The New Year has begun with worrying global economic prospects: Ethiopia & China in perspective By Keffyalew Gebremedhin

January 28th, 2012 Print Print Email Email

The IMF and the World Bank are gravely concerned with uncertainties facing the global economy. Both institutions attribute the problems to the massive Euro states’ debts and the adverse consequences thereon to growths in developed and several emerging economies.

In its latest World Economic Outlook, the IMF is of the view that global recovery would stall, risks intensify and as epicenter of the new crisis, the Euro zone economies are foreseen falling into mild recession. Accordingly, the Fund has sharply cut its global growth forecasts to 3.3 percent in 2012 and 3.9 in 2013. In contrast, the World Bank’s forecasts are sterner at 2.5 in 2012 and 3.1 in 2013.

The perspective from the Federal Reserve in the United States is not any different. Fed Chairman Ben Bernanke cautioned on Wednesday that the central bank would keep rates at the present floor rate through 2014, a firm indication that the much-touted economic recovery in the United States is not firming up. It seems owing to that, he has qualified his statement by indicating, “Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time.”

In mid-January, Justin Yifu Lin the World Bank’s Chief Economist and Vice President for Development Economics sounded the alarm to developing countries from Beijing, urging them “to evaluate their vulnerabilities and prepare for further shocks, while there is still time.”

Another official in charge of the Development Prospects office at the Bank recommends to developing countries to “pre-finance budget deficits, prioritize spending on social safety nets and infrastructure, and stress-test domestic banks.” Of course, many of them would express their frustrations by muttering ‘easier said than done.’

Consequently, it is now clear that the first unfavorable signs of the 2012 shocks would come in the form of falling growth rates in both developed- and developing countries by as much or more than that of 2008/09, according to a World Bank official in charge of global macroeconomics. His view is that this time, “An escalation of the crisis would spare no-one.”

The adverse impacts of these evolving situations in European economies and finances on Sub-Saharan Africa, according to the World Bank, would primarily affect merchandize exports, tourism receipts, commodity prices, foreign direct investment and remittances — the very sources of their means of importing the essentials for their development.

If this assumption is to hold, the first line victims of this onslaught could be countries such as Ethiopia, whose foreign trade by nearly fifty percent is destined to European markets. Europe has always been Ethiopia’s largest export destination, although steady rises have also been observed in the level of Chinese imports during the last few years.

Picking up the other end of the equation, the January 2012 issue of the Economic Intelligence Unit’s Country Report on Ethiopia points out, “Any significant slowdown in the pace of expansion in China—, a crucial economic partner for Africa in terms of trade and investment flows —would be of particular concern.”

This means that many developing countries must brace up with the reality of scaled down growth performances and expectations. This is because, as discussed above, many economies in the developed countries are heading into recession and are in no position to import as many commodities, entailing also falling prices for those they import.

Macroeconomic policies as source of continuing Ethiopia’s problems

On the inflation front, the World Bank observes, “Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.”

Nevertheless, the threat to Ethiopia is not limited to what is happening in European economies. Decisions and policies contributing to macroeconomic instabilities would still be setbacks for economic growth and the country’s development. Recall that Ethiopian authorities in spring announced that they would bring down inflation to less than 10 percent by last September.

In October, the IMF had to warn Ethiopia and, I must add, proved right in stating, “High and rising inflation and entrenched negative real interest rates also threaten Ethiopia’s macroeconomic stability.” A sign of the continuing instability in Ethiopia’s economy is that, despite some signs of decline in inflation lately, by end December 2011 it was as high as high as 35.9 percent with food inflation at 46.5 percent.

It is very likely that we would see further declines in the inflation numbers. The question, however, is what importance it would be if after another quarter the country is to be back to further macroeconomic disturbances?

In any case, this puts to test Access Capital’s forecast in its Macroeconomic Handbook 2011/12, where it exuberantly foresees, “The possibility of an agricultural transformation involving rising acreage, rising yields, and rising exports [as] a very realistic possibility within the next few years.”

China would make its own adjustments

The current problems facing the global economy would also be source of worries for China. Therefore, Beijing would make its own internal adjustments in response to contraction in its foreign markets and increased consumption at home. This would involve prioritizing its imports, elbowing for new markets and searching for greater scope in existing ones to increase its exports.

This would not preclude the possibility of arm-twisting of its African clientele states, including Ethiopia — dependent on its financing of major projects — to import more goods and services. In 2011, Ethiopia’s imports from China are assumed to have outstripped its 17.5 percent level of 2009/10 (source NBE). This is mainly due to China being the source of loans and the centre of many purchases. Of course, one major difficulty is that, as Europe is the largest destination for Ethiopian exports, Asia remains the country’s largest import market, with China leading the way.

The debt burden is likely to become burdensome for Ethiopia going froward, as experts from the ministry of finance indicated to The Reporter. The worst part of the problem is that the loan negotiations are carried out by people who have no ideas of what risks they are putting the country into. The ministry of finance and the economy has no say, at least, in coordinating the debts. Certainly, it means that they also have no say in knowing what has happened to the monies.

In the face of this behavior of the ዘመነ መሣፍንት (the Era of Princes within government), I share the frustration of those great citizens and experts at the ministry of finance. I am struck by their courage to speak openly to the publicly, which I quote here, as an open call for help:

‹‹በተናጠል የብድር ስምምነቶች የሚያደርጉ ድርጅቶችን የሚመሩ ከፍተኛ የመንግሥትና የፓርቲ ባለሥልጣናት ስለሆኑ መሥርያ ቤቱ ብድሮቹን ለማስቆም ይቸገራል፤›› (Those who lead the offices that individually make loan agreements with foreign countries are high-level government and party officials, because of which it is difficult for the ministry of finance to stop the loans to those offices.”)
Therefore, the responsibility of Ethiopian experts in the eyes of those people is simply to record what they borrow, which the country either ends up paying or seeks relief (of course not Chinese loans), irrespective of whether these loans have been essential and effective in the first place in ensuring national development. The Chinese and the others know this and go to those officials, who in turn tough negotiators become difficult to operate as sort of lobbyists/government officials to benefit for foreign companies.

As it happens, at the moment the Chinese appetite for making up for the losses is strong and may take many forms. Unless Ethiopia carefully reviews whatever leverages it may have, the future engagement with China would turn out to be tougher, since its calculation may be dictated by their need to cut losses elsewhere.

Short of that, it should not come as surprise to anyone if Ethiopia continues to dissipate the few leverages it has had, because of officials whose sole loyalty is to politics that sees not the future, not even the country’s longstanding interests. As a consequence of that, today as yesterday, Ethiopia remains incapable of properly playing its cards with the Chinese, especially after the 2005 election aftermath, as well as with others.

These days, I see heavy traffic of Chinese papers writing on Ethio-Chinese friendship. The one that caught my attention, among others, is the following from the ministry of foreign affairs of the People’s Republic of China:

Bilateral economic cooperation and trade grew rapidly. Ethiopia has become one of the important partners of China in Africa in project contracting and economic cooperation and trade. In January, Minister of Commerce Chen Deming visited Ethiopia. China-Ethiopia package loan cooperation made steady progress. The outcomes of the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) were implemented smoothly. The two sides are stepping up communication and coordination on the implementation of the eight new policy measures on assistance to Africa announced at the Fourth Ministerial Conference of FOCAC.
In a study that came out in November and in a manner that underlines how much the Chinese have banked because of their relations with Ethiopia, Christine Hackenesch rightly observes:

For the EU as a whole (EC and EU member states), Ethiopia is the largest aid recipient in Africa (EU donor atlas 2010). Aid is the major instrument in European cooperation with Ethiopia and Ethiopia constitutes one of the key countries in reforming the European aid system. For China, in contrast, Ethiopia is not primarily an aid recipient but an important economic and political ally in its new Africa policy. Contrary to widespread assumptions that China primarily engages in resource rich countries, Ethiopia has become one of the largest recipients of Chinese official flows.
The advantage Ethiopia has facilitated for China is not inconsequential or something that should be considered an everyday opportunity. China has gained more than Ethiopia has, the value of which cannot be easily quantified in financial terms.

Most often, when the question of relations with China is discussed, politicians are quick to point out the importance of China in the development of African countries, especially infrastructural development –roads, power installations and etc. Surely, there is no obliviousness in that regard.

As the Chinese foreign ministry has openly stated, the arrangement must have suited China, when it says, “Ethiopia has become one of the important partners of China in Africa in project contracting and economic cooperation and trade.” The point of this article is that the benefits and interests must be balanced as two-way traffic as bilateral relations to make it even better and more a win-situation in practical terms.

As evidence of the present realities that is being disputed here regarding the realities of our relations with China, we have already got a taste of it from the level of Ethiopia’s interest payments on its fast accumulating debts China is owed, as The Reporter recently indicated. Data from the Ethiopian ministry of finance and economic development has shown that even in normal years, China has literally been charging Ethiopia humongous (relative to Ethiopia’s capacity) interest rates on commercial terms on 20-year loans linked to the LIBOR, compared to moderate interest rates from India, Kuwait Fund and others.

I do not mean to offer any consolation in writing the following. I must, however, state that this is not the first time Ethiopia has fallen victim to its foolish designs, by failing to capitalize on its advantages — or forgive the language — for choosing to prostrate before the interests of others.

For instance, when the Soviet Union was Ethiopia’s friend in the 1970s and 1980s, they knew that Ethiopia needed them more than they needed Ethiopia.
Therefore, they imposed extortive interest rates with manipulated exchange rates of the ruble on any loans or in the barter trade the country was involved with them. They even attempted on several occasions to discourage import of goods with better quality and relatively cheaper prices from other Eastern Europe, their sisterly socialist states.

Sadly, today’s Ethiopia has taken few lessons from that. Even where common sense could have been a better guide, the politics of the moment has prevailed, compelling the country to repeat the same mistakes all over again to its detriment — more debts and strengthening Chinese leverage on Ethiopia.

Coming May, the World Economic Forum Conference would take place in the Ethiopian capital. Since the conference’s focus would be Africa, what would Ethiopia’s contribution be, as a host and in the light of its own experiences with china, to help other countries benefit more, especially by avoiding its mistakes and the pitfalls of its experiences?

http://transformingethiopia.wordpress.com/

  1. Dawi
    | #1

    Studies have shown LIBOR plus a margin, kind of loans are given to income generating projects or middle income countries like Namibia and Botswana who have the ability to pay.

    In Ethiopia the only LIBOR plus kind has to be Hydro, Telecoms and others profit centers with a known income generating capacity.

    It beats me how one compares such productive loans with Soviet Kalashnikov and useless former E. Germany tractors type loans etc.

    The Economist wrote of the “DOWN SIDE” Chinese aid? which is? (don’t laugh) they finance large hydro-power-projects like the Gibe dams? Off course they are talking about how such projects spoils “the way of life” of the “tribes” with no infrastructure of what so ever? Please!!

    Such areas are at present are adventure places for voyeurs, tourists who post tons of videos that show the deplorable conditions of the folks who live there, with extreme lack of developments.

    On the other hand, if you want to give where credit is due: The Guardian I quote, said of the Meles Dictatorship dealing with the Chinese:

    [[.. Ethiopia is clearly in charge in this engagement. Chinese traders and shopkeepers, who are fixtures across many African cities, are absent on Ethiopia's streets. These positions are reserved for locals, and Ethiopians enforce their rules...]]

  2. Dawi
    | #2

    I think Ato Keffyalew or any body else would have a hard time producing a non productive loan given to Ethiopia by China.

    The only questionable one would be ZTE’s Telecom deal. Even that with all its draw backs including corruption probably better than selling it to the “Vultures” who will end up milking just the profitable side of the business. Now however, the possibilty of the entity being profitable down the line or commanding a higher value if sold after fully developed as a company is very sound.

  3. Sam
    | #3

    Keffyalew seems proficient in understanding economics. And his using the English language to impart his message is magnificent. “Even where common sense could have been a better guide, he wrote, the politics of the moment has prevailed, compelling [Ethiopia] to repeat the same mistakes all over again to its deteriment — more depts and strengthening Chinese leverage on Ethiopia.” It is true, Keffyalew, always EPDRF’s policy is geared towards “the politics of the moment.” In fact, sometimes I think EPDRF keeps believing that the end of the world is near so leasing everything at hand– fertile lands from Gambella– borrowing as much as possible, no matter how much the interset, is the best move. What if God fails to show up? I do not think they thought of that. Most Ethiopians, I believe, remember when selling flowers to Europe became the fashion of the moment. Most agricultaralists warned then the land in a few years will become unproductive, and harvesting other crops after using it to grow flowers would be impossible. The response of EPDRF politicos is to not worry. Guys they know something we do not know, believe me, about the end of the world. But the important thing about their love affair with China has to do more than economics. It is politics. Forget multi-party democracy, Meles believed and still does, the Chinese brought economic miracle while the Communist party is the sole organized party in the country. This worshipping of everything chinese came upon immediately after the 2005 election. That was a signal for anyone who wants to take notice it is the end of multi-party politics which EPDRF gave lip service for a while. About strengethening Chinese leverage on Ethiopia, Keffyalew, you must be realistic. Why you are suprised of that? A government which leases fertile lands for 99 years with practically no money in return would worry about Ethiopia being compliant to the Chinese interest? I do not think such a government would, Keffyalew.

  4. Haile Tewdaj
    | #4

    To Mr. Dawi,
    Before you challenge Ato Kefeyallew or anybody else, let us challenge your boss to open up the book for scrutiny and to be totally transparent so that we all see the TOR of these loans and including who is getting the contracts and sub contracts of the projects the money is intended for. After all, the money is borrowed in the name of all Ethiopians. We will know then not only the productive and non-productive nature of the projects the money is going for, but we will also know how much of the money is going for kickback, your salary, for TPLF affiliated business. As you know, not all projects are not as efficient as you would like to us to believe. Have you heard about phrase “the bridge to no-where”. Many of the projects are just like that. We also know that most of the projects lack detailed plan, feasibility studies, and so forth.
    Shortly putting it, many of the things that are built in Ethiopia nowadays are done in a very expensive manner, are economically unsustainable, do not take into an account the purchasing power Ethiopian people. This is not my word, read the former worldbank man in Ethiopia in Addis fortune.
    We know, TPLF needs to get as much money it can get from IFS , Indiana government and Chinse exim bank in order to complete the quick empowerment project – a massive transfer (the great theft) of assets and wealth to chosen regions and people before it expires in power. The only way it can secure the loan (money) quickly is using projects. For as long as it gets the money, TPLF will not care how the future generations of Ethiopians will pay the debt. Shame on you for not seeing the fact that Ato Kefeyallew, who is a far sighted person, trying to give a dispassionate and balanced advise to your boss. I wish he would heed to his well-thought advice and critics for sake of all people of Ethiopia including people from your kill

  5. Dawi
    | #5

    Keffyalew Gebremedhin is former Derg official, I read it looking at his blog. He has an Axe to grind but, Don’t get me wrong I respect the guy. He is an asset to our country and should probably be one of the advisers at the present State of Ethiopia. God knows Meles needs all competent compatriots he can muster.

    Having said that, the 2nd largest economy and the leading Developmental State in the world, has an interest in not messing up their repetition by screwing up fellow little Developmental State of the Meles Dictatorship. ;-) If you read some details in all projects they do, they expect the State to put a huge part of the cost mostly in BIR off course. In other words, Zero down deals to come out with cash on the other end for corrupt officials is very difficult. On the other hand, corrupt officials have coffee, chat and sesame etc exports to fatten their pockets (the ones that do); if that is what you are thinking and we can talk about that.

    [[…lack detailed plan, feasibility studies, and so forth….]]

    What feasibility?

    C’mon Now! We are still building stuff “detailed plan, feasibility studies” of bridges & Dams done decades ago by US & USSR, millions spent on them. Do you really believe in that crap?
    Don’t listen to those who want to keep you beggars for life.

    [[… “the bridge to no-where”….]]

    That doesn’t apply to Ethiopia because my brother, we don’t even have enough bridges to SOME where yet.

    You may be thinking about the one in Alaska:

    [… "Bridge to Nowhere," the bridge in Alaska would connect the town of Ketchikan (population 8,900) with its airport on the Island of Gravina (population 50) at a cost to federal taxpayers of $320 million..] That is a different story.

    Show me anything the Chinese built that Ethiopia doesn’t need and I will take your words.

  6. Rezene Kaddisaba
    | #6

    The writer brought all the right premises and data but riched to a pre-concieved decision he already had in heart.
    However, its much more better read than calling names and bashing the government for every turn it makes.
    My personal advise – people specaily who left Ethiopia some time ago thinks they left a prosperous nation capable of negotiating a deal with anyone ( China & US included). We sometime needs to look Eth from an African perspective. Why do you expect Ethiopia to perform unimaginable tasks when almost all our African brothers are fighting the same fight?

    Good start Mr. Kefyalew – once we start looking closer we become more rational to what we write.
    Cheers,

  7. Dawi
    | #7

    Sam said:

    [[..But the important thing about their love affair with China has to do more than economics. It is politics. Forget multi-party democracy, Meles believed and still does, the Chinese brought economic miracle while the Communist party is the sole organized party in the country..]]

    I concur with your assessment and Meles is correct in that.

    As we discussed somewhere else in this site the resources (cost of electoral process etc) for Multi-Party system democracy is huge and at the stage our country is, unnecessary expense and and probably an exercise in futility.

    Even if we do go through the so called “fair election” process, the best we can muster is, as case in point Iran OR today’s Egypt whereby fundamentalists or some right wing wackos end up being elected to be the government and the poor country goes back words a century or so in politics where Mullahs/Priests “burn or hang” philosophers. I don’t think that is far fetched.

    The Meles Dictatorship is the product of Ethiopian Student Movement where many died calling a revolutionary slogan “Land to the teller”. They are former EPRP/MLLT etc. who were communist oriented.

    So, why is it surprising you or you don’t understand that Meles & co. are embracing the ideology of the Chinese Communist party lead Developmental State today?

    To me the most shocking would have been if they became complete “reactionaries” and sweared by Liberal Democracy as you, I suppose do. Everything else so far is a given. They have my respect for not selling out completely; that is not easy particularly, when World Bank/IMF breathing all over Meles’s face.

  8. tewbel
    | #8

    Does anyone know the Ethiopian national debt ???

  9. Sam
    | #9

    Dawi wrote, in response to my feedback, to me the most shocking would have been if [EPDRF] became complete ‘reactionaries’ and sweared by liberal democracy as you, I suppose do.” Well, Dawi, we have a disagreement here. First, your choice of the word “reactionary” is unwarranted. Is liberal democracy reactionary? I believe not. Had you intended to write that EPDRF would not have changed, as you Sam wished, its Communist past to appease the current political trend, your choice of word should have been different. To unravel the EPDRF past though we have to start from the TPLF politics. TPLF leaders had never been communists as you claimed. They were politicians who share the common notion of ethnic politics as the only means to change Ethiopian politics. True, around 1983, European calender, they started reading marxism, and even wrote very infantile literatures here and there based on the new-found knowledge. They did not pursue it further. But , Dawi, you misunderstood the intention of Meles. I do nt think Meles believes the Chinese made economic miracle because the Communist party led the country. No. Do you think Meles believes if there was multi-party democracy in China, the Chinese would remain backward? I do not think meles believes that, neither do you. Meles used the economic miracle created under a single party as an excuse to strangle other parties in Ethiopia from functioning.
    The most disturbing idea of yours, however, is the belief that “multi-party democracy system is huge and at the stage our is, unnecessary expense and probably an exercise in futility.” No suprise I disagree, Dawi. Unnecessary expense? What does that really mean, Dawi? I have heard many ideas about the “futility” you worried about, but not once I heard expense being used as an excuse. If you just calm down and reread what you wrote, I think, Dawi, you say,I do not make sense here. About Muti-party competition might not be a gurantee for fair election, I agree with you. Having multi-party competiition does not neccessairly gurantee the best interest of the majority will be served. The current Egyptian politics attest to that fact. But, Dawi, you do not cite an example that only backs up your premise. That is unjust. As there are a failed multi-party competition, there are successful ones. You do not have to go far to Europe and North America to name countries. Right there in your neighborhood, you could find examples. Say Ghana. Say Botswana. Good bye, Dawi, nice having this valuable discussion.

  10. Dawi
    | #10

    Dear Sam said:

    [[..But , Dawi, you misunderstood the intention of Meles. I do nt think Meles believes the Chinese made economic miracle because the Communist party led the country. No. Do you think Meles believes if there was multi-party democracy in China, the Chinese would remain backward? I do not think meles believes that, neither do you...]]

    I think Meles at first compared government systems and studied the impacts on country.

    India & China are comparable based on population, the length of the states in existence where both got independence late 1940Th India took a Democratic route & China Dictatorship.

    I think he probably wanted to have a mixture of the two as long as he remained in power as head of the Developmental State of Ethiopia however, when Kinijit won in 2005 and Berhanu and the other leaders wanted to give only a finite time for transition, nothing more (compared to what Messay would have offered (king!) Meles in his original manifesto) he decided to take a more authoritarian direction and adjusted course.

    It may not just be a personal choice for him because he has to take care of his followers wishes as well. They will all want a guarantee of soft landing similar to Burma’s military as Messay explained some time ago. If not, even if Meles wishes to give in, he will probably be overthrown.

    You see India’s private sector is more sophisticated than China’s, the fact that Indians are the ones with the largest FDI in “grabbing land” in Ethiopia while China’s “land grab” is almost non existence is telling you something. The Chinese on the other hand unlike India, have successfully built real infrastructure and delivered basic services to the population. India is weak in basic services and law and order to say the least.

    Bottom line, study shows, it is easier to create markets than it is to create state capacity or to prevent its deterioration. So for Meles it was hands down easy to choose capacity building similar to China. At this juncture, he concluded Democracy is secondary.

    Having said that, If the opposition signs a pact with Meles as in Messay’s original manifesto (which is unlikely because most were angry at Messay) and all Ethiopa’s children decide to work for Development as in China, IMO, we can be the fastest economy in the Planet.

    [[..The most disturbing idea of yours, however, is the belief that “multi-party democracy system is huge and at the stage our is, unnecessary expense and probably an exercise in futility..]]

    When a country like ours with civil wars and ethnic tensions, until the opposition overcomes the internal escalation of tensions as G7 is doing with new OLF, and such things are the norm not the exception, elections today will only going to be used to come to power and take revenge of one group over another thus making our predicament even worst. However, Dictatorship won’t give power quotas to anyone therefore, no more fights. Dictatorship of Developmental State type will pave the way to “multi-party democracy” down the line. In the mean time “fake elections” are exercises in futility is what I was trying saying.

  11. ጉረኞች
    | #11

    Dawi said
    “Bottom line, study shows, it is easier to create markets than it is to create state capacity or to prevent its deterioration.” In a series of commentary you made you are contradicting yourself too much. The only thing you have been consistent is, your plea— please do not harm my boss meles. Have you read Dr. Fekadu Bekele’s recent article in the right hand of the frame of this website in Amharic titled “መጨረሻ ላይ ስምምነት !!”? If you have not, please do. You will learn what market economy meant to third world countries in general and to Ethiopia particular when it is governed by corrupt dictators like the midget.

  12. Sam
    | #12

    Dawi, reading your reply again, I never doubted your true intention. You are torn between choosing multi-party democracy now, or having a party which monopolizes power now, hoping it will create a condition for multi-party system to prevail in the future. You seem to choose the later. I believe you do not pick up your choice overnight, and so I am not trying, even hoping, to convince you to believe otherwise. But I urge you to read more about what fertile political climates are essential for multi-party competition to be born. If you spend some time reading on the subject, I believe, you might come to the conclusion that EPDRF will never create that climate. If you really believe you have the information you need to make your choice and stick with your previous stance, I respectfully tell you on this subject we do disagree. And I also believe as time goes by, your stance might change, and that I hope. Good bye again, Dawi.

  13. Dawi
    | #13

    ጉረኞች:

    “Bottom line, study shows, it is easier to create markets than it is to create state capacity or to prevent its deterioration.” In a series of commentary you made you are contradicting yourself too much.

    I don’t know why it is hard to fathom that richer, more educated and more equal countries are more likely to be democratic. Multi-Party political competition/democracy does have a significant effect after a country reaches middle income, otherwise it retards it, with endless bickering of the old OLF,EPLF,ONLF,TPLF etc.

    National disaster, poverty, ethnic tensions are special crises that require central command decisions with diminished liberties; such things are unlikely to be done in a democratic way but economic developments are promoted by the authorities as in the Asian Tigers.

    So the fastest way to Multi-Parti Democracy is Dictatorship. Capacity is built under Dictatorship like China during transition to Democracy then markets will be easier to build.

    If you choose the INDIAN way (market 1st) you will have to tolerate idiotic caste system (hidden aparthied in the 21th century).

  14. ጉረኞች
    | #14

    Dawi
    It seems that you are confused that is why I say you have been contradicting yourself too much on your commentaries. Your commentaries are targeted to make the midget dictator a better alternative. We get the message, you have been unbelievably consistent on that message. The first paragraph you quoted @#13 is your own statement I quoted you from @#10 of your posting. As a remedy for your ill conceived theory, I invited you to read Dr. Befakadu Bekele’s Amharic titled “መጨረሻ ላይ ስምምነት !!. You do not have to go far, it is posted in this website at the right hand frame. The only proven way to have fast and strong economic growth is to have accountable government and build local capacity by enhancing tangible capital, not by money laundry. As you have admitted yourself, the mushrooming of all these unknown companies in Ethiopia neither bring economic growth or build local the necessary capital. All unknown companies you are talking about run only two three people and little capital. The capital they have is not more phone lines, computers and fax machine. That is what you are depending upon when you claim of market economy. Even these are completely dominated by woyanes who issue the bid and win the bid itself. The genuine Ethiopians are pushed out of business. The midget-meles dictatorship is not like other Asian dictators. The midget-meles has no ability or skill to bring economic progress like others did. There is no single year that Ethiopians were not starved in millions since he came to power. Can you tell me a single prosperous year for Ethiopia since woyane came to power? Woyane and misery are synonymous, no one could tell the difference. That what Ethiopians know.

  15. Kamal
    | #15

    And as TheNakedListener has ceivrohensmpely explained to us, there is no Rule of Law in China, only Rule By Law. I have been following Tom’s wonderful Blog all this year, shortly after he commenced it. I have learned so much from the comments posted and enjoyed reading them all, even the unhelpful ones.

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