Investment, The State of Ethiopia, and TPLF/EPRDF High Officials’ Tour of North America

It is now an established truth that a minority, ethnic-based political party, the Tigray Peoples’ Liberation Front (TPLF), which represses the citizens and dominates the national economy by merging ethnicity, party and state, governs Ethiopia. First, we would like to highlight some facts and salient features with regard to the current state of affairs in Ethiopia under these same officials who have had an iron grip over the people of Ethiopia for the last 20 years.

On Governance and Human Rights Ethiopia:

“The 2010 Failed States Index has ranked Ethiopia as the 17th most failed state in the world. Ethiopia’s ranking is worse than that of Kim Jung-il’s North Korea” (Foreign Policy and the Fund for Peace).

In a 2010 Freedom House report; “Worst of the Worst,” Prime Minister Zenawi is ranked as the ninth worst dictator on the planet (Professor George Ayittey).

In the words of Human Rights Watch researcher Ben Rawlence,
Ethiopia now was one of the most repressive societies in the world.
“People were very, very scared about talking to me – they would only do so in safe-houses”
BBC News – Africa, 19 October 2010

ü BBC’s Network Africa programme (interview with HRW)
… based on a six-month investigation last year.
… Visited 53 villages in 26 districts in three regions of Ethiopia
… found systematic discrimination from one end of the country to another

ü against people who were members of the opposition party or people who disagreed with the regime.”
…Villagers, who are often subsistence farmers, were rejected for micro-credit loans, seeds, fertilizer, food aid, housing if they were a member of an opposition party.

ü “University places are conditional on ruling party membership, promotion in the civil service – if you’re a teacher or a nurse or a bureaucrat in a government ministry – all of these things are conditional on loyalty,”
… People are being asked to disassociate themselves from political parties – rescind comments they’ve made and write out letters of regret – in order to obtain food aid.

· “The Ethiopian government is routinely using access to aid as a weapon to control people and crush dissent,” Rona Peligal, Africa Director at Human Rights Watch
http://www.hrw.org/en/news/2010/10/18/ethiopia-donor-aid-supports-repression.

· TPLF/EPRDF controls the Parliament using illegal and bogus elections as we witnessed in May 2010 winning 99.6% of the seats thus effectively turning Ethiopia into a One-party state.

TPLF/EPRDF controls the military, security service, and the police leaving our people at the mercy of a few sick and selfish individuals

On The Ethiopian Economy:

Ethiopia has received foreign aid estimated at $30 billion since 1991
Ethiopia receives an average of $3 billion per year in foreign aid.

Despite the staggering amount of aid Ethiopia received/receives, the latest Oxford University Multi Dimensional governance index showed that Ethiopia is the 2nd poorest country, behind Niger, in Sub-Saharan Africa:

· Ninety (90) percent of the population remains poor;

· There are 5 million orphans;

· 70 percent of Ethiopian youth is unemployed;

· An estimated 7 million Ethiopians depend on international emergency food aid to survive year in and year out despite the fact that the leader of the TPLF/EPRDF promised twenty years ago that he would have the people of Ethiopia eat three meals a day;

· Ethiopia has 1 doctor per 66,236 persons; with 1 hospital bed per 6,062 persons

· 80% of the Ethiopian people live below the absolute poverty lines while those affiliated with the regime and political cronies are becoming millionaires overnight.

· 20 years of TPLF rule has succeeded in putting the lion’s share of the national economy under party affiliated ethnic and political cronies. These groups have become the most visibly empowered groups in Ethiopia not only in the political but also in the economic arena;

· State owned industries under the previous Dergue/WPE regime have been transferred mostly to the Endowment for The Relief and Rehabilitation of Tigrai (EFFORT) and Sheik Mohammed Almoudi’s MIDROC-Ethiopia in the name of privatization.

· EFFORT ( Endowment Fund for the Rehabilitation of Tigrai) is the largest owner of the major industries in Ethiopia including Banking, Construction, Agribusiness, Mining, Communication, Insurance and other pillars of the economy that are vital to the well-being of the country. Ethiopian business owners are being pushed out of the market due to a lack of a level playing field. While the regime penalized these business owners with trumped up charges of tax evasion etc., business owners affiliated with the regime due to their ethnicity or political loyalty are made to thrive and prosper.

· TPLF/EPRDF is selling the most fertile lands to foreign investors for dirt-cheap prices at the expense of Ethiopian farmers and the fragile ecology of these areas. Thus leaving this problem for generations to come. Our most fertile land and forest resources are being cleared off to feed foreigners without regard to the grave consequences to the people of Ethiopia.

The people of Ethiopia have been made by-standers and strangers in their own land with the ruling regime working day and night to create fear, subservience, animosity, division, confusion and hatred among Ethiopians based on ethnic background and religious affiliation.

Two years ago, Professor Seid Hassen, Professor of Economics at Murray State University, wrote an article where he gave an account of several reasons why members of the Ethiopian Diaspora are “against’ investing” or reluctant to do so under the current conditions in Ethiopia. In view of the planned 14 city tour in North America of the top officials of the TPLF/EPRDF regime to speak about investment opportunities for Diaspora Ethiopians, we have found it important to republish Professor Seid’s findings as summarized here in.

Research Unit, Global Civic Movement for Change in Ethiopia (GCMCE), April 2011

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A Few Reasons Why some of the Ethiopian Diaspora Community Members are not interested and/or against “Investing” in Ethiopia: A Summary of selected

Conversations over coffee and by telephone.

By Dr. Seid Hassan

Murray State University

Introduction:

As some of you already know, some of the EPDRF (Ethiopian People’s Democratic Revolutionary Front) representatives (cadres?) have been roaming the western world trying to lure the Diaspora community so that they would “invest” their assets in Ethiopia. Some in the Diaspora community have challenged the same cadres and representatives in some of the cities they visited, such as in Dallas, Los Angeles, and London. This writer wondered, just to satisfy his intellectual curiosity, about this issue and decided to talk to some of the Diaspora members why they would be against or are reluctant to “invest” in Ethiopia.

Please note that the complaints (rationales not to invest) are sayings of many people even though I have represented them in a single first-person (that is, as “I”) format. Please also note that the list of complaints/rationales is by no means exhaustive.

List of complaints (rationales not to invest in Ethiopia):

1. The country is engulfed with a rampant inflation rate. Because of this, my real rate of return will be lower than what they appear to be. Moreover, if I want to bring some of my “profits” or my assets back home, just in case things fail to work out as originally planned, my real assets will be a lot less by the time they are converted into dollars, euros or any other hard currency. Therefore, “investing” in a country like Ethiopia with high inflation rates does not make any business sense. That is one of the reasons why I refrain (have refrained) from doing business in Ethiopia.

2. Due to the undemocratic nature of the government and the lack of peace and stability in that country, there a chance for me to lose my assets. The lack of peace and stability creates confusion and uncertainty. Such situations are known to create losses. Consequently, I hesitate to waste my hard earned resources by taking them to Ethiopia.

3. The major economic structure is controlled by the EPDRF and its cadres. There is no level-playing field in the system. As a result, there is a market failure due to too much interference in the functioning of the business sector by the cadres. The system is also too bureaucratic. A bureaucratic system does not recognize that time is money and hence it would be foolish on my part to try to invest in that country.

4. Many of the Diaspora community I happen to know who have tried to invest in Ethiopia have been disappointed in part because they are unfairly discriminated against in the workplace as well as in getting meaningful employment. Furthermore, they are excluded from the decision-making and policy-making processes with regards to Ethiopia. I am afraid, therefore, I may face the same fate, and, if so, my capabilities would be wasted.

5. The country’s miserable infrastructure (lack of roads, sewer systems, electric power, water, etc.) does not allow my investment to flourish. Whatever infrastructure there is, it is limited to certain geographical places, such as the Tigrai region and a handful of some cities elsewhere. Hence, investing my funds in other disadvantaged regions puts my investment at a disadvantage. Moreover, my investment requires constant communication and since the country’s Internet and telephone infrastructure is the lowest in the world, I am afraid that the returns on my investment will not be attractive.

6. The country lacks the necessary skilled manpower, in part because of the brain drain. Recent reports indicate that even the EPDRF owned businesses and structures are operating way below full capacity due to skilled manpower shortages and other bureaucratic entanglements. In fact, the EPDRF seems to be more interested in sending its citizens abroad so that it could garner increased remittances. Its policy seems to encourage some of its citizens to become “super-maids” in advanced and neighboring countries.

7. The financial sector is controlled by the TPLF and its cadre-controlled businesses. As a result, my investment may face challenges in case I needed some more financial support. It has been reported that the government-controlled banks are bent to extend loans mainly to the government controlled businesses. It could be very hard for me to compete with those businesses, which are being paid to borrow funds (through negative real interest rates). It is quite clear, therefore, that the financial infrastructure needs to be restructured in order to accommodate investors like me, and unless such changes are made, it is not worthwhile for me to invest in Ethiopia.

8. Thanks to my hard work and the opportunities accorded to me in the country I took refuge, I have acquired some skills that could turn out to be good investments and useful to Ethiopia. But I am afraid that I may be unemployed or underemployed once I get there. Specifically, my sources tell me that joining the EDPRF (political party) is the main qualification to land on a good job in Ethiopia, instead of one’s abilities and earned skills. Even worse, my sources also tell me that those who voted for the opposition parties and who exercised their rights during the 2005 election are now being harassed for doing so. I am, therefore, reluctant to waste the human capital that I acquired through hard work. I rather stay put where I reside.

9. Because of the rampant corruption, my investment would not be safe; I have seen or heard complaints from those who attempted to “invest” and I do not want to make the same mistakes they have made.

10. I have better alternatives to invest my funds where I live than doing it in Ethiopia; the returns on my investments where I live may not be high enough, but the risks are more tolerable than the ones in a corrupt country like Ethiopia.

11. It would be immoral for me to buy the land that belonged to my relatives (ancestors) and enrich the TPLF kleptocratic gangs. Just think about it: Before the Derg confiscated all city dwellings; they used to belong to the people who owned them. Instead of returning those same properties to their rightful owners, who could well be my own relatives, the government is trying to sell them back to me! I am not willing to play this game that the EPDRF has created: taking away/keeping the properties, which should belong to me and my relatives and selling them back to me. Doing so will be morally unacceptable to me.

12. I am afraid that the investment that I make in Ethiopia would be lost (confiscated) when the regime goes away. I suspect this possibility because there is a good chance that my investment will be contaminated while trying to deal with a corrupt system.

13. Why would I take my money to Ethiopia knowing full well that the corrupt EPDRF leaders and cadres would use the hard currency I take into the country for them to expatriate the stolen funds out of the country? My actions will be tantamount to a philanthropic activity to those who send the looted assets overseas. My conscience would not allow me to do just that.

14. Since funds are fungible, I am afraid that the TPLF (EPDRF) would use my hard currency to suppress my own people (using it to buy weapons); for example, the regime was accused for indirectly using the hard currency it obtained from multilateral institutions, foreign governments, and Ethiopian expatriates to buy weapons during the Ehio-Eritrean nonsensical war of 1998-2000, in which the lives of 100, 000 people were lost, many more were maimed and hundreds of thousands were displaced. I want neither my funds nor my actions be a part of that in case conflicts flare up again.

15. For those people who bought apartments in Addis Ababa, it has become clear to them that they did not get their money’s worth. People who bought apartments, especially those I saw in Addis, are found to be a lot smaller than they anticipated. Some of these buildings lack the proper sewerage systems. They lack running water. They have faced power outages. In effect, some of those premises have become ghettos, especially compared to here, where I live. I am not going to waste my precious resources to live in a ghetto like environment.

16. I know a few friends of mine who tried to “invest” in that country that have lost their assets or not made any progress with their funds; the cost of the handling fees, the number of days wasted to get the proper license, the bureaucratic red tape, etc. is just too high to warrant my investment. I happen to know some people who have been deceived. Knowing this to be true, the EPDRF established a Diaspora complaint center at the ministry of foreign affairs, called Ethiopian Expatriates Affairs Directorate of the Foreign Affairs Ministry. That complaint center is known to be too bureaucratic. Those who presented their complaints have been told to go back and resolve their issues with the local EPDRF representatives. Some who have left the country in despair.

17. The consultancy fees that I would have to pay to the EPDRF cadres and other non-cadres are just too high to warrant my investment.

18. The flow of foreign investment tends to camouflage Human Rights Abuse and I am afraid my investments will do the same. The very concept of opening up the country for foreign investment sends out the wrong message to the outside world by perpetuating the myth, often through the IMF and World Bank, that TPLF/EPRDF is open to free market economics and democracy and that Western powers should support it by all means possible irrespective of the opposition’s cry of injustice! So, those who care about human rights abuses should instead advocate for an embargo. This was what was done during the Apartheid regime of South Africa. This is what is being done on Zimbabwe, Cuba and host of other countries. As one who believes in “injustice anywhere is injustice everywhere”, I believe the same embargoes should be applied to the dictatorial regime in Ethiopia, which in my view has stolen the people’s votes during the 2005 election, has killed many people and put tens of thousands of them in concentration camps.

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Posted by on April 6, 2011. Filed under VIEWS. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.