Posted by OromianEconomist in #OromoProtests.
Tags: #OromoProtests, #OromoRevolution, AFK Insider, Africa, Ethiopia, Ethiopia’s fake economic growth borrows from ENRON’s accounting, Genocide Against Oromo People, Oromia, Oromo
The self-defeating tactics adopted by the Ethiopian government to address genuine cries against lack of job opportunities, more political inclusion and more space to enjoy freedoms and rights in the Oromo and Amhara regions may scare away investors, according to theEmbassy of the US.
By Kevin Mwanza, AFK Insider, October 25, 2016
Nearly a year since the Oromia protests began, and despite efforts by the Ethiopian government to hide the ugly suppression on its own citizens from the rest of the world, it has culminated into a state of emergency for the next six months to restore order in restive Oromia and Amhara regions.
The decision to put one of Africa’s fastest growing nation on lock-down came after three incidents that are likely to redefine one of the continent’s silent massacres where economic and political marginalization has for months been met with brutal force and resulted in the deaths of hundreds of people.
In September, Dutch-owned florist, Esmeralda Farms BV shut down operations in the horn of Africa nation after protesters attacked its farm in Bahir Dar, causing at least $7.8 million of destruction. Last week, the protesters attacked a Dangote Cement plant in the Amhara region.
The government linked the two attacks to the Oromia protests that have rocked the country since November last year.
Prior to the attack on Dangote Cement plant, dozens of people died in a stampede in Bishoftu after helicopter gunship fired on nearly two million celebrants attending the Irreecha festival, an annual thanksgiving ceremony by the Oromo tribe.
The stampede is so far the darkest moment in the clashes. At least 250 people died in the melee, according to social activists quoted byTesfaNews.
Two weeks after the massacre, the government decreed a state of emergency, an uncomfortable admission that state machinery has failed to suppress protests by the two biggest tribes.
Foreign investors are already developing cold feet in a nation where cheap labor and electricity has wooed manufacturers to set up operations. Ethiopia is on course to become the continent’s manufacturing hub in coming years.
The authoritarian regime under Hailemariam Desalegn accused some foreign eyes of inciting the Oromo and Amhara people to the violence. It branded opposition politicians terrorists and dissidents.
This decision follows an all-too familiar tact by African governments that cannot tolerate objective opposition, choosing to label those involved as enemies of the state.
It accused neighboring Eritrea, Egypt and other countries of arming and training the groups that attacked the two plants in the months-long violence that is threatening to undo the nation’s economic gains, The Guardian reported.
Economic and political marginalization became the fire behind the protests that have seen investors leave the nation and others incur losses running into billions of dollars. The government can no longer hide it.
The declaration came days after Ethiopia opened Africa’s first electric railway linking it to Djibouti which will boost Ethiopia’s economy by reducing the transport of imports from the port of Djibouti from three days by road to about 12 hours.
It will handle nearly 90 percent of the nation’s imports currently transported by road, BBCreported.
The government however chose economic growth over the economic inclusion of its people, despite their persistent protests and now it is paying the price through the state of emergency.
After hundreds of deaths ignored by the international community and trampled upon by the government’s security forces, the next six-months are set to be key to the country.
It will be a testing period for the nation to maintain investor confidence on the back of the Oromia protests.
The self-defeating tactics adopted by the Ethiopian government to address genuine cries against lack of job opportunities, more political inclusion and more space to enjoy freedoms and rights in the Oromo and Amhara regions may scare away investors, according to theEmbassy of the US.
Click here to read related article: FP: Dispatch: The Rotten Foundation of Ethiopia’s Economic Boom. #OromoProtests
(Financial Times, 25 October 2016): A wave of anti-government protests and the imposition of a state of emergency has triggered a collapse in tourism bookings in Ethiopia.
Posted by OromianEconomist in #OromoProtests, Africa, Oromia, Oromo.
Tags: #OromoProtests, Africa, Civil Disobedience Against Tyranny, Ethiopia’s fake economic growth borrows from ENRON’s accounting, Foreign Policy, Genocidal killings against Oromo people, Land grab in Oromia & Gambella, Oromia, Oromo, The Rotten Foundation of Ethiopia’s Economic Boom
“There are so many problems facing the Oromo people… “But those who speak about it are getting arrested. Educated people, farmers, teachers, doctors — the government accuses them all of being part of the protests.”
Brutal repression was the secret to the country’s rapid rise. It could also bring it crashing down again.
BY JACEY FORTIN, Foreign Policy, 23 March 2016
ADAMA, Ethiopia — For those who would speak frankly about politics in this landlocked East African country, the first challenge is to find a safe space.
But on a recent evening in Adama, a city in the heart of a region reeling from the largest protest movement Ethiopia has faced in decades, most people seemed at ease. University students poured out of the city’s main campus, spilling into claustrophobic bars and pool halls. Others crowded around a cluster of aging taxis, jostling for a quick ride home.
Though it is one of the largest cities in Oromia — where members of Ethiopia’s Oromo ethnic group have taken to the streets in recent months in unprecedented numbers to protest their political and economic marginalization — Adama has remained mostly quiet.
Hidden beneath the casual veneer of daily life, however, lurks a deep-seated suspicion of the government, which has built a massive surveillance apparatus and cracked down violently on its opponents
Hidden beneath the casual veneer of daily life, however, lurks a deep-seated suspicion of the government, which has built a massive surveillance apparatus and cracked down violently on its opponents.
Citizens feel they have to watch what they say, and where they say it. At the hangouts where crowds have gathered, a political statement might be overheard. Out on the sidewalks, government spies could be on patrol. Inside the university campus, security officials are on the lookout for suspicious behavior.
In a way, the recent unrest is rooted in Ethiopia’s rapid economic rise. The federal government claims to have notched double-digit GDP growth rates over the past decade, but its rigid, top-down approach to developing industry, and attracting foreign investment, has resulted in mass displacement and disrupted millions of lives. This, in turn, has heightened ethnic tensions that today threaten Ethiopia’s reputation for stability.
All across Oromia, government security forces have been struggling to control the spate of violent protests that erupted in November, partly in response to the government’s so-called master plan to coordinate development in Addis Ababa with nearby towns in Oromia, a sprawling central region that surrounds the capital on all sides. Like much of the country, the vast majority of Oromia is rural, home to small-scale farmers who feel left behind by the dazzling growth of Addis.
When this latest round of protests began last year, demonstrators seized on the master plan as symbolic of broader encroachments on Oromo autonomy. They also accused the government of taking land from Oromo farmers for little or no compensation, suppressing the Oromo language in schools, and unfairly redistributing the region’s natural resources.
In Adama, a 23-year-old engineering student, whose full name has been withheld for his safety, was initially reluctant to speak with this reporter for fear of reprisal. He relaxed only after he and some close friends sat down in a deserted cafe near campus, where a quiet woman brewing coffee over hot coals was the only person listening in.
“There are so many problems facing the Oromo people,” he said. “But those who speak about it are getting arrested. Educated people, farmers, teachers, doctors — the government accuses them all of being part of the protests.”
His caution was warranted. Less than two weeks later, a confrontation erupted at the university, reportedly in response to a small demonstration by students — though the details, as always, are hazy. One witness who asked not be named said he heard gunshots as security forces descended on the campus. Amid the confusion, at least two fires were sparked — one in the school’s backup generator.
“On campus, students already feared the armed forces,” said the witness, who is a student at the university. “Now, no one feels like they have any right to speak at all.”
Government security forces have been accused of exacerbating the crisis in Oromia by violently suppressing the protests. In a recent report, Human Rights Watch said it had “documented security forces firing into crowds of protesters with little or no warning, the arrests of students as young as 8, and the torture of protesters in detention.” The rights group said military and police forces have killed “several hundred peaceful protesters” since November.
Members of the Ethiopian diaspora have been equally vocal, taking to social media to call attention to alleged atrocities. Jawar Mohammed, who is based in Minnesota, is perhaps the most prominent online activist, manning a number of social media feeds featuring bloody photos of dead demonstrators and grainy videos of police brutality that have become hubs for Oromo diaspora members around the world. His Facebook page has amassed nearly a half million followers.
“We have freelancers embedded in pretty much every district across the country,” said Mohammed, who was born in Ethiopia but works abroad as the executive director of the Oromia Media Network, a news broadcaster whose satellite feed here has been repeatedly jammed by the Ethiopian government. “They infiltrate the system from top to bottom,” he said in a Skype interview.
How much of an impact social media activism has had on the actual protest movement is a matter of debate. In a country with limited Internet penetration, and where the sole government-owned telecommunications provider has the power to shut down signals and block opposition websites, online activists like Mohammed are necessarily limited in what they can do. According to the engineering student in Adama, people on the ground are driving the protests, and social media matters “only a little bit.”
Where online activists have succeeded is in channeling video and photographic evidence of abuses to the outside word
Where online activists have succeeded is in channeling video and photographic evidence of abuses to the outside word. But even this evidence is difficult to verify; several journalists, including this correspondent, have been detained by officials for attempting to report in some of the worst-affected areas.
There are also questions about the direction social media activists have steered the debate surrounding the protests. Comments by Mohammed’s passionate social media followers sometimes advocate violence against members of the Tigray People’s Liberation Front (TPLF), a political party from the northern region of Tigray that dominates the government’s security and intelligence agencies. And because he and other online activists are far from the front lines, some argue that their social media posts are ultimately a distraction. The student who witnessed the altercation at the university in Adama, for instance, said he agrees with Mohammed’s political analysis, but is concerned that the Facebook page has become a magnet for a dizzying array of viewpoints — about religion, regional politics, and ethnic strife — that make the movement more controversial than it needs to be.
Still, Mohammed has a clear strategy in mind. When it comes to human life, he advocates nonviolence. But he encourages demonstrators to block trade routes, destroy the property of companies that are seen as operating against Oromo interests, and avoid bringing crops to market in order to raise food prices.
Might such tactics be unethical during the worst drought Ethiopia has witnessed in decades, which has left 10.2 million people in need of emergency food aid? “Morally, yes,” Mohammed said. “Strategically, no.”
Officials have no time for these “activists on the other side of the Atlantic,” said government spokesman Getachew Reda. He claimed that agitators, some of whom have backing from Eritrea, Ethiopia’s archrival, have infiltrated the ranks of the protesters and are responsible for the current violence. The government security forces, by contrast, have generally handled the situation professionally, he said.
“We may have some bad apples,” Reda said. “Otherwise, the security apparatus that we have in this country is very much oriented towards serving the interests of the public.”
Amid this war of words, normal citizens are caught in the middle. In the quiet café in Adama, the engineering student spelled out a set of remarkably prosaic demands: He would like to see more Oromo professors at the university, for instance, and a fairer allocation of resources for the region. But, he said, he stays quiet for fear of Ethiopia’s pervasive security and intelligence apparatus.
“People don’t feel free,” he said. “We are all psychologically impacted.”
After two months of violent demonstrations, the government announced that it was scrapping the master plan. It wasn’t enough. Some protesters said they didn’t believe it had really been canceled. Others were motivated by grievances that run much deeper than any development scheme, citing marginalization stretching all the way back to the late 1800s, when the Ethiopian emperor Menelik II swept in from the north to expand Ethiopia’s borders and establish the capital city in Oromo lands.
On paper, today’s federal system is meant to ensure some measure of autonomy for all of the country’s ethnic groups, including the Oromos. The ruling coalition, the Ethiopian People’s Revolutionary Democratic Front (EPRDF), is made up of four regional parties, including the TPLF and the Oromo People’s Democratic Organization (OPDO). But the government lost some credibility in May, when the EPRDF and allied parties won every parliamentary seat in a national election. Though the OPDO holds more parliamentary seats than any other party, protesters say the party either cannot or will not challenge the dominance of the TPLF — and Oromos remain marginalized as a result.
Officials say they are trying to promote meaningful dialogue. “It is the government’s responsibility to make sure that people’s legitimate grievances are addressed properly,” Reda said. To that end, OPDO officials have convened meetings with concerned citizens across Oromia, and hundreds of low-level officials have been dismissed for corruption.
But the government has continued to lean on its powerful security apparatus, which has both enabled Ethiopia’s impressive, state-led economic development and imperiled it by bringing ethnic tensions to the fore. The ongoing protests in Oromia point to cracks in the facade, where citizens feel left out as the government pursues its uncompromising vision of modernization.
By continuing to crack down on demonstrators instead of listening to their demands, Ethiopia risks compromising the reputation for political stability that fueled its unprecedented decade of growth and foreign investment. In that way, the government may soon erode the very foundation of its own economic ambitions.
The Ugly Side of Ethiopia’s Economic Boom
Posted by OromianEconomist in Uncategorized.
Tags: Africa, Africa is not rising, Africa Rising, Africa's statistics, economics, Ethiopia and poverty, Ethiopia’s fake economic growth borrows from ENRON’s accounting, Famine and the “Ethiopia rising” meme, If Ethiopia’s economy is so vibrant, The danger of Single story on Africa Rising
Ethiopia’s fake economic growth borrows from ENRON’s accounting
J Bonsa analyses Ethiopia’s economic growth over the last ten years. Africa At LSE
More than 70 people have been killed and dozens wounded in an ongoing crackdown on peaceful protesters in Oromia. One of the underlying causes of the prevailing tense political situation is Ethiopia’s bogus claim about “miraculous” economic growth in the last decade.
The youth is not benefitting from the country’s supposed growth and doesn’t anticipate the fulfillment of those promises given the pervasive nepotism and crony capitalism that underpins Ethiopia’s developmentalism.
Courtesy: OPride
The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) came to power in 1991 and briefly experimented with democratic transition. However, a little over a decade into its rule, the party’s former strongman, the late Meles Zenawi, realized that their pretentious experiment with liberal democracy was not working. Zenawi then crafted a dubious concept called, “developmental state.”
Stripped of the accompanying jargon and undue sophistication, Zenawi was simply saying that he had abandoned the democratic route but would seek legitimacy through economic development guided by a strong hand of the state. This was a ploy, the last ditch attempt to extend EPRDF’s rule indefinitely.
Using fabricated economic data to seek legitimacy and attract foreign direct investments, the regime then advanced narratives about its double-digit economic growth, described with such catchphrases as Ethiopia rising, the fastest growing economy in the world and African lioness. The claims that EPRDF has delivered economic growth at miraculous scales has always been reported with a reminder that it takes several decades to build democratic governance. The underlining assumption was that, as long as they deliver economic growth, Ethiopia’s leaders could be excused on the lack of democracy and human rights abuses associated with the need for government intervention in the economy.
EPRDF spent millions to retain the services of expensive and well-connected Western lobbying firms to promote this narrative and create a positive image of the country. These investments were also accompanied with a tight grip on the local media, including depriving foreign reporters’ access if they cross the government line. Ethiopia’s communication apparatus was so successful that even serious reporters and analysts started to accept and promote EPRDF’s narrative on rapid economic growth.
However, a few recent events have tested the truthfulness of Ethiopia’s economic rise. Drought and the resulting famine remain the Achilles heels of the EPRDF government. The government can manipulate data on any other sector, including the aggregate Gross Domestic Product, and get away with it, but agriculture is a tricky sector whose output is not so easy to lie about. The proof lies in the availability of food in the market, providing the absolute minimum subsistence for the rural and urban population.
The sudden translation of drought into famine raises serious questions. For example, it is proving difficult to reconcile the country’s double-digit economic growth with the fact that about 15 million Ethiopians are currently in need of emergency food aid.
Rampant famine
Except for some gullible foreign reporters or parachute consultants, who visit Addis Ababa and depart within days, serious analysts and students of Ethiopian economy know that authorities have often fabricated economic statistics in order to generate fake GDP growth. To the trained eye, it does not take a lot to find inconsistencies in the data series. In fact, Ethiopia’s economic growth calculus is so reminiscent of Enron accounting. (See my recent pieces questioning EPRDF’s economic policies, including anomalies in the alleged achievements of millennium development goals, crony businesses, devaluation, external tradeand finance.)
The tacit understanding in using GDP as a measure of economic growth is that responsible governments generate such data by applying viable international standards and subjecting the data to scrutiny and consistency checks.
Unfortunately, these standards are not foolproof; irresponsible governments with mischievous motives can abuse them. There is credible evidence that shows Ethiopian authorities deliberately inflated economic statistics to promote feel-good, success stories.
Let’s take the agricultural data, which is timely and topical given the ongoing famine. This came to light recently as the European Union tried to understand anomalies in Ethiopia’s grain market, particularly persistent food inflation which the EU found incompatible with the agricultural output reported by the Central Statistical Authority (CSA) of Ethiopia.
The EU’s Joint Research Centre (JRC) then developed the technical specification for studying the scope of the Cereal Availability Study in order to account for the developments in the Ethiopian cereal markets. The International Food Policy Research Institute (IFPRI) was selected to carry out the study.
Figure 1 (above) compares the EU-sponsored survey and the Ethiopian government’s survey produced by the CSA. I am using the data for 2007/08 for comparison. The negative numbers indicate that the IFPRI estimates were consistently lower than the CSA data. For instance, CSA overstated cereal production by 34 percent on average. This ranged from 29 percent for maize to 44 percent for sorghum. The actual amount of Teff produced is lower by a third of what’s reported by the CSA.
The research team sought to explain this “puzzle” by examining the sources of the confusion, the methodological flaws that might have led CSA to generate such exaggerated economic data. Toward that end, they compared CSA’s crop yield estimates with comparable data from three neighboring countries: Kenya, Tanzania, and Uganda (see Figure 2).
From 2000 to 2007, the average increase in cereal yield for these countries, including Ethiopia, was 19 percent. Yet the CSA reported a whopping 66 percent for Ethiopia’s yield growth. The country was not experiencing an agricultural revolution to justify such phenomenal growth. It is unrealistic that Ethiopia’s yield growth would be greater than the neighboring East African countries, particularly Kenya, where the agricultural sector is at a much more advanced stage. If anything, the reality in Ethiopia is closer to Uganda, which did not report any yield increase during that period.
This reveals the extents of data manipulation by Ethiopian authorities to create an inexistent economic success story and seeks political legitimacy using a bogus record. We now know the widespread distortions in official statistics on cereal production thanks, in no small part, to EU’s intervention in sponsoring a study and explaining the disparities. Cereals represent only a sub-sector in the agricultural realm. It is likely that worse distortions would be revealed if similar studies were done on Ethiopia’s growth statistics in other sectors, including manufacturing and service divisions.
‘Poverty reduction’
The IMF has praised Ethiopia for achieving accelerated growth with a focus on equity and poverty reduction, a challenging dilemma for most countries. However, a closer look at three interconnected facts turns this claim on its head.
First, as noted above, Ethiopia’s agricultural output has been inflated by 34 percent on average. Second, a33 percent poverty reduction since 2000 is widely reported. Third, there is a consensus that poverty reduction has happened mostly in rural Ethiopia. Now we put these three facts together and apply a simple logic to establish that the 33 percent poverty reduction is explained by the 34 percent exaggerated agricultural outputs. Notice that it is not by accident that the two percentage points are almost identical. Therefore, the ups and downs cancel each other out. In the best-case scenario, poverty rate must remain at the same level as in 2000.
The World Bank, IMF and other donors have often anchored their conclusions on poverty reduction on alleged changes in the agricultural sector, where the bulk of the poor live and work. Little do they know that the data they used to compute the poverty index comes from agricultural statistics with hugely inflated yield assumptions as shown above.
This raises the question: where has the billions of dollars in bilateral and multilateral aid pumped into Ethiopia in the name of poverty reduction and the millennium development goals gone?
‘The enclave economy’
The ‘Ethiopia rising’ storyline is a standard set by foreign correspondents who often repurpose official government press releases, or reports based on the construction projects in the capital, Addis Ababa.
For example, Bloomberg Africa’s William Davison, often uses the proliferating high-rise buildings in Addis Ababa as tangible evidence of Ethiopia’s double-digit economic growth. In his latest whitewash, Davison writes, “such growth is already visible in parts of the capital, where shopping malls and luxury hotels are sprouting up.” That a veteran reporter for a business website unashamedly passes judgment on economic success by referring to heights and width of buildings underscores his shallow understanding of the country’s social and political fabric.
Here are some of the questions that reporters aren’t asking and seeking answers for: Who owns those building? Where did the investment money come from? Are there any firm linkages between these physical infrastructures and the rest of the Ethiopian economy? I have partially answered some of these questions in a previous piece and will soon provide additional insights.
For now, I would like to draw attention to the existence of an “enclave economy” within the mainstream Ethiopian economy. This enclave is made up of highly interconnected crony businesses, which are owned and operated by Tigrean elites, who also have a tight grip on the political and military command structures. Take, for example, the Endowment Fund for Rehabilitation of Tigray (EFFORT), a business conglomerate affiliated with the Tigrean People’s Liberation Front (TPLF). EFFORT has its humble origin in the relief and rehabilitation arm of the TPLF. However, it has undergone amorphous growth and now controls the commanding heights of the Ethiopian economy. By some estimates, EFFORT now controls more than 66 business entities.
The EFFORT controlled enclave and related military engineering complexes have created a semi-autonomous economy in Ethiopia. They made smart choices and specialized in engineering and construction businesses. This means they do not have to rely on the Ethiopian public for their products; instead, each specialize in separate industrial branches and buy from each other and also sell to the government, which is also in their hand. The huge government infrastructural projects necessitated by the “developmental state” model create business opportunities for these engineering companies.
The enclave economy is only loosely linked to the mainstream economy and it does not benefit the bulk of the Ethiopian people in any meaningful way. The luxury hotels and supermarkets that Davison refers to cater for the needs of the affluent business classes, their families, and the expatriate community.
In other words, Ethiopia’s miraculous economic growth, if it in fact exists, must have happened only in the enclave economy. Statistically, it is possible to generate a double-digit economic growth at the national level through a combination of some real astronomical growth in the enclave component and stagnation or declines hidden, through some accounting tricks, in the rest of the economy.
Lock-in style of reporting
Unfortunately, the unquestioned reporting on Ethiopia’s economic success has continued. Even the EU study appears to have been shelved, or deliberately ignored despite the significant findings. Even as a fifth of the population is in need of emergency aid, the World Bank is sticking with the outdated data and has recently released a sensationalized report entitled “Ethiopia’s Great Run: the growth acceleration and how to pace it.”
The ensuing famine has shaken the foundation of Ethiopia’s growth narrative, yet western NGOs and media outlets appear to suffer from the lock-in effect in adopting consistent storylines. They continue to link and refer to the World Bank, IMF and others reports and indexes by multilateral organizations.
That’s why we continue to see comical headlines such as “Ethiopian Drought Threatens Growth as Cattle Die, Crops Fail,” which assumes that Ethiopia’s growth is actually occurring. This acquiescence does not only display ignorance, but it also underscores an effort to evade accountability for previous mistakes and failure to report accurate information.
In a recent interview with The Ethiopian Reporter, Prime Minister Hailemariam Desalegn made a rare and fateful admission: “if we crave for too much praise for our achievements, we might run the risk of undermining the challenges we are facing. These challenges could grow bigger and become irreversible and that would be detrimental.”
Over the past 25 years, the EPRDF worked tirelessly to create a distorted image of the country and began craving and lobbying foreigners for praises.
Enron’s success involved an elaborate scam, but the firm was named “America’s Most Innovative Company” for six consecutive years. This fame did not stop Enron from crumbling. EPRDF’s fate will not be any different. The Oromo uprising has already started the unraveling of its elaborate scams devised to attain legitimacy on the back of non-existent economic and democratic advancement.
J. Bonsa is a researcher based in Asia.
This article was first published on OPride.
Ethiopia’s economic growth borrows from ENRON’s accounting
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