ETHIOPIA: helpless victim of twin evils—double-digit inflation and illicit financial outflows By Keffyalew Gebremedhin

December 15th, 2011 Print Print Email Email

This article deals with two issues. The first part discusses the new data on inflation that was released Tuesday morning and therein too the failure of government to get a handle on the problems and the adverse consequences thereon to the lives of ordinary citizens and the country’s economic future. It also offers suggestions to help address structural problems of the economy and also of the need to free it from all sorts of shackles, as possible ways out of the current morass.

The second part raises serious concerns about the revelations in June by a new study sponsored by the UNDP on illicit financial flows, which includes Ethiopia. To anyone wondering about what this has to do with inflation, my primary defense is the problem of perception of citizens that increasingly is perturbed and discouraged by allegations of corruption and official culpability and the consequences of that on overall economic performance.

This concern is further aggravated by the additional testimony on illicit financial outflows from Ethiopia that was published on December 5 in the advance summary provided in a forthcoming broader global report of the Task Force on Financial Integrity & Economic Development, financed by the governments of Norway and Spain.

A. November 2011 inflation

Ethiopia’s overall inflation for November 2011 stood at 39.2 percent, compared to 39.8 percent last October. While year on year basis the increase is 31.5 percent, the monthly figure reflects a decrease of a mere 0.3 percent, according to the Central Statistics Agency (CSA), which released the data with a delay of two days.

Similarly, the report indicates that food inflation slows down by 1.1 percent to 50.3 percent, although year on year basis it reflects 36.0 percent increase, i.e., since November 2010. However, CSA is reporting declines in the prices of maize, sorghum, pulses, spices and vegetables and fruits, which only translates into this 1.1 percent reduction. On the other hand, non-food inflation jumps to 24.0 percent, compared with 23.4 percent in October, which reflects a monthly increase of 0.9 percent.

The pace of increases in overall prices is reported to be similar to that of October, which means that it reflects across the board rises in most of the items in the price indices. For instance, the total price index of cereals increases from 63.1 percent in October 2011 to 64.8 percent in November; bread and other prepared foods rise to 31.8 percent from 26.1 percent, meat to 40.9 percent from 38.6 percent, other food items to 9.8 percent from 3.7 percent, and potatoes and other tubers to 53.5 percent from 49.8 percent.

On the other hand, the indices for vegetables and fruits decline by 5.4 percent. Also declines are observed in the prices of foods taken away from home to 31.6 percent from 32.8 percent, coffee and tea leaves to 67.5 percent from 76.8 percent, and spices to 71.6 percent from 85.7 percent.

Bear in mind that in August 2011, Ethiopia imported 300,000 tons of wheat at a cost of $94 million to counter the problem of escalating food prices. This is in addition to the 150,000 tons imported in May 2011. Access Capital reported that commercial import of foods constituted 6.0 percent of the country’s imports in 2010, which makes the 2011 much higher. In April 2011, Addis Fortune reported that Ethiopia also imported 12,500 tons of palm oil at a cost of $17 million.

Nevertheless, the season’s most troubling part of the inflation story in Ethiopia on one hand exposes the TPLF/EPRDF’s love of secrecy, i.e., its strong revulsion to practices of international competitive bidding, as has been witnessed on several occasions. It would be recalled that this behavior was one major problem responsible for jeopardizing foreign loan prospects for the construction of Gibe III power generating capacities. On the other hand, this proclivity to secrecy also ended up with the regime’s ranking of 118th out of 142 countries in transparency of government policymaking in the Global Competitiveness Report 2011-2012.

Against the backdrop of publication by the Task Force on Financial Integrity & Economic Development, most crushing is also the fact that Ethiopia, one of the poorest countries on the planet, lost $11.7 billion to illicit financial flows between 2000-2009! This is over 43.0 percent of the total aid of $27.4 billion Ethiopia received during 2000-2009, as reported by the World Bank in the context of its Global Monitoring Report 2011: Improving the Odds of Achieving the MDG (2011). This has put in the minds of people the question why the Meles regime often chooses to go against competitive bidding in international contracts. I would return to that in a moment.

Regarding inflation, in mid-November the National Bank of Ethiopia (NBE) told parliament that it had been tackling the problem by reducing its foreign currency holdings, exercising stringent control over the supply of money, limiting imported inflation, loans and encouraging savings. Important tools as those measures are in the fight against inflation, nonetheless, in Ethiopia’s case they have not been quick enough for ordinary citizens who have been battered by either unaffordable prices or unavailability of goods and services for a long, long time now.

The Meles regime may now be hoping that its recent decision to raise the amount of capitalization of private bank’s to ETB 500,000 ($29,000) would bite substantial money out of circulation, thereby reducing the effect of excess money supply as cause for inflation. Unfortunately, if the regime does place its hopes on this alone it would only delude itself. This is because all halfway solutions applied to date, including curtailing money supply, have in fact worsened the condition of the patient, instead of ameliorating it.

This is one evidence that the reasons for near permanence of double-digit inflation in Ethiopia could be multiple factors, chief of which is the economy’s structure, about which many experts have also made good observations in this past year. What that means, among other things, is failure to facilitate conditions for manufacturing, as a step toward transformation of the economy. Successful manufacturing could lay solid foundation for industrial development. In Ethiopia, industrial development has in fact vegetated for decades, bracketed in the current decade between 11-14 percent growth rates.

(i) What & whose economy?

The latest joint UNIDO /UNCTAD report (Economic Development in Africa Report 2011: Fostering Industrial Development in Africa in the New Global Environment , which came out in the summer clearly indicates that manufacturing value added (MVA) per capita in Ethiopia in 1990 was just 8.0. In 2010, this figure moved to 9.0 and Ethiopia’s MVA compound annual growth rate from 1990-2010 was stuck as pathetic 0.3. It is reported that there are over 30 large and mid-size firms in the country (2010 data), their equivalence in value being half of Ethiopia’s total exports. Most of these firms, according to CSA’s 2010 report on manufacturing, are in the production of foods and beverages, tobacco, apparels, leather, wood works, paper and paper products, non-fertilizer chemicals, basic iron and steel chemicals, etc.

In 2008-2009, gross investments in these firms, both private and state, amounted to a paltry ETB 149 million, of which the share of the state is only 6.0 percent, according to CSA. The total number of persons employed by these firms was 148,817, of which 105,367 were in privately owned firms. This is neither given acknowledgement, nor guidance provided to the private sector using various incentives available to the state, instead of threats and shutting them out.

Not surprisingly, even looking to the future with the lens of the five-year growth and transformation plan (GTP), it is planned to establish ten sugar factories, two (?) fertilizer factories, and expanded metal works and engineering outfit, etc. The problem is that in a state that values political loyalty more than qualifications and performance, as confirmed by none other than the chief executive and leader of the party in power, all these futuristic plans happen to be state enterprises, to be funded by the state to end up with deficits for lack of able management, possibilities for profitability, innovation and expansion. The employees in these outfits, would rain or shine get paid their monthly paychecks.

(ii) Mortal hostility to the private sector

In GTP, as usual, the role of the private sector has been mentioned again and again. For this, one only needs to turn a few pages into the GTP Policy Document. Overall, it states “During the planning process, strong commitments, and participation of the private sector, development of development partners, civil society organizations and the public at large are demonstrated at all levels.”

Nowhere in this document or in the GTP Policy Matrix is there any indication how the private sector can hand-in-hand with government play its role to get the country out of the depth of its misfortunes. I cannot blame the private sector if it has lost confidence in the country’s political leadership, whose state of mind changes like the weather that is pummeled by climate change. Having closely observed in this past two decades nice words about the private sector, the outcome has been determined goal of weakening it. Another two decades previous to this, at least, the military regime made no secret of its ideological conviction in nationalizing private properties and denied any roles to private capital, until it found its role was distributing poverty.

In countries like Ethiopia, there is ample role for government. In the early phases, it is a must that growth and development be steered under the guidance of the state, for mobilizing resources and trained manpower, joining hands with the private sector. This is no advocacy for developing countries to entertain the dream of nanny states. In the first place they can not afford to feed from cradle to grave. Worse, when they fail in such a costly adventure they begin to exercise heavy-handed politics, depriving citizens their rights and freedoms and businesses possibilities to do what they can do best–create businesses, employment, research and innovations, growth and development. This would be lost when the state becomes the main actor in businesses.

If we leave the political behavior of the state aside for a moment, the major problem in manufacturing, according to the UNIDO/UNCTAD report, is the size and distribution of the existing firms, which, like in other African countries, is skewed towards micro and small firms. These are characterized by low size mobility, like a body pushed into a child’s shirt, constrained from growing and becoming large firms. That is a major problem our country is facing, of which the present uncontrollable inflation is an expression of the long pent-up demand.

It has now confronted Ethiopia in bad ways—as obstacles to its future development. With the story of economic growth overplayed in recent years, in the end what the country would reap is only to keep running fast to remain in the same place in this competitive environment. The high doses of political theatrics and nationalism that is being invoked from time to time may have worked for a while, but the laws of diminishing returns also apply to it, rendering it incapable of quieting the strong undercurrent of pessimism, distrust and rejection that have set on the nation for a while now.

In the circumstances, I do not blame members of the business community in Ethiopia for being nervous, as if the end of the world is arriving soon. They are distrustful of the regime; they do not want to commit to put their capital in more productive sectors of the economy. Many speak of the Ethiopian political and economic environment being frightening, where even the law is designed to seek favorites. How could the economy’s structures change in such a situation and our country advance?

The issue here that needs addressing is the country’s growth and development. It takes more than a few good seasons of high volume exports or seasons of good harvests. First and foremost, it means demonstrating capability to find solutions to the problems of the huge unemployment in the country; it means ensuring income generation for millions whose numbers is fast growing; God knows the number of the unemployed, the underemployed or unpaid or underpaid, lacking injera on the table and deprived of human pride that labor offers. How could poverty be reduced, without such concrete and tangible measures?

If the regime does not have eyes to human sufferings, it should, at least, look into the economy’s performance closely. INo dismissal of officials would do the job, as if that were the miracle gear of a super racecar the shifting of which would boost the engine. What Ethiopia needs now is for the regime to be done with tired political excuses and ego massaging that are being used as cover-ups not to face the real challenges.

The fact remains that Ethiopia’s economy has become terribly sick; it can no longer endure this endless lashing and bleeding by double-digit inflation. Unfortunately, those obsessed by politics and power have not shown the requisite capability to see and solve the problems of double-digit inflation, which since 2005, except for brief periods, have been more the norm than the aberration.

The fact remains, however, even the operations of government owned businesses and endowment funds—of which EFFORT is the giant—although much privileged have found it is no easy go. By a recent admission of EFFORT that came out in August, it could not believe it that it hass found it increasingly difficult to become profitable, to which I would revert in a moment. Unfortunately, most state owned enterprises operate in deficits. Lately, all of them attribute the problem to the slackening in the global economy, although the prime minister argued the 2008 financial crisis and its fallout had no impact on Ethiopia.

Clearly, the growing sense of despair within the domestic business community with no links with the politicians, the situation is undoubtedly testing patience, or some contemplating flights of both individuals and their resources. Some are already exploring South Sudan, if it were not for the conflict situation.

The sign of desperation became manifest when the private sector, as Addis Fortune put it, began to feel aggrieved “not knowing where to go to be heard or even if there exists an authority for appeal.” The end result of this is that last month many pleaded with British diplomats at sort of a problem hearing session, according to the paper to help them find solution. Put bluntly, it badly reflected on the political leaders in the country, whose presence has lost meaning. Under normal conditions such a role by a diplomatic mission would have been seen standing counter to the sense of a self-respecting country’s independence and a nation’s sovereignty.

All said and done as regards inflation, it seems the inevitable conclusion that the government has either chosen to raise its hands up without meaning to do so, or is still bent on continuing to make things worse, further burdening the country with more foreign debts, as if that would solve the problems at hand. To make it tastier, they would as usual blame the so-called rent seekers, who they say are responsible for the problems in the first place.

Of this, Addis Fortune, in its popular column, The Fine Line, last April wrote, “The Revolutionary Democrats are unable to come to terms with the impact of their macroeconomic policies on fuelling the economy, thus facing the inevitable curse of inflation. Instead, they find it convenient to put the blame on a couple of powerful businessmen for causing all the malaise in the market, gossip noticed.”

What is knowledge or intelligence, if at all solutions that we see them applying are the same tired things all over again, as does NBE or the ministry of finance, after the declaration by the prime minister in parliament how everyone in his government saw the light in finding out that the culprits were foreign currencies in the NBE vault?

It is time to look into those areas the government has so far most dreaded—those are the measures that loosen up the economy. For instance, the five major problems Ethiopian businesses as respondents to surveys by the World Economic Forum for its 2011-2001 Global Competitiveness Report identified in order of severity: access to financing, foreign currency regulations, inflation, inefficient government bureaucracy, tax regulations and corruption.

Others add the land policy, which the government constantly asserts would safeguard it as the common property of the people. The problem is that the people resent the fact that, against the constitution’s provision and without any national conversations, farmlands are being commercialized to foreigners in half to a full century shy of a year, which is no different from a permanent handover. This is because there are two laws in Ethiopia: one that is applicable to all and none to those in power, especially where their interests are involved. This has adversely affected national attitude; it has had negative impact on politics and the economy.

In its June 2011 issue, Forbes magazine ranked Ethiopia the 121st Best Country for Business out of 134 states. Not much differently, in its Operational Plan for 2011-2015 UK’s Department for International Development (DFID) acknowledges in its webpage “Ethiopia matters to the UK for a range of development, foreign policy and security priorities … But its approach to political governance presents both substantive challenges to sustainable development and reputational risks to partners.”

B. Illicit financial flows from Ethiopia

Major investors and do not like to associate their businesses with a poor country, where there is the problem of un-ending hunger, corruption and looting. They know that these are the perfect ingredients for political instability, possibly conflicts, and a danger to their wealth, reputation and life-long efforts to build legacies in their names and their families.

Unfortunately for Ethiopia, there is now the story of $11.7 billion siphoned off from the country just in one decade, this past decade. It has angered citizens. Foreign observers write their disgusts and bewilderments, blaming the country’s leaders. Also diaspora undercurrents are being felt to prepare the ground for international action, by drawing the attention of foreign governments, businesses and international civil society organizations to help a poor country recover its undeserved losses. Many share the conviction that this pretty hefty sum could have been used to conquer deep-seated hunger and poverty, for which Ethiopia has been known and many at the beginning of this regime were hoping it would become a thing of the past.

Unfortunately, in a country that has not been able to feed itself right at this moment over 12 million people in Ethiopia are alive because of international food aid. This figure is the sum of the 7.8 million people that are being taken care of under the multi-donor financed Productive Safety Net Project (PSNP) to which must be added the government figure of 4.8 million that have been afflicted this year by what has come to be known as the current Horn of Africa famine.

It is against this background that this question of illicit financial flows has now become a very troubling, nasty and revolting story everywhere. It is even difficult to discuss, but in time the culprits would be exposed. I would begin this piece by asking why the government is involved in importing food and oil, by avoiding the time-tested international principles and practices of competitive bidding?

Last April, in its bewilderment Addis Fortune also raised a number of pertinent questions. I must confess that, when I read that piece first it did not strike me as a revelation of sorts but a speculation, about which Ethiopians are far advanced. It began to both worry and bother me after the UNDP’s June revelations, which were followed by findings of the above-mentioned task force this month on substantial illicit financial outflows from Ethiopia.

Here is what Addis Fortune wrote at the time:

The manner in which the palm oil is purchased from Malaysia can potentially become controversial, gossip claimed. The administration is spending close to 17 million dollars on 12,500tn of palm oil to be distributed by the state owned enterprise in charge of merchandise trading.
This company is to be supplied with the oil by a company based in London, Agrimpex Co Ltd, whose accounts is with the Swiss UBS, gossip revealed. The company is owned by the Phillipas family, with Mr P.G. in charge, according to gossip. This was not the first time for the Phillipas family to be awarded procurement contracts without competitive bidding. Since 2008, wheat imports worth six billion Birr had been supplied to Ethiopia by this company.

Why this company is always awarded such lucrative procurement contracts designed to provide welfare to the Ethiopian poor is a subject of quiet controversy between those on Lorenzo Tazaz Street and their counterparts on King George VI Street, gossip disclosed.

Someone owes the Ethiopian taxpayers an explanation, claimed gossip.

To make matters worse, in August this year Rethinking business and politics in Ethiopia: The role of EFFORT, the Endowment Fund for the Rehabilitation of Tigray was published, under the auspices of the UK Aid and Irish Aid-sponsored Africa Power and Politics Project (APPP), authored by Sarah Vaughan and Mesfin Gebremichael. The main purpose of the publication is to promote endowment funds as effective means of centralizing rents for the development of Ethiopia, which APPP tries to promote it to other Sub-Saharan African (SSA) states.

Nevertheless, unlike their broader conclusions endowments as tools for national development, the authors acknowledge that EFFORT’s objectives, as set out in its articles of association, primarily are: (a) “To use the resources ‘of the people of Tigray’ held by the TPLF, for the economic, social and cultural development of the region; (b) To generate income for the families of the martyrs and other victims of the war in Tigray, as well as other vulnerable citizens including orphans, the elderly, HIV victims, etc.; (c) To act as an instrument to promote the industrialization of Tigray, given that most investors prefer the service sector; (d) To open up new sectors into which private sector businesses could follow, once infrastructure and a precedent have been established; (e) To contribute to the development of human resources in Tigray, especially to the establishment of research and training institutions.’

To show successes and virtues of EFFORT, however, they write:

Our analysis suggests that it is unlikely that the endowment-owned companies in Ethiopia will be short-lived, however little they accord with international funder preference. The role that EFFORT-owned companies play in Ethiopia shows some important differences with similar commercial ventures in other countries. They do not seem to provide direct financial subsidies to the ruling party and political elite as is the case in Rwanda. Nevertheless they provide indirect resources and public goods that feed wider social, political and developmental processes. They have played a role in financing and facilitating investment in areas of weak private involvement, and by small and new business start-ups, including youth co-operatives. A degree of divestment from the SME sector, in combination with outsourcing business to new actors in the last year or two may contribute to the emergence of a small-scale entrepreneurial class. Although benefits in terms of profitability have been relatively slow to accrue to some of the companies, EFFORT now makes important contributions to the slender commercial tax-base of Tigray Region, to job creation, and to manufacturing capacity.
Because of EFFORT, behind it is the regime’s commitment, today in Ethiopia it is easier to get investments for Tigrai region than for any others. More coordinated development activities are also being carried out in that part of the country than anywhere else in the country—manufacturing, industries, minerals exploration, infrastructural development, irrigated agriculture, well-equipped education institutions, domestic and foreign marketing researches for trade and exports.

After all, that is one reason why foreign dignitaries during their visits to Ethiopia are shepherded to Tigrai region to show the Meles regime’s efforts in support of the country’s development, something that has not been translated to the rest of the country in the same manner. All this is because EFFORT in Tigrai is working in all sectors, with utmost support from top down by the government of Meles Zenawi and some of its foreign partners. Foreign governments, companies and international organizations are involved in more than one ways with EFFORT. I have in mind, especially those that have joint venture interests or those organizations for which it acts as projects executing agent on behalf of the federal or regional government. The issue here is not how much the people of Tigrai benefitted, but in a country where there is no tradition of state or company accountability how much those who own and run effort benefit themselves at the expense of the people.

The point is that this strength that has muscled EFFORT has also gone in the direction of making things difficult for its competitors, about which private businesses constantly complain. Even at time when all businesses were denied foreign currency, EFFORT was the only one that could knock at government banks and collect what it needs. Therefore, lack of capital and foreign exchange are not problems known to EFFORT — a fact unintentionally confirmed by the Millennium Cities Initiative (MCI)—Mekelle—No. 10/2009, which hints EFFORT’s use of not only endowment funds but also state resources.

For the authors of the EFFORT report, however, this something that could be overlooked, or find a way of explaining it away. They invoke lack of or little credible or empirical “evidences” 12 times to reject or discredit views critical of EFFORT’s behavior. Of this, anecdotal evidence is employed twice, only to underline existence in the country of control systems, which get improved with new legislations put in place from time to time.

To their credit, however, Sarah Vaughan and Mesfin Gebremichael have tried to show the dangers and problems of endowment funds. Still they find a way to make up for that, for instance, by stating, “Perfect market competition or effective liberal constitutional checks and balances might appear to offer ideal solutions. In their absence, however, the institutionalising of the strong technocratic integrity to bolster systems that have the ability to distinguish and steer a path between productive and unproductive rent utilisation is probably more important.”

(i) Does EFFORT own foreign assets?

Whatever the origin of EFFORT’s assets since 1991, it has created serious resentments in Ethiopia and there is a huge credibility of gap regarding those that are associated with it. The stories out there, Vaughan and Gebremichael reiterate the claim by the leaders of EFFORT that they do not own any assets in foreign countries. Ethiopians had also heard about from Sebhat Nega, former chairperson of EFFORT, during his interview on the VOA on 17 June 2009.

But this APPP publication specifically reveals that EFFORT had sold the London-based Tower Trading Company (called Senay Trading up to 1995) that it incorporated in that city in September 1993 with a share capital of UK£300,000. The publication on one-hand states—as related to the authors—the company “ceased several years ago.” Perhaps they trusted this information to a point because they could not find it in the UK list of companies.

On the other, intriguing as it is, former directors of that company that included two diplomats from the Ethiopian embassy in London, individuals associated with EFFORT had at some point reappeared to revive it. At that time, some of the company’s former directors, described by the UK Companies House as “the trustees of EFFORT”, became its new shareholders.

The company is reported to have grossed profits of “UK£125,000 in 2006, and UK£102,000 in 2007 and had an annual turnover of between UK£1million and UK£1.2million”, according to the above-mentioned publication. It is also stated in the publication, “These figures would accord with the view that the company was not of great importance in the overall scheme of EFFORT operation, but provided useful facilitation of import/export activities.” Therefore, the publication understandably states, “no annual returns have been reported since 2008 and in March 2010 the company was removed from the UK Companies Register.”

Interestingly, however, “The High Court in London reversed this decision [delisting of the company] in July 2010, in response to the petition of lawyers acting for Mulugeta Guade Mengiste and Addis International Trading, described by the court as ‘creditors of Tower Trading Company.’ There is no evidence that EFFORT owns other companies outside Ethiopia, and interlocutors report that at present it does not.”

Clearly, during the two-week interview with EFFORT and other TPLF officials in December 2010, the authors of the publication have hardly received any indication that EFFORT would not in future to claim the company.

A friend I have know closely for a long time recently asked me if I had any indication that the removal of Abadi Zemo from his chairmanship of EFFORT on 2 November 2011 to become ambassador to the Sudan had anything to do with the revelation of this information to the researchers. I told that friend that I knew that Abadi Zemo has been a long time TPLF hand and, chief of REST for considerable time previous to this. But I have no information as to the reasons for his removal, although there are news reports of conflicts between him and the prime minister’s wife who has been second in command at EFFORT.

I must also add here that there is no tangible evidence as yet that TPLF, which owns EFFORT, is involved in a scam of sorts with its London operations, or else where. Neither is there evidence that exonerates them from what seemingly reflect their financial and economic interests in London nor whether they may not have arrangements with the rechristened Addis International Trading and what ever happened between 2008-2010.

As I grope in the dark on this matter, for now I feel comfortable with Sarah Vaughan’s conclusion: “The prospect that it [EFFORT] might do so [revert to recover] in future, meanwhile, is explicitly not ruled out.”

  1. Yinegal
    | #1

    My take on this is that SHEIKH MOHAMMED Al AMOUDI is at the heart of the money laundering scheme. He is largely responsible for laundering WOYANE’s money. He legitimizes the woyane loot from Ethiopia by bringing it into a legitimate international business transaction.

    We should follow the money Woyane is looting from the Ethiopian Treasury through an international investigation of the Sheikh’s wealth. It is time for Al Amoudi to come clean by disclosing all his financial transaction and business relation with the Woyane mafia and criminal organization.

    I wish Professor Al and other patriotic Ethiopians to guide us into the criminal investigation of Woyane and collaborants like Al Amoudi.

  2. Gigi
    | #2

    In a country that most farmers and herders are abandoned of their lands with even putting what import, it is not even a matter of double digit inflation but starvation. And that is what is happening on the ground. And speaking of elicit
    Financial out flow, we know they have been stealing Ethiopia’s money since day one and still are and they make it them,
    Their families and their political parties money one why or another in most cases. And their is no transparent auditing
    Body of Ethiopia’s income and financial out flows or investments. It is on the news now, how many billions of dollars
    Ethiopia lost. And that money is stolen by the government officials.

    And if they steal all the money where do you going to get the money for financial out flows? And surprisingly they are
    Talking about financing the Nile dam project, I would say that is monumental joke.

    The people who consumes the imported food like cereal are people with money. Majority Ethiopians can’t afford that.
    Let alone imported food, the countries food price is high. And palm oil? As far as I remember people eat corn, sesame,
    And nuge, oil not palm oil. So I don’t know what you are talking about on that. I heard the Indian business companies
    Are producing palm oil and so on, not Ethiopians importing palm oil for consumption.

    Millions are depended on food aid. There is starvation and drout in Ethiopia. And adding the double inflation and a country with no money to that, and no press freedom and no freedom of political and social and economical opinion
    To that, and denying capable and privet NGOs their wrights to function freely in the country to that, …………and
    Put the country in an imaginable dept of loans of 24/7 and money that just ends up in some peoples pocket to that,

    Ere minu kitu. Endia newu engi.

    So where is all of this heading? Definitely the end of the regime of TPLF/ EPRDFS. And we better get ready how to deal with the rest ones they are gone.

  3. Gigi
    | #3

    This is a serious dreaded crime by musulim and indians and Arab countries and also china contributes to that.

    What a shame. Knowing all of this Ethiopian riling party leaders are none except group of tugs, they deal with them
    Day and night. A person that spits on the people he leads can do worse to hid deals. Because their is less responsibility
    Involved.because he doesn’t deal with them on a personal level but he make deals on our country. If they are involved
    In thievery? Which I think they are. Who cars about their money. If there is any, but not to out knowledge.

    It is indeed ” Country for free ” as professor Ale- G Mariam put it. But is it? Why not free to us then the Ethiopians????
    And if they are using the countries money to develop the country may be they should buy us bonds too. When is it going to be ours??????……or may be they should stop bagging us, robbing us, lying to us, diving us, selling us,
    Killing us prisoning us, starving us, …………..etc.

    Ethiopia will prevail from this bondage of evil. Curl draconian leaders. Mercinarys and out outsiders.
    Ethiopia belongs to her people and who treats her well.

    Manège your horses TPLFs.

    | #4

    Dear writer you write such good detailed expressions of the entire situation in Ethiopia.
    However unless we are able to figure out and make conclusion as to why this all things happen then this all details are worthless by themselves.

    Therefore let me say some things in summary so that readers will have a clear picture regarding what is happening now in Ethiopia.
    1) Reading the book called “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ” written by Weyane will greatly help us the inherent historical nature of TPLF and its followers. Forget all deliberately devised confusing and misleading ideologies of Meles and TPLF like revolutionary Democracy or Marxism or any other current claims like the recent Developmental-State or GTP. All are bogus hypes deliberately designed to confuse and mislead us. The main, vital and viable governing ideology of Ato Meles and TPLF that is more meaningful is written in “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ”.This governing ideology is combined with the colonial aggression of Italia and has created such a huge identity polarization between the north Tigrigna Speakers and the rest of the country.
    2) The above identity polarization and internal conflict created such an ample opportunity so that foreign Western colonial powers are able to meddle significantly in the internal affairs of this nation as it is also the usual modus-operandi in other African and other 3rd world countries. Hence after the fall of the last emperor and the advent of the Derg regime then such a significant change and momentum took place in this nation. Then for so many complicated reasons Derg sided with the old USSR and happened to advocated and advance Socialism. And that time was also known as the era of cold-war that was prevalent between the West’s Capitalism and that of USSR Socialism and its followers. Then this global cold-war significantly led to the advent or emergence of TPLF and EPLF for becoming as stooge servants for foreign powers. The Western governments happened to exploit the identity polarization and the historical internal conflicts of this nation as is expressed in the mentality or sentiment that is expressed in “የትግራይ ህዝብና የትምክህተኞች ሴራ”.Then TPLF and EPLF with the insidious advice and support of Western governments ignited, agitated and aggravated the above perverted sentiment among their peoples and then entitled themselves as Liberators of their peoples and start gorilla fighting against the Derg Regime. When cold-war was concluded with the victory of the West and the fall of USSR and socialism then together with it then Derg also failed as regime and TPLF and EPLF has come to power.
    3) Then after the fall of USR and Socialism Capitalism of the West becomes victorious and enthroned as the sole dominant global political economy. And accordingly Ethiopia as a nation with TPLF as ruler also automatically happened to advocate and advance the Neo-Liberal capitalist system as the socio- economic system of the nation. Then perpetual devaluation of money and privatization of public service sectors sell off has taken place as the motto of the system. And in fact bogus democracy was also orchestrated and hyped by Ato Meles, with the help of the Western Governments, in order to lull, create illusion and fantasy for naïve and gullible Ethiopian intellectuals and politicians in the so-called opposition camp.
    4) While the naive and gullible Ethiopians intellectuals and politicians in the so-called opposition camp have been lulled and dancing around the silly song of music around bogus democracy orchestrated and hyped by Ato Meles, the crafty and slick Ato Meles and TPLF managed to insidiously plunder,devastate and destabilize this nation in an organized manner with the help of foreign powers. First they deprived this poor nation the ownership Port Assab and make us land-locked. Now we have been doomed to pay around 700 millions of dollars every year for port service to Djibouti. What a tragic curse it is? Second they create ethnic Federalism with the insidious strategic agenda and motto of divide-and-rule (known to be scheme of their MASTERS) to disunite and destabilize the nation so that they are able to carry out their insidious destructive hidden agenda. Third they managed to create and establish such an amazing plundering machine called EFFORT. Here we have to wisely understand that EFFORT is such an amazing gift or reward paid to Ato Meles and TPLF, arranged by their MASTERS, for their destructive deed they committed against Ethiopiawinet and Ethiopia. The creation of EFFORT economic empire is like symbiosis between MASTERS and TPLF as a compensation or reward for Ato Meles and TPLF for their favor they served the Western governments against toppling of Derg during cold-war. And for this symbiosis between MASTERS and TPLF to work effectively a certain platform has to be created and arranged so that EFFORT is also able to coherently symbiotically work with the global capitalist system. And that is why we get billions of dollars in aid and loan from the Western governments in the name of poor peoples of our nation. However, the same money in aid and loan is again systematically plundered and siphoned back to EFFORT and then to foreign banks in private accounts for Ato Meles and his TPLF members. It is like a crocodile’s tear by Western governments and their organization like UNDP to tell us billions plundered from us by our incumbent regime and others in Africa and other 3rd world. Why in the first place they keep quite while billions are accumulated in foreign banks for these whole years in the name of such rulers? We have to wisely scrutinize and understand the historical and inherent nature of the entire global capitalist and its associated symbiotic food-chain. Otherwise this all talk and complain by the writer and others is worthless. Here we have to wisely scrutinize and explore the hidden role and agenda of investors like Alamoudi related to the incumbent TPLF, EFFORT and the global Capitalist system. Why Ethnicity or race in Ethiopia is inculcated and hyped? Malcolm-X once said that race is also one of the inherent attributes or internal workings of Capitalism. Yes I agree with it in that for Capitalism to function effectively as a full-fledged system then it has to create and establish its own class structures that are suitable for itself. It has to also create it own loyal servants as bureaucratic technocrats that advocate and advance its own system. And in fact that is why we happen to see the creation of Civil-Service College that is systematically created to serve the sole interest of TPLF and its affiliates. Look same technocrats are appointed and taking power undemocratically by short-cut in Greece and Italy following the global financial and economic crisis. When such amazing paradoxes are taking place globally I do not see about what sort of or essence of Democracy the Ethiopian political oppositions have been shouting, hyping and expecting from the incumbent mafia style client-regime. I can really dare to tell that they are just failures and have also failed us just for nothing but just mainly because they are just nuts with and stuck with this bogus fashionable word called Democracy in that they are naively and gullible fantasizing about it. And this is the quandary of Ethiopian politics.
    5) Therefore, for Ato Meles TPLF and its affiliates to pillage or plunder the nation in the shortest periods of time they also engage in mischievous means in order to ultimately undertake asset grab. Asset grab means to grab and control real economy as fast as and as easily as possible through phony credit and financial manipulative means. And for this to happen TPLF has to print a lot of money, beyond which the economy can carry, and make this money monopoly controlled for its own asset grab goals. Ato Meles and TPLF can create money automatically out of thin-air but they can not create real-economy easily like wise. Hence to systematically deprive and take-over the real-economy and real asset from other society then they use this sort of treacherous corrupt and irresponsible act. They do not care about the rest of the society whether inflation hurts or not. The other thing is that to save safely plundered money in foreign banks in foreign currency then they have to devalue and inflate our local currency as far as possible so that they will not be affected or hurt by future potential catastrophic inflation that may hit the nation. Therefore Asset Grab is one of the main reasons for such devastating inflation that is wrecking the nation. Perpetual devaluation is also mainly caused by foreign pressure like IMF and World Bank. As long as the lower class employed workers are exploited by lowest possible wage, then what inflation severely hurts is such poor parts of the society. The other cause of inflation is the parasitic blood sucking dependent parts of the society that is politically serving the incumbent in different unproductive sectors like spying and other security areas that simply gets paid for nothing. The incumbent has to pay in billions annually for such blood sucking parasitic society.
    What ever crisis or chaos the inflation may cause, Ato Meles and TPLF does not care as such as long as their grand-plan of pillage, impoverishment and destabilization of the nation is succeeded. Who suffers mainly from the inflation and deteriorating and harsh living conditions in the country? It is the majority mass and the rest of the society outside of the domain of TPLF and its affiliates and supporters. Who benefits from all this crisis and chaos? Ato Meles TPLF and its affiliates and its Tigreans supporters. That is what matters most as long as the grand-plans of Ato Meles TPLF and his backing Western governments are concerned. Therefore I do not see the relevance of mere theoretical economical analysis discourse as long as this decisive game-changing political ideology and grand-plan of TPLF (የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ) and its MASTERS backers is concerned.
    And hence behind such tragic and destructive pervasive economic scenarios there is such a decisive and vital political motive. And that is why most of our intellectuals in the sphere of economics make such futile analysis that is worthless and irrelevant to solve the severe problems that are of mainly deliberate than lack of knowledge. Look what is happening following the event of 1997 national election and the aftermath chaos. A 100 kilogram of Teff was bought by less than 300 birr now it is more than 300 birr. The same is true for all other consumable items. Therefore what sort of economics is trying to figure out this tragic and bizarre event mainly based on mere theoretical demand-supply economics? And hence it is better we forget economics and focus on political solutions in any means possible. And the other amazing paradoxical scenario in this nation is while such social and economic chaos is pervasive; the opposition camp is still stuck on bogus stereotypical democracy and mere party politics that is futile to solve the intricate social conditions in this country.
    Therefore what we learn from such paradox? For me the paradox lies in that we usually happen to see politics and economics separately, that is mere theoretical demand-supply and free-market for economics approach for the economic sphere and the bogus fashionable democracy through election and party politics. We have to stop this sort of approach and hence we have to view our nation and society through the prism of political-economy. And it is in this sense that most of our politicians and intellectuals get mislead and confused by the separate misleading approaches of Liberal-Democracy and Liberal-Economy (Free-Market Economy) that is mischievously inculcated and hyped by the West while actually in practice and as a system they are two sides of the same coin(Capitalism).
    Therefore, Political-freedom and Economic-Freedom are two inseparable sides of the same coin, and hence we need both of them at the same time. If we do not have a real veritable Political-freedom then we can not have a real and veritable Economic-Freedom. And like wise the converse is also true in that If we do not have a real veritable Economic-freedom then we can not have a real and veritable Political-Freedom. And it is the luck of such understanding that the opposition camp has been making such a grave mistake. While they were all shouting entirely stuck on the political-rights(bogus democracy, free-press, etc) then they happen to entirely forget the economic-rights and failed us so that they allow TPLF to deny and sabotage us our economic-rights and then able to plunder the wealth of this nation and to impoverish and cerate social chaos.
    While we are being starved and impoverished and our survival basis is endangered from time to time to to the extent of death, so many naive and gullible politicians in the opposition camp and out side of it still shout about lack of bogus democracy and deterioration of political space for stereotypical game of party politics. How pity and paradoxical and confusing it is!!! Such shouting of such naive and gullible politicians regarding bogus democracy and deterioration of political space for stereotypical game of party politics in the opposition camp are even helping in camouflaging the insidious organized acts of pillage of the TPLF thug.
    Therefore, even though I appreciate the details of the article, I advise the writer and others similar as to clearly and precisely envisage by posing a question “WHY?” to figure out eventually what is the political motive and end-game behind all this event. The incumbent has such a grand-plan to make sever social restructuring in a way that greatly favors TPLF,members and Tigreans and to the contrary in a way that severely devastates the rest of the society out side of its domain and food-chain. Hence amazingly during the last 20 years through pillage and corruption using EFFORT’s economic empire a new capitalist class, based on ethnicity (TPLF and Tigrians) is being created that is compatible with the global capitalist system. we can imagine the symbiotic food-chain and class strictures in the global Capitalist system. And this is the inherent legacy of global Capitalism.

  5. Gigi
    | #5

    Perfectly said Melkamu. Thanks a million!!!!!!!!!!!!

    About your conclusion though, I think it is better if we call it global robbery.

    And also we need to advocate freedom and democracy too. Not that you said we shouldn’t .
    But it is as important as every thing and you are wright lately we haven heard from opposition
    Politicians about our economy good enough but some time it is good enough if we know already.

    Ethiopia is in a big mess. Now the national bank is borrowing 3 or 30 million$ from china. Is that going
    Last them for three days? Based on their blake holiness of money? Good heavens!!!!
    Lord show them the way.

    Long live Ethiopia!!!!!!!!

  6. Mengistu Teshale
    | #6

    WOW, what we have here is two articles in one if would describe it using the jargon used in retail world. I cannot thank enough both Ato Kefeyalew and the Melkaemu for their contributions. Ato kefyalew, it is always great to see your work, but This one goes deeper into the matter of what is going on in Ethiopia – the money. As saying goes “follow the money” you will be able to figure out the whole story, keep up the good work. The ultimate goal of TPLF is to loot Ethiopia as much as, as long as possible, he will then overtly covrtly force Tigray to cede from Ethiopia to create the greater Tigray along with Eritrea. To do that, he will do everything and anything possible in his power, kill, bomb, torture, inprison so forth to leave the rest of Ethiopia and intellectually and financially poor so that we cannot challenge his greater Tigray in any foreseeable future. This strategy seems to have worked so far, I am not sure if it will continue to do so. As increasingly more Ethiopians are coming to term with this. The great professor whom everybody thought was crazy 15 years ago saw that all, unfortunately nobody heeded to his plea. TPLF doing it so openly, many people are realizing the grand stargy of TPLF. The analysis by Ato kefayalew helps to document and expose it. Dear editor of Abugida Ato Melkamu’s comment deserves the status of an article by itself.

  7. Abba Tobia
    | #7

    አንቀጽ 39ኝን ተጠቅሞ, ትግራይ አፋርን ክልል ይዞ ከኢትዮጵያ ይገነጠልና ከኤርትር ጋር ይቀላቀላል. ስለዚህ, አማርኛ ተናጋሪው ባስቸክዋይ ተሰባሰብ. የባት የቆቱን አትቀባጥር.

  8. Dawi
    | #8


    [[...Reading the book called “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ” written by Weyane will greatly help us the inherent historical nature of TPLF and its followers....]]

    I know you bring this book all the time and I understand this book is stuck in your mind however, it is based on the then prominent thinking of the time. Marxism and the national and colonial question by Stalin which was a popular literature among Ethiopian intellectuals then. I didn’t read the book you are talking about but, I have no doubt it is a TPLF writing about “chauvinism of the oppressor nation” etc. which will not be any different from the run of the mill stuff of every communist minority nationality movements of the world then.

    Just by listening to Mekonen Zelelew, former TPLF combatant on ESAT by Abebe Gellaw alone, we can see the majority combatants consider themselves Ethiopians but willing to sacrifice to change the playing field in the nation for all. On the other hand the TPLF leadership under MLLT wanting to do same but followed Marxist Leninist thought at the time and organized based on that teaching and even supported EPLF up to independence based on Stalin’s theory etc, That ultimately succeeded in making the country separated and land locked.

    Why are you then now blanketly putting folks who suffered like Mekonen & the Tigrean masses in one box with MLLT’s blunder? EPRP has written similar Marxist Leninist stuff on national chauvinism etc. minus recognizing Eritrean question as “colonial” . That differentiated them from TPLF otherwise they agree on most other questions.

    “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ” is Marxist Leninist leadership of TPLF concoction designed to mobilize Tigrean peasants to fight a revolutionary war. As we know, TPLF is no more and as Meles is known to continuously adjust his philosophy that book is left in the past for history books. If anything TPLF is the “ትምክህተኞች” today. :)

    At present Developmental State Theory is what is advocated by Meles and has very little to do of the past stands of MLLT.

  9. Gigi
    | #9

    I am an Oromo
    I am also Tigray
    I am an Amahara
    Shankilana Agewu
    Endihum guragay

    Metegna kelelehe
    Tegadem begirgay.

    Yemin feten feten
    Tirasen mekemat
    Betegna engida new

    Betegna negn bilo
    Tirasen kekema
    Engida lihunewu
    Minim salakimama.

    Tigiray enatenat
    Enatenat gojamina
    Wolona sidamo
    Wolega ena Harara
    Emeye Ethiopia
    Kanchee befit enay
    Lezelalem nuree
    Wuditua hagery.

  10. Dawi
    | #10

    The following quote gives us a glimpse of the departure of MLLT of Tigrai to just a Meles Dictatorship. And Lo and behold! The person who was disappointed by the matter was non other than Dr. Negaso.

    Taken from “Negasso on Meles”:

    [[..The direction taken by Meles towards capitalism hasn’t been pleasing to Negaso, who demonstrated discomfort with this cruel system.Although in his earlier days Meles proclaimed to espouse socialism that would favor the mass, he seems to have changed his mind somewhere along the way.Negasso joined the TPLF movement believing it expressed a broad commitment to democratic rights, including the rights of the different nations in Ethiopia. Negasso says he was flabbergasted when he heard Meles say, “We have put socialism under a table, in order to get the Western nation’s assistance and also win heart of Ethiopians who have come to regard the system in a negative light because of the Derg.” Negaso feared ethnic groups including the Oromos would have no place in the capitalist system as they have not accumulated capital yet. When Negasso confronted Meles with the issue, his response was typical, rude and dismissive. “Anyone who failed to notice the policy shift in the 1992 program was an illiterate person who can’t even work out that two plus two make four.”
    The splits between them widened to take in more fundamental issues, becoming hostile in 2001 when a splinter group of dissidents from TPLF were expelled from the party.Negasso says he has made his views clear that he felt the dissident affair was not handled in a democratic manner by the government. It becomes clear from Negasso’s account that Meles harbored the feeling that the president was demonstrating a sentimental attachment to the splinter group and even branded him of being a “conspirator”. “I know you have been hosting Tewelde at the palace and conspiring with him,” Meles is quoted as saying. (Tewelde is one of the dissident suspended from TPLF). An accusation which Negasso says was “baseless and mischievous”.
    The frustrations brought Negasso’s discontent with Meles to a climax at a meeting when Meles was speaking in a conceited way against the splinter group. “We stripped them away their jacket and send them away”, said Meles. Negasso was staggered. He raised his hands and said, “Excuse me, you are sounding exactly like Mengestu Hailemariam”.... ]]

    | #11

    Dear Dawi how are you.
    If you do not read the book (የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ) find it somewhere and then read it. Yes i admit that am stuck with it because it makes real sense for me about Ato Meles and TPLF.
    In this book it is time and again in detail mentioned that Tigray and its peoples are becoming destitute, destabilized and detracted, as if deliberately, after the advent of Emperor Menilik II coming to power because of his plundering and destabilization. In this book so many things are written in that some of it may be true and some of it may be false. But what maters most is the very concluding vital message being conveyed behind the details? Therefore, the very fabricated and perverted provision of the whole story that is as if Emperor Menilik II deliberately plundered Tigray and its peoples to the point of being destitute, destabilized and detracted from its previous civilization and development is in fact a pure allegation.
    Therefore, why this perverted allegation is insidiously fabricated and provisioned.
    First to saw the seeds of hatred and resentment among the Tigirians so that they get a justifiable cause so that they will be agitated and mobilized in support of the insidious agenda of Ato Meles and TPLF and in fact also some foreign forces behind them. Second to also achieve a justifiable cause so that Ato Meles and TPLF commit such sort of diabolical plundering ,destruction, chaos and destabilization in this nation out side of their domain. Many of it also looks like some sort of revenge.
    In today’s intricate world some evil forces always has to fabricate some sort of mythical causes so that they are able to agitate and mobilize the mass behind them .And similarly Ato Meles and TPLF also has done this to their followers. If it was seriously a matter of socialist ideology as is the case you mentioned in MLLT, then why not Ato Meles and TPLF resolve other minor differences and work with Derg that had already followed Socialist Ideology? Those Ideologies in Ethiopia have been misleadingly abused and used as cover-ups for another insidious motive so many of us are not as such aware of it.
    Dear Dawi the same fabricated and perverted sentiment is perpetually cooked and provisioned to Tigray peoples so that they always stand with Ato Meles and TPLF and i admit that it has been working effectively till now to their causes. So many Ethiopian have started to realize things in that Ato Mels and TPLF are not alone when they are undertaking these all insidious grand-plan that is beyond the imagination of ordinary innocent Ethiopians. Yes they have been with the advice of foreign powers.
    And that is why I mentioned all the backings, including foreign powers and global capitalism, who exploit the “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ” mentality and cause.
    However here we have to remember the other very decisive factor, the Eritrea cause.
    The Eritrean cause is even some how more vital and better to be exploited by foreign forces than that of the Tigreans as is mentioned in “የትግራይ ህዝብ ትግልና የትምክህተኞች ሴራ” in order to serve as a legitimate cause for the war against Derge.
    However, here we have to be wise to view things from different perspectives and also be able to discern between main products and bi-products in a certain process.
    Some of us do not happen to view the main-products and only see and focus on bi-products and make them our concern of argument. Here what I have been mainly talking is about main-products that are more vital and meaningful than the bi-products.
    And I dare to say that the majority of us fail to view and discern the main-products (end-game) and rather we focus on the bi-products (means) just because they are mainly misleadingly and insidiously hyped and inculcated obviously to confuse the populace. Therefore it is better we are wise enough to listen to and see things in the cloudy background that are taking place in insidiously silence rather than things being shouted in front obviously for public consumption.


  12. Gigi
    | #12

    Speaking of shouting to public consumption, I wonder who can be number one in the race.? Of cours some time
    No justice can win what is done. Not that we live or exist to out come some body out of this world as we live in this planet

    But think about it dear people. Individually if you have too. some are unwilling even to hear about God. Why we don’t know. Even some time when we think we know, like reasons like slavery and so on, unless they think god did that to them, how is god involve in that? What els happen to the world for such a compliant? Non. When did people start to do

    that? We don’t know the age or the time the year…….it could be some yesterday too or today. Because it doesn’t matter
    Some time until it does. Some time I can’t wate to meet this world of bosses. Your might think of me some cynical,
    I can be cynical enough to become or am some body’s slave. Some of us do that out of luck of our chise’s. Depending
    On what…………….if I finished that statement I know I won’t even me. and I am slitly not to be honest with you but why
    Am I saying all of this? ……. Or tell me if there is a world for each of us, what ever that means.

    Gigi keyet mettash? Bitilegn, ye niguss Dawit indihum Ye Selomom, ye Minilik, ye Saba, ye, Fassiledess,
    ye Jotey Work, ye, Jemes Bruss, ye Aster, andihum Ke Egiziabihe

    And never liteyikehe,

    Enane sitaschenik anchee manesh bileh
    Enay biteyikeh min timelisalehe?
    Chekigne endaligelihe antem endenay sew
    Woy limarihina yinur ……

    Yetim bitagegne beyetim beyetim
    Bekalu anurognal min binikeratetim.

    Goolibetegna nesh calk goolibety getta newu
    Goolibety Egiziabihernewu
    Antem emenina selam selam enihunewu.

    Egiziabeharen amino manise sewu yitalal
    Yefetern kido sewu wodet yihedal?

    Wode Bank?????

  13. Gigi
    | #13

    Wodedikut telahut sitile Israelen
    Amilak chemiribet, benigigirheliy.

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