Advertisements
jump to navigation

Ethiopia: The bankrupted fascist Ethiopia’s regime has imposed huge sums of arbitrary payments and demands on small businesses July 15, 2017

Posted by OromianEconomist in #OromoProtests.
Tags: , , , , , ,
5 comments

 

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” 
― Frédéric Bastiat


TPLF, the unelected and unrepresentative fascist/ terrorist group from Tigray which occupied state power  in Ethiopia has  imposed heavy arbitrary payments called ‘gibri‘ on small business in the country. The group conducts such fraud activities in the name of taxation and federal state.  The bankrupted TPLF is to compensate its income losses from international aid and economic boycotts people imposed on the regime through series of protests (#OromoProtests, #AmharaResistance, #KonsoProtests, #SidamaProtests and resistance in Ogadenia and other parts of the country). Critics claims that  in the last 26 years and so  the TPLF has engaged in war booty, systematically looting resources and transfers to its group members and its rocky homeland, Tigray, Ethiopia’s north.  Click here to read ETHIOPIA: IS TPLF GOVERNING OR EXPANDING IT’S CORRUPTIONS EMPIRE?

And also,  protests against this  new systematic escalation of TPLF’s thievery in the name of taxation is viral on Ethiopia’s related social and independent media.

BreakingNews: Several districts in Oromia & SNNPR fall from dusk to dawn curfew; night public transport stopped

https://www.youtube.com/watch?v=eWYwnfozCMk

Slammed by unexpected tax hikes small business owners in Addis Ababa threatening to close their business. 

 

 

Advertisements

Forbes: Ethiopia’s Cruel Con Game March 3, 2017

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , , , , , , , , , , , , , , , ,
4 comments

Odaa Oromoooromianeconomist

The amount of American financial aid received by Ethiopia’s government since it took power: $30 billion. The amount stolen by Ethiopia’s leaders since it took power: $30 billion.


Ethiopia’s Cruel Con Game

Forbes Opinoin, GUEST POST WRITTEN BY David Steinman, 3 March 2017


Mr. Steinman advises foreign democracy movements. He authored the novel “Money, Blood and Conscience” about Ethiopia’s secret genocide.


In what could be an important test of the Trump Administration’s attitude toward foreign aid, the new United Nations Secretary-General, António Guterres, and UN aid chief Stephen O’Brien have called on the international community to give the Ethiopian government another $948 million to assist a reported 5.6 million people facing starvation.

Speaking in the Ethiopian capital, Addis Ababa, during the recent 28th Summit of the African Union, Guterres described Ethiopia as a “pillar of stability” in the tumultuous Horn of Africa, praised its government for an effective response to last year’s climate change-induced drought that left nearly 20 million people needing food assistance, and asked the world to show “total solidarity” with the regime.

Women and children wait for care at an outpatient treatment center in Lerra village, Wolayta, Ethiopia, on June 10, 2008. (Jose Cendon/Bloomberg News)

Ethiopia is aflame with rebellions against its unpopular dictatorship, which tried to cover up the extent of last year’s famine. But even if the secretary general’s encouraging narrative were true, it still begs the question: Why, despite ever-increasing amounts of foreign support, can’t this nation of 100 million clever, enterprising people feed itself? Other resource-poor countries facing difficult environmental challenges manage to do so.


Two numbers tell the story in a nutshell:

1. The amount of American financial aid received by Ethiopia’s government since it took power: $30 billion.

2. The amount stolen by Ethiopia’s leaders since it took power: $30 billion.


The latter figure is based on the UN’s own 2015 report on Illicit Financial Outflows by a panel chaired by former South African President Thabo Mbeki and another from Global Financial Integrity, an American think tank. These document $2-3 billion—an amount roughly equaling Ethiopia’s annual foreign aid and investment—being drained from the country every year, mostly through over- and under-invoicing of imports and exports.

Ethiopia’s far-left economy is centrally controlled by a small ruling clique that has grown fantastically wealthy. Only they could be responsible for this enormous crime. In other words, the same Ethiopian leadership that’s begging the world for yet another billion for its hungry people is stealing several times that amount every year.

America and the rest of the international community have turned a blind eye to this theft of taxpayer money and the millions of lives destroyed in its wake, because they rely on Ethiopia’s government to provide local counterterror cooperation, especially with the fight against Al-Shabab in neighboring Somalia. But even there we’re being taken. Our chief aim in Somalia is to eliminate Al-Shabab. Our Ethiopian ally’s aim is twofold: Keep Somalia weak and divided so it can’t unite with disenfranchised fellow Somalis in Ethiopia’s adjoining, gas-rich Ogaden region; and skim as much foreign assistance as possible. No wonder we’re losing.

The Trump Administration has not evinced particular interest in democracy promotion, but much of Ethiopia’s and the region’s problems stem from Ethiopia’s lack of the accountability that only democracy confers. A more accountable Ethiopian government would be forced to implement policies designed to do more than protect its control of the corruption. It would have to free Ethiopia’s people to develop their own solutions to their challenges and end their foreign dependency. It would be compelled to make the fight on terror more effective by decreasing fraud, basing military promotions on merit instead of cronyism and ending the diversion of state resources to domestic repression. An accountable Ethiopian government would have to allow more relief to reach those who truly need it and reduce the waste of U.S. taxpayers’ generous funding. Representative, accountable government would diminish the Ogaden’s secessionist tendencies that drive Ethiopia’s counterproductive Somalia strategy.

Prime Minister of Ethiopia Hailemariam Desalegn attends the 28th African Union summit in Addis Ababa on January 30, 2017. (ZACHARIAS ABUBEKER/AFP/Getty Images)

But Ethiopia’s government believes it has America over a barrel and doesn’t have to be accountable to us or to its own people. Like Mr. Guterres, past U.S. presidents have been afraid to confront the regime, which even forced President Barack Obama into a humiliating public defense of its last stolen election. The result has been a vicious cycle of enablement, corruption, famine and terror.

Whether the Trump Administration will be willing to play the same game remains to be seen. The answer will serve as a signal to other foreign leaders who believe America is too craven to defend its money and moral values.

 

“General Gabre” the most corrupt fascist TPLF Ethiopia’s officer in Somalia February 13, 2017

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , , , ,
add a comment

Odaa OromooOromianEconomist


“General Gabre” the most corrupt Ethiopian officer in Somalia

“General Gabre” the most corrupt Ethiopian officer in Somalia
"General Gabre" the most corrupt Ethiopian officer in Somalia

Ethiopian military and political backing for sale by a corrupt officer called “Gabre” (Part 1)

(Suna Times )- The most Ethiopian corrupt military officer who is called Haile Gabre known by Somalis as General Gabre becoming extremely wealthy from the huge sums of money that he is getting from opportunistic Somali politicians who want to buy the sympathy of Addis Ababa, one of his juniors told Waagacusub anonymously.

“Atto  Gabre was corrupted  by Somali politicians and he also then corrupted Ethiopian senior officials so they will condone  his wrong doing,” the officer who could not give his name afraid of reprisals said

“There was several vehicles that were taken from somali individuals  by intimidation or corruption which were later donated by Gabre to most senior military officials and their family members,” he said.

Gabre had a business interest in United Arab Emirates in which he is represented by one of cousins

The bussiness is to give a better exchange rate of foreign currency for Ethiopians who want to import goods to landlocked hugely populated  Ethiopia.

“Recently large construction equipment owned by Gabre were sent to Ethiopia on a duty free from Dubai through port of Djibouti,” an Ethiopian business man based in Djibouti said.

“All the materials belonged to Gabre but his name can’t be seen on the manifest,” he said.

Gabre most incoming generation is from Somali politicians who want to use his country’s support in order to come to power.

He also gets money from the funds donated by the west for the regional East African body known as IGAD, he is suppose to be a facilitator for Somali so called peace process.

The Ethiopian traitor started his murky business in very early 90 in Bay and Bakol region by selling small arms to rival warring factions in southern Somalia but he became principal corruption boss after 2002 when the major Somalia talks in Kenya started.

There is a famous Mogadishu saying “if you want the power in Somalia first corrupt Gabre and enjoy military and political backing of Ethiopia.”

Gabre is from the Tigre tribe which is ruling the country since 1992.

Most of his dark business is well known by many Ethiopians but no one dare to say a word of that as most of national secret service agents are from his compatriots of Tigre Libration Front.

The continuation of violence  in Somalia us a surviving kit for Gabre and few other African corrupt officials, but he is the most ruthless money monger in that sector.

To be Continue Part 2

Reporters in Dubai, Djibouti and Mogadishu

Compiled by Dahir Alasow

 


 

Related Article: 

Ethiopian spy is the most hated person in Somalia.

 Waagacusub.net, February 11, 2017



 Somali elected president Mohamed Abdullahi Mohamed “Farmaajo” was requested by many people and political groups to declare Ethiopian secret service official Hailu Gabre persona non grata for intermingling in the internal affairs of Somalia and masterminding renewed hostilities.”The spy, Gabre, is rearming former warlords to foil the newly elected Somali president,” Ahmed Daud Ibrahim who is a local district official in Medina district said.

“Gabre is always working against the peace in Somalia because violence is the best chance for him to sell weapons,” he said.

The officer who falsely calls himself  as General Gabre is a spy committed to serve only the interest of few Tigre ruling tribe of Ethiopian.

He is highly paid for his services by Somali  politicians who want to come to power through corruption, violence  and intimidation.

But he attracted extreme antipathy of those who care about Somalia.

“Everybody in Somalia knows Gabre is a weapons dealer, corrupt and saboteur,” Ahmed Tubako, a shop owner in Mogadishu said.

“He is part of the so called international community but Gabre is a cancer in the national interest of Somalia.” said Tabako.

Maryan Awale, elementary school teacher, warned that if the new president did not expel Gabre from our country then no progress will be made to rebuild Somalia.

“You can’t avoid sickness if you have bacteria in your food or or environment at home,” says Maryan who is 36 years old mother.

“Gabre is a combination of bacteria and virus that harm the nerve of our politics ,” she said by adding ” he is the most hated person in Somalia.”

Somali president was elected by overwhelming vote on Wednesday  in Mogadishu to replace president Hassan Sheikh Mohamud who was rejected for corruption and misrule.


 

Fascism: Corruption: TPLF Ethiopia: Inside the Controversial EFFORT January 19, 2017

Posted by OromianEconomist in Corruption, Tyranny.
Tags: , , , ,
6 comments

Odaa OromooOromianEconomist

The TPLF Corruption network


ANALYSIS: INSIDE THE CONTROVERSIAL EFFORT


  

Every authoritarian regime has its own symbol of economic exploitations and monopoly either in an individual face or in an organizational mask.

Ethiopia, despite its success in persuading its western allies that it is combating poverty using its fast economic growth and democratization, remained to be one of the poorest and most closed countries where a group of few individuals control vast economic shares and absolute political power. Unlike many other authoritarian regimes, the most dominant ruling elite group in Ethiopia has a complex behavior in that it claims to represent a minority ethnic group from the northern part of the country, Tigray. In response it has gotten a relatively overwhelming legitimacy among the people of Tigray as compared to other regions; or at least many people, including myself, believe it receives better legitimacy only in that specific region.

Moreover, this elite group has established a chain of several multi-billion dollar worth business firms under a home-grown umbrella called EFFORT, ‘Endowment Fund for the Rehabilitation of Tigray’, which was originally established to serve a harmless looking purpose of  ‘rehabilitating’ Tigray, a war-torn region deprived of a fair chance to prosper during decades of successive regimes. In the past 25 years of TPLF’s dominated political rule in Ethiopia, therefore, EFFORT has emerged as one of the leading economic powerhouses in the name of ‘rehabilitating’ the region.

 What is in the name?

On the surface, EFFORT is an umbrella company for a group of businesses which are involved in major industrial activities in Ethiopia, such as banking and insurance, import and export, media and communication, construction, agribusiness, and mining, among others.

Having started with an initial capital of around US$100 million, EFFORT’s worth has now reached more than a staggering US$3 billion in paid capital, creating more than 47,000 employment opportunities.

EFFORT companies were first registered as private share companies owned by some of the top leaders of TPLF. Later on, however, the companies were re-registered as “endowment” companies whose profits will not be divided to individuals, according to the 1960 Ethiopian civil code. However, top officials of the TPLF, the most powerful member of Ethiopia’s ruling party EPRDF, remained as the CEOs and GMs of these companies; and some of whom reportedly own small shares designed to motivate them in helping EFFORT stay competitive.

‘The original sin’: How did TPLF accumulate its wealth?

 EFFORT’s official profile claims it was established by using seed money from the liquidated amount of capital of the Tigrayan People’s Liberation Front (TPLF), accumulated during Ethiopia’s 17 years civil war of the militarist Derg regime to establish these companies.

In 2008, Aregawi Berhe, a former veteran of TPLF who later on left the party, did his Ph.D. dissertation on ‘The Political History of TPLF’ for Vrije Universteit in Amsterdam, somehow corroborates the story. In his account of the party’s earliest times, Aregawi wrote about one of the first successful operations that the then guerilla fighters ever had: ‘Axum Operation’. It is a military operation that succeeded in raiding a police garrison and a bank in the historic city of Axum in the north during which the TPLF fighters made away with “substantial amounts of arms and ammunition and 175,000 birr (US$ 84,000)”, according to Aregawi.

Having started by raiding public banks, members of the TPLF continued to accumulate wealth and went on to dominate the contested use of ‘aid money’ for political purposes before the party came to control power in 1991. TPLF had also founded the Relief Society of Tigray (REST), a humanitarian wing, during the civil war. “By June 1985,” wrote Aregawi Berhe, “REST had received more than US$100 million from donors in the name of saving famine victims. [… however] the late Meles [Zenawi’s] proposal for the allocation of the relief aid money was as follows: 50% for MLLT [Marxist-Leninist League of Tigray] consolidation, 45% for TPLF activities and 5% for the famine victims.” Predictably, Aregawi’s claim, especially that of aid money allocations, has been vehemently denied by the current TPLF leaders.

Gebru Asrat, another former TPLF veteran who later on established an opposition political party Arena Tigray, has briefly raised this issue in his book, ‘Lualawinet Ena Democracy beEthiopia’, (Sovereignty and Democracy in Ethiopia), and said that the guerilla fighters used to get a lot of money in foreign aid and; ‘it was up to the TPLF [leadership] to allocate which money goes where.” Gebru neither confirmed nor denied Aregawi’s claim that aid money was used for political purposes. If anything, he is of the view that it is impossible to make such allegations.

However, legally questionable ways of accumulating wealth seemed to have continued within the party even after it took control of state power. Ermias Legesse, a former Communication State Minister, who is now in exile, has recently published his second book, ‘Yemeles Leqaqit’, in which he raised multiple controversial points against the establishment and functions of EFFORT.

In Chapter six of this 565 pages book, Ermias tells several stories on how EFFORT used to get its finances unfairly from the Ethiopian state and how it transferred it to its own account. Ermias went an extra mile to display a letter written in 1994 and was signed by the then Prime Minister, Tamrat Layne, demanding the Addis Abeba Health bureau to refund TPLF’s medical expenses of the civil war time. The money requested amounted to more than four million birr (almost 67% of the city’s annual budget at that time), but the total amount paid by the Ministry of Health was actually 17 million birr. Ermias also wrote that the medicines that TPLF had distributed to  the locals during the civil war, for which it had requested a refund, was actually robbed by the guerilla fighters from public pharmacies. The money that was paid back in such a bizarre demand by the then Prime Minister was put in TPLF’s accounts.

Of continued sins & controversies

Companies that are currently under the umbrella of EFFORT were originally established as PLCs having a few members of TPLF leaders as shareholders. Later on, in August 1995, they were re-registered as ‘endowment’ companies and still remained under the umbrella of EFFORT.

The re-registration of these PLCs as ‘endowment’ companies was done to justify that these companies were established using the money donated by the shareholders of the preceding PLCs, which in itself portrays a picture that EFFORT, as a conglomerate of these companies, did not use public money to be established. According to the Ethiopian civil code, endowment companies are legally prohibited from distributing their profits to individuals. This fact effectively obscures the few individuals controlling these companies behind a party cover.

In 2004, the Amharic version of the ‘Ethiopian Reporter’, a bi-weekly newspaper owned by a former member of the TPLF rebel group, published series of stories concerning EFFORT and its debt in public banks, including the controversial cancellation of the debt. (The copies of these publications are annexed in the latest book of Ermias Legesse, referred above.)

According to this series of publication, EFFORT had borrowed 1.7 billion birr from the state-owned Commercial Bank of Ethiopia (CBE) which later on has risen to 1.8 billion birr debt including the interests. First, CBE officials have denied and said that ‘they did not loan money to EFFORT’. But later on CBE had transferred the debts to yet another state-owned bank, Development Bank of Ethiopia (DBE), for ‘better management’. Finally, DBE reported that the amount of money loaned to EFFORT was ‘none performing’ loan. Ermias claims that the CBE had loaned EFFORT the money with no collateral in the first place. The following year it was reported that DBE, the bank that took over the loan for “better management” was facing a bankruptcy of some 3.5 billion birr; certainly not exclusively attributable to the loan provided to EFFORT, but due in a significant part to it.

The other controversy surrounding EFFORT lies in the manner in which its businesses affiliates operate. Its leaders claim that their extreme obedience to the rule of law and their refusal to bribe local officials often poses a great challenge to their operations, disadvantaging their businesses. However, EFFORT companies are generally known to enjoy a great deal of support from officials. A good example to prove this is a rare ruling by a federal court on the 19th December 2012. The federal First instance court at Lideta ruled that one of EFFORT’s companies, Mega Entertainment Center, which was led by the widow of the late PM Meles Zenawi, Azeb Mesfin, has been running its business in a fraudulent manner by reporting more expenses than the actual and without paying value-added taxes collected from its customers during the preceding eight years.

But the secrecy of most of these companies is such that details like this come to the public’s knowledge only when there is disagreement between stakeholders; this time, it was between Azeb and another management member of Mega, Eqoubay Berhe.

Still, just what is EFFORT?

According to a letter by former US ambassador to Ethiopia, Donald Yamamoto, which was one of the Wikileaks documents, Ex-TPLF veteran Seyee Abraha (who later on fell from favor and was subsequently jailed for corruption) was quoted as saying the objectives of EFFORT during its foundation were “to study, and then establish profitable companies that use locally-available resources and provide employment [opportunities] for Tigray.” In this sense, EFFORT, even though it also gets raw materials from and markets its end products to other regions in Ethiopia, mostly (though not exclusively) hires Tigrians.

In principle, its profit should be used to rehabilitate the region. However, many Tigrians despair the fact that the “Endowment” is merely used by a few corrupt TPLF elites to enrich themselves. Former veteran and ex-president of the Tigray region for a decade, Gebru Asrat, in his book mentioned above admitted that the “endowment” was being exploited by a few TPLF top leaders; he suggested that there must be ways of diverting EFFORT’s profits/wealth to the people of Tigray as the endowment belongs to the Tigrians. His suggestion indicates a return, once again, of the endowment to a share company in which as many individuals could become shareholders. Many Tigrian pro-democracy activists agree with Gebru Asrat’s suggestions.

What do ‘others’ own?

Without a doubt, other regions of Ethiopia have also suffered significant social and economic devastations during the 17 years civil war before it ended in 1991. Military expenditure was Ethiopia’s biggest expense during the entire rule of the militarist Derg regime. Suffice to say, therefore, other regions also needed ‘endowments’ of their own.

It seemed it was in response to this concern that TPLF ‘provided’ seed money for other rehabilitation funds.  In Oromia regional state is Dinsho endowment, which was established in 1992 and was renamed Tumsa Endowment for Development of Oromia in 2001. It is led by top officials of the OPDO, the party representing the region within the EPRDF coalition. In Amhara regional state is ‘TIRET’, first established in 1995 and went on to incorporate several pre-existing companies. TIRET is led by senior officials of ANDM, the party representing the region within the ruling EPRDF. And in Southern Nations Nationalities and People’s Region (SNNPR) is WENDO trading, which was established in 1994 and is led by senior officials of SEPDM, the party representing the region within the ruling EPRDF.

Seyee Abraha has admitted: “TPLF gave a portion of its capital to each of the three parties within the EPRDF to establish their own endowment funds”. However, the combined numbers of companies run by these three ‘endowments’ are less than twenty; whereas at least 24 companies are listed under EFFORT; (some put these numbers as high as 380). The nature of secrecy surrounding this delicate matter means one may never find out the real figures.

Nonetheless, the three “endowments” run by OPDO, ANDM and SEPDM were supposed to create employment opportunities for more than 80% of Ethiopia’s population as compared to EFFORT’s targeting of 6% of Ethiopians in Tigray regional state.

According to a research titled ‘Rethinking Business and Politics in Ethiopia’, published in 2011 by Sarah Vaughan and Mesfin Gebremichael, “[TIRET] companies employ only 2,800 staff, as compared with the more 14,000 permanent employees or 34,000 contract staff of EFFORT and its companies.” And the poorest regional states of Ethiopia, namely, the Somali, Afar, Benishangul-Gumuz and Gambella regions do not have ‘endowment companies’ of their own to help them rehabilitate their respective regions, although they are politically administered by EPRDF’s sister parties.

What’s not and what’s owned by EFFORT?

There is a big deal of confusion in identifying EFFORT’s business complexities. Selam Bus Share Company is a good example. Established in 1996, 99.6% of this interregional transport service providing company share is held by Tigray Development Association (TDA); the rest is held by individuals. Although Selam Bus board members, as are EFFORT companies’ board members, are members of the TPLF, EFFORT has no registered share in Selam Bus. However, Selam Bus is a company many people name first when asked to list EFFORT’s businesses. This blurry ownership status is perhaps one of the reasons why Selam Buses were targeted by the last year’s widespread public protesters in Oromia and Amhara regions.

Dejennna Endowment is another example. Established to ‘help promote development in Tigray,’ on the surface Dejenna Endowment is a part of the Relief Society of Tigray (REST). There are 11 companies listed under Dejenna Endowment in its website. In 2009, Dejenna has merged with EFFORT following the appointment of Azeb Mesfin, widow of the late Meles Zenawi, as head of the later. Companies under EFFORT usually hold shares in one another’s companies so that one pulls up when another fails. However, until today little is known about the merger of EFFORT and Dejenna. Besides, the information on the official websites of the two endowments mis-inform readers as if the two are independent of one another. But, some of the companies that are known to be under EFFORT are actually listed as the properties of Dejenna endowment.

The Sheger vs Mekelle narrative

By now, keen observers of the relationship between politics and business in Ethiopia can safely assume that business and politics in Ethiopia are radically divided into two major narratives in defining and perceiving the current TPLF dominated regime. I call these narratives ‘the Sheger narrative’ – a political narrative that is mostly advocated from here in the capital Addis Abeba, and ‘the Mekelle narrative’ – usually advocated by the people in Mekelle, the capital of the Tigray regional state, home to the all too powerful members of TPLF.

However, both narratives go beyond these respective centers depending on whose political view is solicited. The two narratives are only thoughts that do have majority acceptance in their respective centers. ‘The Sheger narrative’ (the most popular one) considers the TPLF dominated administration as a total failure that holds power by force; whereas ‘the Mekelle narrative’ generally sympathizes with the regime and considers it as a legitimate administration, albeit admitting some of its fault lines mostly due to the corrupt practices of some of its leaders.

This definition makes it clear how and why Tigrians (in most cases driven by ‘the Mekelle narrative’) and non-Tigrians (driven by ‘the Sheger narrative’) view the relationship between TPLF and EFFORT differently.

Tigrian pro-democracy activists’ criticism of EFFORT can be clearly seen by how they react to the manner in which former leaders of TPLF, who were expelled during the party’s infamous split in 2001, view EFFORT. Former top leaders of TPLF, Seyee Abraha, as we read him on wikileaks documents, and Gebru Asrat, from his book, both criticize EFFORT’s management. Both regret EFFORT’s failure to rehabilitate Tigray as was stipulated in its foundational principles. However, both believe the people of Tigray are the rightful owners of these ‘endowment’ companies under EFFORT.

On the contrary, most non-Tigrian activists and politicians disown EFFORT and also the rest of ‘endowments’ that are being manipulated by EPRDF leaders. Lidetu Ayalew, former leader of the opposition Ethiopian Democratic Party, and Dr. Berhanu Nega, current leader of the outlawed Ginbot 7, both condemned EFFORT as a party business that monopolized the economy, and both concluded the “endowments” should be dissolved or privatized. Similarly, many other activists want to (and sometimes advocate) boycotting EFFORT services and products to stop TPLF’s hegemonic march.

In the same manner, Tigrian activists claim other home grown charity organizations operating in Tigray, namely REST and TDA, are used to create grassroots networks to dictate the people of Tigray become loyalists of the TPLF, whereas non-Tigrian activists, such as Ermias Legesse, disagree and say these organizations are replicas of EFFORT to simply promote disproportionate social development of Tigrians at the cost of others.

This leads us to conclude that ‘the Mekelle narrative’ generally portrays EFFORT as an organization that rightfully belongs to the ‘Tigrian people’ which is unfortunately being exploited by few members of the top management for personal gains. ‘The Sheger narrative’, on the other hand, defines EFFORT as ‘a tool to exploit the wealth of Ethiopian people and create economic monopoly for the benefit of a [small] group’.

 The red line

What is indisputable is speaking truth in a country governed by the TPLF dominated EPRDF is always a dangerous exercise; speaking the truth about EFFORT is even more dangerous. A tax controller from Adama, 100kms south east of Addis Abeba, who is now in Qilinto prison on the southern outskirt of Addis Abeba suspected of ‘corruption’ has recently told me that ‘EFFORT trucks were known to be untouchables on their way to and from Djibouti port’. Similarly, investigating companies under EFFORT is normally a red line no journalist in Ethiopia would like to cross, contributing to the secrecy of the ins and outs of the giant umbrella.

Concealed in this intimidating rubble are crucial facts about EFFORT such as details on tax returns. That is why this article cannot be taken as an exhaustive look into the functions of EFFORT and its affiliates, but just the tip of the iceberg to demonstrate in part some facts about the economic exploitations of the authoritarian regime currently governing Ethiopia.


Graphic design: Addis Standard

Ethiopia: Millions of dollars squandered in fraudulent land loan December 22, 2016

Posted by OromianEconomist in Corruption, Uncategorized.
Tags: , , , ,
add a comment

Odaa OromooOromianEconomist

The TPLF Corruption network


Bank-Loan-for-Land-Grab_Ethiopia


Ethiopia: Millions of dollars squandered in fraudulent land loan


ESAT News (December 21, 2016)


Nearly 400  of the 623 investors who took land for development in the Gambella region, western Ethiopia, have reportedly taken multiple loans  on a single plot of land. Most of the so-called “investors” have reportedly been from Tigray region.

A report issued by a team to probe into the case concluded that 381 investors have taken multiple loans on 45,000 hectares of land. The Development Bank of Ethiopia also said it is investigating cases where multiple loans were issued on a single plot of land.

The report did not say how much money was squandered in the scheme but data shows about 200 investors have taken over 50 million dollars in loans from the Development bank of Ethiopia.

Only about 300 of the close to 600 tractors imported duty free were actually seen on the location of the development.

The report also said 29 investors who took loans to develop land have not reported yet. The team said in a report that it actually could not put faces on the files of the said 29 investors.

The government sponsored study also revealed that only 15% of the 630,000 hectares of land has been developed as of this year.

Last week, over one thousand Tigrayan businessmen who took land for agriculture in Gambella, displacing the locals, complain of lack of additional loans from the Development Bank of Ethiopia.

Critics say the complaint by the Tigrayan businessmen only revealed that they were actually favored by the ethnocentric government and that they were the only ones with access to land and loans.

Several local and Indian investors have disappeared after taking millions of dollars in land loans in Gambella, Benishangul and other naturally endowed regions of Ethiopia.

Crisis in Ethiopia: Drought persists, and nutrition suffers September 28, 2016

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , ,
1 comment so far

Odaa OromooOromianEconomistZenawi the tyrant still rules after death

 

 

Ethiopia is one such part of the world where there is ongoing disappointment, and hope has been severely tested. The country, in the Horn of Africa, has experienced very bad drought since February 2015. There was no harvest at the end of last year, and it’s doubtful there will be much of one this year. Spring brought rain, and some relief, but in some places too much rain led to severe flooding, which displaced 190,000 people. “The majority of Ethiopian farmers are dependent on rain-fed agriculture. Rain failure is a disaster for farmers,” said Argaw Fantu, regional director in Ethiopia for the Catholic Near East Welfare Association. “Some areas are also naturally disadvantaged areas as the rainfall is so erratic, [and because of the] rocky and mountainous nature of the area.”

Though the situation is not as extreme as it was in the 1980s, when some 400,000 Ethiopians starved to death, more than 10 million people are threatened with malnutrition. The United Nations estimates that 15 million people are in urgent need of food aid due to drought, and that 33% of this population is already suffering the effects of severe malnutrition due to agriculture failure and death of livestock, Fides reported. It is estimated that, between October 2015 and April 2016 about 450,000 animals died, severely affecting the supply of milk, especially for children.

 

 

The colored corn and pumpkins decorating the front entrances of homes in North America, the weekend apple-picking ventures, the waning days of the farmer’s market in town all hark back to a time when America was a thoroughly agrarian society. So while “harvest time” may be more of a slogan than anything else anymore, in other parts […]

via Crisis in Ethiopia: Drought persists, and nutrition suffers — Aleteia.org – Worldwide Catholic Network Sharing Faith Resources for those seeking Truth – Aleteia.org

ALJAZEERA: The ‘Ethiopia rising’ narrative and the #OromoProtests June 20, 2016

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , , , , ,
2 comments

Odaa Oromoo#OromoProtests against the Ethiopian regime fascist tyranny. Join the peaceful movement for justice, democracy, development and freedom of Oromo and other oppressed people in Ethiopia

Opinion/ Human Rights: The ‘Ethiopia rising’ narrative and the Oromo protests

Oromos have been the victims of indiscriminate and disproportionate attacks in the hands of security forces.

 


Members of the OromoComunity living in Malta, protest in Valletta, Malta, December 2015, Reuters photo
Ethiopian migrants, all members of the Oromo community of Ethiopia living in Malta, protest in Valletta, Malta, December 2015 [Reuters]

by Awol K Allo, ALJAZEERA, 20 June 2016

Awol K. Allo is a Fellow in Human Rights at the London School of Economics and Political Science.


So much for the “Ethiopia rising” meme which Ethiopian authorities ostentatiously promote to camouflage the repressive nature of the state.

A new report published by Human Rights Watch on the Oromo protests depicts a disturbing picture of a government that thrives on systematic repression and official violence.

The report, which puts the death toll from the seven-month-long protest at more than 400, exposes the “Ethiopia rising” narrative for what it is: a political Ponzi scheme.

Underneath the selective highlighting of Ethiopia’s story of renaissance and transformation lies a Janus-faced reality in which the triumph of some has meant the utter submission of others.

The Oromo protests are exposing the senseless suffering and brutality that lies beneath Ethiopia’s rhetoric of development and revival.

Ethiopia’s largest ethnic group ‘marginalised’

Long-simmering ethnic discontents

After 25 years of absolute control over the country’s public life, the ruling party is facing its biggest political challenge yet: an unconventional and innovative resistance to its iron-fisted rule.

What is unfolding in the drama of this increasingly defiant and unprecedented protest is the subplot that producers and cheerleaders of the “Ethiopia rising” myth neither anticipated nor fully understood: the power of the indignant to wreak havoc and paralyse the state even as they were met with murderous official violence.

Though the protest was initially triggered by the threat of displacement by Ethiopia’s development policies – particularly the proposed expansion of the territorial limits of the capital, Addis Ababa, into neighbouring Oromo lands – this is not the sole reason and cannot provide an adequate explanation of the level of defiance on the streets of Oromia.

Rather, the protest is a manifestation of long-simmering ethnic discontent and deeper crisis of representation that pushed Oromos to the margin of the country’s political life.

READ MORE: Ethiopia – Oromo protests continue amid harsh crackdown

Despite a rare concession by the authorities to cancel the “master plan”, the protest is still ongoing, demanding genuine political reforms aimed at an equitable reorganisation and overhauling of existing frameworks and arrangements of power in the country.

Protesters argue that the prevailing arrangements with the ethnically mixed morphology of the Ethiopian state, in which ethnic Tigray elites dominate all aspects of public life, are not only undemocratic, they are also an existential threat to the peaceful co-existence of communities in the future.

The Oromo question

As the single largest ethnic group in a multi-ethnic country in which ethnicity is the pre-eminent form of political organising and mobilisation, the prevailing arrangement presents a particularly unique and challenging problem for the Oromo.

According to the 2007 Ethiopian National Census, Oromos constitute 34.49 percent of the population while Tigray, the politically dominant ethnic group, represents 6.07 percent of the total population. The real figure for the Oromo people is much higher.

The silence of the international community in the face of consistent reports raising alarms about systematic and widespread atrocities is deafening.

By virtue of being a majority ethnic group, Oromos represent an existential threat to the legitimacy of ethnic Tigrayan rule and therefore have to be policed and controlled to create an appearance of stability and inclusiveness.

In a landmark report titled “Because I am Oromo“, Amnesty International describes a widespread and systematic repression, astonishing in scope and scale, in which the conflagration of ethnic identity and political power gave rise to the unprecedented criminalisation and incarceration of Oromos over the past five years.

Oromos have been the victims of an indiscriminate and disproportionate attack in the hands of security forces. This, protesters argue, had a far deeper and more corrosive effect of rendering Oromo identity and culture invisible and unrecognisable to mainstream perspectives and frameworks.

OPINION: Ethiopia drought – How can we let this happen again?

The government’s response so far has been to dismiss the movement as misinformed, and besmirch it as anti-peace or anti-development elements controlled and directed by external forces – an old tactic used by the government to discredit and criminalise dissent. The most vocal and outspoken members of the movement are being tried for terrorism.

Western influence

The silence of the international community in the face of consistent reports raising alarms about systematic and widespread atrocities is deafening.

The obsessive focus of the West on the “war on terror” and the tendency to define human rights policy through the lens of the war on terror means that those who abuse their citizens under the guise of the war on terror are impervious to criticism.

READ MORE: Ethiopia’s Oromo people demand equal rights in protests

In the decade since 9/11, the West went beyond technical and financial support to providing diplomatic cover to abuses of human rights including by creating make-believe stories that Ethiopia is a democracy and an economic success story.

High-ranking government officials, including the United States President Barack Obama, praised the ruling party as “democratically elected“, providing much-needed endorsement and legitimisation to the government.

Ethiopia is a classic case of US counterterrorism policy inadvertently producing the very thing it seeks to prevent: helping to create an Orwellian surveillance state reminiscent of the Stasi in East Germany.

The “Ethiopia rising” narrative and its economic fiction is beginning to unravel. With the IMF significantly downgrading its economic forecast to 4.5 percent from 10.2 percent last year, the exodus of people fleeing its repression, and the droughts that made a fifth of its 100 million people dependent on food aid, Ethiopia’s economic miracle is being exposed for what it is: the benefit of the elite.

The Ethiopian government and its partners in the West are thinking that the outcry will die away, that the outrage will pass. We should lose no opportunity to prove them wrong.

Awol K Allo is Fellow in Human Rights at the London School of Economics and Political Science.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.

Source: Al Jazeera


More at:-

http://www.aljazeera.com/indepth/opinion/2016/06/ethiopia-rising-narrative-oromo-protests-160620140306460.html


 

Ethiopia: The US SEC forced TPLF to pay $6.5 million for Unregistered Bonds sold in U.S. June 9, 2016

Posted by OromianEconomist in Uncategorized.
Tags: , , ,
add a comment

 

Odaa OromooUS SEC

Wayyaaneen  karaa seraan alaatin gorgurtaa  bondii biyya Ameerkaa keessatii kan rawwatte  dolaara miliyoona 6. 5 waan seraa biiyyaati cabsiitef akkaa kaafaltu agoowoni Ameerkaa itti  murttessan.


SEC: Ethiopia’s Electric Utility Sold Unregistered Bonds In U.S.

Washington D.C., June 8, 2016  (SEC) — The Securities and Exchange Commission today announced that Ethiopia’s electric utility has agreed to pay nearly $6.5 million to settle charges that it violated U.S. securities laws by failing to register bonds it offered and sold to U.S residents of Ethiopian descent.

According to the SEC’s order instituting a settled administrative proceeding:

  • Ethiopian Electric Power (EEP) conducted the unregistered bond offering to help finance the construction of a hydroelectric dam on the Abay River in Ethiopia.
  • EEP held a series of public road shows in major cities across the U.S. and marketed the bonds on the website of the U.S. Embassy of Ethiopia as well as through radio and television advertising aimed at Ethiopians living in the U.S.
  • EEP raised approximately $5.8 million from more than 3,100 U.S. residents from 2011 to 2014 without ever registering the bond offering with the SEC.

“Foreign governments are welcome to raise money in the U.S. capital markets so long as they comply with the federal securities laws, including registration provisions designed to ensure that investors receive important information about prospective investments,” said Stephen L. Cohen, Associate Director of the SEC’s Division of Enforcement. “This settlement ensures that investors get all of their money back plus interest.”

The SEC’s order finds that EEP violated Sections 5(a) and 5(c) of the Securities Act of 1933. EEP admitted the registration violations and agreed to pay $5,847,804 in disgorgement and $601,050.87 in prejudgment interest. The distribution of money back to investors is subject to the SEC’s review and approval. Investors seeking more information should contact the administrator of the distribution, Gilardi & Co. LLC, at 844-851-4591.

The SEC’s investigation was conducted by Carolyn Kurr and Daniel Rubenstein and supervised by C. Joshua Felker. The SEC appreciates the assistance of the U.S. Department of State.

 


የኢትዮጵያ መንግስት በአሜሪካን ህገወጥ የቦንድ ሽያጭ በማድረግ የሰበሰበውን ገንዘብ እንዲመልስ ተወሰነበት። የአሜሪካን የቦንድ ሽያጭና ግዥን የሚቆጣጠረው ኮሚሽን ባቀረበው ክስ መሰረት የኢትዮጵያ መንግስት በአሜሪካን ባልተመዘገበ የቦንድ ሽያጭ የሰበሰበውን 5.8ሚሊዮን ዶላር ጨምሮ በድምሩ 6.5 ሚሊዮን ዶላር እንዲከፍል ተስማምቷል። በአሜሪካን ሀገር ከሚኖሩ ከ3,100 ኢትዮጵያውያን የተሰበሰበው ገንዘብ ለአሜሪካን መንግስት ይከፈላል።

Oromia: Ethiopia: The People Want Their Country Back May 21, 2016

Posted by OromianEconomist in Uncategorized.
Tags: , , , ,
add a comment

Odaa Oromoo#OromoProtests @sululta, Rd Blocked at 50 locations, 17 Dec. 2015The TPLF Corruption network

 

The People Want Their Country Back

OPINION  By Seid Hassan,   All Africa


Ethiopia is in the grip of a terrible crisis. The recent widespread popular protests must be understood in the context of an atrociously repressive regime and near total capture of the state by ethnic elites, who are now the sole beneficiaries of national resources. The people are bitter. If this mass frustration is channeled into properly organized popular resistance, Ethiopia could see a revolution.

INTRODUCTION

In addition to the senseless killings of protesters by the ruling party targeting the Oromos, the latest video clips and news reports also indicate that the same protests in Oromia region have led to the burning/destruction of properties, foundations, etc. There is an ongoing and raging debate among Ethiopians, residing both in and outside of the country, about this debacle. Some members of the diaspora link (and rightly so in this regard) the burnings/destructions to the innumerable atrocities and endemic corruption committed by the ruling party. Their condoning seems to emanate from the fact that a good portion of the destroyed properties are owned by corrupt elites and foreign companies/individuals with close links to the ruling clique. The owners of these properties and structures are reaping what they have sown, they argue. Folks who echo these sentiments seem to consider riots as antidotes to unending pillaging and a necessary evil to avenge evil doers.

There are others, particularly those who consider themselves as soldiers of the peaceful struggle, which includes those who participated in organizing of the protests, who argue against the burning and destruction of properties. The destructions and burnings, they say, were perpetrated by saboteurs of peaceful struggle and repercussions of the ruling party’s uncalled for brutalities on peaceful protestors. Folks in this camp at times point out mechanisms of regaining ill-gotten assets. The burnings and destructions also seem to have put a large portion of Ethiopians in a quandary and deep dilemma. They really seem to be between a rock and hard place (that is, unable to either condemn or condone the destructions).

As a soldier of non-violent resistance, I also do not condone the burnings/destructions. But contrary to our wishes, I acknowledge and fret the fact that burnings and destructions of greater magnitude may be inevitable. In fact, I saw this debacle coming, long ago. And I have raised this possibility, on several occasions, with friends, such as renowned professors of Ethiopian origin, namely, Minga Negash, Messay Kebede and Berhanu Mengistu, every time we discussed the cunning nature of Ethiopian corruption. As we discussed, it seemed as though our heads have become dizzy and our voices trebled, for the destructions could reach epic proportions. Why do Ethiopians consider the government supported investment structures and properties as not belonging to them but instead as “foreign” assets and even vehicles of large scale displacements, exploitation and oppression?

Now, if you want to understand why the protesters failed to understand that foreign direct investment (FDI) creates wealth (which it does), but instead consider even the “domestically” (political-party and elite-owned) “investments” as alien/foreign owned, why foreign direct investment is considered as a “fancy word for stealing” and as highly exploitative and accessory to evil, etc., and why they even venture for their destructions, I urge you to read on. If you want to understand the nature of Ethiopian corruption, its ramifications – how it has been and continues to irreparably damage the social and institutional fabrics of the country – and most importantly, if you really want to begin thinking of designing strategies for combating corrutpion and forestall potentially devastating destructions, please allow me to elaborate.

This commentary is designed, therefore, to implore you (the reader) to understand the intractable nature of Ethiopian corruption and then think about potential “solutions.” This is because designing strategies and finding “solutions” require a good grasp of the type of corruption found in a specific country, in this case Ethiopia.

STATE CAPTURE: A FORM OF GRAND CORRUPTION AS THE ROOT CAUSE OF THE PROBLEM

As I have shown on several occasions before, what we have been witnessing in Ethiopia is the most [url=file:///G:/Documents/my articles/v]pernicious and intractable[/url] form of corruption known as State Capture. This form of corruption needs to be distinguished from what is known in the corruption literature as Administrative (Bureaucratic) Corruption. The latter is the type of corruption defined and observed in the traditional manner, in almost all countries, save for post-communist (transition) countries. In particular, administrative (bureaucratic) corruption deals with the extent to which the bribe payer uses the existing laws, rules, and regulations to tip the balance in his favor. In general, administrative (bureaucratic) corruption is known to take place at the implementation level of the bureaucracy while the political (grand) corruption takes place at the highest level of political authority. Examples of variants of administrative corruption may include: impeding the implementation of justice; getting involved in the forgery and/or destruction of documents; delaying and/or procrastinating on executing high level official (assigned) duties; using official hours for personal gains; misrepresenting one’s authority; getting involved in partisan favors (nepotism); misusing public property; engaging in absenteeism; getting involved in kickbacks from developmental programs; pay-offs for legislative support, diversion of public resources for private use; overlooking illegal activities; common theft/embezzlement; overpricing, establishing non-existing projects and tax collection and tax assessment frauds, etc.

Even though it may be difficult to completely eradicate it, fortunately, nations could minimize the damage done by administrative (bureaucratic) corruption by ensuring transparency, accountability and openness in governmental activities. This is done, for example, by (a) Establishing independent power centers outside the bureaucracy; (b) Establishing independent electoral boards and developing and allowing competitive party politics; (c) Using the independent media, which in turn enables interest groups, members of civic society, NGOs, etc.; (d) Using the investigative powers of parliament; (e) Setting up of independent anti-corruption boards and commissions; and (f) Using the independent judiciary.

However, what we have been witnessing in Ethiopia is a different kind of corruption known as State Capture, which is known to have manifested itself in transition (formerly socialist) countries. It is a phenomenon in which powerful groups exert their corrupt and undue influence in order to shape the institutions and policies, laws and regulations of the state for their own benefit rather than for the public good.

State capture could arise and be practiced in several ways: it could result from powerful individuals, groups or firms using both non-transparent provisions as well as legitimate and transparent channels to deny competing groups access to state officials and resources. It could also arise from the exploitation of the “unclear boundaries between the political and business interests of state officials” by specific groups and state officials for their mutual benefits at the expense of the society in question (Hellman: 1998:3).

According to Broadman and Recanatini (2001), state capture is harmful corruption that subverts the entire political process designed to ensure that policies and regulations favorable to specific groups and business interests are implemented.

State capture may differ from country to country. In some countries, state capture could clearly be seen as a variant of a corruptive practice known as crony capitalism in which powerful groups, individuals and oligarchs shape and manipulate the formation of new policies – that is, the “rules of the game”- to their own advantage. The phenomenon could be observed whenever state officials pass decrees and/or legislative votes favoring organized business groups, oligarchs or powerful individuals. It could also be observed in huge “concentration of economic and political power” and economic inequality arising from self-interested actors gaining and controlling the state and its resources. The state capture phenomenon could also be observed in the collusive activities of powerful leaders (regional or national), ministers, and legislative and judiciary executives, corporate executives of state institutions/agencies and party-owned companies. In some cases, state capture is a result of weakened legal and political institutions. In other instances, captors purposely weaken the country’s legal and political institutions so that they would be susceptible to capture and exploitation.

It is also manifested in the failure of economic reforms and the stripping of public assets by some powerful individuals or organized groups using the “privatization” process. In some instances, state capture could be observed when organized groups clandestinely create a state within a state (“parallel state”) in order to influence the state structures, including the judiciary, the security apparatus, the military, and even the media. In some countries where state capture has occurred, the line between what is private and what is public, what is official and non-official, what is state and what is market are totally blurred.

As you can observe from the above descriptions, under state capture, a country’s laws, regulations, legalities and ultimately its institutions are part of corrupt transactions. Such corruption features are quite different from the administrative/bureaucratic corruption described above.

In some countries such as Ethiopia (Hassan, 2013) (and to a limited extent, countries such as Uganda and Rwanda), the entire political, economic, legal and military structures are under the control of powerful cliques or ethnically organized groups. Corruption of this type is pernicious because these same organized groups, in collaboration with owners of powerful firms and/or oligarchs, happen to dominate the vital sectors of all institutions (economic, social, legal and military). In some cases, as manifested in countries such as Russia in the 1990s and in some countries in Africa, Ethiopia included, the practice of capture is highly organized and predatory. The captors are known to use, among other things, violence and intimidation. They are known to have created their own monopolies (oligarchies) and cartels in order to monopolize the vital sectors of the economic system while at the same time disabling the ongoing market reforms. In short, this kind of corruption resembles a modern version of organized crime.

COUNTRY SPECIFIC CHARACTERISTICS OF CAPTORS

The corruptive activities of the captors are largely similar but they may differ by country or origin and type of captors. In post-communist countries, Hellman et al (2000:3) make distinctions between private “captor firms (i.e. firms that make private payments to public officials to affect the rules of the game) and influential firms (i.e. firms that have influence on those rules without recourse to private payments to public officials).” The captors in general are the nomenklatura – a group of former managers and bureaucrats of state-owned enterprises under the old Soviet system and other Eastern Bloc nations (estimated to be about 1.5 percent of the population) who were “engaged in ceaseless political maneuvering among themselves while maintaining total power, as a privileged class, over all the others.”

They could also be public officials who “may use their positions to capture enterprises,” or a group of actors such as the members of parliament, the executive, ministers and judiciary acting in unison (the ruling party leaders acting prosecutor, judge, and jury).

While largely similar, state capture in developing countries such as Ethiopia differs from that in post-communist countries in some important ways: For one, unlike their Russian and East European counterparts, the Ethiopian captors do not exclusively belong to the nomenklatura (former higher officials of the communist parties), since a large portion of them were rag tag guerrilla fighters who had marched all the way out from the bushes to seize power and enrich themselves. Secondly, in countries such as Ethiopia, the state capture phenomenon is highly parochial (quasi-feudal and ethnic-based) in nature.

Unfortunately, patronage infested Ethiopian corruption has a strong tendency for both envy and tolerance. It involves envy because corruption assisted riches of elites in one ethnic group irritate other ethnic groups. On the other hand, it is quite possible for tolerance for the vice to emanate from those who have ethnic affiliation with the ruling clique. This tendency is known to have permeated the Kenyan society (Michela Wrong, 2009: “It is Our Turn to Eat.”) The end result is a vicious cycle of corruption, each (largely powerful) ethnic group’s elites taking their turns to enrich themselves at the expense of everyone else.

One also observes a very strong patron-clientelistic and neo-patrimonialistic nature of corruption in these countries (Ethiopia, in particular).

Thirdly, unlike in some post-communist countries such as Eastern Europe, in which some oligarchs were forced out of political power, the Ethiopian captors continue to hold both political and economic power. The Russian oligarchs made their fortunes through wheeling and dealing and by committing all kinds of economic crimes including buying Russian assets at throw away prices (so did their Ethiopian counter-parts). But, Mr. Putin, who did not like the political meddling of some of them, used his scorched earth tactics to put some of them behind bars and sent others into exile while at the same time stripping off their assets (leaving alone those who did not venture to politically challenge him). Putin’s scorched earth tactics might have averted a rise of a potentially more devastating plutocracy than we observe in Russia today. The captors in Eastern and Central Europe gradually lost their political clout partly due to the desires and efforts of those countries to join the European Union and fulfill the EU’s conditions and the latter’s assistance in fighting and eradicating state capture.

Fourth, state capture in countries such as Ethiopia is unparalleled in that it is a stronger form than one finds elsewhere in that it encompasses the seizure of the political apparatus and the commanding heights of the national economy – the seizure extending to the military, security, foreign policy and judicial system and even the complete control of the media. In Ethiopia, the predatory oligarchs’ appetite for controlling the commanding heights of the country’s economy, misappropriating its resources and accumulating wealth using a network of political power continues unabated, thereby exacerbating the gaps between the haves and the have-nots. Elite predation has led to a virtual criminalization of the state to the extent that mafia-type criminal activities pop up occasionally.

Another peculiar characteristic of state capture in Ethiopia is its high level ethnic nature. Moreover, the lines between what is official and what is private are totally blurred, and the party and the state have become almost indistinguishable. It is for this reason that many are tempted to label the Ethiopian corruptive system as highly kleptocratic. As a result, the captured economy is trapped in a vicious cycle in which any policy reforms designed to improve governance are doomed to fail. There is constant collusion between the powerful groups operating from outside and within the government.

WHAT HAS TRANSPIRED IN ETHIOPIA?

What is being witnessed in Ethiopia is the establishment of shell companies in contravention of the country’s commercial codes, such as establishing sare companies with only 2-5 “shareholders”, most of these “shareholders” being party leaders. As Gennet Mersha explains, the parallel existence of political party-owned businesses has led to (a) “leakage of resources in the form of capital flight, (b) the granting and manipulation of licenses, (c) use of inside information pertaining to privatization, competition for state contracts and bids and awards of project contracts such as road and building and other construction works, (d) lack of competition, and (e) systematic discrimination of businesses and professionals.”
What we have observed is “favouritism and clique building [which] flourished around the privatization boards ([url=file:///C:/Users/shassan/Documents/tdrive as of june 23 2015/corruption/Aid, Development and corruption/follow up and Commentary of Professor Ejigu Demissie of the University of Maryland]Minga Negash[/url]). What the Ethiopian people witnessed were improper handling of the restructuring and privatization process (Mersha: 2010), Young (1998), Vestal (2009), and Negash (2010). What Ethiopians have witnessed is large-scale systemic state capture through the rise of suffocating political-party owned companies (“endowments”), such as EFFORT and the numerous companies subsumed under it.

What we know is the refusal of the members of the ruling clique (TPLF) to return the country’s assets that they looted when they were guerrilla fighters while at the same time occupying the highest branches of government.

What we know is party hacks presiding “over top-level corporate boards of party-owned businesses and major government enterprises including banks” and their funneling of easy bank loans to regional party-owned companies.

What has transpired is the disfranchisement of “other” Ethiopians and the stifling of competition through the awarding of contracts to those connected with the ruling party, such high level nepotism being very high particularly in the construction sector (see, World Bank’s Diagnosing Corruption in Ethiopia, Chapter 6, for example.)

What we have witnessed on a daily basis, twenty five years and counting, is the currying of favour of these same conglomerates and cadre-owned and favored companies resulting in the distortions of competition and lack of competitive marketplace.

What we have witnessed, much like in countries which were under the influence of the Soviet Union, is the seizure and control of the financial sector by a specific group.

What we are witnessing is suffocation through the use of the so-called new press and anti-terrorism laws.

What we observe in Ethiopia is the passage and adoption of new repressive laws such as the one prohibiting opposition parties from receiving funds from abroad, while at the same time the ruling party benefits immensely from that.

What has developed is a zero-sum mentality and practice, a powerful leadership with deaf ears that is “too rigid, arrogant and disconnected” with high level of patronage.

What Ethiopians have witnessed is the constant attack and dismantling of opposition political parties, the weakening of the country’s institutions – be they independent civil society organizations, unions, or professional organizations – the watering down of the quality of education, constant violation of the rule of law, etc.

What is being observed is the creation of a toothless anti-corruption commission (itself implicated in mushrooming of corruption) to hoodwink donors and the hijacking of anti-corruption efforts – to the extent of using it to attack and imprison political opponents.

Just like in communist Russia and elsewhere, the ruling party of Ethiopia has captured the legislature, the executive, the judiciary and practically all regulatory agencies – all distinguishing caricatures of state capture, the highest form of corruption that is directed toward extracting rents.

THE REPERCUSSIONS

State Capture and (mafia type) criminal oligarchy, accompanied by an unbelievable arrogance and repression has resulted in deep disillusionment, cynicism and polarization in the country. It has resulted in once upon a time rag-tag guerrilla fighters and poor taxi drivers, not known for their ingenuity or something else that is good, becoming extremely wealthy, almost overnight. It has led to the setting ablaze of property, in which local businesses happen to bear the brunt of the destructions. Riots do not take place in a vacuum. The causes are the nauseating greed on the part of the ruling party, the eviction of tens of thousands of people from their ancestral lands and the transfer of these same lands, with little or no compensations, to the ruling party-owned companies, elites and foreigners. The causes of the riots are, no doubt, outright nepotism and organized crime committed by the ruling elites. Corruption riddled land transfers have resulted in the transfer of resources from the people into the hands of a very few. Those whose lands have forcefully been taken away and displaced and those who have been oppressed seem not to be taking the abuse any more.

As an economist, I see the ruling clique’s overreach (of forced displacements, arrogance, insatiable greed and suffocating corruption) having lasting damage. Thanks to the overreaches of the government and criminal activities of party elites, foreign direct investment is now considered a fancy word for deceit and exploitation. Indeed, people-centered and properly compensated urban development projects would have been a win-win for all those involved. Thanks to the rampant land-related corruption, the ruling clique’s dirty tricks have undermined future legitimate development projects. No doubt these overreaches will be big time setbacks to future development.

RESISTANCE TO PREDATORY LAND GRABS

Allow me to elaborate the fraud infested and predatory land grabs which sparked several unrests, a little more. Just like North Korea and China, land belongs to the Ethiopian government, which in turn created a space for a frenzy of uncompensated land grabbing, rent-seeking and nepotism. Using several endless land proclamations as their tools, Ethiopian officials and land grabbers might have copied Chinese practices of forcefully expropriating land. It appears that land grabbers in Ethiopia have failed to understand the problems associated with such a practice. For one, forced evictions have resulted not only in human rights abuses and the violations of the international covenants that China has ratified, but the scheme has contributed to growing income inequality. Ethiopian authoritarian rulers should have known that growing inequalities have consequences.

Secondly, a large portion of the evictions in China was largely done by local officials and against the wishes of the central government. In Ethiopia, both the re-zoning and demolition plans and executions are exclusively done under the directives of central government authorities, contributing to the rising resentments.

Thirdly, both the central and local governments of China were able to create factory jobs which absorbed a significant portion of the evicted peasants, resulting in indirect compensations to the lost properties for those who were displaced. In Ethiopia, local communities hardly get any benefits from the “investments” despite promises of creating jobs and other goodies such as access to electricity and clean water.

Fourthly, contrary to what is largely observed in Ethiopia, it appears that Chinese local authorities and developers compensated evictees even though the compensations were nowhere equal to the market value of the properties.

Fifth, in the Ethiopian case, those who benefit from land-related corruption (which includes forced evictions and demolitions) happen to be at the top echelons of the ruling party.

Sixth, unlike the Chinese, the Ethiopian population is highly divided along ethnic lines, such divisions exacerbated by the policies of the regime itself. And last but not least, unlike the Ethiopian land grabbers, the Chinese authorities never used live ammunitions against protesters whose lands ha been seized. That must be why other ethnic groups, the Oromos, in particular, consider the so-called federal police (repeatedly observed brutally beating students and protesters) and the military as only belonging to and used as a killing paramilitary squad of the TPLF. The Ethiopian people have repeatedly witnessed that the ruling party have never been accountable for the atrocities it committed. Witness the tortures, disappearances, mass arrests and massacres the regime committed in 1995, 2005/6, 2014, and now 2015/16, the genocide committed against the Anuak people in 2003, the killing of university students in 2001, just to name a few.

The Ethiopian people have been traumatized by the endless atrocities. It is these and numerous other atrocities that have forced the people to think that this is not their government. It is the looting of public resources by a few and the extreme corrupt activities which have led the Ethiopian people to think the properties and investment do not belong to them but to a parasitic group. Consequently, it is not hard to imagine corruption that is committed by “others” (conserved by many as if they are invaders) – and in a lot of cases, orchestrated by those who claim to be representing one ethnic group – to be viewed with great envy and anger thereby escalating the polarization. No wonder it results in extreme discontent and riots.

State capture, together with oppression, arrogance and brutality, is leading the country to experience an accelerating socio-politico-economic breakdown and to potentially ethnic/sectarian conflicts – all contributing to the unravelling and possible disintegration of the rotting system. Unfortunately, the collapsing system will have collateral and innocent victims.

“SOLUTIONS”: WHERE DO WE GO FROM HERE?

As I indicated above, state capture is anathema to reform. In the Ethiopia today, there is no independent judiciary that can uphold the rule of law since the rule of law gets subverted by top-level officials on a constant basis. There are no checks and balances. All we have is a rubber-stamp “parliament. All we have is a toothless anti-corruption agency, which is saddled with the lack of resources and incompetence. Nearly all independent and privately owned newspapers have been forcefully shuttered and many of journalists sent to jail or exile. These brutal measures have deprived the country of the means to fight rampant corruption.

Civil society organizations have been either decimated or captured. What we have is an executive body which fires auditors when the auditors expose corruption and the disappearance of billions of birr. In today’s Ethiopia, every regulatory agency is captured, to the extent of Mr. Sibant Nega, the founder, architect and now revered figurehead of the TPLF, boldly and unashamedly admitting the obvious: that corruption in Ethiopia is so bad that it has permeated even the religious institutions.

The Ethiopian oligarchy lacks a Vladimir Putin (that is, Meles Zenawi) who could have served as an anti-corruption czar and used his unparalleled power and Machiavellian tactics to trap and quell his distractors and possibly extend the political life of the oligarchy. The paranoid and heavy-handed measures taken against the Oromos by the ruling clique clearly indicate that not only the ruling party has become headless but it also indicates a lack of command and control.

What we are left with is three relatively powerful groups, who could potentially allay the pains inflicted upon the Ethiopian people by rampant corruption – their measures having the potential to extend the political life of the kleptocratic regime. Even though these groups may be able to extend the political life of the regime, they would not, however, save it from eventual collapse since corruption of this magnitude cannot be saved from within. What I am thinking about are (a) Multinational institutions, such as the IMF, World Bank and others; (b) donor nations, particularly the United State and the EU; and (c) pressure from stakeholders who are a part of and have closer ties with the regime, that is, ‘custodians of the status quo’ (Berhanu Mnegistu, 2016-“Mediating Political Space… “).

The first two are holders of strong arms – capable of putting immense pressure on the clique. For one, these institutions and donors know how aid dependent the regime is – so aid dependent just “[like] a patient addicted to pain killers.” The United States and members of the EU, the U.K. in particular, along with the aid institutions, know the “aid” they provide was and still is the source of corruption, be it via illicit financial outflows, used to recruit and pay millions of cadres, used to fund forced villagization or other means. As I have shown elsewhere, donor nations know that part of the seeds of capital for party-owned conglomerates are the “aid” they provided. Should they wish to do so, donor nations can bring the TPLF leaders to their knees by suing them for their misuse of foreign aid and money laundering.

As for the third group, according to Professor Berhanu Mengistu (2016), the effectiveness of the ‘custodians of the status quo’ depends not only on their ability to “convince the narrow stakeholders” that change is in their best interests but also on their ability to direct those changes. One may legitimately ask: Would the custodians of the status quo be able to control their own greed and selfishness when in fact the entire ruling party, top-to-bottom, is so repugnantly corrupt? Well, if they failed to do so, then they will lose all that they have amassed!

So, why did Oromo protesters burn down properties and investment structures located within their own neighborhoods? Well, it is because of the resentment which running deep against overbearing party elites who scoop up lands that don’t belong to them – the grabbed lands making very wealthy almost overnight. All that the people see is wealth following senseless corruption, party affiliation, bloodlines, but not hard work or original access to one’s ancestral land. The protesters are not only pushed out of their ancestral lands but they also do not have jobs, money or even prospects. As the rioters’ selective attack targets indicate, the burnings/destructions and boycotting seem to be directed at those owned by the TPLF and its supporters. Unfortunately, resentment of this kind is also harbored by other ethnic groups. Such practices may indeed be repeated in other regions, even though Ethiopia does not really have lots of resources to burn and destroy.

Unfortunately, the Ethiopian people continue to be traumatized by TPLF’s economic gangsterism and government-led violence. Trauma leads to hopelessness, extreme anger and frustration, to the extent of being self-destructive. The burning of properties, therefore, is a by-product of the traumas that the Oromos have suffered for too long. I have my deep fears that someday such destructiveness may repeat itself in the other regions of the country and possibly in a large scale. Let’s pray and hope that appropriate measures, capable of forestalling the looming dangers will be taken.

Seid Hassan teaches at Murray State University.

THE VIEWS OF THE ABOVE ARTICLE ARE THOSE OF THE AUTHOR AND DO NOT NECESSARILY REFLECT THE VIEWS OF THE PAMBAZUKA NEWS EDITORIAL TEAM

http://allafrica.com/stories/201602231258.html

RUSH FOR THE EXITS: WHY IS ETHIOPIA’S CAPITAL FLIGHT ACCELERATING? May 11, 2016

Posted by OromianEconomist in Africa, Corruption, Corruption in Africa, Economics, Illicit financial outflows from Ethiopia.
Tags: , , , , , ,
add a comment

Odaa Oromoo

Addis Standard

The TPLF Corruption network

 

According to estimates reported by the World Bank, the amount of official development assistant (ODA) Ethiopia received in 2010 was $4 billion but total amount of IFFs during that year was $5.6 billion.

This means in 2010 alone Ethiopia’s IFFs exceeded the ODA it received that year by $1.6 billion.  In other words, Ethiopia’s IFFs amounted to diverting the entire aid money of 2010 to foreign banks and then still transfer abroad an additional sum of money. During the entire period (2004 to 2013) the total amount of money that Ethiopia lost due to IFF was $26 billion. This amounts to stealing nearly $300 per citizen.  Alternatively, the size of stolen money was about 11 times the total the amount of emergency aid being sought from donors in the current year to buy cereals from abroad and feed the drought victims.


 

RUSH FOR THE EXITS: WHY IS ETHIOPIA’S CAPITAL FLIGHT ACCELERATING?

 

By J. Bonsa (PhD), Special to Addis Standard,  9 May 2016

A substantial sum of money has been illegally flowing out of Ethiopia during the last decade. What is even more worrying is not just that the levels of out flows are high but also the sizes of illicit capital outflows have been rising at alarming rates. This rather unique pattern has attracted the attention of the general public as well as those of bilateral and multilateral donor agencies.

I will also attempt to put some flesh on the bones of facts presented in the GFI database. I will do so by shedding some light on the political economy context of the illicit capital outflow (IFFs) from Ethiopia.

Stolen money trails

The natural starting point is to get a sense of magnitude on the levels and trends.  The GFI data is summarized and plotted in Fig. 1.  For the time being we focus on the total flows, that is the heights of each bar denoting sizes of annual illicit money outflows.  The sum of the blue and red colors gives total amount of money illegally moved aboard from Ethiopia during that year.  This ranged from USD $0.4 billion in 2004 to USD $5.6 billion in 2010.

 

The average annual outflow was $2.6 billion during 2004 and 2013. This is a sizeable sum of money by any standard.  For instance, according to estimates reported by the World Bank, the amount of official development assistant (ODA) Ethiopia received in 2010 was $4 billion but total amount of IFFs during that year was $5.6 billion.

This means in 2010 alone Ethiopia’s IFFs exceeded the ODA it received that year by $1.6 billion.  In other words, Ethiopia’s IFFs amounted to diverting the entire aid money of 2010 to foreign banks and then still transfer abroad an additional sum of money.

During the entire period (2004 to 2013) the total amount of money that Ethiopia lost due to IFF was $26 billion. This amounts to stealing nearly $300 per citizen.  Alternatively, the size of stolen money was about 11 times the total the amount of emergency aid being sought from donors in the current year to buy cereals from abroad and feed the drought victims.

Potential culprits

One may wonder – who are the culprits responsible for Ethiopia’seconomic fraud at such massive scale?  The GFI categorizes possible perpetrators into three groups: (a) financial institutions; (b) complicit business counterparts, mainly importers and exporters; and (c) government officials.

In the Ethiopian case, it is reasonable to exclude financial institutions because there is no foreign bank operating in Ethiopia, and the domestic private banks are extremely tightly controlled.  Ethiopia’s most influential banks, the Commercial Bank of Ethiopia (CBE) and the National Bank of Ethiopia (NBE), are owned and run by the government.   Therefore, in the context of Ethiopia it is safe to include (a) under (c).

That is to say Ethiopia’s IFF can only be undertaken by importers, exporters or government officials.  One would hasten to add that there is a huge extent of overlaps between government officials and big businesses in Ethiopia, since big businesses are highly interconnected with the government and/or they are directly or indirectly owned and run by government officials.

Money diversion channels

Now we can shift our attention back to fig. 1 and consider the breakdowns of the IFFs, the individual component denoted by the blue and red sections in each bar. The GFI applies a methodological framework that accounts for two types of illegal movements of money from one country to another.

The first one is export or import trade misinvoicing. This is measured by using a methodology called Gross Excluding Reversals (GER).  This simply mirrors exports by one country with imports of another country and vice versa.  For instance, items of imports recorded by Ethiopia should agree with records of exporters to Ethiopia in all aspects – value, quantity and quality.

The second one is various leakages in the balance of payments, measured by using the “hot money narrow” (HMN) approach.The latter one is often referred to as “net errors and omissions” in the balance of payment jargon. For instance, if a donor agency or country recorded $1 million grants to Ethiopia but this does not appear in the records by the authorities in Ethiopia, then the GFI records this as a leakage from Ethiopia’s balance of payment.

It is clear from Fig. 1 that the bulk of illicit money transfer from Ethiopia has taken place using trade misinvoicing, denoted by the blue component of the bar. In 2004, trade misinvoicing constituted only 14% of the total IFFs.  In 2013, however, this proportion has grown to 100%, the entire IFFs began to be accounted for more and more by trade misinvoicing. For the entire period under discussion, $19.7 billion (or 76% of the total IFFs) was conducted through trade misinvoicing.  The year 2010 is an exception – diversion of “hot money” dominated in that year; it constituted 55% of the total IFFs.

False invoices

Trade misinvoicing can take place in one of the following four ways: over invoicing exports, under invoicing exports, over invoicing imports and under invoicing imports. In Ethiopia’s case, the GFI report indicated import over-invoicing is by far the most important method of transferring money abroad. During the period under analysis, about $19.7 billion was transferred abroad through import over-invoicing.

It is critical to understand how import misinvoicing hurts the Ethiopian economy.  This is important in the context of huge public construction projects with substantially large components of imports of machinery and other equipment. For instance, an acquisition of a set of machinery whose real value is $1 million is recorded with inflated invoice of $1.5 million.

The importer allocates project budget at the inflated import value, pays the real value to the supplier and then siphons-off  the difference (in this case $0.5 million) and deposits it in a foreign bank account. The real damage to the economy happens in terms of inflated capital expenditure.  Perhaps the opportunity large capital projects provide for corrupt officials could be the ulterior motive for the uncontrollable urge to attach such a high priority to large capital projects in economic development strategies.

However, it should be noted that public capital projects are often financed through commercial loans that should be paid back with cumulative interests in years to come. The economic return to capital project would partly depend on the cost consideration at project implementation stage.

The GFI also finds some export trade misinvoicing in Ethiopia’s foreign trade, over-invoicing by $6.5 billion as well as $3 million under-invoicing. In trade based money laundering, the most common types of misinvoicing are import over-invoicing and export under-invoicing. As noted above, the case of import invoicing has no complications – so much over invoicing has taken place and it explains the bulk of trade based money laundering in Ethiopia.  However, the case of export over-invoicing is uncommon.

Export over-invoicing do happen although they are rare, e.g. China’s trade with Hong-Kong.  Export over-invoicing is required when there is a need to plough back money from abroad and report it as inflated foreign direct investment. This is likely the case with Ethiopia where the authorities have been desperate to report higher foreign investments particularly in the first half of the period under analysis.

 

Ethiopia’s capital flights dwarfs rest of developing countries

 

It would prove useful to know how bad Ethiopia’s IFFs is relative to other countries.  Fig. 2 below compares Ethiopia with its neighbors, the rest of Sub-Saharan Africa (SSA) as well as the average of developing countries (DCs). The comparison was done by expressing total illicit money outflowas percentage of GDP.  The years are grouped into three intervals. For reasons discussed further below, it would prove useful to contrast pre- and post-2005. Accordingly, I have isolated 2004 and then divided the remaining years into two equal intervals.

This revealed astonishing patterns of illicit money outflow from Ethiopia which starkly contrasted with those for other countries.  First, throughout the years Ethiopia’s records considerably exceeded those for its two immediate neighbors, Kenya and Tanzania. Second, a comparison of 2004 across the countries shows that Ethiopia’s illicit money outflow was way below the Uganda, SSA, and the DCs averages.

Third, the situation changed dramatically from 2005 onwards.  Ethiopia outstripped Uganda, and then closed the gap with the SSA average. Fourth, Ethiopia’s average annual money outflows between 2010 and 2013 reached 11% of the country’s GDP, considerably exceeding the corresponding figures for the other countries – SSA (5%), DCs (4%), Uganda and Tanzania (2%) and Kenya (0.013%).  Fifth, it is important to note that illicit money transfers abroad constituted smaller and smaller percentages of GDP for most countries over the years, implying substantial improvements in transparency in their economic management. The situation in Ethiopia sharply contrasts with this reality – illicit money outflow becoming a larger and larger percentage of Ethiopia’s GDP.  This indicates transparency in Ethiopia’s economic management has gone from bad to worse over the years.

 

It should be noted that the SSA average is largely driven by money being squandered by oil and other mineral resources exporting countries such as Nigeria and Angola. It is telling to note that Ethiopia, a country not known for exporting substantial mineral resources, is now characterized by illicit money outflow to GDP ratio exceeding that of an average SSA country.

Blind spots in accounting for remittance flows

The analysis in the preceding sections relied entirely on the Global Financial Integrity (GFI) report.  GFI methodology is strictly confined to official records as starting points and then mirrors records at different places and times. Systemic discrepancies between records are then registered as illicit transactions.

Clearly, then the GFI methodology does not account for illicit money flows that take place through financial transactions in informal or black markets. Remittance flows are riddled with black markets in hard currencies. The situation is even worse in the context of Ethiopia, where official hard currency flows are tightly controlled, and hence creating conditions for prevalence of underground currency transactions.

To the extent that remittances are channeled through formal banking or foreign exchange offices, then the transactions get into the balance of payment records.  Leakages from the flow are accounted for through the GFI approach called “hot money” discussed earlier.

However, there are strong evidences indicating that the bulk of remittance transfers to Ethiopia actually happen through informal channels, mainly because of better rates and lower costs.

The informal channels may take one of two forms.  First, it is common for  Ethiopians living abroad to take hard currencies with them every time they visit home and then directly exchange it to birr in local black markets at better rates by avoiding transfer fees. It also happens that they send hard currencies via travellers they trust so that they give it to their relatives, who in turn get it converted in local black markets. The World Bank estimated that 14% of Ethiopians to whom money was transferred from abroad in 2010 got it through travelers. Since the World Bank has not made a reference to money converted at local black markets, it means the total amount of hard currencies entering Ethiopia by informal channels is much higher than the 14% who regularly receive remittances.

Additionally, there is a more sophisticated black market which operates pretty much like the way foreign money transfer services operate, except that these are operated informally by individuals living abroad. As any Ethiopian living abroad can tell, every big city countries with hard currencies has  a few black market operators who offer exchanges of foreign currencies to birr with additional incentives,at least two or three birr on top of the going rate that money transfer agencies offer.

I selected a couple of major cities and gathered background information for this piece. The margins offered vary across time and space but the current margin on above Western Union conversion rates were at least one birr per unit of USD equivalents of local currencies in London, Dubai, and Kuwait, excluding foreign exchange office fees charged per transaction. This means Ethiopians living abroad have good enough incentive to look for black market operators rather than sending money through formal channels.

The role of the black market is simply to collect and bulk the hard currencies.  Where exactly the collected money goes is anybody’s guess.  One may hope that importers who face constraints in foreign exchange rationing may smuggle out the hard currency they collected and/or importers may assign agents in foreign countries to collect and bulk hard currencies for them.

In both cases importers may spend the money they bulked on purchasing goods and services that will eventually enter Ethiopia. This is an optimistic scenario since the country may eventually benefit from availability of goods and services in the domestic market, except that the transactions were done informally and the government might have lost some tax revenues.

The upshot of this discussion, however, is that the hard currencies collected from local black markets may get smuggled out and get deposited in foreign bank accounts. Similarly, black market operators residing abroad may also be primarily motivated by a pressing need to convert birr into a hard currency and safely deposit it in a foreign bank account.

It should be noted that the GFI methodology misses out such blind spots in remittance flow accounting, which means Ethiopia’s capital flights discussed in the preceding sections is highly likely to underestimate the size of illicit capital flights from Ethiopia. If so much has been done to move money illegally abroad by abusing formal channels, then it is realistic to assume that the informal channels are even more susceptible to abuses by the same group of actors who seem to be in a rush to the exits.

Why the rush?

 At this juncture it is appropriate to pool together different lines of discussions in the preceding paragraphs. The most crucial point here is the timing of dramatic changes in Ethiopia’s capital flight. It is clear from the facts presented in this piece that 2005 was a watershed moment in Ethiopia’s capital flight history in recent years.

For those who closely follow Ethiopia’s political and economic affairs, the fact that dramatic things began to happen soon after 2005 does not come as a surprise.  The general election of that year and the upheavals that followed had seriously shaken self-confidence among the elites who held political and economic power. The possibility of losing power and economic advantages that accrues from it began to be felt starting from that year, when the ruling EPRDF snatched power under murky conditions from the hand of the opposition who claimed they actually won the general election.

This argument is substantiated by the following logical reasoning established in our discussions earlier. In the Ethiopian context there are no foreign banks, and domestic banks are very tightly controlled by the government. Also, there is a great deal of overlaps between interests of big businesses and those of government officials.

In that case, corrupt government officials and their affiliated businesses are the likely culprits for capital flights from Ethiopia at such epic proportions. The fact that rampant corruption has crippled the current government is openly debated in local media and among the elite at official forums. The evidence provided in this piece only corroborates the ongoing public debate.


ED’s Note: J. Bonsa is an economist by training. He can be reached at dinade0612@gmail.com.

Rush for the exits: Why is Ethiopia’s capital flight accelerating?

Illicit financial outflows from Ethiopia: Migrant Workers Find $356,246 In Chinese Airport, Return Cash Back To Owners: Three Woyane (TPLF) travelers claimed the lost money. It was wrapped up with Ethiopian Airlines official bag April 11, 2016

Posted by OromianEconomist in Illicit financial outflows from Ethiopia, Uncategorized.
Tags: , , , ,
1 comment so far

Odaa Oromoo

Three Woyane travelers claimed the lost money. It was wrapped up with Ethiopian Airlines official bag

(National Helm) — Two Chinese migrant workers found $356,246 cash in airport and returned it to three travelers from‪ Ethiopia. The migrant workers who were working on a construction project in southern China‬‘s Guangzhou Baiyun International Airport Friday found a white paper bag containing bulks of US dollar bills unattended.

The workers reported the situation to the police and later on met three Ethiopian travelers who came to claim the lost. The migrant workers’ move won lots of praises after the story went viral.


 

http://www.nationalhelm.net/2016/04/migrant-workers-find-356246-in-chinese.html


 

Ethiopia: The failed State’s Collapsing Economy April 8, 2016

Posted by OromianEconomist in Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Free development vs authoritarian model.
Tags: , , , , , , , , , ,
1 comment so far

Odaa OromooThe TPLF Corruption network

Ethiopia: Double Digit Growth or Collapsing Economy?

Analysis by  Andualem Sisay,  All Africa, 8 April 2016


 

Ethiopian government’s increasing reliance on foreign loans is posing a serious risk of economic collapse, a renowned economist has revealed.

“Take for instance China, which has loaned over $17 billion to the Ethiopian government for infrastructure projects. Our total investment is 40 per cent of the GDP. Our saving is between 10-20 per cent of the GDP.

“We import $13 billion and export $3 billion. They are the ones who are filling all these deficit gaps,” said Dr Alemayehu Geda.

The Addis Ababa and London universities don was presenting his paper on Foreign Direct Investment (FDI) in Ethiopia and Credit Financing.

“What will happen if they stopped such financing tomorrow? What if, for instance, the Chinese government tomorrow says sell for me Ethio Telecom or sell to me Ethiopian Airlines or give me some share or buy my aeroplanes, or I will stop such credit financing?

Strategic items

“The country will collapse, I guarantee you,” he said.

Dr Alemayehu went on: “About 77 per cent of our imports are strategic items. Fuel only has 25 per cent share of the total import. As a result, even if we want to reduce these imports, we can’t. Ethiopia needs to minimise strategic vulnerability.”

The don elaborated giving the example of how the Koreans mitigated against such dependency risks when they used to source 75 per cent of their imports from the US some decades ago.

Dr Alemayehu presented his paper in Addis Ababa at the launch of a two-year 12 series of public dialogue by the Forum for Social Studies – a local civil society, partially financed by the UK’s Department for International Development (DfID).

 

“The Koreans came out of such vulnerability risk after analysing their situation properly, discussing the issue with their intellectuals and setting long term plans,” he said, advising the Ethiopian government to invest in quality education, skilled labour and improve the negotiations capacity as well as have in place a well-designed policy.

Last decade

Official estimates have shown the Ethiopian economy growing by double digits annually for about a decade now, a figure that has highly been doubted by independent scholars.

The Addis government has been applauded for growing the country’s GDP by around 10 per cent per year for the last decade.

In his paper, Dr Alemayehu indicated that Ethiopia’s external loan included $17.6 billion from China for various infrastructure developments, around $3 billion from Turkish and close to $1 billion from Indian governments.

The World Bank’s data shows that from 2012 – 2016, Ethiopia has taken a total loan of close to $6 billion from the global lender. Last year, Ethiopia for the first time, joined Euro Bond and accessed $1.5 billion.

In addition to loans, reports show that some $3 billion annually came to the country in the form of aid from donors.

Have declined

Ethiopia’s exports have declined from around $3 billion last year to around $2.5 billion this year, as revealed in the recent six-month report of the prime minister to the parliament.

Even though tax collection has been growing by an average of 20 per cent annually over the past five years, Ethiopia’s tax to GDP ratio still stands at 13 per cent, which is less than the around 16 per cent of the sub-Saharan average.

Last year, Ethiopia collected around $6 billion from tax, including $25 million recovered from contraband traders. The figure could have been raised by at least $3 billion had it not been for the generous tax incentives the country has provided to investors, according to latest report of the Ethiopian Revenue and Customs Authority (ERCA).

In only nine months of Ethiopia’s last budget (July 8, 2014 – July 7, 2015), the country provided tax incentives of around $2.4 billion to investors, by exempting them from customs and excise duties and withholding, VAT and surtaxes, according to ERCA’s report.

Financial integrity

A financial integrity report last December indicated that around $2 billion was leaving Ethiopia every year through mis-invoicing and other tax frauds.

When it comes to the FDI coming from China, India and Turkey, close to 71 per cent of their investments in Ethiopia were in the manufacturing sector.

However, job creation, technology transfer and export contribution were insignificant for Ethiopia, which has over an 90 million population dominated by the youth. The country has about 16 per cent unemployment rate, according to Dr Alemayehu.

Between 2003-2012, there were 93 Chinese companies that had reportedly invested $600 million, creating around 69,000 permanent and 79,000 temporary jobs for Ethiopians. There was little contribution to technology transfer and foreign currency generation through the exportation of their products.

According to Dr Alemayehu’s paper, during the same period, Indian investments in Ethiopia created 24,000 and 26,000 permanent and temporary jobs respectively, while 341 Turkish companies operating in Ethiopia created a total of 50,000 jobs.

Though much was being talked about Chinese investments growing in Africa, the Asian giant had less than 4 per cent of total share of FDI on the continent, out of the total stock of $554 billion worth in 2010. Most of the investments in Africa were still dominated by the Western companies, according to Dr Alemayehu.

Prime Minister Hailemariam Desalegn recently told the local media that Ethiopia’s GDP growth was not expected to record a double digit this year and would likely drop to around 7 per cent.

However, his special economic adviser with a ministerial docket, Dr Arkebe Equbay, reportedly told Bloomberg media that the economy was expected to grow by 11 per cent this year.

Foreign debts

The government was now expected to deal with puzzles such as why the economic performance was not as good as in the previous years, with all the generous incentives to investors and huge infrastructure investments mainly dependent on local and external loans?

How to repay its local and foreign debts before the lenders force the government to cede shares in its highly protected businesses, such as, Ethio Telecom, Ethiopian Airlines, the Commercial Bank of Ethiopia, the Ethiopian Insurance Corporation and Ethiopian Shipping Lines is, for sure, the elephant in the room.

But the big question is: How soon will these issues get the attention of a government pre-occupied with trying to feed about a dozen million people affected by drought and dealing with political unrest and conflicts mainly in Oromia and Gondar area of Amhara Region?


 

http://allafrica.com/stories/201604080259.html

FOREIGN INVESTMENT IN ETHIOPIA: A BLESSING OR A CURSE? March 7, 2016

Posted by OromianEconomist in Colonizing Structure, Development Studies, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Ethnic Cleansing, Free development vs authoritarian model, Genocidal Master plan of Ethiopia, Uncategorized.
Tags: , , , , , ,
add a comment

 

Odaa OromooAddis Standard

 

The TPLF Corruption network

OPINION: FOREIGN INVESTMENT IN ETHIOPIA: A BLESSING OR A CURSE?


By J. Bonsa, PhD,   ADDISSTANDARD,   MARCH 03, 2016 


 

In conflict prone contexts, foreign investors, especially whose actions while entering a given country were not subject to checks and balances, may undermine political stability and fuel social unrest.Depending on the level of accountability in the recipient country, foreign direct investment (FDI) could be a blessing or a curse.

In this piece, I will attempt to highlight Ethiopia’s political economy and the setting for the operations of foreign investors.

 

Peculiar political context

Notwithstanding the announcement of a 100% electoral victory by the ruling EPRDF, the fact remains that Ethiopia has never had a fully representative government. This rather unique situation means it is naïve to discuss Ethiopia’s current affairs by applying standard rhetoric.Doing so fails to capture the peculiarity of the situation on the ground. For instance, familiar phrases such as“dictatorial regime” or “totalitarian government” do not fully capture the essence of the current political system in Ethiopia.

 

The key to understand the strange nature of the ERPDF government, a coalition of four parties, is to recognize it as a system of “internal colonial rule” led by one powerful party, the Tigrean People’s Liberation Front (TPLF).It is a conspicuous knowledge held by many that EPRDF essentially means TPLF.

 

The loyalty towards TPLF of Ethiopia’s military and security apparatus has remained the only source of EPRDF’s strength and tight grip on power. Without further ado it is suffice to mention that the country’s army generals and high ranking officers hail from Tigray, the geographic location home to TPLF. In turn the army’s brutal efficiency in military and security command system has earned the TPLF an extraordinary reputation and near complete political upper hand in the eyes of the other three parties within the coalition.

 

Technically that leaves Ethiopia with a reverse political system: the world is familiar with majority-rule and minority-rights, Ethiopia’s, on the other hand,is a political system without even some majority-rights. Today’s TPLF dominated EPRDF needed to be certain that the majority would not have the bare minimum of rights, because, if allowed, this might eventually lead to the emergence of democracy.

 

Business as unusual

The political and military power disparity favoring a single party has also caused divergences in economic and domestic private investment opportunities. This resulted in the emergence of domestic crony capitalism of the ugliest type. Endowment Fund for Rehabilitation of Tigray (EFFORT), the acronym that has more than 50 companies under its control, owns its presence and dominance to the growing trend of domestic crony capitalism.

 

In the last 25 years EFFORT has emerged as the most powerful domestic business conglomerate controlling the commanding heights of the Ethiopian economy. Its monopoly on the Ethiopian economy ranges from heavy engineering, construction, import and exports (of key capital and raw materials including fertilizers on which all Ethiopian farmers rely) to freight and passenger transport, wholesale and retail distributions. And yet, there is little information about EFFORT that is available for the general public.

 

It is a misnomer to describe EFFORT as a business group “affiliated to the government”. But Ethiopians know that the same groups of people who occupy government positions are also owners of the companies under EFFORT.

 

And as of late another unlikely business monopoly has emerged in the form of the military establishment, the same military whose top leadership is either loyal to or under the indirect control of TPLF. METeC, a company run by the national army, is having an elaborate business interest from production of computers and flat screen TVs to heavy metals, car assembly and hotels. Once again, there is no or little information available to the public on the exact nature of METeC’s business empire.

 

The dark horse

It is within this political reality that one needs to look into the economic aspects, including the manner by which the EPRDF led government is regulating the flow of FDI. It is a public knowledge that cronyism has, by and large, emerged as the trade mark of EPRDF’s economic governance over the past two decades, including its deals with foreign companies operating in the country.

 

As of this writing, news is coming that protesters in Guji zone of southern Ethiopia and Dembi Delo of western Ethiopia are targeting the two gold mines in the area owned by the MIDROC Ethiopia Investment Group. To understand this boiling public frustration, it is important to acknowledge that the people of Ethiopia have no knowledge about how these two gold mines were sold to MEDROC in the first place, and to evaluate whether the people in the areas where the natural resources are being ferociously extracted have stood to benefit from it in any way. It is also important to know that the name MIDROC stands for Mohammed International Development Research and Organization Companies, a name that implies nothing about the nature of the vast business functioning under its umbrella. For Many Ethiopians, therefore,MIDROC is the dark horse that appeared on the scene from nowhere but spread itself in all sectors of the Ethiopian economy at alarming pace.

 

For much of the first decade under EPRDF’s rule, Ethiopia suffered a serious setback in attracting foreign investment. Foreign investors were cautious (rightly), observing the unhealthy governance system as a risk not worth taking. However, during those days, MIDROC Ethiopia was often presented as a cover up to entice other foreign investors, giving the impression that the EPRDF regime was trustworthy and foreign investment was safe to flow in. That, and its sworn allegiance to the ruling party in power, gave MIDROC the opportunity to enjoy unparalleled access to Ethiopia’s natural resources. This was done primarily because the EPRDF could count on MIDROC as a foreign investor. The United Nations Conference on Trade and Development once reported that about 60 per cent of the overall foreign direct investment approved in Ethiopia was related to MIDROC.

 

MEDROC’s expansions began with acquisitions of many previous public enterprises – manufacturing branches, state farms, gold mines, and other mineral resources mostly outside of public scrutiny. MIDROC is most commonly associated with land grabs in many parts of Oromiya, at the heart of Addis Abeba and Gambella, causing havocs through evictions of millions of households from their ancestral lands.

 

The other murky deals

The contradictions in Ethiopia’s business environment are rather perplexing. On the one hand the TPLF dominated regime in Addis Abeba has a very hostile attitude to private domestic investors. Ethiopia has remained at the bottom of World Bank’s country ranks in ease of doing business, ranking 146th out of 189 countries in 2015. But EFFORT, METeC and MDROC business empires and their affiliates are exempt from such restrictions and the little private businesses in the country have to survive the three to make a meaningful economic gain.

 

On the other hand Ethiopia is known for making extraordinary concessions to attract foreign investors, particularly during the last decade. Here is the question – why such officious treatmentfor foreign investors when private business are forced to eat dirt? The answer lies in the assumption that the government often acts in the interest of domestic cronies – foreign investors are needed to camouflage EFFORT’s aggressive expansions. The deals to couple EFFORT with foreign businesses are surrounded by dark secrets; details are unavailable to the general public. Foreign investors have often been lured into joint ventures with party owned or affiliated local companies. The recent US$30 million worth deal between a local pharmaceutical company owned by EFFORT and a foreign company symbolizes that assertion. The overlap between the operations of domestic oligopolistic companies and their foreign counterparts is so much that it is difficult to know where one ends and the other begins.

 

The recent fall out between the government in Ethiopia and the Karuturi Global Ltd has revealed the murky nature of foreign investment deals in Ethiopia that prompted many to summarize “in Ethiopia, foreign investment is a fancy word for stealing land”. In 2010, Karuturi Global Ltd was given a concession to develop 300, 000 hectares of agricultural land in Gambella. However, in Dec. 2015, the deal collapsed when the Agricultural Ministry’s land investment agency “cancelled the concession on the grounds that by 2012 Karuturi had developed only 1,200 hectares of land within the initial two year period of the contract.” There is a lot more into this fall out than meet the eye, least the fate of the hundreds of thousands of indigenous people who were forced to give up their lands to give way to a deal they know nothing about.

 

But one of the most unsettling details to emerge out of this fiasco was the claim by Karuturi Global Ltd management that the land was forced upon them by the local authorities despite their insistence otherwise. At first glance this may sound awkward, as if the foreign investor and the Ethiopian authorities switched sides in the process of bargaining. However, for someone who is familiar with the shrewd operations of doing business in Ethiopia it is easy to know why Ethiopian officials were forcing the foreign investor to take 30 times more than it said it could handle. One plausible explanation held by many is that since enough land grabbing had already been done by the cronies during the previous decades, authorities found it prudent to frame a foreign investor as a vehicle to continue land expropriation.

 

In the wake of a possible persistence of protests by Ethiopians, protesters’ targeted attacks against foreign companies operating in Ethiopia may come as sheer anarchic for outsiders. But as long as the people of Ethiopia are kept in the dark as to the nature of the real deals between foreign companies and a government flawed by asymmetrical party coalition (deals that symbolize a life deprived of its means and style),incidents of targeted public outrage against selected foreign companies should not come as a shock.

 

The same explanation holds true for the land expropriations for flower farms and industrial parks in Oromiya, particularly in the vicinity of Addis Abeba. It is for such reasons that the infamous Addis Abeba Master Plan was formulated, eyeing 20 times more land that would be transformed into wasteful industrial parks all in the name of attracting foreign investment the nature of it is kept secret from the very people it greatly affects.

 

ED’s Note: J. Bonsa is an economist by training. He can be reached atdinade0612@gmail.com. The opinions expressed in this article are that of the author and do not necessarily reflect the editorial principles of Addis Standard.


Opinion: Foreign investment in Ethiopia: a blessing or a curse?


 

Ethiopia listed among the most corrupt Countries in the world according to Transparency International 2016 Report February 7, 2016

Posted by OromianEconomist in Corruption, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Illicit financial outflows from Ethiopia, Uncategorized.
Tags: , , , , , ,
add a comment

Odaa OromooThe TPLF Corruption network

The 2015 Corruption Perceptions Index clearly shows that corruption remains a blight around the world. But 2015 was also a year when people again took to the streets to protest corruption. People across the globe sent a strong signal to those in power: it is time to tackle grand corruption.

 José Ugaz,  Chair, Transparency International


 

Ethiopia is listed among the countries in the world where corruption highly prevails. According to Transparency International’s Corruption Perception Index, Ethiopia ranks 103 out of 168 countries and territories included in this year’s index.This doesn’t come as a surprise to many as Ethiopia has been for two decades under the control of a bunch of corrupt officials who are deafening us with the ‘11% economic growth’ mantra while millions of Ethiopians are starving to death.These corrupt officials are killing, torturing and imprisoning citizens in hundreds and thousands because they challenged their corrupt attitudes and their endless greed for wealth and power.


 

Source: Ethiopia listed among the most corrupt Countries in the world according to Transparency International 2016 Report


 

Related:-

TPLF/EPRDF Ethiopian Regime is a Contra to a Developmental State

https://oromianeconomist.wordpress.com/2016/01/12/tplfeprdf-ethiopian-regime-is-a-contra-to-a-developmental-state/

The Conflict between the Ethiopian State and the Oromo People, by Dr. Alemayehu Kumsa

https://oromianeconomist.wordpress.com/2014/08/14/the-conflict-between-the-ethiopian-state-and-the-oromo-people-by-dr-alemayehu-kumsa/


 

Oromia: Torban lama keessatti January 17, 2016

Posted by OromianEconomist in Uncategorized.
Tags: , , , , ,
add a comment

Odaa OromooBirrii (Qarshii Xophiyaa)Birrii bank run

Torban lama keessatti Birrii bilyoona 5n oltu baankii dhuunfa wayyaanee keessaa bahee gara baankii daldala Itiyyoophiya fi baankii Oromiya keessatti gale.

Kana ta’uu isaa kan agarsiisuu fincila diddaa garbummaa irran kan ka’ee lammiin ilamaan Oromoo waamcihaa qoqqoobbii diinagdee warishaalee wayyanee fi kaamphaanii wayyanee irrati fudhatamuu  jalqabameen wal fakkaata.

Ammas lammiiwwan Oromoo maallaqaa baankii wayyanee keesa qaban akka hin baafinne dhorkamanii jiru. Sababiin isaa moo maallaqa amma kana sababbii tokko malee sa’aa tokkotti baasuun hin eyyamamu kan jedhamu dha bulchiinsa bankotii kana irra kan kennameefi.

Ha ta’u itti harka lafa jalaatiin abban qabeenyaa axxiyyoonnonii bankolii dhuunfa kanaa maallaqa saamichaan argatan kana ammas amma isaan harka jiru saamanii biyya gad dhiisuudhaaf qopha’anii jiru.

Ka’uumisi naannoo Oromiyaa keessatti ta’a jiru kunii Finfinnee Oromiyaan marfamtee jirtu si’a tokko akka garbaa nu irratti galagalu kan jedhu sodaa ofi keessaa kan qaban ta’uun isaa dhagahamee jira. Dabalataanis bankoliin kun gara fuunduraatii akka tarkaanfachuu hin dandenyee fi kisaara guddaa jala akka seenu danda’an ibisamee jira.

Garuu haala jiru ibisuuf kan yaalanii fi akka sababaati kan ibsani bankinii daldala Itiyyoophiyaa Letter of credit seeran ala waan eyyemaa jiruu fi maammiltoonnii keenya nu dheenisaa jiru jedhani malee akka qoqqobiin ilamaanOromoo irra isaan muuddate hin ibsine.

Alemayehu Tilahun

– See more at: http://www.caboowanci.com/2016/01/17/torbaan-lama-keesatti-birrii-billiiyyoona-5-oltuu/#sthash.1HCenG7A.dpuf

 

 

Qabeenya Wayyaanee armaa gadii irraa hin bitinaa, ittis hin gurgurinaa.

https://oromianeconomist.wordpress.com/2015/12/27/oromia-oromoprotests-qabeenya-wayyaanee-armaa-gadii-irraa-hin-bitinaa-ittis-hin-gurgurinaa/

The return of the Tigrean rebels to TPLF camp might be shocking to those who have been counting on them to serve as reliable ally. However for those who has followed recent development carefully, this event could hardly be surprising. September 18, 2015

Posted by OromianEconomist in Tyranny.
Tags: , , , , , , ,
add a comment

???????????Afro fascismWoyane unite to kill freedom

When an elite drawn from small minority ascends to power, the process of consolidation brings about two developments that are complementary and conflicting at the same time. On one hand, as they try to consolidate power by fending off potential rivals, they develop an exclusionist policy that leads them to accumulate disproportionately high wealth and power. On the other, such exclusionist policy leads to developments of resentment among excluded groups which would be expressed through generalized hostility towards the privileged group as whole. These two developments enable the regime to increase internal cohesion. The control of huge resource among the minority elites allows them to spread it around hence reducing internal competition and conflict. More importantly the ever increasing hostility of elites of the ‘other’ towards the privileged group in general creates sense of collective insecurity and solidarity making ‘sticking together’ an inevitable reaction.

This is basically what has been happening in Ethiopian politics in the last two and half decades. Tigreans who make up no more than 6% of the population have come to monopolize the meager wealth and power that country has. The TPLF regime has control over national resource that can be spread around the Tigrean elite reducing competition and conflict among them. The repression and exclusion of the rest has led to ever intensification of vocal hostility towards Tigreans. In such situation, even those Tigreans who might not support the regime policy and are not attracted to wealth and power would have to join the mothership due to shared sense of existential threat to the collective.

The type of corruption that really hampers Nigeria’s economy August 25, 2015

Posted by OromianEconomist in Corruption, Corruption in Africa, Uncategorized.
Tags: , , , ,
add a comment

???????????corruption-in-africa

Economic Freedom Index 2015: Ethiopia is ranked 37th out of 46 countries in the Sub-Saharan Africa region, and its overall score continues to be below the regional average.Ethiopia’s economic freedom score is 51.5 July 27, 2015

Posted by OromianEconomist in Corruption, Free development vs authoritarian model.
Tags: , , , , ,
1 comment so far

???????????The TPLF Corruption network

‘State institutions are dominated by ruling EPRDF officials who reportedly receive preferential access to credit, land leases, and jobs. Under the government’s “villagization” program, hundreds of thousands of indigenous people have been forcibly relocated to new villages with inadequate infrastructure so that the state can lease their lands to commercial agricultural foreign investors.’

Ethiopia’s economic freedom score is 51.5, making its economy the 149th freest in the 2015 Index. Ethiopia is ranked 37th out of 46 countries in the Sub-Saharan Africa region, and its overall score continues to be below the regional average.

With a large domestic market and promising economic prospects, Ethiopia has the potential to become a regional economic powerhouse, but persistent state intervention in the relatively closed economy has suppressed the growth of economic freedom over the past five years.

Overall, the institutional basis of economic freedom in Ethiopia is still weak. A nominally independent judiciary continues to follow government policy advice, and corruption remains endemic. The government has made significant investments in major development projects, including the Grand Renaissance Dam, but restricts foreign investment in major industries and keeps important sectors of the economy closed to global trade and investment.

Ethiopia has had 10 years of steady economic growth, but not enough to reduce poverty. Its per capita income remains among the world’s lowest. Ethiopia is a leading coffee producer. Its economy is largely based on agriculture and is vulnerable to droughts and external shocks.

RULE OF LAW

Corruption is a significant problem in Ethiopia. State institutions are dominated by ruling EPRDF officials who reportedly receive preferential access to credit, land leases, and jobs. Under the government’s “villagization” program, hundreds of thousands of indigenous people have been forcibly relocated to new villages with inadequate infrastructure so that the state can lease their lands to commercial agricultural foreign investors.

LIMITED GOVERNMENT

Ethiopia’s top individual income tax rate is 35 percent, and its top corporate tax rate remains at 30 percent. Other taxes include a value-added tax and a tax on capital gains. The overall tax burden equals 11.6 percent of the domestic economy, and government spending accounts for 16.9 percent of gross domestic product. Public debt equals 22 percent of annual production.

REGULATORY EFFICIENCY

Inconsistent enforcement of regulations often impedes business activity and undermines economic development. The minimum capital requirement for launching a business is higher than the level of average annual income. Much of the labor force is employed in the informal sector. Monetary stability has been weak, and subsidies for the government’s state-led development model are hindering private-sector growth.

OPEN MARKETS

Ethiopia has a 10.3 percent average tariff rate. It is not a member of the WTO, and government procurement processes can favor domestic companies. Foreign investment is heavily regulated. There is no constitutional right to own land. The small financial sector continues to evolve and is largely dominated by banks. The capital market remains underdeveloped, and there is no stock exchange.

Read more At:-

http://www.heritage.org/index/country/ethiopia

ETHIOPIA: IS TPLF GOVERNING OR EXPANDING IT’S CORRUPTIONS EMPIRE?

https://oromianeconomist.wordpress.com/2013/09/05/is-tplf-leading-the-country-or-expanding-its-bussiness-empire/

Ethiopia: GNI per capita , Atlas method (current US$) June 24, 2015

Posted by OromianEconomist in Africa Rising, Youth Unemployment.
Tags: , , , , , , ,
add a comment

???????????Ethiopia is the one of the lowest in social Progress 2015Ethiopia's Per capita income trend, relative to  Sub-Saharan Afr 001

Ethiopia’s Per Capita Income trend, relative to Sub-Saharan Africa Average

Sub-Saharan African countries are the poorest regions of  Africa and the world. The World Bank’s Per Head Income trend from 2005 shows that Ethiopia’s trend is by far below Sub-Saharan Africa average trends with constantly widening gap. With Per Capita Income of  below $500 throughout the trends,  World Bank data shows that Ethiopia’s trend has been below the averages of world’s low income countries. So, what is the point of Ethiopia’s ‘fastest growth’ hype?

GNI per capita, Atlas method (current US$) GNI per capita (formerly GNP per capita) is the gross national income, converted to U.S. dollars using the World Bank Atlas method, divided by the midyear population. GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. GNI, calculated in national currency, is usually converted to U.S. dollars at official exchange rates for comparisons across economies, although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international transactions. To smooth fluctuations in prices and exchange rates, a special Atlas method of conversion is used by the World Bank. This applies a conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted for differences in rates of inflation between the country, and through 2000, the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). From 2001, these countries include the Euro area, Japan, the United Kingdom, and the United States. -World Bank national accounts data, andOECDNational Accounts data files

THE DEPTHS OF ETHIOPIA’S CORRUPTION. #Africa March 11, 2015

Posted by OromianEconomist in Colonizing Structure, Corruption, Corruption in Africa, Illicit financial outflows from Ethiopia.
Tags: , , , , , ,
add a comment

O

According to the World Bank, companies held by business group the Endowment Fund for the Rehabilitation of Tigray (EFFORT) account for roughly half of the country’s modern economy. The group is closely allied with the ruling Ethiopian People’s Revolutionary Democratic Front (EPDRF), an alliance of four parties.

EFFORT is a conglomerate formed from assets collected in 1991 by the EPRDF to rehabilitate the Tigray region in northern Ethiopia after it had been decimated by poverty and conflict. The Tigray People’s Liberation Front (TPLF) is the lead party in the EPDRF coalition.

Tigrayans, however, only account for eight percent of the country’s 90 million people. According to Abebe Gellaw, an exiled Ethiopian journalist and founder of Addis Voice, a web platform that provides news that is otherwise censored by the Ethiopian government, EFFORT has become a business racket for the Tigrayan elite who are monopolising major sources of the country’s wealth.

“The TPLF controls key government institutions and a significant portion of the economy. For over 15 years, EFFORT has been used by the TPLF to channel public resources and funds to the coffers of the TPLF through illegal deals, contracts, tax evasion, kick-backs and all sorts of illegal operations,” he told IPS.

Azeb Mesfin, Zenawi’s widow, currently manages the multi-billion-dollar business empire.

She claims her husband paid himself a modest salary of 250 dollars a month, yet the online website “the Richest.org”, which publishes the net worth of the richest people in the world, recently divulged that Meles was in fact one of Africa’s wealthiest leaders having amassed a personal fortune of three billion dollars.

http://www.africacradle.com/2015/03/11/the-depths-of-ethiopias-corruption/

The TPLF Corruption network

THE DEPTHS OF ETHIOPIA’S CORRUPTION

(Africa cradle, Finfinnee/London) – Ethiopia may be one of the fastest-growing, non-oil producing economies in Africa in recent years, but corruption in this Horn of Africa nation is a deterrent to foreign investors looking for stable long-term partnerships in developing countries.

“Bankers, miners and developers presenting projects to investment committees in countries that fare badly in corruption rankings frequently struggle to get investment. Corruption raises red flags because it makes local markets uncompetitive, unpredictable and therefore largely hostile to these long-term players,” Ed Hobey, the East Africa analyst at the political risk firm Africa Risk Consulting, told us.

On May 11, in the biggest crackdown on corruption in Ethiopia in the last 10 years, authorities arrested more than 50 high profile people including government officials, businessmen and a minister.

Melaku Fanta, the director general of the Revenue and Customs Authority, which is the equivalent rank of a minister, his deputy, Gebrewahid Woldegiorgis, and other officials were apprehended on suspicion of tax evasion.

But the arrests have raised questions about the endemic corruption at the heart of the country’s political elite.

Berhanu Assefa of the Federal Ethics and Anti-corruption Commission of Ethiopia told us that these arrests highlighted how corruption has insinuated itself into the higher levels of officialdom.

“Corruption is a serious problem we are facing. We now see that corruption is occurring in higher places than we had previously expected. Areas vulnerable to corruption are land administration, tax and revenue, the justice system, telecommunications, land procurement, licensing areas and the finance sector,” he said.

Ethiopia ranks 113 out of 176 countries on the Corruption Perceptions Index of Transparency International, a global civil society coalition that encourages accountability. The country has also lost close to 12 billion dollars since 2000 to illicit financial outflows, according to Global Financial Integrity (GFI), whose statistics are based on official data provided by the Ethiopian government, the World Bank, and the International Monetary Fund (IMF).

Dr. Getachew Begashaw, a professor of economics at Harper College in the United States, told IPS that there was a fear that the recent high profile arrests were merely political theatre designed to placate major donors such as the World Bank and the IMF, and to give credibility to the new regime’s fight against corruption. Prime Minister Hailemariam Desalegn took over leadership of the country after Prime Minister Meles Zenawi died in August 2012.

“They are using this as a PR stunt to appease not only the donors, but to also dupe the Ethiopian people. Because many non-party affiliated Ethiopians in the business community are complaining, and this complaint is trickling down to the average people on the streets,” he told IPS.

According to the World Bank, companies held by business group the Endowment Fund for the Rehabilitation of Tigray (EFFORT) account for roughly half of the country’s modern economy. The group is closely allied with the ruling Ethiopian People’s Revolutionary Democratic Front (EPDRF), an alliance of four parties.

EFFORT is a conglomerate formed from assets collected in 1991 by the EPRDF to rehabilitate the Tigray region in northern Ethiopia after it had been decimated by poverty and conflict. The Tigray People’s Liberation Front (TPLF) is the lead party in the EPDRF coalition.

Tigrayans, however, only account for eight percent of the country’s 90 million people. According to Abebe Gellaw, an exiled Ethiopian journalist and founder of Addis Voice, a web platform that provides news that is otherwise censored by the Ethiopian government, EFFORT has become a business racket for the Tigrayan elite who are monopolising major sources of the country’s wealth.

“The TPLF controls key government institutions and a significant portion of the economy. For over 15 years, EFFORT has been used by the TPLF to channel public resources and funds to the coffers of the TPLF through illegal deals, contracts, tax evasion, kick-backs and all sorts of illegal operations,” he told IPS.

Azeb Mesfin, Zenawi’s widow, currently manages the multi-billion-dollar business empire.

She claims her husband paid himself a modest salary of 250 dollars a month, yet the online website “the Richest.org”, which publishes the net worth of the richest people in the world, recently divulged that Meles was in fact one of Africa’s wealthiest leaders having amassed a personal fortune of three billion dollars. This has led many to question the provenance of the erstwhile leader’s wealth – when he had no known business engagements.

Illicit financial flows as a result of corruption are a major hindrance to a country’s development, undermining institutions, economies and societies. According to the Africa Progress Panel’s Africa Progress Report 2013, the continent is losing more through illicit financial outflows than it receives in aid and foreign direct investment.

A commitment to greater accountability and transparency to curtail illicit financial flows should occur on both the national and international levels, according to E. J. Fagan, deputy communications director at GFI.

“Reforms and policies are needed to strengthen customs enforcement and make governing apparatuses more transparent. The international community can create a multilateral system of automatic exchange of tax information that African countries like Ethiopia can access, so as to make it difficult for illicit actors to hide money and transfer large amounts of illicit money without detection,” he told IPS.

Begashaw added that corruption in the social sphere also breeds social inequality, disenfranchisement and a breakdown in national unity and civil society.

“The very existence of parastatals and TPLF-affiliated endowed business conglomerates like EFFORT is a major source of corruption. The Birr (Ethiopian currency) will depreciate and inflation will skyrocket. The capacity of the state to provide public goods and services will decline. Free market competition will be eroded. Government revenue will be reduced and the budget deficit will rise.

“If they are really serious about combating corruption, they should start doing so from the top,” he said.