shadow for reality.

We should be aware not only when we are being abused but also used. We should never let them make us do their dirty jobs because they can cleverly manipulate our psychological disposition to righteous indignation. We should never react because that allows them to take control of our emotions and reactions.  We should always act and never react. Most importantly, we should engage in proactive activism instead of reactive activism. When we are proactive, we plan things out carefully and strategically. Nonviolent protest is a highly disciplined effort. Dr. Martin L. King, Jr. taught, “In any nonviolent campaign there are four basic steps: collection of the facts to determine whether injustices exist; negotiation; self-purification; and direct action.” We should educate and train ourselves in the ways of nonviolent protest. When confronting the zombies, we should maintain a high degree of composure and display self-dignity in our expressions of defiance. At dam “bond selling ” events, protesters should adequately prepare pre-event publicity. Serious attention should given to the development of press kits and talking points. Press  and law enforcement liaisons should be trained and designated. Well informed and articulate spokespersons should be selected to give press interviews. Adequate attention should be given to post-event follow up activities.

It is a great disservice to oneself and to our great cause to engage in nonviolent protest without reading and understanding Gene Sharp’s extraordinary work, “From Dictatorship to Democracy”available online for free.  An Amharic translation of Gene Sharp’s book is also available online free of charge (here) for anyone to download or print. Ignorance cannot drive out ignorance, only knowledge can. We must educate ourselves in the ways of peaceful protest, or our efforts will produce few results. We are less likely to be manipulated if we keep ourselves informed and develop critical analysis skills that cut through the blather of our adversaries.

While those of us in the older generation (“Hippos”) wallow in self-pity and cynicism, it is inspiring to see young patriotic Diaspora Ethiopians (“Cheetahs”) using their right to peaceful protest to resist the zombies of tyranny. Just as the task of building a fantasy dam belongs to the Melesistas, the construction of the new Ethiopia is a task reserved for the young Cheetahs. It is painful to admit that we Hippos have not been much of a role model for the Cheetahs. We have unkindly criticized the Cheetahs for their lack of engagement, apathy and single-minded pursuit of flash and cash. We grumble that the Cheetah generation is the lost generation and there is no one to save Ethiopia (but it has been a long time since we Hippos looked into the mirror without smoke).

I am afraid there is little that Ethiopian Cheetahs could learn from Ethiopian Hippos. Perhaps Ethiopian Cheetahs can get inspiration from other Cheetahs. In the past 2 years, we have seen inexperienced youth using social media bring down dictators or force them to make radical changes in governance in North Africa and the Middle East. The key to their success was their ability to get in tune and on the same wavelength with each other, and to be able to speak the same beautiful language of peaceful change and protest. As always, I believe Ethiopian youth united — across ethnic, religious, linguistic, gender, and regional lines — can never be defeated!

“Get up, stand up, stand up for your rights. Get up, stand up, don’t give up the fight.” Bob Marley

Professor Alemayehu G. Mariam teaches political science at California State University, San Bernardino and is a practicing defense lawyer.

Previous commentaries by the author are available at:

http://open.salon.com/blog/almariam/

www.huffingtonpost.com/alemayehu-g-mariam/

Amharic translations of recent commentaries by the author may be found at:

http://www.ecadforum.com/Amharic/archives/category/al-mariam-amharic

http://ethioforum.org/?cat=24

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in Africa, Analysis, Ethiopia, Featured, News | No Comments »

Ethiopia: The Bedtime Stories of Meles Zenawi

Monday, May 21st, 2012

Alemayehu G Mariam

pino

 

 

 

 

 

 

 

 

At the “World Economic Forum Meeting” in Ethiopia last week, dictator Meles Zenawi lectured:

…. My view is that there is no direct relationship between economic growth and democracy historically or theoretically. But my view is that democracy is a good thing in and of itself irrespective of its impact on economic growth. And my view is that in Africa most of our countries are extremely diverse, that may be the only possibility, the only option of keeping relationships within nations sane. Democracy may be the only viable option for keeping these diverse nations together. Sowe need to democratize but not in order to grow. We need to democratize in order to survive as united sane nations. That’s my view. But I don’t believe in this nighttime, you know, bedtime stories and contrived arguments linking economic growth with democracy. There is no basis for it in history and in my view no basis for it it in economics. And there is no need to have this contrived argument because the case for democracy and can stand and shine on its own…

While visiting Ghana in 2009, President Obama told the following “contrived bedtime story linking economic growth with democracy” to Africans:

Development depends on good governance. History offers a clear verdict: Governments that respect the will of their own people, that govern by consent and not coercion, are more prosperous, they are more stable, and more successful than governments that do not. No country is going to create wealth if its leaders exploit the economy to enrich themselves. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery. That is not democracy, that is tyranny. And now is the time for that style of governance to end…. In the 21st century, capable, reliable, and transparent institutions are the key to success — strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people’s everyday lives…. History is on the side of these brave Africans, not with those who use coups or change constitutions to stay in power. Africa doesn’t need strongmen, it needs strong institutions. With better governance, I have no doubt that Africa holds the promise of a broader base of prosperity….

My Favorite Bedtime Stories

I enjoy bedtime stories as much as the next guy. My favorite is “Pinocchio in Africa”. The wooden puppet wanted to become a human boy but could not stop telling lies and tall tales. Whenever Pinocchio lied, his nose grew longer.

I like the story of “Puff the Magic Dragon and the Land of Living Lies”. Puff took a little girl called Sandy, who lies a lot, to the Land of the Living Lies where honesty and truthfulness are prosecuted. She meets the famous fibbers Pinocchio and the boy who cried wolf; and saw the famous purple cow that no one has ever seen and a pink elephant.

I also enjoy the morality tales of Aesop, the ancient Ethiopian storyteller. Once upon a time there was a wolf who schemed to snatch sheep grazing in the pasture, but could not because the shepherd was vigilant. One day the wolf found the shorn skin of a sheep and dressed himself in it and joined the flock. Soon he began dining on the sheep one by one until he was discovered by the shepherd.  That was the end of the wolf; he could no longer steal, kill and eat the sheep.

George Orwell’s allegorical stories of doubletalk and doublespeak told in “political language” are rather delightful because they “make lies sound truthful and murder respectable, and give an appearance of solidity to pure wind.” So, “War is peace. Freedom is slavery. Ignorance is strength.” George could have added, “dictatorship is democracy. Tyranny is liberty. Poverty is wealth. Famine is plenty. Censorship is press freedom. Brutality is civility. Mendacity is veracity. Opacity is clarity. Shadow is reality. Depravity is morality and greed is good.”

Oh, Yes! I like children’s rhymes too:

Humpty Dumpty sat on a wall                                                                                            Humpty Dumpty had a great fall….

Sane Nations, Insane Dictators and Democrazy

Zenawi said “democracy is the only option of keeping relationships within nations sane”. Here are some true stories of democrazy from the Land of Living Lies:

Freedom House/U.S. State Department (2010)

In April 2008 local elections were held throughout Ethiopia. Freedom House and USDoS report that opposition candidates were subjected to intimidation and arrest by the government prior to the elections making it difficult for them to compete, leading to the opposition boycotting the elections and resulting in a massive victory for government supporters.  The ruling party won 99% of the more than three million seats contested.

World Bank (2012)

The May 2010 parliamentary elections resulted in a 99.6 percent victory for the ruling EPRDF and its allies,reducing the opposition from 174 to only two seats in the 547 member lower house… Ethiopia is the second-most populous country in Sub-Saharan… At US$390, Ethiopia’s per capita income is much lower than the Sub-Saharan African average of US$1,165 in FY 2010, ranking it as the sixth poorest country in the world.

Amnesty International (2009)

The Ethiopian parliament has adopted a potentially repressive new law which could criminalise the human rights activities of both foreign and domestic non-governmental organizations (NGOs). The Charities and Societies Proclamation law (2009) is designed to strictly control and monitor civil society in an atmosphere of intolerance of the work of human rights defenders and civil society organisations. The law’s repressive provisions are believed to be an attempt by the Ethiopian government to conceal human rights violations, stifle critics and prevent public protest of its actions ahead of expected elections in 2010.

Human Rights Watch (2010)

Ethiopia’s citizens are unable to speak freely, organize political activities, and challenge their government’s policies—through peaceful protest, voting, or publishing their views—without fear of reprisal. Democracy’s technical framework will remain a deceptive and hollow façade so long as Ethiopia’s institutions lack independence from the ruling party and there is no accountability for abuses by state officials.

Global Financial Integrity/Wall Street Journal (2011)

Ethiopia lost $11.7 billion to outflows of ill-gotten gains between 2000 and 2009. That’s a lot of money to lose to corruption for a country that has a per-capita GDP of just $365. In 2009, illicit money leaving the country totaled $3.26 billion, double the amount in each of the two previous years. The capital flight is also disturbing because the country received $829 million in development aid in 2008. Ethiopia is one of the poorest countries on earth as 38.9% of Ethiopians live in poverty, and life expectancy in 2009 was just 58 years. The people of Ethiopia are being bled dry. No matter how hard they try to fight their way out of absolute destitution and poverty, they will be swimming upstream against the current of illicit capital leakage.

Committee to Protect Journalist (2011) 

Ethiopia trails only Eritrea as the foremost jailer of journalists in Africa. Ethiopia’s repression of the independent press has also driven into exile the largest number of journalists in the world. Yet Zenawi told Aftenposten [Norwegian paper] that ‘We have reached a very advanced stage of rule of law and respect for human rights. Fundamentally, this is a country where democratic rights of people are respected.’

Human Rights Watch (2011)

The Ethiopian government is exploiting its vaguely worded anti-terror law to crush peaceful dissent.  The anti-terror law itself is a huge problem. The international community, especially the European Union, United States, and United Kingdom, should ask the Ethiopian government hard questions about why it is using this law to crack down on peaceful independent voices.

Committee Statement of Congressman Donald Payne (2007)

H.R. 2003 (Ethiopia Democracy and Accountability Act of 2007, sponsored by Cong. Payne passed the U.S. House of Representatives on October 2, 2007) requires the secretary of state to support human rights by establishing a mechanism to provide funds to local human rights organizations. The bill supports democratization by directing assistance to strengthen democratic processes, prohibits non-humanitarian assistance to Ethiopia if the ruling party obstructs United States efforts to provide human rights, fosters accountability for the actions the Ethiopian Government has taken that undermine rule of law and fundamental political freedoms…. and holds security forces accountable for human rights abuses related to the demonstrations of 2005…

Statement of U.S. Senators Russ Feingold and Patrick Leahy on Senate Bill 3457 (2008)

Mr. FEINGOLD. Mr. President, today I am pleased to introduce the Support for Democracy and Human Rights in Ethiopia Act of 2008. Senator LEAHY joins me as an original cosponsor. The purpose of this bill is to reaffirm policy objectives towards Ethiopia and encourage greater commitment to the underpinnings of a true democracy–an independent judiciary and the rule of law, respect for human and political rights, and an end to restrictions on the media and non-governmental organizations…. As we turn a blind eye to the escalating political tensions, people are being thrown in jail without justification and non-government organizations are being restricted, while civilians are dying unnecessarily in the Ogaden region–just like so many before them in Oromiya, Amhara, and Gambella….

2010 European Union Election Observer Commission Report on May 2010 Election 

The separation between the ruling party and the public administration was blurred at the local level in many parts of the country. The EU EOM directly observed cases of misuse of state resources in the ruling party’s campaign activities. The ruling party and its partner parties won 544 of the 547 seats to the House of Peoples Representatives and all but four of the 1,904 seats in the State Councils…. As a result, the electoral process fell short of international commitments for elections, notably regarding the transparency of the process and the lack of a level playing field for all contesting parties.

Zenawi’s response to the 2010 European Union Election Observer Commission Report:

The EU report is trash that deserves to be thrown in the garbage. The report is not about our election. It is just the view of some Western neo-liberals who are unhappy about the strength of the ruling party. Anybody who has paper and ink can scribble whatever they want.

 Such are the nightmarish bedtime stories of Meles Zenawi’s Democrazy in Ethiopia!

Amharic translations of recent commentaries by the author may be found at: http://www.ecadforum.com/Amharic/archives/category/al-mariam-amharic

http://ethioforum.org/?cat=24

Previous commentaries by the author are available at:                                                    http://open.salon.com/blog/almariam/  and www.huffingtonpost.com/alemayehu-g-mariam/

 

Tags: , , , , , , , , , , , , , , , , , , , , ,
Posted in Africa, Analysis, Ethiopia, Featured, News | 23 Comments »

Ethiopia: The Art of Bleeding a Country Dry

Monday, December 12th, 2011

Alemayehu G. Mariam

Ethio-Corruption, Inc. (Unlimited)

“The people of Ethiopia are being bled dry. No matter how hard they try to fight their way out of absolute destitution and poverty, they will be swimming upstream against the current of illicit capital leakage”, wrote Economist Sarah Freitas who co-authored an upcoming report with  Lead Economist Dev Kar of Global Financial Integrity (GFI). The GFI report entitled, “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” previewed in the Wall Street Journal, found that

Ethiopia, which has a per-capita GDP of just US$365,  lost US$11.7 billion to illicit financial outflows between 2000 and 2009. In 2009, illicit money leaving the economy totaled US$3.26 billion, which is double the amount in each of the two previous years… In 2008, Ethiopia received  US$829 million  in official development assistance, but this was swamped by the massive illicit outflows.  The scope of Ethiopia’s capital flight is so severe that our conservative US$3.26 billion estimate greatly exceeds the  US$2 billion value of Ethiopia’s total exports in 2009.”

Two weeks ago in my commentary, “Why is Ethiopia Poor?”, I highlighted the fact that the Legatum Institute (LI), an independent non-partisan public policy group based in London, had recently ranked Ethiopia a pretty dismal 108th/110 countries on its 2011 Prosperity Index (LPI). Last year, the Oxford Poverty and Human Development Initiative (OPHDI) Multidimensional Poverty Index 2010 (formerly annual U.N.D.P. Human Poverty Index) ranked Ethiopia as the second poorest (ahead of famine-ravaged Mali) country on the planet. According to OPHDI, the percentage of the Ethiopian population in “severe poverty” (living on less than USD$1 a day) in 2005 was 72.3%.  Six million Ethiopians needed emergency food aid in 2010 and many more millions needed food aid in 2011 in what the U.N. described as the “worst drought in over half a century to hit parts of East Africa”.

The cancer of corruption is deeply embedded in the marrow of the Ethiopian body politic. The recently released  Transparency International (TI) 2011 Corruption Perception Index report on Ethiopia confirms the findings of GFI and other anti-corruption international organizations. For the past decade, TI has ranked Ethiopia at the bottom of the barrel of countries ruled by the most corrupt governments. In fact, for the past ten years Ethiopia’s score on the TI index has remained virtually unchanged (TI ranks countries on a 0 (“highly corrupt”) to 10 (“very clean”) scale.

TI Corruption Index Score for Ethiopia by Year

2011     2.7

2010     2.7

2009     2.7

2008     2.6

2007     2.4

2006     2.4

2005     2.2

2004     2.3

2003     2.5

2002     3.5

In light of the 2011 GFI and TI reports, is there any doubt today why Ethiopia is the second poorest nation in the world? Is it rocket science to figure out why Ethiopians are the second poorest people on the planet? Ethiopians are poor because they have been robbed, ripped off, flimflammed, bamboozled, conned, fleeced, scammed, hosed, swindled, suckered, hoodwinked, victimized, shafted and taken to the cleaners by those clinging to power like bloodsucking ticks on an African milk cow. Is it not mindboggling that the US$3.26 billion stolen out of Ethiopia in 2009 was double the amount stolen in 2008 and 2007!?!

The Art of Bleeding Ethiopia Dry

I have long argued that the business of African dictatorships is corruption. In a November 2009 commentary entitled “Africorruption Inc.”, I wrote the following about corruption in Ethiopia:

The devastating impact of corruption on the continent’s poor becomes self-evident as political leaders and public officials siphon off resources from critical school, hospital, road and other public works and community projects to line their pockets. For instance, reports of widespread corruption in Ethiopia in the form of outright theft and embezzlement of public funds, misuse and misappropriation of state property, nepotism, bribery, abuse of public authority and position to exact corrupt payments and gain are commonplace. The anecdotal stories of corruption in Ethiopia are shocking to the conscience. Doctors are unable to treat patients at the public hospitals because medicine and supplies are diverted for private gain. Tariffs are imposed on medicine and medical supplies brought into the country for public charity. Businessmen complain that they are unable to get permits and licenses without paying huge bribes or taking officials as silent partners.

Publicly-owned assets are acquired by regime-supporters or officials through illegal transactions and fraud. Banks loan millions of dollars to front enterprises owned by regime officials or their supporters without sufficient or proper collateral. Businessmen must pay huge bribes or kickbacks to participate in public contracting and procurement. Those involved in the import/export business complain of shakedowns by corrupt customs officials. The judiciary is thoroughly corrupted through political interference and manipulation as evidenced in the various high profile political prosecutions. Ethiopians on holiday visits driving about town complain of shakedowns by police thugs on the streets. Two months ago, Ethiopia’s former president Dr. Negasso Gidada offered substantial evidence of systemic political corruption by documenting the misuse and abuse of political power for partisan electoral advantage. Last week, U.S. State Department spokesman Ian Kelley stated that the U.S. is investigating allegations that “$850 million in food and anti-poverty aid from the U.S. is being distributed on the basis of political favoritism by the current prime minister’s party.” [As of December 2011, over two years after the investigation was launched, the State Department has not publicly released the results of its  investigation.]

Deceit, chicanery, paralogy and sophistry are the hallmarks of Meles Zenawi’s regime in Ethiopia. The cunning dictator has been able to shroud his corrupt empire by pursuing a propaganda policy of mass distraction and by staging one farcical political theatre after another. Zenawi has successfully distracted public attention from rampant corruption by

Making wild allegations of terrorism against his critics, persecuting and prosecuting his opponents and by jailing and exiling independent journalists (a couple of weeks ago, Zenawi shuttered Awramba Times);

Proclaiming a bogus Growth and Transformation Plan that will “double economic growth by an annual average of  14.9 percent” by 2015;

Selling Ethiopia’s most fertile land for pennies above the table and for millions under the table;

Panhandling the international community for famine and humanitarian aid and misusing that aid for political purposes;

Taking massive loans from international banks without     any significant accountability on how it is spent;

Trying to shame and intimidate Western bankers and donors by hectoring them of the evils of  “neoliberalism”;

Proclaiming the construction of an imaginary hydroelectric dam over the River Nile;

Sending troops to occupy Somalia and threatening war with other neighboring countries;

Vilifying international human rights groups, election observers and officials of multilateral organizations who disagree with him;

Dispatching swarms of officials to panhandle the Ethiopian Diaspora for nickels and dimes to buy dam bonds;

Systematically extracting foreign remittances sent by Diaspora Ethiopians;

Staging political theatre by a toothless anti-corruption agency to hoodwink complicit Western donors and loaners.

Etc., etc.

The Economics of Corruption

The Economist Magazine in its November 7, 2006 editorial described “the Ethiopian government as one of the most economically illiterate in the modern world.”  In 2009 at a high level meeting of Western donor policy makers in Berlin where, a German diplomat suggested that Ethiopia’s economic woes could be traced to “Meles’ poor understanding of economics”. They are all wrong!

No one knows corruption, the economics of kleptocracy, better than Zenawi.  The facts of Zenawi’s corruptonomics are plain for all to see: The economy is in the stranglehold of businesses owned or dominated by Zenawi family members, cronies, supporters or hangers-on. According to the World Bank, business enterprises affiliated with Zenawi’s regime control “freight transport, construction, pharmaceutical, and cement firms receive lucrative foreign aid contracts and highly favorable terms on loans from government banks.” Dataprovided by Zenawi’s regime  showed that by the end of the 2009 fiscal year, Ethiopia’s  outstanding debt stock was pegged at a crushing USD$5.2 billion. The USD$11.7 billion stolen over the past decade could easily retire that debt. Ethiopia is Africa’s largest recipient of foreign aid at nearly $USD4 billion in 2009, and the second largest foreign aid recipient in the world after Afghanistan.

Is There a Way to Stop Ethiopia from Bleeding?

The international community “naively” believes that corruption in Ethiopia and the rest of Africa could be controlled and significantly reduced by anti-corruption programs. The U.N. Convention Against Corruption (2003)requires signatories to “develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability.” Ethiopia signed the U.N. Convention in 2003. The Africa Union Convention on Preventing and Combatting Corruption (2003)  established a regime to empower African countries to “prevent, detect, punish and eradicate corruption and related offences in the public and private sectors.”  The Convention prescribes that “in order to combat corruption and related offences in the public service, State Parties” shall “require public officials to declare their assets at the time of assumption of office during and after their term of office  in the public service.” Ethiopia signed the AU Convention in 2004. Neither of these Conventions has even made a dent in controlling the metastasizing corruption in Ethiopia.

Zenawi knows the power of corruption. He has effectively used corruption allegations to neutralize and eliminate his political opponents. He used his “Federal Ethics and Anticorruption Commission” to railroad his comrade-in-arms and former defense minister, Seeye Abraha, to jail for six years on unsubstantiated allegations of  corruption. When then-Judge Birtukan Midekssa, and later Ethiopia’s first female political party leader and long suffering political prisoner, released Seeye for lack of evidence, Zenawi rammed legislation through his rubberstamp parliament  to deny Seeye bail and keep him in pretrial detention. He later fired Judge Birtukan.  In 2008, Zenawi’s anticorruption commission reported that “USD$16 million dollars” worth of gold bars simply walked out of the bank in broad daylight. A number of  culprits were fingered for the inside bank job, but no one was ever prosecuted. In February 2011, Zenawi publicly stated that 10,000 tons of coffee earmarked for exports had simply vanished from the warehouses. He called a meeting of commodities traders and in a videotaped statement told them he will forgive them because “we all have our hands in the disappearance of the coffee”. He warned them that if anyone should steal coffee in the future, he will “cut off their hands”.

For years, I have documented and railed against corruption in Ethiopia. In December 2008, three years to the month, in a weekly commentary entitled, “The Bleeping Business of Corruption in Ethiopia”, I wrote:

The fact of the matter is that the culture of corruption is the modus operandi in the Ethiopian body politics. Former president Dr. Negasso Gidada clearly understood that when he declared in 2001 that ‘corruption has riddled state enterprises to the core,’ adding that the government would show ‘an iron fist against corruption and graft as the illicit practices had now become endemic’. In 2007 when Ethiopia’s auditor general, Lema Aregaw, reported that Birr 600 million of state funds were missing from the regional coffers, Zenawi fired Lema and publicly defended the regional administrations’ ‘right to burn money.’…. Ironically, in 2003, Ethiopia signed the U.N. Convention Against Corruption; and a couple of months ago, a conference on institutions, culture, and corruption was hosted jointly in Addis Ababa by the United Nations Economic Commission for Africa and the Council for the Development of Social Science Research in Africa.

The fact of the matter is that absolute power corrupts absolutely. Zenawi has absolute power in Ethiopia.  Pleading for transparency and issuing moral exhortations against corruption will have no effect on the behavior of Zenawi or any of the other African dictators. Indeed, to plead the virtues of accountability, transparency and good governance with Zenawi and Co., is like preaching Scripture to a gathering of heathens. It means nothing to them. They are unfazed by moral hectoring or appeals to conscience. They sneer and jeer at those who rail and vociferate against corruption. Preaching to the corrupt, to put it simply, is an exercise in total futility!

In my November 7 commentary “To Catch Africa’s Biggest Thieves Hiding in America!”, I discussed the importance of initiating and cooperating with the U.S. Justice Department (DOJ) in civil forfeiture actions to seize corruptly obtained cash, personal or real property of any person or entity that can be traced to “specified unlawful activity”. These civil court actions extend to foreign offenses involving extortion, money laundering, or the misappropriation, theft or embezzlement of public funds by or for the benefit of a public official of a foreign government. (18 U.S. C. sections 981 (a) (1) (c); 1956; 1957.)  The U.S. has recently filed action to seize personal and real property of Teodoro Nguema Obiang Mangue, the 43-year old son of President Teodoro Obiang Nguema Mbasogo of Equatorial Guinea.

Carefully review and analysis of GFI and TI data sources reveals that public assets and funds stolen from many African countries, including Ethiopia, are often hidden in banks located in the U.S. and Europe, although the clever African dictators are now diversifying by taking advantage of  financial havens in countries experiencing rapid growth and industrialization. Much of the corruption activity centers around money laundering (that is,  illegal or dirty money is put through a complex cycle of financial transactions or washed and is transformed into legitimate or clean money).

The basic idea in money laundering is to minimize the chances of detection of stolen public assets and funds by breaking the direct link between the kleptocrats or “corruptocrats” and their collaborators by disguising the true ownership. Using financial consultants, shell companies (bogus companies that exist to simply create the appearance of legitimate transactions through fake invoices and balance sheets), fraudulent official documentation, wire transactions, and “smurfing” techniques (breaking up large amounts of money into smaller, less-suspicious amounts in the names of multiple persons) etc., those who have stolen public assets and funds try to sever or camouflage their loot from its illegal source by placing it in international financial institutions. The aim in money laundering is at least twofold: 1) gain anonymity and hide the audit trail in case of a criminal investigation, and 2)  plough the “clean money” into the legitimate economy by buying homes, investing in legitimate businesses, starting businesses and so on.

If the problem of corruption is to be addressed effectively in Ethiopia and the rest of Africa, it is not going to be at the fountainhead of the corruption itself but in the ocean where the river of corruption terminally flows. As one cannot expect the fox to safeguard the henhouse, one cannot similarly expect Africa’s dictators and corruptocrats and their collaborators to safeguard public assets and funds. A big part of the answer to the question of corruption lies in the Laundromats of financial institutions where the dirty money is washed. That’s why I believe it is the civic and moral duty of every Ethiopian and African to help the U.S. Justice Department catch Africa’s biggest thieves hiding in America. It is very easy to do, and do it anonymously.  Individuals with information about possible proceeds of foreign corruption in the United States, or funds laundered through institutions in the United States, should contact Immigration and Customs Enforcement, Homeland Security Investigations (ICE HIS) toll free at 866-347-2423 or send email to: eginfo1@ice.dhs.gov. If calling from outside of the U.S., the number is: 802-872-6199  

BLOW THE WHISTLE ON AFRICA’S BIGGEST THIEVES HIDING IN AMERICA!!!

Previous commentaries by the author are available at:

www.huffingtonpost.com/alemayehu-g-mariam/

and

http://open.salon.com/blog/almariam/

 

 

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in Africa, Analysis, Ethiopia, Featured, News | 4 Comments »

Why is Ethiopia Poor?

Monday, November 28th, 2011

First, Why is Africa Poor?

George Ayittey, the renowned Ghanaian economist and president of the Free Africa Foundation swears that “Africa is poor because she is not free”. Like Ayittey, Robert Guest, business editor for The Economist, in his book The Shackled Continent (2004), declares that “Africans are poor because they are poorly governed.” He argues that “Africa is the only continent to have grown poorer over the last three decades” while other developing countries and regions have grown richer. Much of Africa, it seems, was better off at the end of colonialism than it is today.

For Ayittey and Guest, the tens of billions of dollars in Western aid to Africa have done very little to improve the lives of Africans; at best, aid has served to “bankroll tyrants” and facilitate experimentation by “idealists with hopeless economic policies.” Statism (the state as the principal change agent) and dictatorship have denied the African masses basic political and economic freedoms while the few privileged kleptocrats (or thieves that have pirated the ship of state, emptied out the national treasury and plundered the economy) live the sweet life of luxury (la dolce vita), not entirely unlike the “good old” colonial times. As Ayittey explains, much of Africa today suffers under the control of “vampire states” with “governments that have been hijacked by a phalanx of bandits and crooks who would use the instruments of the state machinery to enrich themselves and their cronies and their tribesmen and exclude everybody else.” (“Hyena States” would be a fitting metaphor considering the African landscape and the rapacious and predatory nature of the crooks.) Simply stated, much of Africa languishes under the rule of thugtators (thugtatorship is the  highest stage of African dictatorship) who cling to power for the single purpose of using the apparatuses of the state to loot and ransack their nations. Such is the unvarnished truth about Africa’s entrapment in perpetual post-independence poverty and destitution.

Could it be said equally that Ethiopia is at the tail end of the poorest countries on the planet because she is not free and gasps in the jaws of a “vampiric” dictatorship? In other words….

Is Ethiopia Poor, Hungry, Ill and Illiterate Because She is Not Free and Poorly Governed?

A couple of weeks ago, the Legatum Institute (LI), an independent non-partisan public policy group based in London, released its 2011 Legatum Prosperity Index (LPI) which ranked Ethiopia a pretty dismal 108th/110 countries.[1] LPI’s findings are sobering as they are heartbreaking. Ethiopia has an “unemployment rate [that] is almost 21%, which is the sixth highest rate, globally.” The “capital per worker in Ethiopia is the fourth lowest worldwide.” The country has “virtually no investment in R&D.” The ability of Ethiopians “to start and run a business is highly limited… [with a] communication infrastructure [that] is weak with only five mobile phones for every 100 citizens”; and the availability of internet bandwidth and secure servers is negligible. Inequality is systemic and widespread and the country is among the bottom ten countries on the Index. The Ethiopian “education system is poor at all levels and its population is deeply dissatisfied.” There is “only one teacher for every 58 pupils at primary level, there is a massive shortage of educators, and Ethiopian workers are typically poorly educated.” Less than a “quarter of the population believe Ethiopian children have the opportunity to learn and grow every day, which is the lowest such rate in the Index.”

On  “health outcomes, Ethiopia performs very poorly. Its infant mortality rate, 67 deaths per 1,000 live births, and its health-adjusted life expectancy of 50 years, placing Ethiopia among the bottom 20 nations.” The population has high mortality rates from “Tuberculosis infections and respiratory diseases. Access to hospital beds and sanitation facilities is very limited, placing the country 109th and 110th (very last) on these measures of health infrastructure.” The core problem of poor governance is reflected in the fact that “there appears to be little respect for the rule of law, and the country is notable for its poor regulatory environment for business, placing 101st in the Index on this variable.”

But it is not only the LPI that has ranked Ethiopia at the rump of the most impoverished and poorly governed  nations in the world. Last year, the Oxford Poverty and Human Development Initiative (OPHDI) Multidimensional Poverty Index 2010 (formerly annual U.N.D.P. Human Poverty Index) ranked Ethiopia as the second poorest (ahead of famine-ravaged Mali) country on the planet. According to OPHDI, the percentage of the Ethiopian population in “severe poverty” (living on less than USD$1 a day) in 2005 was 72.3%.  Six million Ethiopians needed emergency food aid in 2010 and many more millions needed food aid in 2011 in what the U.N. described as the “worst drought in over half a century to hit parts of East Africa”. The World Bank this past June concluded that  “Ethiopia’s dependence on foreign capital to finance budget deficits and a five-year investment plan is unsustainable.” The Bank criticized dictator Meles Zenawi’s “dependen[ce] on foreign capital or other means of financing investment in an unhealthy, unsustainable way.” Ethiopia is the world’s second-biggest recipient of foreign aid, after Afghanistan, according to the Organization for Cooperation and Economic Development rankings of developing nations because its “leaders” have perfected the art of international mendicancy (panhandling).

That is not all. Every international index over the past several years has ranked Ethiopia at the very bottom of the scale including Transparency International’s Corruption Index (among most corrupt countries), the Failed States Index (among the most failed), the Index of Economic Freedom (among the most economically repressive), the International Bank for Reconstruction and Development Investment Climate Assessment (among the most unfriendly to business),  the Ibrahim Index of African Governance (among the most poorly governed African countries), the Bertelsmann Political and Economic Transformation Index (among countries most in need of reform) and the Environmental Performance Index (among countries with poorest environmental and public health indicators).

Of course, none of that comes as a surprise to those who are familiar with the  fakeonomics of Meles Zenawi. Zenawi says all of the Indexes, the World Bank and the International Monetary Fund (IMF) are wrong. He boldly claims the Ethiopian “economy recorded an average economic growth rate of 11 percent over the past seven years.” But that incredibly rosy growth rate figure, often repeated and republished mindlessly and unquestioningly by the international media, is based exclusively on statistics manufactured by Zenawi’s statistics department. This past June, the IMF debunked Zenawi’s imaginary economic growth estimate of 11.4 percent for 2009 “saying 7.5 percent is more realistic.” The IMF “forecast is even lower growth of about 6 percent for the coming year” because of a “more restrictive business climate”.

Economic principles, facts and realities are irrelevant to Zenawi. According to “Zenawinomics” (a/k/a “Growth and Transformation Plan”), there are bottomless pots of gold awaiting Ethiopians at the end of the rainbow in 2015: The Ethiopian economy will grow by 14.9 percent (oddly enough not 15 percent). There will be “food security at household and national level.” There will be “more than 2000 km of railway networks would be constructed” and power generation will be in the range of “ 8,000 to 10,000 MW from water and wind resources during the next five years.” The “whole community has mobilized to buy bonds. This huge savings and mobilization is used for infrastructure development… We are getting loans from China, India, Turkey and South Korea, so all these foreign savings are also mobilized… So I think we can perform on the ambitious plans that are in place.”

Zenawinomics is the economics of a magical wonderland, very much like Alice’s Wonderland: “If I had a world of my own,” said Alice “everything would be nonsense. Nothing would be what it is because everything would be what it isn’t. And contrary-wise; what it is it wouldn’t be, and what it wouldn’t be, it would. You see?”

Maybe you don’t see. That is the whole point. In what Zenawi describes as “one of fastest growing non-oil economies in Africa,” inflation is soaring, and by mid-2011, Zenawi’s Central Statistical Agency reported that the annual inflation rate had increased by 38 percent and food prices had surged by 45.3 percent. There are more than 12 million people who are chronically or periodically food insecure. Yet, Zenawi is handing out “large chunks” of the most fertile land in the country for free, to be sure for pennies, to foreign agribusiness multinational corporations to farm commercially and export the harvest. This past July, the U.S. Census Bureau had a frightening population forecast: By 2050, Ethiopia’s current population of 90 million population will more than triple to 278 million, placing that country in the top 10 most populous countries in the world. It just does not make any sense.

In May 2010, the Economist Magazine rhetorically asked: “Ethiopia’s prime minister, and his ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) expect a landslide victory in the general election due on May 23rd, and are likely to get one (they actually “won” it by 99.6 percent!). The bigger question is whether another five years of EPRDF rule will help ordinary Ethiopians, who are among the poorest and hungriest people in the world.”

Ethiopia Can Prosper Only If She Has Good Governance

The United Nations Development Programme and other international lending institutions define ‘governance’ as the “exercise of power or authority – political, economic, administrative or otherwise – to manage a country’s resources and affairs.” Good governance has to do with the “competent management of a country’s resources and affairs in a manner that is open, transparent, accountable, equitable and responsive to people’s needs.” There is substantial empirical research showing that political freedom, strong social and political institutions and proper regulatory mechanisms significantly contribute to economic growth. Stated simply, good governance and “good” (sustainable) growth are based on mutually reinforcing principles.

Where there is good governance, there is substantial political and legal accountability and much greater respect for civil, political and property rights. Leaders are held politically accountable to the people through fair, free and regular elections; and an independent electoral commission ensures there is no voter fraud, voting irregularities, vote buying, voter intimidation and voter harassment. Institutional mechanisms are in place to ensure the rule of law is followed and those exercising political power and engaged in official decision-making perform their duties with transparency and legal accountability.  Where there is good governance, citizens have freedom of association and the right to freely exchange and debate ideas while independent press, and even state-owned media, operate freely along with robust civil society institutions to inform and mobilize the population.

Good governance is an essential precondition for sustainable development. Stable and democratic governing institutions protect political and economic liberty and create an environment of civic participation, which in turn “determines whether a country has the capacity to use resources effectively to promote economic growth and reduce poverty.”   On the other hand, bad or poor governance stifles and impedes development and undermines competition in the marketplace. Where human rights and the rule of law are  disrespected, corruption flourishes and development inevitably suffers aspolitical leaders and public officials siphon off resources from critical school, hospital, road and other public works and community projects to line their pockets.  But where there is good governance, not only is economic development and growth accelerated, even chronic and structural problems of  food insecurity (famine) that have plagued Ethiopia for decades can be controlled and overcome. As Amartya Sen has argued no substantial famine has ever occurred in any independent country with a democratic form of government and a relatively free press.

Because there is little or no political accountability, Ethiopia suffers from poor governance and remains at the bottom of the indexes of the most impoverished nations  in the world. Programs intended for “poverty reduction” have been misused for political mobilization and rewards for voting for the ruling party. The country has been unable to promote broad-based economic growth because business attached to the ruling party have a near-total monopoly and chokehold on the economy making fair competition for non-ruling party affiliated entities in the market an exercise in futility. Because there is little respect for property and contract rights, those non-aligned with the ruling party feel insecure and disinclined to invest. The ruling regime has made little  investment in human resources through effective policies and institutions that improve access to quality education and health services as the LPI data shows. As a result, the rate of flight of professionals, intellectuals, journalists and political dissidents, is among the 10 highest in the world. The  International Organization for Migration has said it all: “There are more Ethiopian doctors practicing in the US city of Chicago than in Ethiopia.”

Ethiopia is universally regarded as one of the least free countries in the world and ranks at the very bottom of the 10 most repressive countries in the world for citizens’ freedoms in expression, belief, association, and personal autonomy. The respected Committee to Protect Journalists says, “Ethiopia is the second-leading jailer of journalists in Africa.” There is little regard for the rule of law as the LPI data confirms. In other words, those who occupy official positions have little respect for the country’s Constitution or laws, or show any concern for the fair administration of justice. The judiciary is merely the legal sledgehammer of the dictator and ruling party. The judges are party hacks enrobed in judicial garb with the principal mission of giving legal imprimatur to manifest official criminality. In sum, the rule of law in Ethiopia has been transmuted into the rule of one man, one party.

Few should be surprised by LPI’s conclusions that the “levels of confidence in the military and judiciary are both very low” and “Ethiopia is the country where expression of political views is perceived by the population to be most restricted.” None of the facts above matter to the dictators in Ethiopia because they are ready, willing and able to do whatever it takes to cling to power.

LPI’s dismal ranking of Ethiopia merely augments what has been solidly established over the years in the other Indexes. The question is why Ethiopia remains at the tail end of the most impoverished countries year after year. Zenawi’s “Federal Ethics and Anti-corruption Commission” (FEAC) conflates corruption and poverty in seeking to pinpoint the answer to this question. FEAC says the major sources of corruption in Ethiopia are “poor governance, lack of accountability and transparency, low level of democratic culture and tradition, lack of citizen participation, lack of clear regulations and authorization, low level of institutional control, extreme poverty and inequity, harmful cultural practices and centralization of authority.” Not quite! Poor governance, lack of accountability and transparency (a/k/a corruption), lack of citizen participation and the absence of the rule of law are the root causes of extreme and widespread  poverty, underdevelopment, aid-dependency, conflict, instability, starvation and injustice in Ethiopia. Have free and fair elections, allow the independent press to flourish, institutionalize the rule of law and maintain an independent judiciary,  professionalize and depoliticize the civil service, the military and police forces and Ethiopians will be well on their way to permanently defeating  poverty and making starvation a footnote in the history of the Ethiopian nation.

Ethiopia is poor, hungry, ill and illiterate because she is poorly governed and not free!

—————————

[1] The Legatum Index is based on 89 different variables covering the economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom, social capital and so on. The Institute uses data collected by the Gallup World Poll, World Trade Organization, World Development Indicators, GDP, World Intellectual Property Organization, UN Human Development Report, World Bank, OECD and World Values Survey.

Previous commentaries by the author are available at:

www.huffingtonpost.com/alemayehu-g-mariam/ andhttp://open.salon.com/blog/almariam/

Android app for Al Mariam’s blog:

http://www.appsgeyser.com/getwidget/Al%20Mariam

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in Africa, Analysis, Ethiopia, News | 1 Comment »

Ethiopia’s regime and the weaponization of famine

Monday, August 8th, 2011

By Alemayehu G. Mariam

Author’s Note:  On June 16, 2008, I published a special commentary (reproduced below in its original form) explaining the sysetmatic use of disinformation by Meles Zenawi, the dictator in Ethiopia for two decades, to deny widespread famine in various parts of Ethiopia and insidiously manipulate famine as a political and military weapon to cling to power. I wrote: “Famine is not just about images of skeletal children gasping for their last breath of air as their mothers gaze into nothingness in the sun baked landscape. It is also a military and political weapon. Meles today is using denial of food aid to “rebel areas” in the south/southeast as did Mengistu to “rebel areas” in the north back in his day. That is the classic strategic lesson Meles learned from Mengistu. Famine can be used both as a tactical and strategic weapon against one’s opponents…” I offer that commentary which originally ran without a byline to my readers at this time in light of recent revelations by the Bureau of Investigative Journalism and the BBC showing that the U.S., Britain,  the European Union, the World Bank and the International Monetary Fund are still providing billions of dollars of aid to Zenawi’s regime despite evidence that it is used as a tool of political oppression in Ethiopia.  Shame on them all!

Special Commentary: The art of denial (lying)  June 16, 2008

Credit must be given where it’s due. And Meles Zenawi and his crew deserve full credit. For perfecting the art of denial (lying) just like the smooth career criminals who deny everything when caught: “Didn’t do it! Wasn’t there! Didn’t happen! Somebody else did it. Someone stole my fingerprints to make it look like I done it!” Deny, deny, deny!

Famine? What famine? That’s the response of Meles and his gang about the famine that is slowly enveloping Ethiopia, and swallowing its people region by region. A few days ago, the reptilian “Deputy Prime Minister” Addisu Legesse groused: “Institutions that exaggerate the food shortage in Ethiopia and report inflated figures of the needy are intent on belittling the economic growth of the country and calculating their interests.” According to Meles, Inc. Ministry of Disinformation, the whole famine thing is a figment of the overactive imagination of the foreign media and humanitarian organizations: “It is ridiculous and unethical that some media outlets are reporting as if food grain price hike is typical of Ethiopia, though it is known that the existing global price hike is a result of soaring price of oil and ever-increasing demand of food grain among the developing countries. The reporting of some media is very much exaggerated and far from the truth,” concluded the garbled statement of the Disinformation Ministry.

The bottom line from Meles Inc. is: There is no famine in Ethiopia. Just millions of Ethiopians who can’t afford to buy food because it is damn too expensive! But Meles runs a pretty slick disinformation campaign: Blame the international commodities markets for high food prices in Ethiopia, and demonize the foreign media and aid organizations for ruining Ethiopia’s image. Then dish out boldfaced lies to distract public attention from the raging famine, and promptly declare victory: “The country has registered during the last five consecutive years rapid double digit economic growth…”

The fact of the matter is that people in Ethiopia are starving to death, by the thousands every day. There is no question about that: “We’re overwhelmed,” said Margaret Aguirre recently, a spokeswoman for the International Medical Corps, a California-based aid agency. “There’s not enough food and everyone’s starving and that’s all there is to it.” Georgia Shaver, the World Food Programme’s director in Ethiopia, painted an equally bleak picture saying that while up to 14 million people needed food aid across six countries in southern Africa, “in Ethiopia we could have the same number in just one country.”

Now, why would Aguirre, Shaver, the BBC, CNN, Al Jazeera… lie about famine in Ethiopia? What would they gain from “exaggerating” the famine?

Famine Facts

For over three decades, Ethiopia has been the international poster lady for famine and starvation. Images of throngs of skeletal children and their starving parents scratching the sun-baked earth are indelibly imprinted in the minds of people around the world. In 1974, mutinous soldiers deposed Emperor Haile Selassie after foreign reporters (“The Unknown Famine” by Jonathan Dimbleby) and some international humanitarian organizations revealed to the world that a famine of biblical proportion was taking place in the north of the country. Just like Meles today, Haile Selassie then denied reports of widespread famine and starvation, and tried to cover it up. When news of the famine shocked the world, Haile Selassie blamed the foreign media for exaggerating the scope of the disaster and for tarnishing Ethiopia’s image.

In 1985, after a decade of disastrous experiments in socialism, Mengistu presided over a famine that claimed the lives of nearly a million people. He also blamed drought and poor rainfall for the famine (but never his disastrous socialist policies) and set out to deal with the problem by putting into place a reckless policy of forced resettlement of hundreds of thousands of people from the north to the more fertile south. Like Meles today, Mengistu then, sat with his arms crossed waiting for massive international food aid to be delivered to his door. Meles today claims the problem of famine in Ethiopia, if it existed at all, is caused by drought and poor rainfall during successive seasons (but never his disastrous economic policies that give higher priority to growing roses than teff), and now expects delivery of massive emergency food aid from Western nations to rescue Ethiopia. Like Haile Selassie who blamed the famine, the high costs of imported goods, gasoline, and skyrocketing food prices, unemployment, etc., on the international oil crises of 1973, Meles today blames the oil crises of 2008 for exactly the same things.

Meles’ Fine Art of Denial (Lying)

Meles and his gang have perfected the art of denial (lying) and raised it to new heights. They have done it by:

Denial of fact: They deny undeniable facts with a straight face. Example: “Famine does not exist in Ethiopia. It is a story made up by the foreign media and aid organizations. It is all ‘exaggerated  and far from the truth’.”

Denial of responsibility: They deny responsibility in the event such a thing as famine should be discovered. Example: “There is no famine, but if, in the unlikely event it exists, it is first and foremost the responsibility of God. He failed in his divine duty to send the rains. He did not. Therefore, there was no harvest, which means famine. God’s co-conspirators include the oil cartels and the greedy manipulators of global food prices. Last but not least of the culprits is the West. They also failed in their duty to supply food aid as they have dutifully done for the past three decades. We had nothing to do with it. We were just minding our own business growing roses and making sure of double digit economic growth.”

Denial of impact: There is really no famine as such in the country, just some pockets of grain deficits. Example: “With the exception of spot shortages in Oromiya and Somali regions, everything is hunky dory. There is plenty of food in the rest of the country, if people have the cash.”

Denial of awareness: We were so busy doing “double digit economic development” and tending to our rose gardens, we were not aware of any famine. Example: “It is impossible to have famine in a country that has been wallowing in ‘double digit economic growth for the past five years’. We’ve been so busy building office structures, luxury villas with swimming pools, world class hotels, exporting roses and importing French wines and champagne, we simply did not know famine was ravaging the countryside. Oops!! Sorry!”

Denial of recurrence: If there is famine, it just happened. Example: “We did not know this famine thing is recurrent. There were no early warning signs. No sentinel events to cause us concern that real famine was going to happen. Anyway, no big deal. We are in ‘double digit economic growth’ and this famine shall be over soon like all the rest. It is just once in a decade type of thing.”

Denial of denial: There is nothing that we must do to deal with the problem of famine, if it exists. Example: “The whole famine thing will take its own course. For decades, there has been famine in Ethiopia. It’s not like this is the first time. Nothing happened in the past from famine. There are a lot more people in Ethiopia today than were in 1974 or 1984. So, famine will have no real effect on the population. It is natural. We don’t need to do anything.”

Denial-by-admission: The whole famine thing is an overblown “exaggeration”.  Example: “It is true that millions of people are at risk of food shortage. But what some describe as famine in Ethiopia is nothing more than food insecurity. Those skeletal children that are seen in the international media are just nutritionally-challenged, but they are, by no means, famine victims! Their parents are victims of critical food shortages for extended periods, not famine. At worst, the food situation in Ethiopia points to large-scale chronic food deprivation, which is not the same as famine.”

Why is Ethiopia Stalked by Recurrent Famine?

When Haile Selassie was deposed over the famine, the people asked: Why didn’t he do something to prevent it? When Mengistu celebrated the tenth anniversary of his socialist government and hundreds of thousands of people died in a catastrophic famine, the people asked: Why didn’t he do something to prevent it? Now, the same question must be put to Meles: Why didn’t he do something to prevent the current famine as he enjoyed his Millennium celebration in Pharaonic  splendor? The answer to the question is very simple. Meles does not care! He doesn’t give a damn if famine wipes out half the population. (He might even shed a few crocodile tears!) He is concerned only with keeping himself and his gang in power, and making Ethiopia their playground. That is the absolute TRUTH!

We must go beyond the obvious to fully appreciate the severity of the current famine situation. The indisputable fact is that famine in Ethiopia is NOT a natural disaster. Certainly, it is aggravated by certain meteorological phenomena, but it is, and has always been, a preventable man-made disaster. So, we must ask some tough questions of those who have been feasting at the Table of Plenty for the last 17:

Has Meles learned any lessons at all from the Great Famines of 1973-74 and 1984-85 to prevent a famine in 2007-08?

Why isn’t famine prevention given the highest policy priority in the Meles regime?

Why is Meles so adamantly opposed to complete privatization of land, which by all expert accounts is the single most important factor in the food security of any nation?

Why is Meles spending millions upon millions of dollars in Somalia when millions upon millions of Ethiopians are starving?

Why does military spending consume nearly one-half of Ethiopia’s budget?

Why is exporting roses to Europe more important than raising teff and wheat to feed the starving people of Ethiopia?

Why hasn’t the Meles regime implemented a national family planning program in the same manner as those countries experiencing high birthrates?

Why is Meles addicted to international food aid and rescue?

Why is Ethiopia listed 138/179 countries on Corruption Index for 2007?

The Weaponization of Famine

Famine is not just about images of skeletal children gasping for their last breath of air as their mothers gaze into nothingness in the sun baked landscape. It is also a military and political weapon. Meles today is using denial of food aid to “rebel areas” in the south/southeast as did Mengistu to “rebel areas” in the north back in his day. That is the classic strategic lesson Meles learned from Mengistu. Famine can be used both as a tactical and strategic weapon against ones opponents. It could be used to depopulate troublesome regions by creating refugees and eliminating hostile guerilla forces. Like Mao Zedong said, “Guerrillas are like fish, and the people are the water in which fish swim.” When you weaponize famine, it is like draining the water out of the lake. No water! No fish! No problem!

Famine can also be used as a political weapon of control and elimination of any organized opposition. For instance, by controlling and manipulating the supply of grain to the urban markets, the regime can effectively punish and bring that population to its knees while eliminating any capacity for organized political opposition.

But famine is also very good for business (famine profiteering). Regime-allied middlemen buy massive amounts of grains from farmers at low prices (by offering what appears to be a generous price at the time) and eliminate legitimate small businesses that deal in grain. When these middlemen have an absolute monopoly on the acquisition, sale and distribution of agricultural commodities, particularly grains, it not hard to imagine how profitable famines could be. It makes perfect economic sense from the perspective of famine profiteering to place low policy priority on famine prevention and control. It’s the old supply and demand curve. High demand for food and less supply on the market, and complete control on the distribution of international food aid equals to “mo’ money, mo’ money, and mo’ money” for Meles and his gang.

The Real Reasons for Recurrent Famines in Ethiopia

The prime reason for the current famine in Ethiopia is the misguided economic policies of the Meles regime. That is the judgment of the most experienced development economists. As Amartya Sen, the Nobel laureate and world renowned welfare (development) economist, observed, “There has never been a famine in a functioning multiparty democracy.”

In Ethiopia, drought and other meteorological phenomena are aggravating factors in the causation of famine, but their effects can be mitigated through effective policies, improved planning and better coordination in a functioning multiparty democracy. But there is no way famine could be effectively addressed in a one-party totalitarian police state that places a higher priority on the cultivation of rose bushes, coffee exports, tourism and construction of villas, resorts and unneeded office buildings than feeding its people. There is no way to overcome famine when artificially low prices are maintained for agricultural commodities (so that regime-allied middlemen could make obscene profits) and few incentives are provided to farmers for expanded food production. There is no way to rid famine from Ethiopia when fertilizer is used to blackmail farmers into voting for the regime. It is impossible to avoid recurrent famines when the regime relies on flawed policies promoted by the World Bank and the International Monetary Fund which ignore the critical role of the private sector in food production. Famine will always rear its ugly head in Ethiopia so long as it is used as a military and political weapon. There will always be famine in Ethiopia so long as privatization of land is prohibited.

Stretching Her Hands Unto God

Let’s face the facts. For well over three decades, Ethiopia has been forced into recurrent famines by reckless, careless, heedless, feckless, aimless and worthless governments whose solution to the structural problem of food insecurity is to stretch out unbending begging hands to the Western countries. For well over three decades, the West has responded with kindness, goodwill, mercy, understanding, charity and compassion. Today, the limits of Western charity and generosity has reached its limits. For the first time, the West has come to the conclusion that it has no moral obligations to save Ethiopia when the Ethiopian “government” is sitting on its hands and doing nothing; or when it does do something, it is only to stretch out the hand that begs.

We must come to terms with the fact that the West is no longer willing to be blackmailed into accepting moral blame for Ethiopia’s famine. That is why it will be different this time. There will be no Bob Geldofs to save Ethiopia. No Live Aid. No Michael Jacksons singing “We are the World.” It will do us no good to stretch out begging hands to the Western Powers. This time Ethiopia must stretch her hands to a much Higher Power, the only Power that can save her. And Ethiopia will be saved — let there be no doubt about that — because we believe, as written in Psalm 68:31, “Ethiopia shall soon stretch out her hands unto God.” And He will hold and lift her tenderly by her hands and raise her from the depths of despair, privation and misery, and deliver her from the plague of oppression! This time Ethiopia’s children must not only stretch out their hands unto God, but they must also hold hands — extend helping hands — from across the globe and embrace their brothers and sisters who are dying simply because they have nothing to eat. No Ethiopian should die from starvation!

Food for Thought: How many Ethiopians died today for lack of food?

Afterword: I have written about famine in Ethiopia on a number of occasions since June 2008. Here are some of my commentaries:

Ethiopia: Dictator With a Conscience? July 25, 2011

Ethiopia: Apocalypse Now or in 40 Years? July 10, 2011

Licensed to Steal March 10, 2010

Ethiopia’s “Silently” Creeping Famine January 11, 2010

Speaking Truth to Strangers June 10, 2010

Famine and the Noisome Beast in Ethiopia November 2, 2009

Previous commentaries by the author are available at: www.huffingtonpost.com/alemayehu-g-mariam/ and http://open.salon.com/blog/almariam/

Tags: , , , , , , , , , , , , , , , , , , ,
Posted in Ethiopia, Featured, News | 6 Comments »

Ethiopia: The Fakeonomics of Meles Zenawi

Sunday, June 19th, 2011

There is the economics of Adam Smith, the intellectual father of capitalism. There is Levitt & Dubner’s freakonomics of weird stuff. Then there is the fakeonomics (economics by gimmickry) of  Meles Zenawi, the dictator in Ethiopia and author of the five-year “Growth and Transformation Plan” (GTP). Zenawi forecasts a “not unimaginable” 14.9 percent economic growth for Ethiopia over the next five years after devaluing the currency by 20 percent, slapping price controls on many food items and watching from the sidelines annual inflation galloping at 34.7 percent. He has accused the country’s business community of price gauging and hoarding and threatened to shut them down, jail them and literally cut the hands of any business person caught in the illicit trade of coffee.

The GTP is a make-a-wish list of stuff. It purports to be based on a “long-term vision” of making Ethiopia “a country where democratic rule, good-governance and social justice reigns.” It aims to “build an economy which has a modern and productive agricultural sector with enhanced technology and an industrial sector” and “increase per capita income of citizens so that it reaches at the level of those in middle-income countries.” It boasts of “pillar strategies” to “sustain faster and equitable economic growth”, “maintain agriculture as a major source of economic growth,” “create favorable conditions for the industry to play key role in the economy,” “expand infrastructure and social development,” “build capacity and deepen good governance” and “promote women and youth empowerment and equitable benefit.”

In my regular weekly commentary on May 5, I observed:

The ‘economic plan’ (“GTP”) itself floats on a sea of catchphrases, clichés, slogans, buzzwords, platitudes, truisms and bombast. Zenawi says his plan will produce “food sufficiency in five years.” But he cautions it is a “high-case scenario which is clearly very, very ambitious.” He says the ‘base-case’ scenario of ‘11 percent average economic growth over the next five years is doable” and the ‘high-case’ scenario of 14.9 percent is ‘not unimaginable’. The hype of super economic growth rate is manifestly detached from reality. The Oxford Poverty and Human Development Initiative Multidimensional Poverty Index 2010 (formerly annual U.N.D.P. Human Poverty Index) ranks Ethiopia as second poorest (ahead of famine-ravaged Mali) country on the planet. Six million Ethiopians needed emergency food aid last year and many millions will need food aid this year. An annual growth rate of 15 percent for the second poorest country on the planet for the next five years goes beyond the realm of imagination to pure fantasy. The IMF predicts a growth rate of 7 percent for 2011, but talking about economic statistics on Ethiopia is like talking about the art of voodoo.

It seems the International Monetary Fund (IMF) has come to the same conclusion. In a May 31, 2011 statement, the IMF artfully asserted:

Strong growth has continued in 2010/11 that the mission estimates at 7.5 percent (compared to an official estimate of 11.4 percent)….  The mission sees lower growth for 2011/12, at about 6 percent, on account of high inflation, restrictions on private bank lending, and a more difficult business environment… The growth and investment objectives of the new five-year Growth and Transformation Plan (GTP) are ambitious. The mission urged the authorities to the pace implementation of the plan to avoid any further overheating of the economy. Success will also hinge on allowing room for the private sector to thrive and maintaining a low risk of debt distress…

On June 8, Ken Ohashi, the World Bank’s (WB) country director for Ethiopiacandidly stated:

Ethiopia’s dependence on foreign capital to finance budget deficits and a five-year investment plan is unsustainable… I can’t see it’s sustainable short of discovering huge oil reserves, essentially an unexpected windfall… I don’t see how they can sustain such an aggressive investment plan without getting into serious problems… If you’re not as a nation saving enough, you are dependent on foreign capital or other means of financing investment in an unhealthy, unsustainable way… That’s the sort of trap they seem to be falling into… On debt there is a danger… If this public investment-led growth at some point really stumbles or stagnates for a while then all these debt equations could unravel. …  I do worry that without the private sector expanding much more vigorously then rapid growth is not likely to be sustainable and if that’s the case then all these debt balances could go out of control.

On June 6, Zenawi’s finance chief said the WB and IMF are all wrong. He insisted the GTP will “double economic growth by registering 14.9 percent growth on average”. He proclaimed that in the next five years there will be “fast and sustainable economic growth,” and “food security at household and national level.” There will be “more than 2000 km of railway networks would be constructed” and power generation will be in the range of “ 8,000 to 10,000 MW from water and wind resources during the next five years.”

On June 9, Zenawi’s deputy, Hailemariam Desalegn, offered assurances that “economic expansion won’t drop below 9 percent in the fiscal year to July 7, 2012, from 11.4 percent this year.” He boasted that “the whole community has mobilized to buy bonds. This huge savings and mobilization is used for infrastructure development… We are getting loans from China, India, Turkey and South Korea, so all these foreign savings are also mobilized… So I think we can perform on the ambitious plans that are in place.”

Cutting Through the Diplomatic Bull

For the last several months, Zenawi has been staging one farcical political theatre after another to distract attention from his brutal repression and to pretend that he is the one immovable object in the Sub-Saharan universe come the gusting southerly winds of change from Tunisia, Egypt and Libya or high water. He has been engaged in belligerent talk of regime change in Eritrea, inflammatory water war-talk with Egypt, wild allegations of terrorist attacks, proclamations for the construction of an imaginary dam over the Blue Nile, vicious attacks on international human rights organizations and wholesale jailing and intimidation of opponents.

Now Zenawi is shifting from political to economic theatre. As the country convulses in spiraling inflation Zenawi says, “It’s all good. Not a problem.” But the verdict of the big time bankers is in: Zenawi’s GTP is pure fantasy, a figment of his imagination. Of course, bankers like diplomats avoid straight talk and prefer to tip-toe and tap-dance around the truth. When they can say the GTP has as much chance of success as a snowball in hell, they would say the plan is “ambitious,” “unhealthy” and “unsustainable.” Instead of saying the plan is manifestly doomed to failure, they hedge on absurd contingencies that the plan will work only if “huge oil reserves are discovered” or the country gets an “unexpected windfall”. When they can say the Ethiopian economy has collapsed, they hem and haw about their concerns that the plan could “further overheat the economy”. They twiddle their thumbs and “worry about the private sector not thriving,” and express concern over Ethiopia’s “dependence on foreign capital”, the “unraveling of debt  equations” and “debt balances getting out of control.”

Fakeonomics 101

As I have demonstrated in a previous commentary, Zenawi’s economic planning is based on juggled figures, massaged statistics and irrational exuberance about overrated and illusory economic development. Systematic falsification of economic data, fraudulent statistics and creative accounting in economic reports have largely gone unchallenged for years by the learned economists. The lack of systematic and sustained critique by Diaspora economists is all the more surprising and baffling given the fact that the economic swagger and wind-bagging about stratospheric economic growth and development comes from a regime not known for its economic “literacy”. The Economist Magazine in its November 7, 2006 editorial, in the context of the Starbucks coffee row, bluntly stated: “The Ethiopian government, one of the most economically illiterate in the modern world, would do well to take Starbucks’s advice.”  The same observation was repeated in 2009 at a high level meeting of Western donor policy makers in Berlin where, according to a Wikileaks cablegram, a German diplomat suggested that Ethiopia’s economic woes could be traced to “Meles’ poor understanding of economics”. Today, to the surprise of many observers, the IMF and WB who have previously swallowed whole the regime’s preposterous economic claims are openly echoing the views of the German diplomat and the  Economist Magazine.

Deceit, chicanery, paralogy and sophistry are the hallmarks of Zenawi’s regime. For many years, that regime has managed to scam the multilateral bankers and donors by talking about “sustainability,” “double-digit growth”, “renaissance” and “accelerated development in the developmental state”. It has even sought to shame and intimidate Western banker and donors by moral hectoring of the  evils of “neoliberalism”. Zenawi seems to follow the old principle that “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” In the Information Age, if you tell one big lie and embellish it with little lies every day, you will end up fooling yourself and no one else. (That obviously does not apply to Ethiopia which is hopelessly stranded and trapped in the Censorship and Disinformation Age).

The economic facts about Ethiopia are plain for all to see: The economy is in the stranglehold of organized racketeers and regime cronies. Regime-affiliated businesses and enterprises control “freight transport, construction, pharmaceutical, and cement firms receive lucrative foreign aid contracts and highly favorable terms on loans from government banks.” According to the regime’s data, by the end of the 2009 fiscal year, Ethiopia’s  outstanding debt stock was pegged at a crushing USD$5.2 billion. Remittances by Diaspora Ethiopians were the mainstay of the economy, and in 2008 Ethiopians in the U.S. alone sent  $1.2 billion.   “Ethiopia is Africa’s largest recipient of foreign aid (at $3.3 billion in 2008 and rising).” The regime has auctioned off  millions of hectares of the country’s best land for less than pennies. “For £150 a week (USD$245), you can lease more than 2,500 sq km (1,000 sq miles) of virgin, fertile land – an area the size of Dorset, England – for 50 years, plus generous tax breaks.”

According to the regime’s data, Ethiopia’s year-on-year rate of inflation jumped to 34.7 percent in May (2011) from 29.5 percent a month earlier; and food prices rose 40.7 percent during the year. Every year, Zenawi’s regime runs up the SOS flag begging for emergency humanitarian aid . So far in 2011, humanitarian pledges, commitments and contributions to the regime exceed USD$212 million. To get a government job or higher education, one has to be a member of Zenawi’s party. Ethiopia’s current population of some 80 million is expected to double in the next thirty years. It is mind-numbing to imagine the number of people who will be living in abject poverty without access to health care, education and employment in Ethiopia in three decades.  The regime has failed to implement any policy aimed at controlling population growth.

One has to assume that those in the inner circle of the regime are aware of the massive economic crises in the country despite their manifest lack of “economic literacy.” But that assumption may be questionable given the fact that the regime appears to be in denial and has used its modest economic ingenuity to pin the blame for Ethiopia’s galloping inflation and the rest of that country’s economic problems on global market forces.   Zenawi now offers the GTP  as a “pie in the sky” plan that will not only provide food security but also catapult Ethiopia into becoming a middle income country like Malaysia in five years. The fact of the matter is that the regime’s self-centered short-term interests in accumulating wealth for its members and determination to cling to power forever have trumped the long-term strategic interests of the country.

Zenawi now is not only having difficulty persuading its bankers that it has the right economic policy, but the bankers are looking at his plan with increasing derision and cynicism. Ohashi says the GTP will work if Ethiopia “discovers huge oil reserves” or gets “an unexpected windfall.” Ohashi might as well have said the plan will work if manna falls from the sky.

Zenawi’s fakeonomics is nothing new. The old communist regimes in Eastern Europe used to pull the same types of political and economic stunts. They would hold “elections” and declare they won it by 99 percent (to their credit not by 99.6 percent). They also had their “five-year economic plans” in which they predicted and “achieved” incredible economic growth. For instance, they would set a production target of ten thousand tractors a year and actually produce five thousand. They would publicly report they produced fifteen thousand tractors and give the factory bosses increased wages and bonuses for exceeding the production target. The communist regimes would even say they did not have inflation just high prices and deny high quality food items and other amenities to the masses while the nomenclatura (party bosses) and their cronies wallowed in luxury. The reality in Ethiopia is that basic necessities are unavailable and unaffordable to the vast majority of the people, and even those who could afford the inflated prices must have the right connection to get an adequate supply. A regime incapable of providing sugar, cooking oil and other basic staples to the people now boasts of making Ethiopia a middle income country in five years.

Are Ethiopians better off economically today than they were five years ago? The answer to that question will be the answer to what they will be five years from now!

In the final analysis, it is not about the plan. It’s about the man. As George Ayittey said, “Africa is poor because she is not free.” I say Africa is poor because of dictators who cling to power like ticks on a milk cow.

Previous commentaries by the author are available at: www.huffingtonpost.com/alemayehu-g-mariam/ and http://open.salon.com/blog/almariam/

 

Tags: , , , , , , , , , , , , , , , , , , ,
Posted in Ethiopia | 20 Comments »

Ethiopia: The Voodoo Economics of Meles Zenawi

Monday, April 19th, 2010

“There are lies, lies and implausible lies,” to quote Meles Zenawi, the dictator-cum-economic spinmeister of Ethiopia. Last week, Zenawi told a snickering Parliament a story that is the equivalent of the proverbial bull that gave birth to a calf (or in Amharic “bere welede”): “We will be seeing an economic growth rate of 10.1 percent this year, while inflation will fall to 3.9 percent. This is the result of sound economic policy.” (Sorry, but this is the result of voodoo economics!)

For the past several years, Zenawi has been making hyperbolic claims of economic growth in Ethiopia based on fabricated and massaged GDP (gross domestic product) numbers, implying that the country is in a state of runaway economic development and the people’s standard of living is fast outstripping those living in the middle income countries. In March 2009, for instance, Zenawi’s bragged that he expected the Ethiopian economy to grow by 12.8 percent. The International Monetary Fund (IMF) disagreed in the same month stating that given the global economic crises Ethiopia could expect only about 6% economic growth. Zenawi dismissively countered those who pointed out the discrepancies: “We have differences with the international financial institutions when we predict our economic growth, but we usually agree on the economic growth statistics at the end of each year.” The questions remain: Did the Ethiopian economy grow by 12.8 percent in 2009/10? Could it be expected to grow by 10.1 per cent in 2010/11? Who is keeping track of the economic statistics?

The Central Statistics Agency (CSA) and the “National Accounts Department of the Ministry Finance and Economic Development” are the two institutions in Ethiopia that are responsible for keeping track of the statistical data and providing analysis on economic performance. But neither organization has the institutional capability to collect reliable and accurate economic data, let alone assemble complete and comprehensive data sets which could serve as empirical bases for economic prognostications. This fact was emphatically stated on March 24, 2010 in the official statement of Paul Mathieu, the IMF team leader who, after conducting an evaluation of the current half fiscal year economic performance of Ethiopia, said: “Statistics collection of the country requires transformations, and we advised the government to do that.” Translated from “diplomatese” into ordinary language, Mathieu’s statement makes it plain that the statistics and data generated and used by the regime to describe Ethiopia’s economic performance and make predictions are basically “cooked up.” The simple fact of the matter is that the statistics buttressing Zenawi’s exaggerated claims and projections of stratospheric economic growth, vanishing inflation and red-hot performance of key economic sectors originate from seriously flawed, massaged and deficient economic data cooked up in the kitchens of the two institutions for whom the IMF recently prescribed “transformations”.

Zenawi’s stated claims of multi-year runaway GDP growth taken at face value defy not only economic realities but also common sense. On March 4, 2009, the IMF reported that Ethiopia’s economic growth could slow to 6 percent in 2009 based on objective factors rooted in the global economic slowdown and specific trends in the critical foreign exchange earning sectors in Ethiopia such as coffee exports (with decreased demand and a 19 per cent decline in price), tourism and transportation, and depreciation of effective foreign exchange rates by 30 percent. The IMF also indicated that Ethiopia has the highest inflation rate (26%) in Africa outside Zimbabwe. In its April 2010 “Background Note: Ethiopia”, the U.S. State Department reported an average inflation rate (FY 2008-2009) of 36%. There is no IMF (or any other credible multilateral institution) year-end or any other report which indicates that Ethiopia could expect a 12.8 or 10.1 percent economic growth or a decline in inflation to 3.9 percent in 2009/10 or any other subsequent year. Indeed, IMF’s Mathieu stated on March 24, 2010 that “non-food inflation remains close to 20 percent, and has been rising in recent months.” The claim that “we usually agree on the economic growth statistics at the end of each year” is simply not true.

However, for a number of years Zenawi’s regime has been pulling a public relations sleight-of-hand by using the IMF as a front to channel its own preferred economic statistics to prove its economic prowess and unrivalled success to the world. For instance, IMF Country Report (Ethiopia) No. 08/264 (July 2008)[1], states: “Growth has averaged 11 percent since 2003/04, far exceeding the minimum target of 7 percent in the Program for Accelerated and Sustainable Development (PASDEP), that is estimated to be consistent with keeping the Millennium Development Goals (MDGs) within reach.” On pp. 20-24 of this Report, the origin of the data indicating an 11 percent growth is not some independent data collection and analysis source but the very same Central Statistics Office which last month the IMF said needs massive “transformation”. The footnotes in the above-referenced pages state: “Sources: Ethiopian authorities; and IMF staff estimates and projections.” Similarly, the data source for “Financial Soundness Indicators for Banking” is identified as the “National Bank of Ethiopia; and IMF calculations.” In its official reports, the IMF simply accepts and incorporates at face value the data for GDP growth given to it by the Central Statistics Office (with its own staff estimates) and incorporates those figures in its own report without so much as qualifying it for completeness, accuracy or reliability.

In the above-referenced report, the IMF further presents GDP growth data given to it by Zenawi’s regime for 2005/06 at 11.6 percent and 11.4 percent for 2006/07. The IMF uses its own “estimates” (without fully disclosing its methodology given the fact that IMF staffers are allowed considerable latitude in incorporating country-specific circumstances in making estimates) to make additional GDP growth projections for 2007/08 at 8.4 percent, followed by 6.0 percent for 2008/09; 6.5 percent for 2009/10; 7.5 percent for 2010/11; 7.5 percent for 2011/12 and 7.5 for 2012/13. The discrepancy between the IMF’s and the regime’s estimates appears to reflect the IMF’s clear lack of confidence in the regime’s economic data and analysis.

The bottom line on the regime’s statistical claims of economic growth, financial soundness and the rest of it is that the figures are cooked up in the Central Statistics Office and fed to the IMF, which slavishly (with a wink, nod and a smile) parrots back to the world the same figures with some of its own “staff estimates and projections”. This is the extent of the economic statistical game that continues to be played before our eyes.[2]

On the other hand, with respect to inflation, the World Bank (Policy Research Working Paper 4969, June 2009), citing IMF data concluded, “One of the most affected countries is Ethiopia, which, with the exception of Zimbabwe and small island economies, has had the strongest acceleration in food price inflation during recent years. Average food prices rose by more than 34 percent in 2007/08, but annual inflation reached historical record growth of 91.7 percent in July 2008.” On March 17, 2010, the regime’s Central Statistics Office reported, “Except for cereals, all food components have shown a rise. The prices of fuel, construction materials, clothing and footwear, furniture and personal care (products) are on the rise.” What empirical evidence exists in the first half of 2010 to justify a prediction of a steep decline in inflation to 3.9 percent in 2010/11 or beyond?

All of the statistical fairy tales about the economy told in Parliament were a source of puzzlement and amusement for Mr. Bulcha Demekssa, the leader of the Oromo Federalist Democratic Party (OFDM) and former vice-minister of finance and senior official at various international institutions. Mr. Bulcha asked Zenawi in Parliament how such fantastic GDP figures could be achieved: “The prime minister and the government have repeatedly said Ethiopia has grown by 10 and 11 percent. The prime minister and Ethiopian economists know that it is a miracle for Ethiopia to grow by 11 percent. How is it that Ethiopia grew by 11 percent? We know that China, South-Korea are registering such economic growth. But we are confused how Ethiopia ’s economic is growing like these countries. Our unemployment and poverty is on the rise.” Zenawi’s response was characteristically evasive, and he denied any real discrepancies: “We have differences with the international financial institutions when we predict our economic growth, but we usually agree on the economic growth statistics at the end of each year.”

The answer to Mr. Bulcha’s question, of course, is obvious. Magic! All one needs to achieve an 11 percent growth is to invoke the GDP Spirits and recite to them the right incantations about “sustainable development”, “export-led growth” and “improved export revenue sector”. Then sprinkle a palmful of that fine IMF gold dust and command: “Shazam! Let there be economic growth of 10.1 percent! (or 12.8, does not matter any number will do). Abracadabra! Inflation, I command you to go down to 3.9 percent (or 1.1).” But the real “miracle” occurs when the magic wand is waived to deliver economic growth to a precise tenth of a percentage point such as 10.1 percent instead of merely 10.

All of the economic swagger and wind-bagging about unrivalled economic boom, prosperity and progress comes from a regime not known for its economic “literacy”. In an editorial published in the Economist magazine on November 7, 2006 in the context of the Starbucks coffee row, the magazine was graphic in its description of the regime: “The Ethiopian government, one of the most economically illiterate in the modern world, would do well to take Starbucks’s advice.”

But there is a more fundamental question to be answered: Could a nation’s economic health be reduced to a single statistical summation? Does GDP growth necessarily mean improved in standard of living? Zenawi says GDP is the only measure of economic performance that has universal acceptance, and he will continue to use it until a better measure comes up. As anyone with an elementary understanding of economics knows, GDP has little value in meaningfully understanding a country’s economic growth, development and prosperity. Its analytical and descriptive value has been thoroughly critiqued in the economic literature. Suffice it to say that to claim that an economy grew by an 10.1 percent is like saying “activity” on city streets increased by 10.1 per cent. The street “activity” without specificity as to crime, car accidents, pedestrian traffic or other events by itself is meaningless. Yet for the past few years, the regime has been trumpeting GDP numbers as some sort of fetish that definitively explains Ethiopia’s economic growth. The GDP numbers, for instance, tell us nothing about the enormous disparity in incomes between the rich and poor in Ethiopia. By overstating economic welfare, GDP calculations do not tell us the magnitude of environmental damage that is taking place. GDP is certainly not a measure of the sustainability of growth, a point repeatedly made in numerous IMF reports on Ethiopia.

Even if actual GDP growth in Ethiopia is 11 percent or more, it is a meaningless statistic when considered in light of the basic needs and well-being of the people. In the vital area of health, for instance, Ethiopia is in a state of absolute wretchedness. According to World Health Organization (WHO) (2006) data[3], to serve a population of 77 million people, there were 1,936 physicians (1doctor for 39,772 persons); 93 dentists (1: 828,000); 15,544 nurses and midwives (1: 4,985), 1,343 pharmacists (1: 57,334) and 18,652 community health workers (1: 4,128). Total expenditure on health as a percentage of gross domestic product was 5.9 per cent. General government expenditure on health as a percentage of total expenditure on health was 58.4 per cent, and private expenditures covered the balance of 41.6 percent. Hospital beds per 10,000 population was less than 25. Per capita expenditure on health was USD$3 at an average exchange rate. WHO’s minimum standard is 20 physicians per 100,000 population, and 100 nurses per 100,000 population. Such is the real matrix of Ethiopia’s 12.8 or 10.1 or whatever fictional GDP number that is pulled from thin air.

On November 3, 2007, the Economist magazine reported:

The fact is that for all the aid money and Chinese loans coming in, Ethiopia’s economy is neither growing fast enough nor producing enough jobs. The number of jobs created by flowers is insignificant beside an increase in population of about 2m a year, one of the fastest rates in Africa…. The government claims that the economy has been growing at an impressive 10% a year since 2003-04, but the real figure is probably more like 5-6%, which is little more than the average for sub-Saharan Africa. And even that modestly improved rate, with a small building boom in Addis Ababa, for instance, has led to the overheating of the economy, with inflation moving up to 19% earlier this year before the government took remedial action. The reasons for this economic crawl are not hard to find. Beyond the government-directed state, funded substantially by foreign aid, there is—almost uniquely in Africa—virtually no private-sector business at all.

The IMF estimates that in 2005-06 the share of private investment in the country was just 11%, nearly unchanged since Mr Zenawi took over in the early 1990s. That is partly a reflection of the fact that, despite some privatisation since the centralised Marxist days of the Derg, large areas of the economy remain government monopolies, closed off to private business. This is where Ethiopia misses out badly. Take telecoms. While the rest of Africa has been virtually transformed in just a few years by a revolution in mobile telephony, Ethiopia stumbles along with its inept and useless government-run services…. There is no official unemployment rate, but youth unemployment, some experts reckon, may be as high as 70%. All those graduates coming out of state-run universities will find it very hard to get jobs. The mood of the young is often restless and despairing; many dream of moving abroad…. Just as the government is slowing the pace of economic expansion for fear that individuals may accumulate wealth and independence, so it is failing to move fast enough from a one-party state to a modern, pluralist democracy. Again, the reason may be that it is afraid to.

The Heritage Foundation, the pre-eminent conservative American think tank echoes the Economist in its 2010 Index of Economic Freedom[4] concluded:

Ethiopia underperforms in many of the 10 economic freedoms. The business and investment regime is burdensome and opaque. The overall quality and efficiency of government services have been poor and are further undermined by weak rule of law and pervasive corruption. Monetary stability is hampered by state distortions in prices and interest rates, and trade freedom is hurt by high tariff and non-tariff barriers…. All imports must be channeled through Ethiopian nationals registered as official import or distribution agents with the Ministry of Trade and Industry. Foreign participation is prohibited in domestic banking, insurance and microcredit services, and several other activities…. Ethiopia ranks 126th out of 179 countries in Transparency International’s Corruption Perceptions Index for 2008. Despite legal restrictions, officials have been accused of manipulating the privatization process, and state-owned and party-owned businesses receive preferential access to land leases and credit.

Zenawi is desperate to show economic development of epic proportions in Ethiopia after nearly 2 decades of clinging to power. The fact remains that despite the incredible claims of economic growth, tens of millions of people are starving and go without any health care. Millions of young people remain unemployed and trapped in hopelessness. There is no rule of law and human rights violations are widespread. Whether or not Zenawi’s regime has accomplished an economic feat with few rivals in modern history is not a matter of wishful thinking or public relations. It is a matter of evidence: accurate, complete, reliable and comprehensive statistical evidence that is systematically and carefully collected, analyzed and verified. Such evidence can not be invented, fabricated, manufactured, contrived, concocted or cut from whole cloth. Benjamin Disraeli, the 19th Century British prime minister said, “There are three kinds of lies: lies, damned lies, and statistics.” In Ethiopia today, we are witnessing all three!

[1] http://www.imf.org/external/pubs/ft/scr/2008/cr08264.pdf
[2] To see a consistent pattern of “economic gamesmanship”, see also IMF Country Report (Ethiopia) No. 07/247 (July, 2007); IMF Country Report (Ethiopia) No. 06/159 (May, 2006); IMF Country Report(Ethiopia) No. 05/25 (January, 2005) and other reports prior to these dates.
[3] http://www.afro.who.int/home/countries/fact_sheets/ethiopia.pdf
[4] http://www.heritage.org/Index/Country/ethiopia

Alemayehu G. Mariam, is a professor of political science at California State University, San Bernardino, and an attorney based in Los Angeles. He writes a regular blog on The Huffington Post, and his commentaries appear regularly on pambazuka.org, allafrica.com, newamericamedia.org and other sites.

Tags: , , , , , , , , , , , , , , , ,
Posted in Ethiopia, Featured | 3 Comments »