Leader comes and goes but why?
Zeru Hagos 06/24/09
Why are leaders replaced? Take for example PM Meles. Yes PM Meles has been the top leader for his organization for a while now. But, during his time EPRDF has been transformed from a well oiled fighting machine to a formidable organization that won three successive elections. Under EPRDF Ethiopia has become truly a developing country and an aspiring democratic country! Yet, more is to come and more than ever a strong progressive and articulate leadership is needed. Who ever holds a majority seat in parliament in the coming election the next government will have a daunting task to navigate the country from becoming victim of the economic turmoil the world is in today to a proactive one. And if EPRDF becomes the majority seat holder who is there to lead than PM Meles and his team who have showed resilience and true statesmanship to garner world praise! So why change?
The next government will have a daunting task to manage the turmoil that is engulfing the Horn region from Eritrea to Somalia. The Sudanese referendum that will surely split the country in to north south will certainly require an adept government in Ethiopia to manage the dicey situation there. And the biggest challenge of all, for the coming government will be to earn respect from all EPRDF member organizations in order to pass legislation. It is clear that the parliament is becoming more vibrant and may not tip toe to party disciplines when issues come to the floor. Take the current uproar with the Amhara delegation about the population census! The Census bureau has to visit its counting procedures to find any weakness simply because Amhara MPs who are EPRDF members did not like the result.
If EPRDF chooses a new leader out of the non veteran EPRDF circle, who ever he/she may be will have a daunting task to convince the old guards in each front for their support. I see an erosion of camaraderie if the new leader is a former Derge functionary! For such person to take power at the top while long time EPRDF members who gave it their all are side tracked, is simply an additional burden EPRDF can do without. Thus, why would EPRDF want to change leadership at the top today? And why is Ethiopia’s constitution under pressure from Westerners who want to see leadership change to mirror their way of government?
If leadership change is a must no matter what the situation is then why did EPRDF fail to adopt such language in its internal rule and the country’s constitution for this long? Who really benefits a leadership change today? Not tomorrow but today? Tomorrow I agree there must be for no one is immortal!
Would EPRDFites be happy to see Meles and his government replaced? Would anyone be pleased to see Meles alone go and everybody else remain as is…if so what has Meles done for such treatment? Would a new prime minster solve any issue if he is to continue PM Meles government policy as is? If not which policy do we expect the new prime minister to change? Why can’t Meles continue if no policy change is needed? These are questions I have but I am sure there are more.
I personally think PM Meles, unless his medical condition is forcing him to take it easy, like a good soldier that never says I am tired, must continue for another term or at the very least serve a transitional two to three year time so the new leader is not overwhelmed before he /she gets in to the office. That way Ethiopia’s enemy from far and near will know for the next few years things will remain the same. The huge economic infrastructure development and the Sudanese referendum will be over by then and hopefully there will also be a closure with the Somalia and Eritrean issue.
Some say Ethiopia is ready for an Afar, Oromo, Somali and e.t.c prime minister! Ethiopia has been ready for any competent and pragmatist and farsighted leader since God knows when! There was no tomorrow set aside for an Oromo prime minister by the Ethiopian people. Only a dysfunctional opposition and a confused, “aderby” supporters of EPRDF will advocate for such today! The notion that a prime minister who is an Oromo or a Wolayita or Sidama or an Amhara will solve the perception of TPLF dominance is a false one! The perception is simply created by the opposition to break down the EPRDF! Otherwise an opposition that never recognizes OPDO, ANDM and SEPDM as an organization cannot be interested to see a prime minister out of them! EPRDF should choose its next leaders regardless of race creed and religion!
If a new prime minister or an EPRDF leader is to emerge it should be done based on merits and after a genuine discussion. The discussion should be on what is good for EPRDF and the country not what is good for foreign agents! The merits should be valued against tenacity during trying moments, farsightedness and awareness of geo politics! Above all the new leader should be one who has earned great respect among rank and file members of the EPRDF. For the road ahead is still bumpy and when push comes to shove these rank and file members will come handy! No one certainly wants Kinjit type experience when tough times come! Kinjit leaders and supporters run tail behind to Washington DC leaving behind the country and innocent followers cold dry! Can you imagine a weak and unpopular leader leading the country during events like election 2005 aftermath!
Our Ethiopia needs a stable and progressive government, we should tell Westerners we really are ahead of schedule to become like them considering it took them 200 years to be where they are! After all it took them 200 years to be where they are and still their democratic aspiration is still in progress like ours is!
So why would EPRDF replace Meles today? Do they [EPRDF] not see the situation Ethiopia is in today?
Meles for Mo Ibrahim Prize: The Prize for Achievement in African Leadership1
Meles for Mo Ibrahim Prize: The Prize for Achievement in African Leadership1
(First appeared in December 2006 and updated June 23,2009)
By: Mulu GS
--------------------------------------------------------------------------------
Mr. Zena Marcos, I argue that PM Meles Zenawi is not a liability to EPRDF. From my perspective, he is rather the best asset. However, now that he has repeatedly hinted to relieve himself from the daunting job of premiership it is important that we rationally support him to bid for Mo Ibrahim Prize. It could be an impetus for positive thinking and for reassessing his future role in the political development of Ethiopia. The main aim of this article is not to debate with Zena, it is rather to open an intellectual debate on this issue of stepping down from a government position. For starters though, I argue that he qualifies for the prize. I will forward my points for why I believe he deserves it, but first the major points in the prize:
i. It gives a total of $5m prize for Africa's most effective head of state- award winning leaders $5m (£2.7m) over 10 years when they leave office, plus $200,000 (£107,000) a year for life.
ii. The main objective is to remove corruption and improve governance.
iii. It involves one of the best universities in the world -Harvard University will assess how well the president has served his or her people while in office.
iv. It is supported by the world’s best people ever- Nelson Mandela, former US President Bill Clinton and UN Secretary General Kofi Annan.
Now back to my arguments. The gist of my argument is that Meles deserves to work towards getting the Mo Leadership Prize by the end of his term given he transfers power peacefully. As we all do, whenever there is a prize announcement in academic competition or any other competition we try our best to win. We write our applications and essentially nominate our selves and present our work to achieve it. It is not any different here. If the bylaws of the Prize are to nominate oneself by writing an application statement then he should do it. If it is by third party nomination, then we should support his nomination.
Why does Meles deserve this prize? I will give a few highlights that I think are sufficient to demonstrate why he deserves this prize. First and foremost, he is one of the very few leaders in the world who has successfully transformed himself from a second year medical student to a fighter, commander/leader, head of state, economist and intellectual, and from a communist to an architect of developmental state. He has passed through challenges-jungle life, within party fights (the 1984 and the 2000) and the recent election fights with people who have grave hate towards him and his people. Shortly, he is tested!
On the other hand he is a very disciplined man. He values family- sticking to his “amin” first wife and is a family man. He has been seen accompanying his daughter to a high school graduation despite the hectic nature of being head of government. He has made conversations and letter exchanges with school children at several levels. These are characters that everyone envies. After all, we all know how much key role this type of character plays in the USA elections.
He also has other qualities. As far as my knowledge is concerned he is the only leader in the history of Ethiopia who fluently speaks English, Amharic, and Tigrigna. He probably is the only leader who has achieved the highest ladders of education while in office. If the recent news is true he might get a PhD very soon. That would probably make him the first leader to achieve a PhD while in office. He has demonstrated to friends and foe how brilliant he is in articulating the issues that are fundamental for economic development o African countries. His nomination to the Blair African Commission, His recent role in the China-Africa partnership, his recent invited speech in the EU development conference, the prizes and honorary doctorates he has been getting, the recent invited speech at the G20 summit and the invitation to the forthcoming G8 meeting clearly show the high regard he is winning from the international community. He has had a key role in influencing the World Bank and IMF aid policy for the Third World countries. His recent manuscript on the developmental state is, simply put, a great addition to the debate on the possible strategic solutions to the problems of developing countries (especially Africa). What makes it more interesting is that his background is from the poor like one of us.
I am not ignoring the fact that there are those who would like us to believe that he is a monster. There are those who accuse him for every single bad that has happened during his reign. Some called him Grazianni, some Hitler, some worse than Mengistu. And there are some moderate critics who do not like his style of communicating his goodwill to the Ethiopian people and who think he is arrogant. However, history tells us that nobody even Jesus Christ, would pass from this kind of labeling and bashing. I am not saying that he did not make mistakes, probably a lot, but that is part of what being human is. I wonder how many people would volunteer to be leaders of this very poor country and be able to surpass the infinite expectation of Ethiopians of all walks of life.
Some of the shortcomings that I share with my fellow Ethiopians have to do with EPRDF’s handling of the Eritrean issue (I am not against the principle of self determination enshrined in the constitution). My problems are mainly with the fact that why Meles and other leaders of EPRDF were not forthcoming in explaining the rationale for their handling of Eritreans and the Eritrean issue. The monstrosity of the Eritrean regime towards Ethiopians and especially Tigrayans starts from the road blocking of relief food by Shabia during the 84 famine which for any sane person is unforgettable and intolerable. In fact, I do not forget how Meles in his own words described this horrendous event in one of the Yekatit 11 anniversary speeches. Add to this all that happened to Ethiopians who lived in Eritrea which is opposite to what the Eritrean on the Ethiopian side have been enjoying. I am still waiting to hear any justification for this. Frankly, he does not take all the responsibility but as a leader he gets a fair share of the blame.
The debate on whether Meles should stay beyond his current term or not has been in both directions. There are those who nicely argued that having Meles Zenawi stay for one or more terms can be advantageous. For instance, Getachew Mequannent3 gives three reasons, which all make sense (1) he has increasingly become self-conscious of his reputation and this means that he will be pushing ahead with policy reforms and the democratization process, (2) he has spent years learning and accumulating political and diplomatic experiences, which are assets and (3) he has a natural ability for sharp articulation of development issues and this will promote a good image of Ethiopia. Getachew argues that in many cases what matters in politics is not a change of leadership, but a commitment to working towards reducing poverty which Meles has been doing. There are also others who have beautifully argued otherwise. For instance, Mekonnen Kassa4 argues that by peacefully transferring power Meles can leave behind a great Ethiopian legacy for the first time in thousands of years of our existence. Similarly, Belihu Aychilim argued that, “even for those who support most ideas behind the present government, the devolving of power from Meles to another fresh blood is a matter of credibility and renewal of commitment to the EPRDF. It is important to be assured that EPRDF could handle change and continuity without having to narrowly rely on a single individual and clique. Meles should take the road less traveled - which is always the difficult path.”
I do like both sides of the debate and frankly I am torn in between. However, if he has enough of public service, the key to be eligible to the Mo Prize is going to be the peaceful transfer of power to his successor. And I pray to God to help him in this respect.
1 http://www.moibrahimfoundation.org/mif_prize.html
2 http://www.aigaforum.com/Commentary_on_should_PM_Meles.htm
3 http://www.aigaforum.com/Reflection_on_Meles_Zenawi_s_Possible_Retirement.htm
4 http://www.aigaforum.com/Meles_comment.pdf
(First appeared in December 2006 and updated June 23,2009)
By: Mulu GS
--------------------------------------------------------------------------------
Mr. Zena Marcos, I argue that PM Meles Zenawi is not a liability to EPRDF. From my perspective, he is rather the best asset. However, now that he has repeatedly hinted to relieve himself from the daunting job of premiership it is important that we rationally support him to bid for Mo Ibrahim Prize. It could be an impetus for positive thinking and for reassessing his future role in the political development of Ethiopia. The main aim of this article is not to debate with Zena, it is rather to open an intellectual debate on this issue of stepping down from a government position. For starters though, I argue that he qualifies for the prize. I will forward my points for why I believe he deserves it, but first the major points in the prize:
i. It gives a total of $5m prize for Africa's most effective head of state- award winning leaders $5m (£2.7m) over 10 years when they leave office, plus $200,000 (£107,000) a year for life.
ii. The main objective is to remove corruption and improve governance.
iii. It involves one of the best universities in the world -Harvard University will assess how well the president has served his or her people while in office.
iv. It is supported by the world’s best people ever- Nelson Mandela, former US President Bill Clinton and UN Secretary General Kofi Annan.
Now back to my arguments. The gist of my argument is that Meles deserves to work towards getting the Mo Leadership Prize by the end of his term given he transfers power peacefully. As we all do, whenever there is a prize announcement in academic competition or any other competition we try our best to win. We write our applications and essentially nominate our selves and present our work to achieve it. It is not any different here. If the bylaws of the Prize are to nominate oneself by writing an application statement then he should do it. If it is by third party nomination, then we should support his nomination.
Why does Meles deserve this prize? I will give a few highlights that I think are sufficient to demonstrate why he deserves this prize. First and foremost, he is one of the very few leaders in the world who has successfully transformed himself from a second year medical student to a fighter, commander/leader, head of state, economist and intellectual, and from a communist to an architect of developmental state. He has passed through challenges-jungle life, within party fights (the 1984 and the 2000) and the recent election fights with people who have grave hate towards him and his people. Shortly, he is tested!
On the other hand he is a very disciplined man. He values family- sticking to his “amin” first wife and is a family man. He has been seen accompanying his daughter to a high school graduation despite the hectic nature of being head of government. He has made conversations and letter exchanges with school children at several levels. These are characters that everyone envies. After all, we all know how much key role this type of character plays in the USA elections.
He also has other qualities. As far as my knowledge is concerned he is the only leader in the history of Ethiopia who fluently speaks English, Amharic, and Tigrigna. He probably is the only leader who has achieved the highest ladders of education while in office. If the recent news is true he might get a PhD very soon. That would probably make him the first leader to achieve a PhD while in office. He has demonstrated to friends and foe how brilliant he is in articulating the issues that are fundamental for economic development o African countries. His nomination to the Blair African Commission, His recent role in the China-Africa partnership, his recent invited speech in the EU development conference, the prizes and honorary doctorates he has been getting, the recent invited speech at the G20 summit and the invitation to the forthcoming G8 meeting clearly show the high regard he is winning from the international community. He has had a key role in influencing the World Bank and IMF aid policy for the Third World countries. His recent manuscript on the developmental state is, simply put, a great addition to the debate on the possible strategic solutions to the problems of developing countries (especially Africa). What makes it more interesting is that his background is from the poor like one of us.
I am not ignoring the fact that there are those who would like us to believe that he is a monster. There are those who accuse him for every single bad that has happened during his reign. Some called him Grazianni, some Hitler, some worse than Mengistu. And there are some moderate critics who do not like his style of communicating his goodwill to the Ethiopian people and who think he is arrogant. However, history tells us that nobody even Jesus Christ, would pass from this kind of labeling and bashing. I am not saying that he did not make mistakes, probably a lot, but that is part of what being human is. I wonder how many people would volunteer to be leaders of this very poor country and be able to surpass the infinite expectation of Ethiopians of all walks of life.
Some of the shortcomings that I share with my fellow Ethiopians have to do with EPRDF’s handling of the Eritrean issue (I am not against the principle of self determination enshrined in the constitution). My problems are mainly with the fact that why Meles and other leaders of EPRDF were not forthcoming in explaining the rationale for their handling of Eritreans and the Eritrean issue. The monstrosity of the Eritrean regime towards Ethiopians and especially Tigrayans starts from the road blocking of relief food by Shabia during the 84 famine which for any sane person is unforgettable and intolerable. In fact, I do not forget how Meles in his own words described this horrendous event in one of the Yekatit 11 anniversary speeches. Add to this all that happened to Ethiopians who lived in Eritrea which is opposite to what the Eritrean on the Ethiopian side have been enjoying. I am still waiting to hear any justification for this. Frankly, he does not take all the responsibility but as a leader he gets a fair share of the blame.
The debate on whether Meles should stay beyond his current term or not has been in both directions. There are those who nicely argued that having Meles Zenawi stay for one or more terms can be advantageous. For instance, Getachew Mequannent3 gives three reasons, which all make sense (1) he has increasingly become self-conscious of his reputation and this means that he will be pushing ahead with policy reforms and the democratization process, (2) he has spent years learning and accumulating political and diplomatic experiences, which are assets and (3) he has a natural ability for sharp articulation of development issues and this will promote a good image of Ethiopia. Getachew argues that in many cases what matters in politics is not a change of leadership, but a commitment to working towards reducing poverty which Meles has been doing. There are also others who have beautifully argued otherwise. For instance, Mekonnen Kassa4 argues that by peacefully transferring power Meles can leave behind a great Ethiopian legacy for the first time in thousands of years of our existence. Similarly, Belihu Aychilim argued that, “even for those who support most ideas behind the present government, the devolving of power from Meles to another fresh blood is a matter of credibility and renewal of commitment to the EPRDF. It is important to be assured that EPRDF could handle change and continuity without having to narrowly rely on a single individual and clique. Meles should take the road less traveled - which is always the difficult path.”
I do like both sides of the debate and frankly I am torn in between. However, if he has enough of public service, the key to be eligible to the Mo Prize is going to be the peaceful transfer of power to his successor. And I pray to God to help him in this respect.
1 http://www.moibrahimfoundation.org/mif_prize.html
2 http://www.aigaforum.com/Commentary_on_should_PM_Meles.htm
3 http://www.aigaforum.com/Reflection_on_Meles_Zenawi_s_Possible_Retirement.htm
4 http://www.aigaforum.com/Meles_comment.pdf
Multiple Crises Affecting Development
By:-Eyasu Solomon
The ongoing global financial and economic crisis has the potential to usher in a period of a global recession that may seriously undermine all countries’ process of economic growth and transformation, and also jeopardize efforts to widen economic and social opportunities and improve the livelihoods of ordinary people everywhere. In particular, the crisis may put a brake on and also reverse efforts in developing countries and by the international community to assure development gains from trade, promoting achievement of internationally agreed development goals including the Millennium Development Goals (MDGs) by 2015. The crisis has triggered a slowdown in global economic growth that is manifesting itself in a demand-driven fall in international trade exacerbated by the deficit of
credit and trade finance; falling commodity prices; declining remittances; contracting foreign direct investment (FDI); and the potential of declining official development assistance (ODA). These effects have been superimposed onto the ongoing global food crisis, volatile energy prices, and climate change challenges. The aggregate impact is such that most developing countries are being heavily hurt through declining exports, rising unemployment, and thus falling family incomes, bringing millions of people back into poverty or aggravating the conditions of those in extreme poverty. This has given rise to the most significant challenge facing the global community today – how to focus on buttressing development and poverty-reduction efforts globally and in developing countries, and on setting in place the conditions that will avert future crises and facilitate a sustainable process of economic transformation for all countries.
By virtue of globalization, the moment the financial crisis hit the real economy and became a global economic crisis, it was rapidly transmitted to many developing countries through a contraction in trade finance and a slowdown in demand affecting bilateral trade flows. These transmission channels were particularly visible in sectors composed of global production and supply chains.
As most developing countries are heavily dependent on developed country markets, the slump in demand from latter due to the crisis has had an adverse impact on the former.
The world economy is currently facing a severe global crisis that spilled from financial sector to the real economy in the last quarter of 2008, leading to steep falls in industrial production and a rapid decrease in international trade, and to a slowdown in foreign direct investments and potentially in development assistance. The crisis has brought about a slump in economic growth in most countries, and has been accompanied globally by increases in unemployment. The current global crisis – preceded by the food crisis, volatile energy prices and climate change challenge – is a major blow to attaining the MDGs for developing countries. Addressing the dampening impact of the crisis on international trade and investment to restore growth, and reviewing development policies and partnerships to create sustainable practices and greater resilience to future shocks, must be key priorities in the multilateral agenda.
Most developing countries are now closely linked with the global economy by trade and foreign direct investment flows, and their economies are more sensitive to falling international demand (and
conversely to expanding demand). The degree of exposure and integration of developing countries’ economies to external markets has greatly increased in recent years. Developing countries’ exports on average accounted for more than half of their gross domestic product (GDP) in 2007, up from about a quarter of GDP in 1995.
The ongoing reduction of trade and investment flows is starting to restrain the development prospects of developing countries. They are currently seriously hurt through falling commodity prices, demand driven drops in exports exacerbated by the deficit of credit and trade finance, capital outflows, declining remittances, and contracting investment. The prospects are more dire for export-oriented developing countries, especially those with a small domestic economy, where the reduction in international demand is more likely to raise unemployment. In some developing countries, workers are shifting out of dynamic export-oriented sectors into lower-productivity activities. Potentially, all these effects could bring millions of people back into poverty.
The decrease in merchandise trade appears to be affecting all developing regions and most types of goods. Moreover, South–South trade, which has been the most dynamic component of world trade for over a decade, is declining too, especially intra-Asian trade. The quick contraction of developing countries’ manufacturing trade is largely due to today’s highly globalized production and marketing schemes. Among the most affected sectors are automotive products, office and telecommunications equipment, and electronics, as well as textiles and clothing.
Many commodity exporters, particularly those in West Asia, Africa, and countries with economies in transition that benefited from the commodity price boom with considerable terms-of-trade gains, are now facing the downside of their commodity dependence, manifested in a substantial shrinking of export revenues. More than 90 developing countries earn at least 50 per cent of their exports from commodities (47 of them being non-fuel commodity exporters). Most developing countries are now closely linked to the global economy by trade and FDI flows. As a consequence of the crisis, the significant reduction of these flows is starting to restrain their development perspectives. Developing countries are currently seriously hurt through falling commodity prices, demand driven drops in exports exacerbated by the deficit of credit and trade finance, capital outflows, declining remittances, and contracting investment. The prospects are more dire for export-oriented developing countries, especially those with a small domestic economy, where the reduction in international demand is more likely to curtail their exports and raise unemployment. As observed in some developing countries, workers are increasingly shifting out of dynamic export oriented sectors into lower-productivity activities (and moving out of urban areas back into rural areas).
UNCTAD currently estimates world merchandise trade to fall between 6 and 8 per cent in 2009. Exports from developing countries and countries with economies in transition could potentially decline in the range of 7 to 9 per cent in volume, in 2009. Developed countries’ exports are projected to decline by up to 8 per cent this year. The trade contraction in value would be much greater.
The crisis is also spreading to trade in services and to service sectors in general. Maritime transport is particularly affected, as are tourism and construction services. There is also a growing reduction in the employment levels of migrant workers from developing countries. This is expected to lead to a further fall in remittance inflows to developing countries, which began to slow down in 2008. Conversely, trade in ICT-enabled services appears to be less influenced by the economic downturn, as companies see the offshoring of services as one method of enhancing their competitiveness.
The crisis has translated into a sharp decline in FDI inflows, both for developed and developing countries. UNCTAD estimates that global FDI inflows declined by 15 per cent in 2008. An outright decline in FDI inflows to developing countries is very likely in 2009. FDI flows to financial services, automotive industries, building materials, intermediate goods and some consumption goods are among the most significantly affected, but so is FDI into activities ranging from the primary sector to non financial services. FDI outflows from the South are also set to slow down, but to a lesser degree than those from the North. Thus the share of developing countries in global FDI outflows continues to rise, highlighting an increasing presence of transnational corporations (TNCs) from the South.
Multilateral policy responses are required to achieve a sustained global economic recovery. These need to address developing countries’ concerns and enable them to continue to grow through trade, investment, remittances, aid, and technological innovation. Strategic intervention by governments is also required to provide new directions in order to achieve the United Nations MDGs.
At the international level, restoring trade finance and mitigating the risk of increased protectionism are immediate challenges. Concluding the World Trade Organization (WTO) Doha Round on balanced and pro-development terms will help, as well as harvesting some of the key development deliverables such duty-free and quota-free treatment for least developed countries (LDCs). Maintaining and increasing ODA, including through aid for trade, will be important too, especially to build and strengthen productive capacities of developing countries, and related trade-efficiency and facilitation infrastructure.
At the interregional and regional levels, expanding and diversifying South–South cooperation is a viable solution to support and to increase developing countries’ trade and investment performance.
The crisis offers opportunities for strengthening South–South trade and investment linkages, including through reshaping the existing production supply chains (and creating more regional demand).
Available policy instruments such as the Global System of Trade Preferences among Developing Countries (GSTP) and more comprehensive and effective regional trade and investment agreements should be consolidated and enhanced.
At the national level, the crisis has made it timely to review development strategies so as to make them more sustainable against future external shocks, focused on delivering broad-based and inclusive development, and responsive to the imperatives of preserving the environment, while also providing new economic opportunities. Developing countries need to continue to address income inequality and to invest more in education, training, trade-adjustment assistance, health care, community development and tax policy. The role of the state in promoting development has increased in light of the crisis, and there is a need to reflect on how this role can be effectively articulated.
A major challenge for developing countries is to continue to attract foreign investment during the crisis to stimulate economic activities, especially for such investment that serves long-term development goals and enhances competitiveness. Public investment programmes can help. Public–private partnerships are also important. Bilateral and regional investment agreements can encourage FDI. However, national efforts to maintain and attract foreign investment must not result in “race to the bottom” policies.
The United Nations – and in particular UNCTAD – has a special role to play in monitoring the impact of the crisis on trade and development, suggesting coping policies and measures, and building a new consensus on sound and suitable strategies at the national, regional and global level. Given the global span of the crisis, inter-agency collaboration will be crucial.
These impacts are being combined with the effects of the ongoing food crisis, volatile energy prices, and the climate change challenge
1). Many
developing countries are also dependent on ODA, which may shrink during the crisis. Potentially, the aggregate of all these effects could bring millions of people back into poverty,2 and worsen the conditions of those presently living in extreme poverty. This threatens to stall and reverse many years of efforts to achieve internationally agreed development goals, including the MDGs.
The global crisis and its lessons will be subject to extensive in-depth analyses as it progresses. There are many challenges to be addressed, but there are also policy areas which countries can develop – nationally and globally – to sustain trade and development. One challenge is to analyse specific development implications of the crisis, and suggest policy proposals to cope with its detrimental impacts in the short term and rethink development policy for the medium-to-long term. Significantly, signs are emerging of fundamental shifts in the way market economies operate and in the role of governments in economic activities. The crisis affecting development may require rethinking of the whole economic and social paradigm that has prevailed over the last decades and has nurtured the process of liberalization and globalization. It may involve the articulation of ideas on trade and trade-related policies and sectors that have shown some resilience to the crises and can serve as a bulwark on which to restore confidence, build recovery and foster inclusive development. For the moment, however, it is still too early to assess the real depth of the crisis and its likely duration, and also the effectiveness of the mitigating measures being undertaken by various governments.
Countries are responding to the global crisis. At the national level, some countries, both developed and developing, have undertaken national stimulus packages to mitigate the detrimental impact, especially by providing credit, supporting affected domestic industries, and promoting jobs. At the level of the G20, leaders of the G20 countries met in London in April 2009 and pledged to undertake and promote measures to restore credit, growth and jobs in the world economy. At the global level, the United Nations General Assembly has agreed to convene “a United Nations conference at the highest level on the world financial and economic crisis and its impact on development” from 1 to 3 June 2009. This provides an opportunity for the United Nations as a whole to reflect on the causes of the crisis, assess the impacts on all countries, and suggest adequate responses to avoid a recurrence of the crisis and to restore global economic stability. The preparatory process and the conference will draw upon the report of the Commission of Experts of the President of the General Assembly on Reforms of the International Monetary and Financial System. These, and other initiatives, are indicative of the commitment of countries and the international community to comprehensively addressing the crisis and preventing it from ushering in a sustained period of global recession.
The ongoing global financial and economic crisis has the potential to usher in a period of a global recession that may seriously undermine all countries’ process of economic growth and transformation, and also jeopardize efforts to widen economic and social opportunities and improve the livelihoods of ordinary people everywhere. In particular, the crisis may put a brake on and also reverse efforts in developing countries and by the international community to assure development gains from trade, promoting achievement of internationally agreed development goals including the Millennium Development Goals (MDGs) by 2015. The crisis has triggered a slowdown in global economic growth that is manifesting itself in a demand-driven fall in international trade exacerbated by the deficit of
credit and trade finance; falling commodity prices; declining remittances; contracting foreign direct investment (FDI); and the potential of declining official development assistance (ODA). These effects have been superimposed onto the ongoing global food crisis, volatile energy prices, and climate change challenges. The aggregate impact is such that most developing countries are being heavily hurt through declining exports, rising unemployment, and thus falling family incomes, bringing millions of people back into poverty or aggravating the conditions of those in extreme poverty. This has given rise to the most significant challenge facing the global community today – how to focus on buttressing development and poverty-reduction efforts globally and in developing countries, and on setting in place the conditions that will avert future crises and facilitate a sustainable process of economic transformation for all countries.
By virtue of globalization, the moment the financial crisis hit the real economy and became a global economic crisis, it was rapidly transmitted to many developing countries through a contraction in trade finance and a slowdown in demand affecting bilateral trade flows. These transmission channels were particularly visible in sectors composed of global production and supply chains.
As most developing countries are heavily dependent on developed country markets, the slump in demand from latter due to the crisis has had an adverse impact on the former.
The world economy is currently facing a severe global crisis that spilled from financial sector to the real economy in the last quarter of 2008, leading to steep falls in industrial production and a rapid decrease in international trade, and to a slowdown in foreign direct investments and potentially in development assistance. The crisis has brought about a slump in economic growth in most countries, and has been accompanied globally by increases in unemployment. The current global crisis – preceded by the food crisis, volatile energy prices and climate change challenge – is a major blow to attaining the MDGs for developing countries. Addressing the dampening impact of the crisis on international trade and investment to restore growth, and reviewing development policies and partnerships to create sustainable practices and greater resilience to future shocks, must be key priorities in the multilateral agenda.
Most developing countries are now closely linked with the global economy by trade and foreign direct investment flows, and their economies are more sensitive to falling international demand (and
conversely to expanding demand). The degree of exposure and integration of developing countries’ economies to external markets has greatly increased in recent years. Developing countries’ exports on average accounted for more than half of their gross domestic product (GDP) in 2007, up from about a quarter of GDP in 1995.
The ongoing reduction of trade and investment flows is starting to restrain the development prospects of developing countries. They are currently seriously hurt through falling commodity prices, demand driven drops in exports exacerbated by the deficit of credit and trade finance, capital outflows, declining remittances, and contracting investment. The prospects are more dire for export-oriented developing countries, especially those with a small domestic economy, where the reduction in international demand is more likely to raise unemployment. In some developing countries, workers are shifting out of dynamic export-oriented sectors into lower-productivity activities. Potentially, all these effects could bring millions of people back into poverty.
The decrease in merchandise trade appears to be affecting all developing regions and most types of goods. Moreover, South–South trade, which has been the most dynamic component of world trade for over a decade, is declining too, especially intra-Asian trade. The quick contraction of developing countries’ manufacturing trade is largely due to today’s highly globalized production and marketing schemes. Among the most affected sectors are automotive products, office and telecommunications equipment, and electronics, as well as textiles and clothing.
Many commodity exporters, particularly those in West Asia, Africa, and countries with economies in transition that benefited from the commodity price boom with considerable terms-of-trade gains, are now facing the downside of their commodity dependence, manifested in a substantial shrinking of export revenues. More than 90 developing countries earn at least 50 per cent of their exports from commodities (47 of them being non-fuel commodity exporters). Most developing countries are now closely linked to the global economy by trade and FDI flows. As a consequence of the crisis, the significant reduction of these flows is starting to restrain their development perspectives. Developing countries are currently seriously hurt through falling commodity prices, demand driven drops in exports exacerbated by the deficit of credit and trade finance, capital outflows, declining remittances, and contracting investment. The prospects are more dire for export-oriented developing countries, especially those with a small domestic economy, where the reduction in international demand is more likely to curtail their exports and raise unemployment. As observed in some developing countries, workers are increasingly shifting out of dynamic export oriented sectors into lower-productivity activities (and moving out of urban areas back into rural areas).
UNCTAD currently estimates world merchandise trade to fall between 6 and 8 per cent in 2009. Exports from developing countries and countries with economies in transition could potentially decline in the range of 7 to 9 per cent in volume, in 2009. Developed countries’ exports are projected to decline by up to 8 per cent this year. The trade contraction in value would be much greater.
The crisis is also spreading to trade in services and to service sectors in general. Maritime transport is particularly affected, as are tourism and construction services. There is also a growing reduction in the employment levels of migrant workers from developing countries. This is expected to lead to a further fall in remittance inflows to developing countries, which began to slow down in 2008. Conversely, trade in ICT-enabled services appears to be less influenced by the economic downturn, as companies see the offshoring of services as one method of enhancing their competitiveness.
The crisis has translated into a sharp decline in FDI inflows, both for developed and developing countries. UNCTAD estimates that global FDI inflows declined by 15 per cent in 2008. An outright decline in FDI inflows to developing countries is very likely in 2009. FDI flows to financial services, automotive industries, building materials, intermediate goods and some consumption goods are among the most significantly affected, but so is FDI into activities ranging from the primary sector to non financial services. FDI outflows from the South are also set to slow down, but to a lesser degree than those from the North. Thus the share of developing countries in global FDI outflows continues to rise, highlighting an increasing presence of transnational corporations (TNCs) from the South.
Multilateral policy responses are required to achieve a sustained global economic recovery. These need to address developing countries’ concerns and enable them to continue to grow through trade, investment, remittances, aid, and technological innovation. Strategic intervention by governments is also required to provide new directions in order to achieve the United Nations MDGs.
At the international level, restoring trade finance and mitigating the risk of increased protectionism are immediate challenges. Concluding the World Trade Organization (WTO) Doha Round on balanced and pro-development terms will help, as well as harvesting some of the key development deliverables such duty-free and quota-free treatment for least developed countries (LDCs). Maintaining and increasing ODA, including through aid for trade, will be important too, especially to build and strengthen productive capacities of developing countries, and related trade-efficiency and facilitation infrastructure.
At the interregional and regional levels, expanding and diversifying South–South cooperation is a viable solution to support and to increase developing countries’ trade and investment performance.
The crisis offers opportunities for strengthening South–South trade and investment linkages, including through reshaping the existing production supply chains (and creating more regional demand).
Available policy instruments such as the Global System of Trade Preferences among Developing Countries (GSTP) and more comprehensive and effective regional trade and investment agreements should be consolidated and enhanced.
At the national level, the crisis has made it timely to review development strategies so as to make them more sustainable against future external shocks, focused on delivering broad-based and inclusive development, and responsive to the imperatives of preserving the environment, while also providing new economic opportunities. Developing countries need to continue to address income inequality and to invest more in education, training, trade-adjustment assistance, health care, community development and tax policy. The role of the state in promoting development has increased in light of the crisis, and there is a need to reflect on how this role can be effectively articulated.
A major challenge for developing countries is to continue to attract foreign investment during the crisis to stimulate economic activities, especially for such investment that serves long-term development goals and enhances competitiveness. Public investment programmes can help. Public–private partnerships are also important. Bilateral and regional investment agreements can encourage FDI. However, national efforts to maintain and attract foreign investment must not result in “race to the bottom” policies.
The United Nations – and in particular UNCTAD – has a special role to play in monitoring the impact of the crisis on trade and development, suggesting coping policies and measures, and building a new consensus on sound and suitable strategies at the national, regional and global level. Given the global span of the crisis, inter-agency collaboration will be crucial.
These impacts are being combined with the effects of the ongoing food crisis, volatile energy prices, and the climate change challenge
1). Many
developing countries are also dependent on ODA, which may shrink during the crisis. Potentially, the aggregate of all these effects could bring millions of people back into poverty,2 and worsen the conditions of those presently living in extreme poverty. This threatens to stall and reverse many years of efforts to achieve internationally agreed development goals, including the MDGs.
The global crisis and its lessons will be subject to extensive in-depth analyses as it progresses. There are many challenges to be addressed, but there are also policy areas which countries can develop – nationally and globally – to sustain trade and development. One challenge is to analyse specific development implications of the crisis, and suggest policy proposals to cope with its detrimental impacts in the short term and rethink development policy for the medium-to-long term. Significantly, signs are emerging of fundamental shifts in the way market economies operate and in the role of governments in economic activities. The crisis affecting development may require rethinking of the whole economic and social paradigm that has prevailed over the last decades and has nurtured the process of liberalization and globalization. It may involve the articulation of ideas on trade and trade-related policies and sectors that have shown some resilience to the crises and can serve as a bulwark on which to restore confidence, build recovery and foster inclusive development. For the moment, however, it is still too early to assess the real depth of the crisis and its likely duration, and also the effectiveness of the mitigating measures being undertaken by various governments.
Countries are responding to the global crisis. At the national level, some countries, both developed and developing, have undertaken national stimulus packages to mitigate the detrimental impact, especially by providing credit, supporting affected domestic industries, and promoting jobs. At the level of the G20, leaders of the G20 countries met in London in April 2009 and pledged to undertake and promote measures to restore credit, growth and jobs in the world economy. At the global level, the United Nations General Assembly has agreed to convene “a United Nations conference at the highest level on the world financial and economic crisis and its impact on development” from 1 to 3 June 2009. This provides an opportunity for the United Nations as a whole to reflect on the causes of the crisis, assess the impacts on all countries, and suggest adequate responses to avoid a recurrence of the crisis and to restore global economic stability. The preparatory process and the conference will draw upon the report of the Commission of Experts of the President of the General Assembly on Reforms of the International Monetary and Financial System. These, and other initiatives, are indicative of the commitment of countries and the international community to comprehensively addressing the crisis and preventing it from ushering in a sustained period of global recession.
Chinese Investment in Ethiopia: Developmental Opportunity or Deepening China’s New Mercantilism?
Asayehgn Desta (Ph.D), Sarlo Distinguished Professor of Business
Economics, Dominican University of California
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Contrary to Western debt and assistance marked by various forms of economic and political overtones, China, using the South-South Cooperation, is in the process of bestowing a mix of loans with generous terms, debt forgiveness, infrastructure development, and other assistance to African nations so that they could be relieved from Western cultural, political, and economic hegemony. African governments have appreciated and responded enthusiastically to this new source of bottom-up, multiple, bilateral investment, trade, and aid because China has professed a willingness to ignore the political, conditional terms that characterize Western assistance.
China’s deepening involvement across Africa can be viewed from two perspectives. The protagonists of political warfare theory argue that China’s policy in Africa is a nonviolent instrument of grand strategy. It involves coordinated activities that could precipitate in tangible effects on intended targets such as economic aid and development assistance, as well as training, equipping, and arming military and security forces to achieve political and economic influence. The South-South development cooperation school of thought, on the other hand, views China’s increased aid, trade, and investment in Africa as a means to foster Africa’s self-sufficiency and sustainable development in the 21st century.
Therefore, the empirical part of this study will attempt to advance the understanding and rationalization of the various Chinese investments in Ethiopia. More specifically, the central motive of this study was to investigate if the Ethio-Chinese investments indicate a win-win strategy. The South-South cooperative win-win ventures are supposed to bring proportional benefits through trade flows, foreign domestic flows, technology transfer, and integration in global value chains, in addition to aid flows, which otherwise the partners would not have access to before entering into these relations. The four case studies seriously challenge the argument of political warfare theorists that China’s investment in Ethiopia would perpetuate underdevelopment through exploitation, extraction, and destruction of Ethiopia’s resources and industrial capacity. Except for the negative environmental externalities caused by the Sino-Ethiopian investments, the case studies have demonstrated that Ethiopia has substantially benefited from the Chinese cooperative investments. The Chinese investments in Ethiopia are not complementary but appear to be aligned very closely with the South-South cooperative strategies and goals.
(The entire manuscript can be obtained from the author.)
Summary and Conclusion
As the Chinese economy booms, Chinese multinational corporations are embarking on an acquisition drive to capture the oil, natural resources, and unexploited markets of Africa to sustain its rapid economic growth. Based on the current Chinese investments and co-development projects existing in Africa, supporters of Chinese investment in Africa argue that the recent increase in Africa’s gross domestic product is because of Chinese investment. The roads, bridges, and dams built by Chinese firms in Africa are low cost, good quality, and completed in a fraction of the time. Unlike the Western investments in Africa, the Chinese state-owned enterprises provide human and capital assistance to Africa without any conditionality.
Critics on the other hand argue that China has shipped entire workforces across to Africa for many of its projects. In addition, China has flooded the African markets with cheap consumer goods and devastated the local textile and other consumer product industries. In addition, some of the Afro-pessimistic intellectuals argue that yet there is little evidence whether China’s renewed, and most probably lasting involvement in Africa will serve the continent better than the decades of aid from Western governments, which have scarcely delivered on their promises. Lumumba-Kasongo argues that under the pretext of the SSC model China has introduced the “Beijing Consensus,” which is to a large extent based on China’s self-representation as Africa’s help-mate rather than the “Washington Consensus,” “which is the dogma of White House, Pentagon, the Bank, International Monetary Fund, and multinationals representing the interest of big private business (2007).”
Contrary to the two diametrically opposed perspectives of the Chinese engagement in Africa as presented above, the point of view of Holstag (2006) is eclectic. According to Holstag, China’s vision on its economic relations with Africa is beckoned with sweet carrots largely tailored to derive goodwill and permit it to do business suavely (2006).
The three perspectives of the Chinese engagement in Africa are very instructive. But in order to have a clear picture, the three points of view need to be rigorously analyzed from the point of view of an actual African country. For example, for the last five years, Ethiopia has achieved a high and sustained rate of growth. The presence and conduct of China’s foreign direct investment in Ethiopia since 2000 is fast becoming one of the fronts in reshaping Ethiopia’s economic architecture. Given the fact that Ethiopia has been the major beneficiary of Chinese investment and cooperative development projects, the question that needs to be pondered is: can some of Ethiopia’s spectacular growth rate be attributed to the Chinese investments? More specifically, have the Chinese cooperative investment footprints enabled the Ethiopian economy to master highly valued technology and generate productive employment or have the various Chinese investments destined Ethiopia’s economy to be dependent on the Beijing Consensus model?
The Chinese investors seem to have carefully engineered their entry strategy into Ethiopia. With considerable oscillation and no discernible trend before 1991, China devised trade and biddings on government sponsored contractual projects, mainly infrastructural landscape, to gain access and expand into Ethiopia’s downstream resources. With a wave of privatization and structural reforms that gained momentum in Ethiopia spurred a flurry of various types of foreign direct investments that originated from the Southern Countries (i.e., China, India, South Africa, etc.). For example, from 1992 to 2005, Chinese investments in Ethiopia got organized under the wholly owned type of organizational structure (i.e., 86 percent wholly-owned compared to 12 percent in joint-ventures) in order for Chinese companies to acquire upstream assets (See Table 3). In recent years, the presence and conduct of China’s foreign direct investment in Ethiopia is fast becoming one of the prominent features of the Ethiopian economic landscape either by infrastructure in exchange for access to natural resources or by denoting Chinese development assistance or providing favorable lending and capital contribution.
However, though Ethiopia intends to use Chinese cooperative investment as means of enhancing its regional development, the inflow of Chinese investment has not been equally shared. Geographically, most of the Chinese Cooperative investments are located within the Addis Ababa and Oromia Regional State. While 78 of the wholly owned Chinese companies are located in the Addis Ababa Regional Zone and about 9 percent are situated in the Oromia Regional State, without any significant catching up by the other regional zones. In addition, of the 103 joint-venture companies, 53 percent are situated within the Addis Ababa region while 30 percent are reside within the Oromia Regional State. In addition, 22 percent of the small- and medium-size state-owned Chinese Enterprises operating in Ethiopia are fully operational while the remaining 78 percent (647/828) are partially or yet to be fully implemented. To fully implement the various investments, the Chinese investors have employed 44 percent (52,714/119,670) as full-time workers and 56 percent (66,956/119,670) as temporary workers.
Ethiopia’s main objectives for allowing Chinese investment to operate in country are to have access to high technology, to increase employment, to acquire know-how, to increase foreign exchange through export, and to benefit from both backward and forward linkages. Thus, the four Sino-Ethiopian Cooperative Investment case studies given above are analyzed in terms of their effects on 1) Ownership and Human Capital 2) Production Management and Operations, 3) Export effects 4)Technological Transfers 5) Efficiency 6) Foreign Exchange effects7) Local Content requirements and spillover effects, and 8) Environmental effects of the Sino-Ethiopian investments. However, since the analysis is based on four case studies, it needs to be underlined that the results of these case studies are anecdotally based and are not sufficient to generalize about characteristics of the entire Sino-Ethiopia Cooperative investments. Also, it needs to underlined that host countries will not be able to capture the full benefits associated with foreign direct investment until they reach a certain threshold level in terms of educational attainment, provision of infrastructure services, local technological capabilities, and development of local financial markets, thus the analytical outcome of this study needs to considered tentative.
In terms of ownership and human capital, most of the Chinese investments are wholly owned. When Chinese enter a joint-venture or create a wholly owned subsidiary, they send experienced managers or top specialists from abroad. Based on the four case studies, while the CEOs of the three wholly owned Chinese companies are Chinese, the CEO of the Sino-Ethiopia Associate Africa joint-venture company is an Ethiopian. Given the Chinese investors in Ethiopia are unfamiliar with cultural makeup of the local situation and the Ethiopian labor laws that pertain to wages, holidays, housing and other benefits, in the solely owned Chinese firms and the joint venture firm, Ethiopian employees seemed to be in charge of the human resources management. In view of this, it can be assumed that there exists a smooth cross-cultural communication within the enterprises and between the enterprise and its external suppliers and customers.
The process of inviting foreign investors to developing countries is a means to increase the valued-added exports of the host country. Based on the Sino-Ethiopia Associate Africa pharmaceutical joint venture company, it is possible to argue that both partners handle the international marketing sector. Since the Chinese marketing officers are well versed in some aspects of the international marketing, they might have trained local employees in export management and foreign marketing strategies. Also, it is possible that local firms could have acquired international marketing techniques by hiring some of the Ethiopian workers who might have left the Sino-Ethiopian joint venture to start their own businesses. Nevertheless, since the three wholly owned enterprises mostly produce for the domestic market, it is very likely that they might have facilitated some type of interaction with local suppliers and domestic customers. It is likely that the wholly owned enterprises mostly produce for the Ethiopian domestic market and have done little to integrate Ethiopian products to the global value chain. Thus based on the three cases, it is possible to ascertain that the Chinese wholly owned companies don’t seem to act as a platform for exports and their goal is to seek for themselves efficiency in their production process by taking care of Ethiopia’s factors of endowment. The wholly owned Sino-Africa produces leather products that are designed to compete in the international market—it does not seem to crowd out the low quality local products. The Sino-Ethiopia pharmaceutical joint venture enterprise is of higher quality base and is more efficient; therefore, it is complementary and generates foreign exchanges indispensable for the country. Nonetheless, since the Ethiopian employees do not receive the necessary training in international marketing know-how, the leather products seem to be totally dependent on the Chinese joint venture partners in order to promote and distribute their products in overseas markets. In addition, as argued by GebreEgzibher, “The major types of products exported to China are agricultural products which are unprocessed or semi-processed. These include skins, leather and leather products, oil seeds, pulses, coffee, and tantalum. The bulk of leather, skin, and hides are semi-processed. Ethiopia has huge potential in other products which are allowed to be exported to China. These include coffee, natural gum, bee wax, edible oil, horticultural and textile products, precious stones, and other organic products.” (2006)
Typically, the Chinese PLCs arrive in Africa with their work force. In line with this, the project managers, engineers, and technicians working in Ethiopian government project contracts and wholly owned enterprises are mostly Chinese. Even in the Sino-Ethiopia Associate Africa joint firm, research and product design is forged in the headquarters rather than basing it on an equity ratio to include the Ethiopian partner. In terms of efficiency, since more than 50 percent of input materials executed by the Sino-Ethiopian firms come from China, it is very difficult to ascertain the contribution of efficiency to the new products made by the Sino-Ethiopian investments.
Most of the foreign exchange generally used for the Chinese investments in Ethiopia originates from the China’s EXIM and China’s development banks. For instance, Export-Import Bank of China has been granting long-term and short-term loans to companies investing abroad to purchase Chinese equipment and technology necessary to build factories abroad (Zhaoxi, 2009). Thus, the projects in Ethiopia have enabled it to conserve the foreign exchange, which it could have spent on establishing these projects, and helped it to acquire the necessary foreign exchange by selling some of the Sino-Ethiopian investment products in the overseas market.
While the dependency school theory views foreign investment from developed countries at the core of the world economic system as harmful to the long-term economic growth of developing countries out in the periphery, other studies seem to demonstrate that foreign direct investors can potentially benefit domestic firms through spillover effects. Spillover effects are therefore regarded as a very important conduit through which foreign direct investment promotes economic growth in the host country. Though the spillover effect of FDI on the productivity growth of local firms does not occur automatically (See, JBIC, 2002), based on the incentives given by the Ethiopian Government to Chinese investors, the four case studies utilize local content. Adhering to backward linkages, the Chinese investors purchase their factors of production from local suppliers. In addition, since they mostly sell their outputs in the domestic market, they have contributed to forward linkages. The four case studies act in creating complementary activities rather than “crowding out” domestic firms. In short, the Sino-Ethiopian foreign investments have forced local firms to restructure themselves to be more competitive and adequately fulfill the domestic demand, thereby maintaining their market shares. Thus, the Chinese investments have contributed to positive productivity spillovers to the Ethiopian economy.
Since the 1992 Earth Summit in Rio de Janeiro, the environmental and social dimensions of foreign investment have become a matter of intense controversy between certain home and host countries. For example in Ethiopia, to attract the Chinese investors, the Ethiopian government seems to covertly relax the enforcement of the environmental standards. The Chinese contractual-based projects, wholly owned, and the joint venture cases analyzed in this paper are by and large operating in ecologically sensitive regions. They are facing serious environmental problems because the Ethiopian Government seems to have prioritized its short-term economic growth over the achievement of environmentally sustainable economic growth in the long run. Ethiopian environmental protection officers at each level of the political system do not seem to fine Chinese investors for their transgressions or for negatively imprinting their environmental footprints on the country, or they fail to encourage the Chinese investors to adopt production techniques that are less harmful to the Ethiopian environment. Unlike other international financial institutions, the Chinese investors and financiers (such as the Export-Import Bank of China) fail to undertake their environmental guidelines when lending the concessional loans as part of the country’s official development assistance program (See, Bosshard, 2008). Undoubtedly, Chinese investments in Ethiopia are an indispensable part of the economic system (they have contributed to infrastructural development, provide capital, new technologies, modern management know- how, and enhanced demonstration effects). Nonetheless, little or no attention is paid by the Ethiopian Government to check the environmental implications of most of the undertaken Sino-Ethiopian investment case studies.
It needs to be underlined here that host countries will not be able to capture the full benefits associated with foreign direct investment until they reach a certain threshold level in terms of educational attainment, provision of infrastructure services, local technological capabilities and development of local financial markets. As an essential element of avoiding economic and social disparities among the different regions, the Ethiopian government needs to enhance the attractiveness of Ethiopia’s hinterland and other relatively neglected regions by 1) undertaking fundamental infrastructural development (i.e., electricity, water, good transport, and telecommunications), 2) improving and encouraging labor mobility to the undeveloped regions by creating schools, hospitals, parks, etc., 3) create local development agencies to promote FDI in each region. In short, further work is necessary to untangle the effects of social responsibility, to enforce environmental safeguards, to train local labor, and to transfer the technology of the Chinese cooperative investments into the Ethiopian economy.
Though anecdotally focused, the modest contributions upon which we hope other researchers will build is that more case studies need to be collected to analyze if Chinese investments in Ethiopia are politically motivated or are meant to fulfill the ideals of the SSC investments. Nonetheless, based on Lummumba-Kasongo’s argument that according to the win-win approach theory, the SSC ventures are supposed to induce “…liberal economic cooperation through trade flows (export and import relations), foreign domestic flows, technology transfer and integration in global value chains, and aid flows, should bring proportional benefits, which otherwise the partners would not have access to before entering into these relations” (2007); it is possible to ascertain that in the short term Ethiopia has substantially benefited from the Chinese cooperative investments. Thus, the argument of the proponents of political warfare theory—that China’s investment in Ethiopia would perpetuate underdevelopment through exploitation, extraction, and destruction of Ethiopia’s resources and industrial capacity—needs to be challenged at this juncture. As outlined by China’s politico-diplomatic “African Strategy,” it is quite obvious that China has shown its strategic interest in Africa and has particularly mapped out its interest in Ethiopia. Except for their significant negative environmental effects it is perpetuating on the Ethiopian soil at this juncture, it possible to assert that China’s investment in Ethiopia is closely aligning with the SSCs stated goals. In assessing the environmental impact, it should be noted that some of the negative externalities could have been easily corrected if the Ethiopian authorities had proactively asked the Chinese enterprises to adhere to the Chinese domestic environmental policy (See, Bosshard, 2008). Thus, the tentative conclusion we can arrive at from the four case studies is that by using its new standards of economic diplomacy China is slowly gaining ground in Ethiopia. Nevertheless, it looks farfetched to make assertions like the proponents of “New Mercantilism” school of thought—that “China’s rise confirms the current position of African countries: that of a commodity supplier and a modest consumer’s market” (Holslang, 2006).
Endnotes:
Bosshad, P. (2008). “China’s Environmental Footprints in Africa.” China in Africa Policy. China in Africa Project of the SA Institute of International Affairs (SAIIA), No. 3, April 2008.
GebreEgziabher, T. “The Developmental Impact of China and India on Ethiopia with Emphasis on Small Scale Footwear Producers.” Development Policy Research Unit, Johannesburg, South Africa (October 18-20, 2006).
Holslag, J. (2006). “China’s New Mercantilism in Central Africa.” African and Asian Studies, Vol. 5, No. 2, 15-16.
Lumumba-Kasongo, T. (2007). “China-Africa Relations in the Post-Cold War Era: Dialectics of Rethinking South-South Dialogue.” CODESRIA Bulletin, No. 1 & 2, 8-16.
Zhaoxi, L. (2009). “China’s Outward Foreign Direct Investment.” Chinese Multinationals, Jean-Paul Larcon [ed], Singapore: World Scientific Publishing, Co. Pte. Ltd., 49.
Economics, Dominican University of California
--------------------------------------------------------------------------------
Contrary to Western debt and assistance marked by various forms of economic and political overtones, China, using the South-South Cooperation, is in the process of bestowing a mix of loans with generous terms, debt forgiveness, infrastructure development, and other assistance to African nations so that they could be relieved from Western cultural, political, and economic hegemony. African governments have appreciated and responded enthusiastically to this new source of bottom-up, multiple, bilateral investment, trade, and aid because China has professed a willingness to ignore the political, conditional terms that characterize Western assistance.
China’s deepening involvement across Africa can be viewed from two perspectives. The protagonists of political warfare theory argue that China’s policy in Africa is a nonviolent instrument of grand strategy. It involves coordinated activities that could precipitate in tangible effects on intended targets such as economic aid and development assistance, as well as training, equipping, and arming military and security forces to achieve political and economic influence. The South-South development cooperation school of thought, on the other hand, views China’s increased aid, trade, and investment in Africa as a means to foster Africa’s self-sufficiency and sustainable development in the 21st century.
Therefore, the empirical part of this study will attempt to advance the understanding and rationalization of the various Chinese investments in Ethiopia. More specifically, the central motive of this study was to investigate if the Ethio-Chinese investments indicate a win-win strategy. The South-South cooperative win-win ventures are supposed to bring proportional benefits through trade flows, foreign domestic flows, technology transfer, and integration in global value chains, in addition to aid flows, which otherwise the partners would not have access to before entering into these relations. The four case studies seriously challenge the argument of political warfare theorists that China’s investment in Ethiopia would perpetuate underdevelopment through exploitation, extraction, and destruction of Ethiopia’s resources and industrial capacity. Except for the negative environmental externalities caused by the Sino-Ethiopian investments, the case studies have demonstrated that Ethiopia has substantially benefited from the Chinese cooperative investments. The Chinese investments in Ethiopia are not complementary but appear to be aligned very closely with the South-South cooperative strategies and goals.
(The entire manuscript can be obtained from the author.)
Summary and Conclusion
As the Chinese economy booms, Chinese multinational corporations are embarking on an acquisition drive to capture the oil, natural resources, and unexploited markets of Africa to sustain its rapid economic growth. Based on the current Chinese investments and co-development projects existing in Africa, supporters of Chinese investment in Africa argue that the recent increase in Africa’s gross domestic product is because of Chinese investment. The roads, bridges, and dams built by Chinese firms in Africa are low cost, good quality, and completed in a fraction of the time. Unlike the Western investments in Africa, the Chinese state-owned enterprises provide human and capital assistance to Africa without any conditionality.
Critics on the other hand argue that China has shipped entire workforces across to Africa for many of its projects. In addition, China has flooded the African markets with cheap consumer goods and devastated the local textile and other consumer product industries. In addition, some of the Afro-pessimistic intellectuals argue that yet there is little evidence whether China’s renewed, and most probably lasting involvement in Africa will serve the continent better than the decades of aid from Western governments, which have scarcely delivered on their promises. Lumumba-Kasongo argues that under the pretext of the SSC model China has introduced the “Beijing Consensus,” which is to a large extent based on China’s self-representation as Africa’s help-mate rather than the “Washington Consensus,” “which is the dogma of White House, Pentagon, the Bank, International Monetary Fund, and multinationals representing the interest of big private business (2007).”
Contrary to the two diametrically opposed perspectives of the Chinese engagement in Africa as presented above, the point of view of Holstag (2006) is eclectic. According to Holstag, China’s vision on its economic relations with Africa is beckoned with sweet carrots largely tailored to derive goodwill and permit it to do business suavely (2006).
The three perspectives of the Chinese engagement in Africa are very instructive. But in order to have a clear picture, the three points of view need to be rigorously analyzed from the point of view of an actual African country. For example, for the last five years, Ethiopia has achieved a high and sustained rate of growth. The presence and conduct of China’s foreign direct investment in Ethiopia since 2000 is fast becoming one of the fronts in reshaping Ethiopia’s economic architecture. Given the fact that Ethiopia has been the major beneficiary of Chinese investment and cooperative development projects, the question that needs to be pondered is: can some of Ethiopia’s spectacular growth rate be attributed to the Chinese investments? More specifically, have the Chinese cooperative investment footprints enabled the Ethiopian economy to master highly valued technology and generate productive employment or have the various Chinese investments destined Ethiopia’s economy to be dependent on the Beijing Consensus model?
The Chinese investors seem to have carefully engineered their entry strategy into Ethiopia. With considerable oscillation and no discernible trend before 1991, China devised trade and biddings on government sponsored contractual projects, mainly infrastructural landscape, to gain access and expand into Ethiopia’s downstream resources. With a wave of privatization and structural reforms that gained momentum in Ethiopia spurred a flurry of various types of foreign direct investments that originated from the Southern Countries (i.e., China, India, South Africa, etc.). For example, from 1992 to 2005, Chinese investments in Ethiopia got organized under the wholly owned type of organizational structure (i.e., 86 percent wholly-owned compared to 12 percent in joint-ventures) in order for Chinese companies to acquire upstream assets (See Table 3). In recent years, the presence and conduct of China’s foreign direct investment in Ethiopia is fast becoming one of the prominent features of the Ethiopian economic landscape either by infrastructure in exchange for access to natural resources or by denoting Chinese development assistance or providing favorable lending and capital contribution.
However, though Ethiopia intends to use Chinese cooperative investment as means of enhancing its regional development, the inflow of Chinese investment has not been equally shared. Geographically, most of the Chinese Cooperative investments are located within the Addis Ababa and Oromia Regional State. While 78 of the wholly owned Chinese companies are located in the Addis Ababa Regional Zone and about 9 percent are situated in the Oromia Regional State, without any significant catching up by the other regional zones. In addition, of the 103 joint-venture companies, 53 percent are situated within the Addis Ababa region while 30 percent are reside within the Oromia Regional State. In addition, 22 percent of the small- and medium-size state-owned Chinese Enterprises operating in Ethiopia are fully operational while the remaining 78 percent (647/828) are partially or yet to be fully implemented. To fully implement the various investments, the Chinese investors have employed 44 percent (52,714/119,670) as full-time workers and 56 percent (66,956/119,670) as temporary workers.
Ethiopia’s main objectives for allowing Chinese investment to operate in country are to have access to high technology, to increase employment, to acquire know-how, to increase foreign exchange through export, and to benefit from both backward and forward linkages. Thus, the four Sino-Ethiopian Cooperative Investment case studies given above are analyzed in terms of their effects on 1) Ownership and Human Capital 2) Production Management and Operations, 3) Export effects 4)Technological Transfers 5) Efficiency 6) Foreign Exchange effects7) Local Content requirements and spillover effects, and 8) Environmental effects of the Sino-Ethiopian investments. However, since the analysis is based on four case studies, it needs to be underlined that the results of these case studies are anecdotally based and are not sufficient to generalize about characteristics of the entire Sino-Ethiopia Cooperative investments. Also, it needs to underlined that host countries will not be able to capture the full benefits associated with foreign direct investment until they reach a certain threshold level in terms of educational attainment, provision of infrastructure services, local technological capabilities, and development of local financial markets, thus the analytical outcome of this study needs to considered tentative.
In terms of ownership and human capital, most of the Chinese investments are wholly owned. When Chinese enter a joint-venture or create a wholly owned subsidiary, they send experienced managers or top specialists from abroad. Based on the four case studies, while the CEOs of the three wholly owned Chinese companies are Chinese, the CEO of the Sino-Ethiopia Associate Africa joint-venture company is an Ethiopian. Given the Chinese investors in Ethiopia are unfamiliar with cultural makeup of the local situation and the Ethiopian labor laws that pertain to wages, holidays, housing and other benefits, in the solely owned Chinese firms and the joint venture firm, Ethiopian employees seemed to be in charge of the human resources management. In view of this, it can be assumed that there exists a smooth cross-cultural communication within the enterprises and between the enterprise and its external suppliers and customers.
The process of inviting foreign investors to developing countries is a means to increase the valued-added exports of the host country. Based on the Sino-Ethiopia Associate Africa pharmaceutical joint venture company, it is possible to argue that both partners handle the international marketing sector. Since the Chinese marketing officers are well versed in some aspects of the international marketing, they might have trained local employees in export management and foreign marketing strategies. Also, it is possible that local firms could have acquired international marketing techniques by hiring some of the Ethiopian workers who might have left the Sino-Ethiopian joint venture to start their own businesses. Nevertheless, since the three wholly owned enterprises mostly produce for the domestic market, it is very likely that they might have facilitated some type of interaction with local suppliers and domestic customers. It is likely that the wholly owned enterprises mostly produce for the Ethiopian domestic market and have done little to integrate Ethiopian products to the global value chain. Thus based on the three cases, it is possible to ascertain that the Chinese wholly owned companies don’t seem to act as a platform for exports and their goal is to seek for themselves efficiency in their production process by taking care of Ethiopia’s factors of endowment. The wholly owned Sino-Africa produces leather products that are designed to compete in the international market—it does not seem to crowd out the low quality local products. The Sino-Ethiopia pharmaceutical joint venture enterprise is of higher quality base and is more efficient; therefore, it is complementary and generates foreign exchanges indispensable for the country. Nonetheless, since the Ethiopian employees do not receive the necessary training in international marketing know-how, the leather products seem to be totally dependent on the Chinese joint venture partners in order to promote and distribute their products in overseas markets. In addition, as argued by GebreEgzibher, “The major types of products exported to China are agricultural products which are unprocessed or semi-processed. These include skins, leather and leather products, oil seeds, pulses, coffee, and tantalum. The bulk of leather, skin, and hides are semi-processed. Ethiopia has huge potential in other products which are allowed to be exported to China. These include coffee, natural gum, bee wax, edible oil, horticultural and textile products, precious stones, and other organic products.” (2006)
Typically, the Chinese PLCs arrive in Africa with their work force. In line with this, the project managers, engineers, and technicians working in Ethiopian government project contracts and wholly owned enterprises are mostly Chinese. Even in the Sino-Ethiopia Associate Africa joint firm, research and product design is forged in the headquarters rather than basing it on an equity ratio to include the Ethiopian partner. In terms of efficiency, since more than 50 percent of input materials executed by the Sino-Ethiopian firms come from China, it is very difficult to ascertain the contribution of efficiency to the new products made by the Sino-Ethiopian investments.
Most of the foreign exchange generally used for the Chinese investments in Ethiopia originates from the China’s EXIM and China’s development banks. For instance, Export-Import Bank of China has been granting long-term and short-term loans to companies investing abroad to purchase Chinese equipment and technology necessary to build factories abroad (Zhaoxi, 2009). Thus, the projects in Ethiopia have enabled it to conserve the foreign exchange, which it could have spent on establishing these projects, and helped it to acquire the necessary foreign exchange by selling some of the Sino-Ethiopian investment products in the overseas market.
While the dependency school theory views foreign investment from developed countries at the core of the world economic system as harmful to the long-term economic growth of developing countries out in the periphery, other studies seem to demonstrate that foreign direct investors can potentially benefit domestic firms through spillover effects. Spillover effects are therefore regarded as a very important conduit through which foreign direct investment promotes economic growth in the host country. Though the spillover effect of FDI on the productivity growth of local firms does not occur automatically (See, JBIC, 2002), based on the incentives given by the Ethiopian Government to Chinese investors, the four case studies utilize local content. Adhering to backward linkages, the Chinese investors purchase their factors of production from local suppliers. In addition, since they mostly sell their outputs in the domestic market, they have contributed to forward linkages. The four case studies act in creating complementary activities rather than “crowding out” domestic firms. In short, the Sino-Ethiopian foreign investments have forced local firms to restructure themselves to be more competitive and adequately fulfill the domestic demand, thereby maintaining their market shares. Thus, the Chinese investments have contributed to positive productivity spillovers to the Ethiopian economy.
Since the 1992 Earth Summit in Rio de Janeiro, the environmental and social dimensions of foreign investment have become a matter of intense controversy between certain home and host countries. For example in Ethiopia, to attract the Chinese investors, the Ethiopian government seems to covertly relax the enforcement of the environmental standards. The Chinese contractual-based projects, wholly owned, and the joint venture cases analyzed in this paper are by and large operating in ecologically sensitive regions. They are facing serious environmental problems because the Ethiopian Government seems to have prioritized its short-term economic growth over the achievement of environmentally sustainable economic growth in the long run. Ethiopian environmental protection officers at each level of the political system do not seem to fine Chinese investors for their transgressions or for negatively imprinting their environmental footprints on the country, or they fail to encourage the Chinese investors to adopt production techniques that are less harmful to the Ethiopian environment. Unlike other international financial institutions, the Chinese investors and financiers (such as the Export-Import Bank of China) fail to undertake their environmental guidelines when lending the concessional loans as part of the country’s official development assistance program (See, Bosshard, 2008). Undoubtedly, Chinese investments in Ethiopia are an indispensable part of the economic system (they have contributed to infrastructural development, provide capital, new technologies, modern management know- how, and enhanced demonstration effects). Nonetheless, little or no attention is paid by the Ethiopian Government to check the environmental implications of most of the undertaken Sino-Ethiopian investment case studies.
It needs to be underlined here that host countries will not be able to capture the full benefits associated with foreign direct investment until they reach a certain threshold level in terms of educational attainment, provision of infrastructure services, local technological capabilities and development of local financial markets. As an essential element of avoiding economic and social disparities among the different regions, the Ethiopian government needs to enhance the attractiveness of Ethiopia’s hinterland and other relatively neglected regions by 1) undertaking fundamental infrastructural development (i.e., electricity, water, good transport, and telecommunications), 2) improving and encouraging labor mobility to the undeveloped regions by creating schools, hospitals, parks, etc., 3) create local development agencies to promote FDI in each region. In short, further work is necessary to untangle the effects of social responsibility, to enforce environmental safeguards, to train local labor, and to transfer the technology of the Chinese cooperative investments into the Ethiopian economy.
Though anecdotally focused, the modest contributions upon which we hope other researchers will build is that more case studies need to be collected to analyze if Chinese investments in Ethiopia are politically motivated or are meant to fulfill the ideals of the SSC investments. Nonetheless, based on Lummumba-Kasongo’s argument that according to the win-win approach theory, the SSC ventures are supposed to induce “…liberal economic cooperation through trade flows (export and import relations), foreign domestic flows, technology transfer and integration in global value chains, and aid flows, should bring proportional benefits, which otherwise the partners would not have access to before entering into these relations” (2007); it is possible to ascertain that in the short term Ethiopia has substantially benefited from the Chinese cooperative investments. Thus, the argument of the proponents of political warfare theory—that China’s investment in Ethiopia would perpetuate underdevelopment through exploitation, extraction, and destruction of Ethiopia’s resources and industrial capacity—needs to be challenged at this juncture. As outlined by China’s politico-diplomatic “African Strategy,” it is quite obvious that China has shown its strategic interest in Africa and has particularly mapped out its interest in Ethiopia. Except for their significant negative environmental effects it is perpetuating on the Ethiopian soil at this juncture, it possible to assert that China’s investment in Ethiopia is closely aligning with the SSCs stated goals. In assessing the environmental impact, it should be noted that some of the negative externalities could have been easily corrected if the Ethiopian authorities had proactively asked the Chinese enterprises to adhere to the Chinese domestic environmental policy (See, Bosshard, 2008). Thus, the tentative conclusion we can arrive at from the four case studies is that by using its new standards of economic diplomacy China is slowly gaining ground in Ethiopia. Nevertheless, it looks farfetched to make assertions like the proponents of “New Mercantilism” school of thought—that “China’s rise confirms the current position of African countries: that of a commodity supplier and a modest consumer’s market” (Holslang, 2006).
Endnotes:
Bosshad, P. (2008). “China’s Environmental Footprints in Africa.” China in Africa Policy. China in Africa Project of the SA Institute of International Affairs (SAIIA), No. 3, April 2008.
GebreEgziabher, T. “The Developmental Impact of China and India on Ethiopia with Emphasis on Small Scale Footwear Producers.” Development Policy Research Unit, Johannesburg, South Africa (October 18-20, 2006).
Holslag, J. (2006). “China’s New Mercantilism in Central Africa.” African and Asian Studies, Vol. 5, No. 2, 15-16.
Lumumba-Kasongo, T. (2007). “China-Africa Relations in the Post-Cold War Era: Dialectics of Rethinking South-South Dialogue.” CODESRIA Bulletin, No. 1 & 2, 8-16.
Zhaoxi, L. (2009). “China’s Outward Foreign Direct Investment.” Chinese Multinationals, Jean-Paul Larcon [ed], Singapore: World Scientific Publishing, Co. Pte. Ltd., 49.
President Issayas lectures the World, masquerading as defender of Ethiopia Unity
(MOFA 05/22/09):- President Issayas is taking the opportunity of Eritrea’s 16th anniversary of independence (May 24) to offer the region, Africa and the Middle East, his thoughts on world and regional problem, and at length. In a whole series of interviews, with regional media and those in the Middle East, and more widely, he has been telling the region, Africa, and indeed the world, how to behave and pointing out where they have all been going wrong. Every night for weeks, viewers of Eritrean TV have been able to hear their President’s thoughts at considerable length.
President Issayas finds little to welcome in the world or even in Eritrea. The words that most commonly appear are challenge, conspiracy, hostility, sacrifice, hard work and yet more hard work. The rewards are all far in the future; and Eritrea is always the target. “The United Nations, including the Security Council, has become an unjust and inequitable tool of a few nations” indulging in “illegal and unconstructive” positions, as well as baseless slanders against Eritrea over the supply of arms to Al-Shabaab and opponents of the Somali Government, although the Somali Prime Minister said only this week that the Somali Government had detailed evidence of arms flights arriving from Eritrea. President Issayas told Egyptian State TV this week that the problems in Somalia mainly emanate from the illegal actions of the UN Security Council itself. In a comprehensive attack on the Council, President Issayas claimed it had taken illegal and unconstructive positions, breaching the UN Charter and international law. This, he claimed, had caused the present vacuum in Somalia and become the source for piracy and other activities. He said a government “imposed” from outside had further aggravated the problem. In this context he told Kenyan TV that IGAD was a tool in the service of foreign agendas and was the source of the problem in Somalia. Eritrea, he said, expected nothing good from such an impotent organization and this was why it had suspended its membership.
The African Union came in for similar strictures as doing nothing more useful than “talking about a vacuum”. He referred to the behaviour of its leaders as corrupt and despicable, and in this connection he had much to say about democracy and the media in Africa. According to President Issayas, (talking to SABC TV at the weekend) Africa needs “genuine” democracy. Surprisingly, in view of South Africa’s recent Presidential election, he specifically noted that the South African experience proved that one cannot speak of real democracy when holding elections in which there is no equitable distribution of resources and where the majority of the population lived below the poverty line. President Issayas’ version of democracy, which ignores elections or political parties, does not equate with other peoples’ views. He is against such “meaningless exercises or manifestations of ostentatious behaviour”. In fact, democracy is an ideal and a set of institutions of practices. As an ideal it involves the concept that members of a group should have the determining control over rules and policies, and that members of the group should treat each other as equals. In a modern state this ideal is realized through a framework of citizens' rights, institutions for representative and accountable government (in particular through a freely elected parliament), an active civil society and a number of mediatory elements of which the most obvious are political parties and an independent media. None of these are present in Eritrea and President Issayas specifically rejects most of these, even claiming, in defiance of Eritrea’s still unimplemented constitution that the people of Eritrea do not want either political parties or an independent media. It was in an interview with Al-Jazeera last year that the President actually put a time frame on elections. Eritrea would have, he said, to wait three or four decades before it held elections, and possibly longer. On the media, President Issayas claimed there was no free press any where in the world today. However the Eritrean people, he claimed, possessed media organs that served as forums for expressing their views and opinions as well as providing them with correct and objective information. Eritrea, of course, has had no independent media outlets since they were all closed down abruptly in 2001 and at least two dozen journalists detained and dozens more exiled.
Few international bodies or countries have escaped President Issayas’ attacks: “conspiracies and hostilities weaved in the name of regional, international and non-governmental organizations,…under the pretext of free press or [humanitarian activities] or…charity are some of the instruments of neo-colonialism masterminded by intelligence agencies.” The US has been one of the President’s main targets. He said it has a strategy of domination through creating problems and crises with the aim of strengthening US influence throughout the region. He attacked the CIA for encouraging and sponsoring human trafficking and encouraging Eritrean youth to flee their country. Hundreds of Eritreans cross into Ethiopia and Sudan every months to avoid conscription and repression. President Issayas told Asharq Alawat newspaper that lying was the culture of the CIA and the “baseless” anti-Eritrean defamatory campaign currently including allegations of Israeli and Iranian bases in Eritrea was no more than a continuation of this historic activity.
Uganda and Burundi are attacked for sending forces for AMISOM in Somalia. They are categorized as far from stable countries, experiencing civil unrest as well as internal opposition. These governments should, said President Issayas, concentrate on their own problems rather than meddle elsewhere. Indeed, the only viable solution for Somalia, said President Issayas was for outsiders to stop meddling in its affairs. He did not include Eritrea in this however. Eritrea’s support for the Somali people was, he said, a moral and legal obligation; and peace and stability could only be achieved by creating a conducive ground for the Somali people to resolve the issue themselves. Kenya was held responsible for the disappearance of three Eritrean journalists in Mogadishu and President Issayas added, ominously, that Eritrea would never overlook the issue. Last weekend it was the turn of long-time ally, the Sudanese Peoples Liberation Movement. President Issayas, claiming he had the right to criticize the organization, attacked it for failing to fulfill its commitments to the people of Sudan, for corruption and for failing to be definitive on unity or separation.
Perhaps, most bizarrely, in one four hour interview with what claims to be an Ethiopian website though undoubtedly in the pay of the Eritrean Government, President Issayas even tried to portray himself as a defender of Ethiopian unity. The interview indeed appears designed to allow President Issayas to appear in this guise. The truth of the matter is that no other person has worked so tirelessly for the demise of Ethiopia as a country. This is by no means an exaggeration. President Issayas has never been supportive of Ethiopian unity as his current efforts at destabilization make all too clear. Ethiopian officials, of course, are privy to what President Issayas was telling many African leaders during the war between Eritrea and Ethiopia (1998-2000): there is no such thing as Ethiopia and what there is, is no more than a shadow of a country – a country that cannot be taken seriously as a state. In terms of historical background, we would remember what President Issayas told an American, Paul Henze, on 11th March 1991, before he entered Asmara:
“The only reason that there is an Ethiopia is that the US needed it for the Cold War, and recreated it, otherwise it would have disappeared at the end of World War II.”
President Issayas finds little to welcome in the world or even in Eritrea. The words that most commonly appear are challenge, conspiracy, hostility, sacrifice, hard work and yet more hard work. The rewards are all far in the future; and Eritrea is always the target. “The United Nations, including the Security Council, has become an unjust and inequitable tool of a few nations” indulging in “illegal and unconstructive” positions, as well as baseless slanders against Eritrea over the supply of arms to Al-Shabaab and opponents of the Somali Government, although the Somali Prime Minister said only this week that the Somali Government had detailed evidence of arms flights arriving from Eritrea. President Issayas told Egyptian State TV this week that the problems in Somalia mainly emanate from the illegal actions of the UN Security Council itself. In a comprehensive attack on the Council, President Issayas claimed it had taken illegal and unconstructive positions, breaching the UN Charter and international law. This, he claimed, had caused the present vacuum in Somalia and become the source for piracy and other activities. He said a government “imposed” from outside had further aggravated the problem. In this context he told Kenyan TV that IGAD was a tool in the service of foreign agendas and was the source of the problem in Somalia. Eritrea, he said, expected nothing good from such an impotent organization and this was why it had suspended its membership.
The African Union came in for similar strictures as doing nothing more useful than “talking about a vacuum”. He referred to the behaviour of its leaders as corrupt and despicable, and in this connection he had much to say about democracy and the media in Africa. According to President Issayas, (talking to SABC TV at the weekend) Africa needs “genuine” democracy. Surprisingly, in view of South Africa’s recent Presidential election, he specifically noted that the South African experience proved that one cannot speak of real democracy when holding elections in which there is no equitable distribution of resources and where the majority of the population lived below the poverty line. President Issayas’ version of democracy, which ignores elections or political parties, does not equate with other peoples’ views. He is against such “meaningless exercises or manifestations of ostentatious behaviour”. In fact, democracy is an ideal and a set of institutions of practices. As an ideal it involves the concept that members of a group should have the determining control over rules and policies, and that members of the group should treat each other as equals. In a modern state this ideal is realized through a framework of citizens' rights, institutions for representative and accountable government (in particular through a freely elected parliament), an active civil society and a number of mediatory elements of which the most obvious are political parties and an independent media. None of these are present in Eritrea and President Issayas specifically rejects most of these, even claiming, in defiance of Eritrea’s still unimplemented constitution that the people of Eritrea do not want either political parties or an independent media. It was in an interview with Al-Jazeera last year that the President actually put a time frame on elections. Eritrea would have, he said, to wait three or four decades before it held elections, and possibly longer. On the media, President Issayas claimed there was no free press any where in the world today. However the Eritrean people, he claimed, possessed media organs that served as forums for expressing their views and opinions as well as providing them with correct and objective information. Eritrea, of course, has had no independent media outlets since they were all closed down abruptly in 2001 and at least two dozen journalists detained and dozens more exiled.
Few international bodies or countries have escaped President Issayas’ attacks: “conspiracies and hostilities weaved in the name of regional, international and non-governmental organizations,…under the pretext of free press or [humanitarian activities] or…charity are some of the instruments of neo-colonialism masterminded by intelligence agencies.” The US has been one of the President’s main targets. He said it has a strategy of domination through creating problems and crises with the aim of strengthening US influence throughout the region. He attacked the CIA for encouraging and sponsoring human trafficking and encouraging Eritrean youth to flee their country. Hundreds of Eritreans cross into Ethiopia and Sudan every months to avoid conscription and repression. President Issayas told Asharq Alawat newspaper that lying was the culture of the CIA and the “baseless” anti-Eritrean defamatory campaign currently including allegations of Israeli and Iranian bases in Eritrea was no more than a continuation of this historic activity.
Uganda and Burundi are attacked for sending forces for AMISOM in Somalia. They are categorized as far from stable countries, experiencing civil unrest as well as internal opposition. These governments should, said President Issayas, concentrate on their own problems rather than meddle elsewhere. Indeed, the only viable solution for Somalia, said President Issayas was for outsiders to stop meddling in its affairs. He did not include Eritrea in this however. Eritrea’s support for the Somali people was, he said, a moral and legal obligation; and peace and stability could only be achieved by creating a conducive ground for the Somali people to resolve the issue themselves. Kenya was held responsible for the disappearance of three Eritrean journalists in Mogadishu and President Issayas added, ominously, that Eritrea would never overlook the issue. Last weekend it was the turn of long-time ally, the Sudanese Peoples Liberation Movement. President Issayas, claiming he had the right to criticize the organization, attacked it for failing to fulfill its commitments to the people of Sudan, for corruption and for failing to be definitive on unity or separation.
Perhaps, most bizarrely, in one four hour interview with what claims to be an Ethiopian website though undoubtedly in the pay of the Eritrean Government, President Issayas even tried to portray himself as a defender of Ethiopian unity. The interview indeed appears designed to allow President Issayas to appear in this guise. The truth of the matter is that no other person has worked so tirelessly for the demise of Ethiopia as a country. This is by no means an exaggeration. President Issayas has never been supportive of Ethiopian unity as his current efforts at destabilization make all too clear. Ethiopian officials, of course, are privy to what President Issayas was telling many African leaders during the war between Eritrea and Ethiopia (1998-2000): there is no such thing as Ethiopia and what there is, is no more than a shadow of a country – a country that cannot be taken seriously as a state. In terms of historical background, we would remember what President Issayas told an American, Paul Henze, on 11th March 1991, before he entered Asmara:
“The only reason that there is an Ethiopia is that the US needed it for the Cold War, and recreated it, otherwise it would have disappeared at the end of World War II.”
Tilahun-The Hale Comet
Tilahun-The Hale Comet
Do you ever find out that some words lost their magic when you need them most?
That is how I felt now. Tilahun is too big to fit in adjectives like the well known, legendary, the king, the renowned etc. He is just larger than life. But let me call him the king as most people do. Yes, the king is dead. The king that reigned in Ethiopian music scene for the last five decades is dead. Now he had gone for good. But he will remain with us for long as he reigned in our heart for half a century. And he will live in the heart of the coming generation too since he left behind masterpieces that can transcend generations to come.
Tilahun is a household name in Ethiopia. Who else is there in Ethiopia that doesn’t know who Tilahun is? He lived with us in every situation; he lived with us in our ups and downs, in our joy, in our sorrow, in our political turmoil, in our social instability. What subject matter is there that we lived and that Tilahun didn’t sing about? Nothing! Tilahun was there in our personal life that we consider unforgettable. How many of us are there who remember our first love when we listen his songs! How many of us are there who remember the hours we spent in tea- rooms of Addis in our youth listening his songs! How many of us cried longing for our motherland listening Tilahun singing “Selamtaye Yidress”! How many of us courted our would be wives listening his songs! How many of us named our kids after his name to show that we are his loyal fans!
Tilahun was a walking history that embodied the narrative of 5 decades of our lives in his songs. There is nothing that Tilahun did not touch in our life-say it politics, economy, patriotism, love, sorrow etc. Let’s just see some of the songs that reflect the milestones that shaped our political and social history. Tilahun sang almost about all of them directly or indirectly. Just remember the 1953 coup d’etat. What song comes to your mind? “Selechegn, Merergn Enen”(I can’t stand it anymore”) Yes, he paid the price for that song. He was imprisoned because that song was interpreted as a song that embodies a political message. Yes, Tilahun was reflecting in that song the mood of the people at that time. You may not think that Tilahun sang a song about the World War II experience. What about the song entitled “Korea Mezmeten Betam Ewodewalehu”. This song was about the experience of Ethiopian soldiers deployed to Korea.
You remember when nature turn it’s back on us in 1974? I am sure you remember the hunger named the Wollo Dirk. He was there with us, crying on television, singing about the suffering of his people. Just listen again the song “waye waye silu”(“calling for help”). You will watch him paining the pain of his countrymen.
What about the song entitled “Eyaleh Kalhone Keleleh Yelehim”(If you don’t have, You are done)? Was this song just about the universal truth of the power of money or is there any other meaning when we consider the period he sang. Mind you, the 1975-76 was the period we were warming up to learn eating rice. What about his songs about patriotism, love of country. Considering the above mentioned and other great songs of him don’t we have a ground to say he lived and wrote the past half-century’s Ethiopian history in his songs? That is how I feel and think. Tilahun didn’t get the chance to sing these songs, to be loved and admired by the public simply because he has a sweat voice. His unique ability to interpret songs is the main reason that makes him special. The unsung Heroes of the time, lyrics and melody writers Solomon Tesema, Major Girma Hadgo, Captain Afework Yohannes etc prefer to give their lyrics and melodies to Tilahun because of his unmatched voice command to deliver the message of his songs. It should not be surprising if every lyric and melody writer wishes Tilahun to sing his songs.
Tilahun was not simply a singer. He was a performer-singer. There are singers you prefer to listen only their recordings. The professionals call them studio artists. There are singers that you simply watch them. There are singers that create a miracle on stage. And he is one of the miracle makers. Yes life is unfair. Nature favor few people. He was among the favored one. He has everything that a singer need to have- the voice, the look, the charisma, and stage magnetism. Is there any one like Tilahun that has stage presence in Ethiopian music history? No one! That makes him unique. Tilahun is a singer you need to watch and listen. Why? Because he has extraordinary body language to communicate with audiences. Each and every of tilahun’s gesture interpret his song amazingly. Even the way he looks at camera at some points of a song, do convey his message. Go and watch his Sudanese Song that he sang in Khartoum many years back. You will see him making you feel that he is singing personally to you. This much is amazing the king!
Tilahun is a kind of singer that language barrier would not stop you to listen to him. Come on! Does one need to know Oromifa to listen “Selmaeka Yagene? Is there any kind of wall that stop listener to listen his masterpiece “Akam Neguma Feyuma”? Not at all! We don’t have a tradition of biography writing. When we begin that tradition, he will be a gold mine for future biographers. Biographers would dig about his each and every song; they will study about the songs, the period and the situation in which he played them. He is a gold mine for future biographers.
I hope they will study his each and every song, how he sing them, when, the period and their implication. And through studying his songs, they will keep a record about the history of Ethiopian modern music that he dominantly shaped.
One of Tilahun’s extremely popular songs is “Chuhet Ayaskefam, Sileyu Tewado” Let me borrow the first two lines (stanza) of the lyric and use them to express my sorrow to our lose:
Chuhet Ayaskefam It is OK to cry
Sileyu Tewado when the king dies
Kezih Yebelete there is no sad news
Keyet Yimta Merdo bitter than this.
Let his soul rest in peace
Do you ever find out that some words lost their magic when you need them most?
That is how I felt now. Tilahun is too big to fit in adjectives like the well known, legendary, the king, the renowned etc. He is just larger than life. But let me call him the king as most people do. Yes, the king is dead. The king that reigned in Ethiopian music scene for the last five decades is dead. Now he had gone for good. But he will remain with us for long as he reigned in our heart for half a century. And he will live in the heart of the coming generation too since he left behind masterpieces that can transcend generations to come.
Tilahun is a household name in Ethiopia. Who else is there in Ethiopia that doesn’t know who Tilahun is? He lived with us in every situation; he lived with us in our ups and downs, in our joy, in our sorrow, in our political turmoil, in our social instability. What subject matter is there that we lived and that Tilahun didn’t sing about? Nothing! Tilahun was there in our personal life that we consider unforgettable. How many of us are there who remember our first love when we listen his songs! How many of us are there who remember the hours we spent in tea- rooms of Addis in our youth listening his songs! How many of us cried longing for our motherland listening Tilahun singing “Selamtaye Yidress”! How many of us courted our would be wives listening his songs! How many of us named our kids after his name to show that we are his loyal fans!
Tilahun was a walking history that embodied the narrative of 5 decades of our lives in his songs. There is nothing that Tilahun did not touch in our life-say it politics, economy, patriotism, love, sorrow etc. Let’s just see some of the songs that reflect the milestones that shaped our political and social history. Tilahun sang almost about all of them directly or indirectly. Just remember the 1953 coup d’etat. What song comes to your mind? “Selechegn, Merergn Enen”(I can’t stand it anymore”) Yes, he paid the price for that song. He was imprisoned because that song was interpreted as a song that embodies a political message. Yes, Tilahun was reflecting in that song the mood of the people at that time. You may not think that Tilahun sang a song about the World War II experience. What about the song entitled “Korea Mezmeten Betam Ewodewalehu”. This song was about the experience of Ethiopian soldiers deployed to Korea.
You remember when nature turn it’s back on us in 1974? I am sure you remember the hunger named the Wollo Dirk. He was there with us, crying on television, singing about the suffering of his people. Just listen again the song “waye waye silu”(“calling for help”). You will watch him paining the pain of his countrymen.
What about the song entitled “Eyaleh Kalhone Keleleh Yelehim”(If you don’t have, You are done)? Was this song just about the universal truth of the power of money or is there any other meaning when we consider the period he sang. Mind you, the 1975-76 was the period we were warming up to learn eating rice. What about his songs about patriotism, love of country. Considering the above mentioned and other great songs of him don’t we have a ground to say he lived and wrote the past half-century’s Ethiopian history in his songs? That is how I feel and think. Tilahun didn’t get the chance to sing these songs, to be loved and admired by the public simply because he has a sweat voice. His unique ability to interpret songs is the main reason that makes him special. The unsung Heroes of the time, lyrics and melody writers Solomon Tesema, Major Girma Hadgo, Captain Afework Yohannes etc prefer to give their lyrics and melodies to Tilahun because of his unmatched voice command to deliver the message of his songs. It should not be surprising if every lyric and melody writer wishes Tilahun to sing his songs.
Tilahun was not simply a singer. He was a performer-singer. There are singers you prefer to listen only their recordings. The professionals call them studio artists. There are singers that you simply watch them. There are singers that create a miracle on stage. And he is one of the miracle makers. Yes life is unfair. Nature favor few people. He was among the favored one. He has everything that a singer need to have- the voice, the look, the charisma, and stage magnetism. Is there any one like Tilahun that has stage presence in Ethiopian music history? No one! That makes him unique. Tilahun is a singer you need to watch and listen. Why? Because he has extraordinary body language to communicate with audiences. Each and every of tilahun’s gesture interpret his song amazingly. Even the way he looks at camera at some points of a song, do convey his message. Go and watch his Sudanese Song that he sang in Khartoum many years back. You will see him making you feel that he is singing personally to you. This much is amazing the king!
Tilahun is a kind of singer that language barrier would not stop you to listen to him. Come on! Does one need to know Oromifa to listen “Selmaeka Yagene? Is there any kind of wall that stop listener to listen his masterpiece “Akam Neguma Feyuma”? Not at all! We don’t have a tradition of biography writing. When we begin that tradition, he will be a gold mine for future biographers. Biographers would dig about his each and every song; they will study about the songs, the period and the situation in which he played them. He is a gold mine for future biographers.
I hope they will study his each and every song, how he sing them, when, the period and their implication. And through studying his songs, they will keep a record about the history of Ethiopian modern music that he dominantly shaped.
One of Tilahun’s extremely popular songs is “Chuhet Ayaskefam, Sileyu Tewado” Let me borrow the first two lines (stanza) of the lyric and use them to express my sorrow to our lose:
Chuhet Ayaskefam It is OK to cry
Sileyu Tewado when the king dies
Kezih Yebelete there is no sad news
Keyet Yimta Merdo bitter than this.
Let his soul rest in peace
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