The IMF: Friend or Foe?

March 20th, 2007 Print Print Email Email

Mengedegna | March 19,2007

On March 17th, the International Monetary Fund (IMF) released the 2007 Country Report for Ethiopia. The findings of this report include a national economic “growth rate of almost 11 percent”? (from 2003/3004-2005/2006), which has resulted in a “real per capita income increasing at the fastest rate in Ethiopia’s recent history”? at 7 percent per annum over the same 3-year period (translating to $121 annual per capita income, according to ATLAS calculations).

Frankly, this comes as quite a surprise to me. While I do not have enough information to confidently assess their methods of data collection, I can assure you that such growth has yet to trickle down into the pockets of the poor (or even the middle class, for that matter), though the current rate of inflation is noticeably felt by all.

For those not living in this country (or, rather, any of us who have more than $121/year on which to survive!) this new GDP figure, while perhaps a statistical improvement from a decade ago, is nearly impossible to grasp in actual terms. Let’s forget the math for a moment–a stroll through Shola market on a Saturday afternoon unfortunately proves a far more accurate indicator of current economic conditions than any official document. Considering a friend struggling to feed her family on a monthly income of 400 birr (approximately $50/month) puts things sharply into perspective for me: one litre of oil now sells for 16 birr. A kilo of tomatos 4 birr, onions 3.5; oranges, sugar and coffee (unroasted) have become rare luxuries, at 6, 8 and 24-26/kilo, respectively. A large loaf of bread sells for 2 birr and a month’s supply of teff flour (50 kilos for a small family of 5) has become unafforable at 250- 270 birr. 1.5 litres of bottled water sells for 4 birr and omo (washing powder) for around 24/kilo.

And it gets worse. The eucalyptus debate can be put on hold in Ethiopia it seems, as the price of charcoal has actually doubled (a month’s supply is now 80 birr); at 1 birr each, cow dung patties have become the biomass fuel of choice for the majority of poor households (and for the bargain of a single birr, the health hazards of methane gas must be necessarily forgotten).

Yet, in spite of these drastic increases, none can compete with the leap petrol has taken in recent months. From around 5 birr/litre in August, it has since been driven up to 8.25, and rising still. Cars have become weekend luxuries for former 7-day motorists, and taxi drivers are forced to continually count their losses (as people are increasingly unable to pay the higher fares). A mini-bus ride costs between 65 cents-$1.60 birr, while 50 cents now barely guarantees you standing room on the perilously crowded yellow city buses. In this light, feeding even a small family on $50/month becomes a super-human feat, yet this is nearly 5 times the average per capita income in Ethiopia today, according to the findings of the annual IMF country report.

Which brings us back to the role of this instituion in developing economies such as this one:

The IMF can certainly be recognized as more-highly functioning than the plethora of international aid agencies that currently saturate this region of the world, however, their credibility in the arena of the world’s poorest populations (and not Western or emerging markets, where they have achieved some success) must come from actual measured achievements and not merely relative success in comparison to the abysmal failures of the aid industry as a whole. After all, millions of lives are at stake.

Accordingly, when considering the recommendations of country reports such as this one, we would be well-served to begin with a single, basic question: Has the IMF actually proven its ability to achieve macroeconomic stability in the poorest regions of the world? (Unfortunately, I think we all know the answer to that one”¦)

Absolutely, these countries are plagued by severe obstacles to economic prosperity (the “root causes of extreme poverty”?, –political, historical, geographical, social) for which the IMF cannot be blamed, but it is worth noting that (as pointed out by NYU professor of economics and former senior World Bank economist, William Easterly, in his fascinating book “White Man’s Burden”?) “of all 8 cases worldwide of state-failure or collapse”?–Afghanistan, Angola, Burundi, Liberia, Sierra Leone, Somalia, Sudan, Zaire”””seven of them had a high share of time under IMF programs in the 10 years preceeding their collapse”?; therefore, “statistically speaking, spending a lot of time under an IMF program is associated with a higher risk of state collapse”?. This seems as good a starting point as any and, at the very least, should raise some serious red flags regarding the credibility of such intervention methods within the Ethiopian context.

Though officially “the financial assistance provided by the IMF enables countries to rebuild their international reserves, stabilize their currencies and continue paying for imports”? (, recent history sadly demonstrates that quite the opposite has been achieved. A great part of the problem lies in the fact that statistics available in the poorest countries of the world–the very same statistics used to determine the current GDP and thus predict future economic performance–are often unreliable or downright inaccurate (due to the challenges of gathering information from highly inaccessible rural regions combined with widespread political corruption and intentional data manipulation). Also, how do the “human complexities”? that cannot be represented by a financial programming model accurately factor into such country projections and interventions? The problem is they cannot, and do not.

Further, the nasty habit of refusing to seriously penalize the fiscal corruption of borrowing governments has thus ensured that money continues to flow, regardless of actual economic performance and repeated failure to translate progam agendas into real on-the-ground benfits for the desperately poor. This suggests little incentive for developing countries to comply with all conditions outlined by the IMF, and reccommendations are thus accordingly often only partially implemented, increasing the risk of further economic chaos.

(Enter: the art of diplomatic language.) Fortunately, there are plenty of euphemisms to choose from which conveniently afford the IMF justification to continue to lend to irresponsible and corrupt governments (extending new loans to help pay for the old ones, and round-and-round we go!)””hence, reliably overly-optimistic country projections and annual progress reports abound, alongside the ever-lengthening list of countries wallowing in economic turmoil.

Finally, despite the fact that international funds are essentially guaranteed–even in the wake of gross human rights violations and ongoing political oppression–this government will nonetheless be expected to miraculously attempt to bring federal spending within the the limits outlined by the IMF policies (an interesting suggestion when partnered with the observation that “further efforts are needed to strengthen public financial management and financial sector reform”?). Grudgingly, Meles may be an extraordinarily intelligent man, but a magician he is not and a reduction in public expenditure–however justified–poses a serious national dilemna. With the social sectors already trapped in a perilous state of disrepair, any additional budget cuts (by a government comfortable devoting a mere 4.9% of the annual federal budget to public health services!) will forseeably serve to further deny the most vulnerable people of society access to these vital services. Even if the rate of inflation can be successfully halted and eventually reversed through such demand-dampening measures, there is no guarantee that the social sectors will receive the radical transformation they desperately require in the future. (Equitable distribution of funds and proper sector allocation under the EPRDF at this point seems an almost laughable suggestion.)

Fortunately, the IMF is not an “˜official aid agency’ and therefore conveniently lacks accountability to the very citizens their economic advice is designed to most greatly assist.

  1. casanova
    | #1

    Ha ha ha u funny Abugidas,just b/c u can not analyze the IMF`s report on Ethiopia, which is a very burning issue,first u make us watch a documentary film on the hard life in Afar and try to tell us that IMF does`t know what they r doing.And then u came up with a text written by unkown person who does`t know how the IMF`s assesment is done but only knows how life has become expensive in the Urban areia(by the way it is a shame to give a bottled water as one example).I don`t even think u(the Abugidas) read it.Ashebir,please try to read it.Don`t be afraid of the volume of the text and the terms. But again this guy is insulting the intelegense of the IMF.He thinks he knows but he knows nothing.Why don`t u tell us what the IMF presented as a solution and why the Weyanes r opposing it so that everybody can come up with his idea and disscuss it?U just wrote nonesense.

  2. Mesfin
    | #2

    “casanova” it looks like you are the one who needs to read the analysis till you get it. The whole idea of the analysis is that the economic growth that is reported in Ethiopia and by IMF and Meles doesn’t appear on day to day life of ordinary Ethiopians. If you have average 7 percent economic growth over three years, the middle class has to some kind of break, but what we see in real life of Ethiopians totally opposite of what is reported. Now, regarding how the IMF come up with those figures for Ethiopia the author of the article didn’t get into that. Here a piece that I copy from the analysis that I thought would summarizes the whole idea:
    “The IMF can certainly be recognized as more-highly functioning than the plethora of international aid agencies that currently saturate this region of the world, however, their credibility in the arena of the world’s poorest populations (and not Western or emerging markets, where they have achieved some success) must come from actual measured achievements and not merely relative success in comparison to the abysmal failures of the aid industry as a whole. After all, millions of lives are at stake.”

    In another note, it seems like you Woyannes are focusing on Ashibir these days. Well, that only proves that Ashibir is doing a good job. All the abugida team members are doing a fantastic job. You just single out Ashibir now, and will move on to the rest of them just one at a time. You hyenas! That is your trade mark. You are so moron, you are not even trying to hide your wicked nature.

  3. casanova
    | #3

    Mesfin,in the first place the growth is not 7%.It is about 10%.And the report is also about the ordinary people.The thing u quated about IMF says only about the capasity of IMF in bringing changes.
    It does`t say anything about their credibility of analysing a country`s economical status.U don`t even read what you quated.U r another Ashebir.Moron.If anybody brings any evidence regarding IMF`s lack of capacity on analysing a countriy`s economic growth,i will reward him a 1milion USD.

  4. Abeba
    | #4

    Interesting people — I mean the IMF. The hired scribes of Meles owned up to the fact that the country suffers from the largest deluge of educated people leaving the country; hospitals are now closing for lack of surgeons; there is only one economics professor in the country; there are more medical doctors in Chicago than in the whole of Ethiopia. All this story I read on the previous week’s edition of The Reporter — the informal organ of the TPLF. Now the IMF tells us that the country grows at 11 percent. So it is possible to build a country with the forced labour of the masses misled by bumpkins posing as liberators!! What a new-fangled role model!

  5. geremew
    | #5

    GIRAM NEFESE KEGN, There is a new word to be added in the Ethiopian dictionery for the first time in our history………..ECONOMIC GROWTH!!!!!!!

    It sure is funny to see institutions like the IMF and others being criticized by the types of Ashebir….and all the other DERSO AWAKI, DERSO GAZETEGNA, DERSO POLETIKEGNA, DERSO ARBEGNA.

    The institution which you begged so much not to give money to Ethiopia has come out with this news, No woyane agents in IMF, the people who work there doesn’t use ALUBALTA to make decisions but only facts, and the facts show that ETHIOPIA IS CHANGING FOR THE BETTER EVENTHOUGH YOU TRY TO SABOTAGE YOUR OWN COUNTRY.

    No knowledge to challenge the IMF report ha!!!

    There is more humiliation to come, just wait and see.

  6. Tesema
    | #6

    You don’t need to be an expert economist to know how things are going in the third world countries. Casanova, you need only to see how the people in Ethiopia suffer and live, even you don’t need to read the IMF report and now you are arguing that the Woyanes are doing well? Are you on this planet, casanova? dick head, after all all woyanes are the same

  7. casanova
    | #7

    Abeba,IMF being hired by one of the world`s poorest country`s PM,ha ha.This should be rated as joke of the millennium.Thanks 4 making us lough.

  8. casanova
    | #8

    Tesema,another moron.Nobody denied that our people r suffering,neither Weyanes nor IMF.But don`t ever and ever try to under estimate the capacity of IMF on analising a country`s economic growth.That is big Difret.Shame on u.Maferia.Okay know 4 all moron guys insulting the intelligence of IMF:IMF is not ye Buna Mahiber.It is an international organization with 185 member countries and one of it`s main responsiblity is to survey economic status of countries.So acording to the recent survey on Ethio economics,the growth is about 10% which is double than the average growth of African countries.TESEMA,ASHU,ABEBA,MESFIN and all other morons,u r against 185 countries.So don`t u think it is a big DIFRET.No more disscussion about IMF.U can open up your mouth but it is finished.

  9. Mesfin
    | #9

    Now the so called “casanova” you are so fucked up woyanne brand. You fiercely support and protect IMF just because it come out with report that states that the Ethiopian economic growth by almost 11% this year and that makes the Ethiopia economic growth over the last 3 years about 7%. Not only that, the IMF report also included recommendation to Meles regarding the high inflation in the country which Meles reject totally.
    What the reset of us are criticizing is the methods that IMF uses to measure the economic growth in Ethiopia. Just because we think if that much economic growth is reported, it should be reflected in day to day life of average Ethiopians. Life is getting tough for middle class and lower middle class Ethiopian families. They barely survive and IMF and Meles are telling us that the Economy is growing by this numbers and that number. There is no benefit for ordinary Ethiopian in that. I would say that the report is more of political assertion: Nothing more and nothing less. The other day the World Bank director for Ethiopia and Sudan said that there is a promising change in Ethiopia in terms of building the democratic intuitions. That is one pure political statement which has nothing to do with the truth. In Ethiopia there is no independent media, legal system and election board. The major opposition party leaders have been jailed for 18 months for wining the election. Innocent civilian got shot on the head with high caliber bullet on a day light in the capital city and no body has been held accountable for that yet. In the real world we know, Ethiopia is a crisis mood and under a rootless dictator. There is nothing going on in Ethiopia that gives a hint that Meles and co. values human rights and vibrant democracy. World Bank guy was making that kind of political statement to justify his reasons for giving money for butcher Meles. The real reason why Meles is getting the money is for his labor in Somalia. But, they don’t want say that officially and look some other means. That is when the economic growth and the democratization process come handy for cover up.

    Finally, I have one question for all you moron woyannes: if you have any normal brain left in you for rational thinking, why is that you let Meles ride over your back all along? He made you landlocked, he took you to Badma and after over 70 thousands of Ethiopians died, he agreed to give Badma back to his mother land Eritrea. The same guy sends the solders to Somalia just because he thought they ICU are a treat. Most of the Ethiopian people already figured that Meles is up to no good. He is one a hell of wicked man. He is against all Ethiopians and we are against him. Now, you moron woyannes, you are so primitive you can’t even think out side of the ethnic box. I see no open mind, no rational thinking no civil manner in you. You are so embarrassing figures. If you need to be considered seriously you need to civilize yourself first.

  10. Tigist
    | #10

    Wow, a bunch of woyannes are posting this days. It reminds me the very famuse Mahatma Candhi’s statement about peaceful struggle “First they ignore you, then they laugh at you, then they fight you, then you win.” Where are you at weyannes? I think you are fighting…

  11. casanova
    | #11

    Tigist Robbie Williams:Tripping,one of my faviroite songs of Robbie.

  12. Daniel
    | #12


    Let us argue with ideas would rather than attack a person. A meticulous argument comes from a deep thought and understanding a subject matter clearly. I am sure we will come up a solution although we have a different perspective. Hopefully, you have seen George Bush and John Kerry shaked their hands before and after the debate in spite of their difference. We should learn from them. A good argument and thought are always executed a superb solution. The bottom line provides clear and concise ideas bring a solution. Please do not attack people.

    Back to your point, Collecting and analyzing a statically data is very complex. There are two different ways: collecting the entire data and compute the present out come and determine the future. The other one is collecting randomly sample data and determine the outcome. For example US census determines the economic growth of next year because of the previous pattern and also a randomly chosen data. My argument is all the data collection must be takes place by the government body. To illustrate: region, city, kebele “¦etc. I am sure IMF and World Bank does not have the wheel to go in each region, city and kebele to collect all data. Their job is analyzing and computing based on the data was provided by the government body. Based on the above scenario, they might use a randomly chosen data. The big question how genuine the present government is to provide a true data. The regime is continuing lying in many aspects any way.

  13. casanova
    | #13

    Mesfin,the recomendation by IMF to the current inflation is to slow down the Economic growth.And that is true,Woyanes has refused.They planned A and B.Plan A was to wait for the farmer to bring his product for the new season.But the farmer is still hording his product just b/c they r not in an emediate cash need like b4.So that has failed.Plan B is still not disclosed to the media and the public.It is still under study.I am not capable of comming up with a solution 4 the current problem.It is beyond my capacity.I am just trying to read and update myself to what people like the Weyanes,IMF,Dr Berhanu(in most economics issues,Dr Berhanu share IMF`s policy:things like privatization of all sectors and land`s ownership)and Abugida`s economic profesors r saying about the Ethio economics.So if Abugida`s economist have a solution to the current problem,please let us hear u.

  14. casanova
    | #14

    Daniel my point is just one and only one.IMF is a big international organization.They have all the second to none human resource.Most of the brilliant Economists of the world r working in IMF.IMF does`t take datas and infos from govts.They have all the wheel to reach every part of the nation.185 countries r members.Period.And nobody did`t talk about the economic 4cast.So your example about US census is not applicable on our issue b/c the IMF`s report on the economic growth is the current one.They did`t 4casted the future.Anyways thanks just b/c u r Chewa.But trust me, people like Tesema,Tigist,Ashu and others r so ignorants.


  15. Mesfin
    | #15

    I agree with Daniel on the fact that the IMF report is base on analysis of the row data it was feed by woyanne. Woyannes are certified liars. The difference between the reported economic growth and reality on day to day Ethiopians life shows how big liars woyannes are.

    In another note Casanova asked if the abugida economist have any solution for Ethiopia’s current problems. Well, as far as I know abugida is a media center that displays different people’s point of view on variety of issues. But, if you happen to follow has been repeatedly said that economic growth is highly related with good governance. In order to have a good governance we need to have an independent legal system that only interprets the law of the country not the political will of the executive, we need to have an independent election board that only counts the people vote besides that we need independent medias that serves as watch dogs and serve the general public by providing information and checking if the government bodies are functioning according to the law and order. Now, despite all the chaos that has been going on in Ethiopia Meles claims that he is running a good government and as a result of that the economy is booming. All I can say is that it is only woyannes who may buy that kind of bull crap.

  16. casanova
    | #16

    Mesfin,it is u who is row:not the data Weyane is feeding the IMF.Weyanes miss leading,miss informing and puppeting the IMF,i think those Weyanes r kind of superpowers.I mean if they r able to pupet 185 countries on a string.

  17. casanova
    | #17

    And Mesfin,if economics is highly related to good governance,automatically anybody can tell that there is a good governance in Ethiopia b/c NO ONE can`t denie the 11% growth in Ethiopia.Heeeeeeeeeeha.

  18. Daniel
    | #18


    I hope I do not offend. A good argument needs a well structure sentence and thought. I have hard time to comprehend your thought. I am very delighted to argue your point; however, I do not understand clearly what you wrote. Can you use a dictionary or “Microsoft words” to correct your grammar and spelling? When you post your message in here, make sure your thought clear and must have a substance.


  19. Mimi
    | #19

    casanova is a smart ass weyanne trying to look any other normal person. There is no normal thing about weyannes. No matter how hard they try to hide their stinky nature.

    | #20


    Since you are blinded with hate, you are not open for an honest discution but deep in your hart, you know the good things happening in Ethiopia but the filthy hate that covered your eyes doesn’t allow you to see the good things.

    In every economic re-structure, there are people who goes up and people who goes down, but the point here is, are the foundations for good functioning economy being set up????

    You write too many lines but they don’t make sense.Your argument is based on the situation in Addis, but the vast majority lives in the rular areas, all you need is to drive in any direction out of Addis and see for your self how the life of the people has been changed, that is ofcourse if you are aware of the past rular areas.



  21. casanova
    | #21

    Mesfin,i know it is very hard 4 u 2 understand expression like “second to none”,”puppet on a string” etc.And if u think “puppeting”is grammatically incorrect,u r the dum ass.Go and c how ur grammar is shit.”good argument” mina min,nobody here wants to listen to ur teret teret.Just bring facts.

  22. casanova
    | #22

    Sorry Mesfin,the above reply was to DANIEL.I mean it.So Mesfin yemilew part DANIEL teblo yi ne be biligne.Ke yikerta gar. Respect.

  23. Mesfin
    | #23

    Ato Geremew, a couple of points for you:

    1. You think I hate Woyannes. You are dame right. You don’t have any idea how deep my hate rate is, particularly towards Meles, for the rest of you it is deep disrespect that I have more than any thing else, just because you let wicked Meles to ride on your back freely.

    2. You brag about how things are well in Ethiopia, well first of all no matter how things are going well in Ethiopia that doesn’t substitute our quest for basic human rights for all Ethiopians. Meles can neither give nor deny our basic human rights. That is our givte from the almighty God. Meles is just one wicked man who is up to no good and doesn’t even know what is going to happen to him the next minute or day.
    Second, Ethiopia is currently known as being a police state where no body can even speak his/her mind and for that reason no reasonable person would pay attention for your bull crap propaganda.

    3. I still think that Woyannes are biological elements that Meles uses for his evil purpose and incapable of having their own independent ideas about anything. They followed Meles in the past for distraction and they know they will go with him no matter where he would take them. That is being stupid as much as it gets. If you think you are deceiving the international community or anybody else, think again. You deceive nobody! Meles told to all the foreigners that he is some kind of Monkey, and he is not good enough for democracy and civil manners. The White people kind of say ok to that, and gives him what he needs for his monkey job. If Meles himself present him self as primitive and monkey, why would they argue with him hard, to convince him that he is better than Monkey and deserve more than some thing to eat.
    The rest of us strongly disagree with Meles when he said that we are not good enough yet to have a democratic society, and we are working hard and harder to prove Meles wrong. If Meles and his Woyanne gangs want to be perceived as a bunch of primitives that can’t think rationally in the 21 century to resolve issues peacefully, that is their problem. But, they don’t represent the rest of Ethiopians.

  24. geremew
    | #24


    Like all humans, Meles have it’s own short commings.
    I’m not trying to portray him as an Angel. The problem you have is that you can’t call spade a spade. You can’t brand anybobdy a puppet of Meles Just because he or she doesn’t agree with you.

    We have seen what your “DEMOCRATIC LEADERS” had in their bag for us so I’m not going to waste any time with you about it.

    Tell me, is chanting Tigre wede Mekele a thing of the 21st century?????????? I’ll will tell you what it is, TILACHA,,,TILACHA,,,,& TILACHA. That was all that HOYA HOYE about, nothing to do with democracy, freedom of speach…and bla bla.

    You said that people are not able to express them self freely, so what were all the “free press” doing in the past 15 years and even until after the election???????? I tell you what they were doing, expressing their deep routed HATE HATE AND HATE against TIGREANS.


  25. Daniel
    | #25


    I agree Mesfin that the majority of people do not hate Tigrian since we have a cross marriage and have brothers and sisters from Tigrian. The people are a well respect and a loving people. However, some of them have been poisoned by blood sucker Wayene blood extremely hate others. I am sure the regime will be gone but our love to Tigrian exists for ever except the one who killed innocent children and woman. I am sure Woyane does not represent 4 million tigrian in a Tigrian region. Even some of our Tigrian brothers and sisters are murdered by Woyane because they do not want to participate their squad murder group.

    “We do not live in the best of all possible worlds.”? ““ Gottfried Wilhelm Leibniz (1646 ““ 1716). Back to Meles, He killed one way the other way innocent people, he high jacked freedom, justice and democratic value; he put jail young, old, women and children. He is the traitor by giving out our port. You tell me how any body can forget all this destruction, agony and human suffer. The truth will come with time. I and you see sooner not later. Human blood is not vain.

  26. Goytom
    | #26

    First of all I would like to appreciate Daniel’s way of argument. I think this is the right way to being teach each others. We should focuse on ideas and facts instead of jumping to judge individual. Having said this, I would like to add a little bit about our Tigrian brothers and sisters. Weyanna is using different tactics to poison our brothers and sisters to being away themselves from the rest of Ehtiopians. One of the tactics is used, poisoning their mind as if others Ethiopian, particularly Amhara and Oromo, are threat to Tigrians. If we agree on this, we shouldn’t consider them as Woyanna or enemies. We are responsible to thwart Woyannay’s tactic. No matter how they say bad things, it wouldn’t be justified to generalize or to hate them. This is not because they were bad from the very beginning but because they are victimized by Woyanna’s false Propaganda. So we should fight those people who are trying to generalize. We are at the beginning of the end so we have to think twice before what we gonna to say our brothers and sisters.

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