By Yilma Bekele, 28 November 2008 — “Damn the torpedoes! Full speed ahead!” was the order given by the first American Admiral, Admir. David Glasgow Farragut at the Battle of Mobile Bay. The entrance to the Bay was heavily guarded when he ordered his fleet to steam ahead. Despite heavy loses; he took over New Orleans leaving the Confederacy with no port on the Gulf of Mexico. Loss of a port was a strong blow to the Confederacy. Loss of a port in no small matter.
Senator Mc Cain’s decline in the polls started when he uttered these fate full words “the fundamentals of the economy are strong!’ It showed that the candidate was clueless. Things were falling around him and he was in his own bubble. That morning in Florida started his melt down. It was clear that this was not a “Full Speed Ahead!” moment.
President Bush took a note of this and adjusted his response accordingly. His administration shouted ‘the sky is falling’ in unison. We all agreed with this assessment. Gas was $4.60 a gallon, home values were dropping, lay-offs were common and the stock market was tanking. Yes, for a change Mr. Bush was right. Mind you his failed policies caused this catastrophe, but he was decent enough to warn people of the predicament he got them into.
The Bush administration suggested a $700 billion rescue package. Congress rejected the proposed solution. After a lengthy discussion both the Senate and the House approved it with some amendments. The jury is still out regarding its effects on the economy. Big problems require constant adjustments.
President elect Obama is smart enough to admit that the situation does not look good. His advisors are floating different ideas to gauge citizen’s reaction. He is surrounding himself with highly skilled and diverse advisors. Party affiliation is not an issue. Race, color or gender is not a factor. Personal achievement and character are the defining points.
The President elect is faced with myriad of problems. He is meeting the challenge head on. As a true leader he is uniting his people. He is asking for some sacrifice and a lot of ingenuity. He is working hard trying to rally the people behind his ideas and actions. He is aware that without their consent and cooperation there is no solution. He knows that he has four years to deliver what he promised. The clock has already started ticking.
Thus the whole planet is in the midst of an economic recession verging on depression and governments all over the world are trying all kinds of cures and solutions and what do you think the Ethiopian government is doing? This is what Ato Meles have to say about it in a speech to his kangaroo Parliament.
“…In general, we don’t expect drastic effects on our economy, our financial structure is not as liberalized as those of affected countries and the economy is not intertwined to Western economies to face a crisis…..the whole situation goes hand in hand with economic recession, which could lead to a decrease in foreign investment and aid. On the other hand, we could benefit from a decrease in petrol price.” (Source: AFP).
As a layperson I have a few problems with this assessment. First of all we live in an integrated world. World economy is intertwined as never before. Ethiopia is not some isolated island floating all by itself. In fact when the west sneezes we catch the flu. Regardless Ethiopia is a welfare state. What this means is that the Ethiopian budget cannot stand on its own with out foreign assistance. Development assistance by European Union, UN agencies, Nordic countries or foreign investment is dependent on the health of International economic situation. Surely there will be a decrease in aid and economic activity. (ethiomedia.com)
One of the biggest incomes enjoyed by the government is remittance by the Diaspora. It is a billion dollar bonanza. But again the decrease in economic activities is definitely going to impact the amount and frequency of remittances. Who is going to build all those concrete behemoths littering the country?
We are a raw material exporter while others manufacture it and make more money than us. We sell our coffee to Starbucks for pennies and they roast and brew it and make a buck. World recession will negatively affect that. Who is going to buy those flowers grown on farmlands after displacing the poor peasants?
Furthermore Banks are ground zero of this catastrophe. They are not lending, not even to each other. Ethiopia depends on loans and grants from World Bank and the IMF and other private banks to finance all those projects the TPLF regime is proud of. It is definite that the cost of borrowing will skyrocket. Isn’t the additional finance cost going to impact us negatively?
As for the ‘not liberalized financial sector’ the chickens are in the process of coming home to roost. The whole fiasco regarding the missing 4 billion Br is both sad and comical. The line of demarcation is very blurry when it comes the pockets of the Ethiopian National Bank and the TPLF endowment companies. (dagmawi)
The decrease in the price of gas is seen as a silver lining in this dark picture. It is difficult to see why? We need petrol to transport goods to foreign markets to earn foreign exchange so we can buy food and other products. On the other hand if there are fewer foreign buyers we will not have enough currency to buy oil even if the price plummets further down. In other words it is conceivable that even free is nothing to celebrate.
We are in the midst of our recurring famine. The official inflation is nearing 60%. The war in Somalia is draining our resources and creating enmity with our Somali brethren. The no war no peace situation with Eritrea is costing a lot of money in troop deployment along the so-called border. The imposed one party rule is causing economic stagnation, rampant corruption and is paving the road towards a failed state status.
Surely it is very clear that this is not a “Damn the torpedoes! Full speed ahead!” moment. In my humble opinion this is a complete stop and reassess your options situation. The problem calls for the assembly of a wide range of learned persons to recommend a cure before the disease reaches a point of no return. Both the host and the parasite will suffer. The parasite will not survive.