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To invest or not to invest in Ethiopia

Posted on by Elias Kifle

A Few Reasons Why some of the Ethiopian Diaspora Community Members are not Interested and/or against “Investing” in Ethiopia: A Summary of selected conversations over coffee and by telephone.

By Dr. Seid Hassan

As some of you already know, some of the EPDRF (Ethiopian People’s Democratic Revolutionary Front) representatives (cadres?) have been roaming the western world trying to lure the Diaspora community so that they would “invest” their assets in Ethiopia. Some in the Diaspora community have challenged the same cadres and representatives in some of the cities they visited, such as in Dallas, Los Angeles, and London. This writer wondered, just to satisfy his intellectual curiosity, about this issue and decided to talk to some of the Diaspora members why they would be against or are reluctant to “invest” in Ethiopia. The conversation was made via telephone, at coffee/tea houses, and to a limited extent at lunch places. Incidentally, most of those that I have talked to have no problem in sending remittances to their loved ones back home and in making contributions to their NGOs, provided that the NGOs they support have full control of the monies they send back home. So, this summary of many conversations is not about remittances. It is about Foreign Direct Investment (FDI) in general, and Diaspora “investment” in Ethiopia, in particular.

By the way, there are good economic reasons why nations would be interested in luring the Diaspora community to make foreign direct investment (FDI). Unlike the FDI made by multinational corporations (MNCs) and foreign nationals, whose impact is not known in promoting economic growth, FDI by the Diaspora community is known to be advantageous in many respects, some of them being: 1) That the profits and the assets/technology that the Diaspora community members take to their Homeland seem to stay in the host country for a longer time; 2) That the know-how and the knowledge-spillover effects of the Diaspora and its advantages are relatively quantifiable; the Diaspora members are known to be a richer source of know-how and skills. 3) That, once settled to their country of origin, the Diaspora seems and are expected to be more motivated in achieving the desired results compared to employees of multinational corporations. 4) That there seems to be more informal and altruistic intentions directed towards families, friends and their country of origin than MNCs. Many experts seem to think and recognize that, if properly directed and handled, the Diaspora plays an active role in the development process of their countries of origin more than MNCs. 5) That the Diaspora is expected to stay longer in the host country, and their stay is expected to attract more FDI flows by other companies; and last but not least: 6) That, the Diaspora members seem to bring new cultures with them and infuse those newly acquired cultures with those of their country of origin.

In so doing, they tend to bring additional societal rate of return.

Despite the importance of Diaspora FDI, however, remittances are much larger (for example, remittances from Africans working abroad between 2000 and 2003 averaged roughly 17 billion dollars per annum, according to a 2005 report by the United Nations Office of the Special Adviser on Africa. Ethiopian Diaspora remittances exceed $1.1 billion per annum in the last few years). Remittances are also much more predictable than FDI and ODA (Official Development Assistance).

It seems that many of the Ethiopian Diaspora community have numerous problems and issues in making investments inside that country. Obviously, individuals have to weigh the risks and rewards when making investment decisions. For the most part, evaluating such risks and rewards seems to be in the minds of many of the Diaspora members who have the resources to invest and have been contemplating to do it in Ethiopia. Some of it seems to be related to the problem of asymmetric information. In the context of the Diaspora investors, they have and are expected to contemplate if there is any information that they do not know and if their competitors, especially the ones supported by the government or those who are inside the country know more than they do. They also have to weigh the risks in case the government fails to honor the promises. They seem to ask: Do I have the power to legally challenge the authorities if the government fails to honor the explicit or implicit promises it gave before I invested?

In general, risk assessment firms, international organizations, and governmental agencies try to provide information in order to allow investors evaluate their investments more objectively, or to make an investment in a particular country appear profitable or attractive. This provides the individual investor with additional information. Unfortunately, such assessments and guidance either do not exist when it comes to Ethiopia or the quality of information available does not allow investors to venture investing in that country.

As you can imagine, the Diaspora possesses various forms of capital, e.g. investment, intellectual (professional, technical, and entrepreneurial skills and expertise), social (trust, values, relationships), and political capital (lobbying, advocacy), which could be positively mobilized for development of any country. Unfortunately, when it comes to Africa, only about 6% of remittances are actually channeled into investments. The vast majority of remittances are made through international money transfers and physical cash transfers. Unfortunately, the current regime made things worse by shooting its own feet when it arrested private foreign exchange dealers and confiscated their assets. The confiscation of the traders’ assets might have enabled the TPLF to improve the amount of foreign exchange available to it in the short run, but it is counterproductive in the long-run. It also shows how desperate this regime has become to acquire foreign exchange. As some of you in the Diaspora community might already have observed, such actions have scared some of the Diaspora community not to take their hard currency into that country. They instead have resorted to some other means to send their money back home. The hard currency that the government used to enjoy is not or is less available now compared to the situation before. By the way, as alluded in my previous postings, Ethiopia could have faced a financial crisis were not for these huge flows of remittances and foreign government support.

In any case, most of the Diaspora community members I have chatted with seem to list a number of obstacles for them to invest in Ethiopia. Some of their concerns seem to be related to moral issues. Most of them seem genuinely concerned about the potential real returns on their investments, the efficacy of their endeavors, and, most importantly, the lack of consistency and the rule of law. As one of my good friends stated it “I have lived and worked in Ethiopia for one year since the TPLF came to power. What I observed most was the lack of transparency and the absence of the rule of law. A rule of law (or rule of the game) that is clear to all and that’s consistently applied is crucial to the development of a modern economy and society. Max Weber, the German sociologist, emphasized this same point in his famous book: The Protestant Ethic and the Spirit of Capitalism. He argued that a clear rule of law was central to the development of capitalism in Western Europe…”

The good news is that, nearly all of them seem to be either sympathetic or willing to invest in the country they came from provided these obstacles are tackled. I have listed, in a paraphrase format, some of the obstacles or moral issues they mentioned and I am happy to share them with you.

Please note that the complaints (rationales not to invest) are sayings of many people even though I have represented them in a single first-person (that is, as “I”) format. Please also note that the list of complaints/rationales is by no means exhaustive. For those of you whose rationales are either omitted or that I failed to include, my apologies.

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

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

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

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

* The country is now totally landlocked, pretty much by the choice of its own leaders. As a result, it has to pay port fees, most of the payment going to Djibouti, Ethiopia’s main conduit for its imports and exports. The forfeiting/ceding of its ports and the lack of having access to the sea, among other things, has increased the importing and exporting costs of finished goods, capital and intermediate inputs for both the country and the business sector. Obviously, my business will face the same fate. Moreover, if some regional conflicts arise around the neighborhood, as it is happening between Eritrea and Djibouti, I may not be able to transport the equipments and the intermediate input goods that I may need to use and run my business smoothly. There are, therefore, both cost and risk considerations involved and a lot of uncertainty as well. These are additional reasons why I am (was) not comfortable in “investing” in Ethiopia.

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

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

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

* The country is divided into ethnic enclaves and there is limited freedom of movement of both people and assets. As a result, my investments will be restricted to a limited ethnic enclave thereby adding more constraints and inhibiting growth. I rather invest my assets where there are less geographical constraints. Because of these restrictions, the market size is also rather small, thereby limiting the prospect of the growth of my investment and business in the future.

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

* If I cannot make financial investments, I want to help that country by sharing my expertise and knowledge. I want to share my marketing knowledge, my engineering abilities and management skills with the people of Ethiopia. I want to be a bridge between foreign investors and the people of Ethiopia. I want to teach there, too, no matter how little the payment could be. But, unfortunately, as things stand right now and in the last 18 years, it will be a waste of time for me to do so. Look, can’t you see all educated people trying to flee the country? That is because the system has failed to allow them to use their expertise. For some of them, it will be downright dangerous to go there. Others who volunteered to teach at the universities were denied because they believe they did not belong to a certain ethnic group. Others were expelled from the country for speaking their minds. Due to the lack of academic freedom, it is perilous to try to serve a repugnant bureaucracy. Instead of trying to combat the brain-drain by creating conducive environments to attract those who have left the country, the actions of the government exacerbate the brain-drain problems, almost on a constant basis. By the way, many experts suggest that both China and India were able to expand and build their economies in part by attracting their expatriates and creating conducive environments for them. The Ethiopian government, on the other hand, seems to be doing the opposite.

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

* I could be willing to go back to that country but I am reluctant to do so because I may say something, as I am used to here where I live, that the EPDRF does not like and be put in prison or be expelled. Isn’t that part of the reason why some of the country’s citizens leave their own country, leaving their loved ones behind? The insecurity or unstable political and socio-economic conditions are not attractive to me either to move into that country and/or invest my assets.

* The prime minister has said that he would bring Nigerians to the country so that they would teach at the country’s universities FREE of charge, while at the same time, expelling some foreign born professors, such as the American law professor, Salisbury for speaking her mind. Consequently, there is neither a place nor a reason for me to go there. Besides, I cannot support my livelihood while competing with those who teach for free. As the old Ethiopian (Amharic) saying goes “yagerun serdo (ersha) bageru berie. Instead of using and supporting the country’s educated personnel to teach their own country’s burgeoning young population, the prime minister wants to bring in and replace them with foreigners. Why would I go back to that country while the “leader” of the country itself threatens to replace me at the outset?

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

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

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

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

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

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

* I am not like some people who just take my money and pretty much waste it just to feel good and boast to my friends that I have made an “investment” in Ethiopia. I happen to know people who said they bought properties and have made many trips to secure those properties. By the way, some of the deals that some of my friends made did not go through, and as a result, they lost money in the process. Unfortunately, and sadly, some of those who tried to secure some properties were not (are not) wise enough to count their expenditures they make while making the trips in order to secure those properties. What they do really does not make any economic or business sense and, hence, I refuse to follow suit and act stupidly, no matter how hard the EPDRF cadres try to lure me to do so.

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

* Many times, I considered building a house in Ethiopia so that I could use it for my vacation or for my retirement. When I think about it, the cost of building a house where I reside is somewhat cheaper than, or comparable to, depending on the location, compared to doing the same in Ethiopia. So, it makes little or no economic sense for me to build a house or an apartment in that country. By the way, Ethiopia is listed as one of those countries which has a competitive disadvantage for tourism, mainly due to its bad and/or nonexistent infrastructures and lack of amenities. This is one reason why I would be less tempted to buy properties in that country. Moreover, I am not really sure if Ethiopia would be a good place for me to reside when I retire. As you know, I need more things when I retire than I do now such as access to the doctor, medicine, convenient facilities and other amenities. Such things do not exist in Ethiopia, especially when I need them the most. That is why I am reluctant in building a retirement place in that country.

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

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

* Past and present experience indicates that those who tried to invest in the country have ended being supporters of the dictatorial regime. Knowingly or unknowingly, the so-called investors have become subservient to the system. So, if I want to play by the same cards that I will be dealt with, I am afraid I will end up doing the same. I am reluctant to play with cards that someone else controls and hence will be reluctant to invest in Ethiopia.

* Why would I take my assets to that country to fill the gap of foreign exchange and tax revenues of a dictatorial government? If I could, I would actually work against such actions in order to deprive the regime from buying the extra bullet it uses to kill my own relatives.

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

33 thoughts on “To invest or not to invest in Ethiopia”

  1. I read the above article that the writers said to be “Jero Yalew Yisma” We knew that what is TPLF mean a crowed of Gablers. They don’t have responsibility about thier country and their people that mean ” yeken jib”. nobody dislike their home lands and their people to become developed and change the life of our people but the gabler government plays a triky game to cheat and abuse the diaspora.So thanks to the writers you told me what I thought.

  2. The Ethiopians in diaspora and foreigners who intends to invest their money in Ethiopia occupied Land the woyanes should be warned to do it, otherwise they are going to loose their money and rights after the bloody woyanes.The people of Ethiopia shall have all the rights to confiscate those who collaborate with the enemy of Ethiopia. They shall be boycotted.

    Investers can wait untill the liberation of the Ethiopian Land.

    Ethiopia Prevails.

  3. My main observation is that most of the excuses for not investing in Ethiopia are politically motivated. Sadly, many people avoid making investments and creating employment opportunities for the poor of their mother land JUST for fear that they will some how benefit the EPRDF government. I would say this is too selfish.

  8. What an observation!!! You hit it right on the nose. I am one of those potential investors who have been very reluctant in investing in my country or even in any one of the countries in Africa. Money does not come easy here as you well know it. We have to work our butt and brain off to be able to save and become a capable investor. The last thing we want to do is throw our hard earned money down the toilet. If all those impediments mentioned very well in the scholar’s article are done away with, Ethiopia has the potential to be another economic power in two or three decades. Just look at South Korea, Taiwan, Malaysia and Singapore. Where were they just 30 or 35 years ago? Some of these countries are also multi-ethnic societies. They invested heavily on infrastactures for one. They called this project ‘The Great Construction’ such as in Taiwan. And they made every effort to encourage foreign investment by doing away with wasteful red tapes and stabilizing their societies. They stamped out harmful corruption and produced millions of qualified business managers and intellectuals. Most of these qualified entrepreneurs stayed in their own countries. The governments made sure that these educated human assets have the security and incentives to stay in their respective nations. Foreign investors were presented with such salivating menus as the availability of efficient infrastructures, skilled labor and politically stable environment. Then foreign money started pouring in millions first and then in billions. Ethiopia is not Austria or Switzerland. I hate to say this – It has missed the boat 112 years ago. Eritrea, Ethiopia and should start doing some serious soul-searching and come up with a political solution. But will that happen now or in the near future? The answer is no. Not even in the next 100 years. With all these ethnic tensions and so-called border disputes, there will be more blood-letting like never seen before perhaps of biblical proportion. They are all armed to their teeth. There are more people there who know more how to dismantle and assemble guns than the simple task of changing oil in a car. They know more names of gun parts than tools of a manufacturing facility. Sad. Very sad indeed. This scholar deserves kudos for putting together the feelings and opinions of potential investors why they are reluctant in doing so in Ethiopia. I thought he was hearing it all from me.

  9. Any one who wants to invest in Ethiopia today deserve what is coming to him. This is a corrupt, criminal leba so-called government. They are there to only steal and take the country back 100 years. They are interested in greater Tigrai….they are illitreate dedeboche…

  10. This writer has not talked to me.

    I would like to point out that I am not a supporter of the EPRDF in any shape or form. I am an ordinary non political person. If your article is to keep investment away from the current government you are free to do so. All what I saw in your article is a collective punishment against all Ethiopians. That is sad indeed.

    I did not know a single soul in the current Ethiopian government, no friends or relatives in high places when I went back 5 years ago for a visit. I stayed in a private hotel for one month on my visit which I believed gave good income to the owners and I was happy they had a lot of young people employed there. I completely fell in love again with a place I left in my young years so much so I bought a house to anchor me to the place. That is probably the most rewarding investment I have done in my whole life. I knew there were no expectation of monetary gain from this investment on my part. You can not put a dollar value for love. I love Ethiopia dearly.

    I had a spiritual connection to Ethiopia, it is a power that I could not explain here. I did not know that many people in Addis but with the help of a real estate agent I purchased a home.I did not have any hassle at government offices they were doing their job very well, things were very slow at times compared to north america but I had lots of time to move things along.

    The spiritual connection and the happiness I am blessed with while I go to my home in addis every year for the last 5 years on my vacation has brought so much fulfillment and happiness in the life I missed here in North America over many years. There is no dollar value for it for me.

    It has made me much more productive at work and my returns on my other investments here has brought higher returns and made up for it. In my very little way I hire few individuals who look after my place there. My experience with Ethiopia has brought me many returns and it is great.

    Thank God for it

  11. Dr. Seid,

    Very nice to see your article again. This one is very good.
    What about the positive aspect of investing, if there is any?

    Keep up. Cheers

  13. if ethiopians’ do not invest in Ethiopia,who will invest in Ethiopia?West Europian countries are investing in east europe.Because they are europian like them.They help them.They don’t care what happen in Africa.Our
    poletician must solve their differences and guide our country toward peace and stability.
    no peace-no investors-no economic growth.

  15. It is now clear to the world that Woyane has killed and maimed millions of Ethiopians during our last 18 years of painful history. The looting of the Ethiopian treasury worth billions of dollars is also a public domain information. Needless to say many millions are also forcefully displaced from their traditional home and livelihood to provide land for investors who are mainly Tigrean thugs, “Hodam” so called diaspora investors including the Sheik and his pimps. To give an example of so called investors, the Sheik Al Amoudi’s crime is most outstanding as the sole benefactor / enabler of Woyane looting – he deliberately collaborated with Woyane thugs by single handedly legitimizing foreign investment in the eyes of World Bank and IMF – To highlight among many of his crimes is that he took over the only operational gold and rare metal mining in southern Ethiopia denying any benefit to the local people – this is repeated in many others of his so called investment. Contrary to what you hear from the likes of Tilahun Gessesse, Mengistu Worku and many glorified prostitutes and pimps who were tipped as part of his Ethiopia disneyland enterprise.

    The result is a cumulative misery and pain to many more particularly to our Oromo Ethiopians. Those who are hurt and hurting as we speak will hold the so called diaspora investors and the Sheik equally responsible for the numerous economic crime against the people of Ethiopia – since they are partners in crime with Meles and his Adwa thugs.

  16. How long do we wait?
    Another 5, 10, 15 until your politically correct administration take over!. I like you am against the current fascist regime. However, it is misadventure to suggest investing now is all bad.

    I say Invest to reduce unemployment!
    Invest to educate
    Invest to grow.

    How about those of us who can invest our knowlwdge?

  17. Nice rejoinder, Ato Jawisaw Metta. I like your analysis regarding FDI in Southeast Asia. I agree with on on that.

    If the EPDRF or any othe government wants to attract foreign investment in general, and Diaspora investment, in particular, it just needs to clean up its mess, and cleanse itself from corruption and act and behalf like a government that cares about its people and the country. Once that is done, investors will floak to Ethiopia without the beggings of the government officials.
    The examples you just used reminds me to say that, Ethiopia is in a much superior position than some of those counties in Southeast Asia who have surprised the world by acheiving fast economic development. Look at Hong Kong (now part of China) and Japan, for example. They do not possess that many natural resources but they have become some of the leading economies of the world, using per capita income as one of the benchmarks for comparison. Good governance, the respect of the rule of law, democracy, and economic policy are the driving force for the well-being of an economy.
    In contrast, economies, such as Russia and others which happen to be endowed with huge natural resources still struggle because of bad policies.
    Thanks again, Ato Jawisaw Metta.
    Seid

  18. Ato Seid,

    Thank you for your very kind words. You are right on the money about the fact that some of those countries I mentioned in the Fareast do not possess any significant natural resources. Some of them like Hong Kong and Japan had to scour for throw aways(scraps) in the industrialized nations. They still do that from scrap metals to paper. And some of these countries were not democratic. One example was South Korea. They used the aids they were getting(thanks for the cold war years) to improve the infrastructures, invest heavily in education and made things attractive for foreign investors. Those generals were as ruthless as some these regimes in Africa. But they were not stubborn when it comes to economics. The same goes for Malaysia and Singapore. The most unfortunate behavior that has been bedeviling the regimes of our country is stubbornness. They are gripped with stubbornness that they conditioned themselves with from very bloody and protracted warfare they were waging in the bushes. I have watched videos of their past interviews on this and other media outlets. They get so animated. That is bushes (wilderness) mentality. They are all more concerned about their political groupings (cottage) than the well-being of their own citizens. I am sure you and similar other enlightened Ethiopians (Horn-of-Africans) do understand what that typical family in the countryside desperately needs now, today. He/she is concerned more about how he/she is going to feed his/her family including herself/himself. They don’t give a flying tickling who they want to put in the office. I am sure you know that the former ruling generals in South Korean and Indonesia were also lining their own pockets but they did not just squander everything. They created economic giants like Samsung, Hyundai and others when they were in charge. But at the later days they had paid for their corruptions. Then came China. I was there in 1983 to set up an injection molding facility. We did not have to worry about building for the factory. We did the wiring and setting up the machines. They have qualified engineers who do not speak English. We had not-so-good translators. But they were dedicated and determined to get the factory up and running. And in 3 months every thing was running, humming. That was in Southern China around Shenzhen. What a transformation since then!! I used to think about my own country. If there was similar favorable situation in our country, it could have been done there too. I am sure what it used to look like in Ethiopia then. Were the leaders then doing the right thing to make things attractive for foreign investors? No. From what I read on this and other website and hear from others, thing are not yet attractive for foreign investment. We will keep getting one pan handling regime after another. To keep bragging about past gallantry is one thing but getting the people out of unheard misery is completely another beast. I hope and pray that current and subsequent leaders will be endowed with your kind of enlightenment and then if I am still alive I will be there with others like me to set up factories, factories, factories, factories….I can not say it enough. Because things in China are finally maxing out. Inflation is getting worse. This will pose another great opportunity for countries like ours. But what can we do. We will keep looking somewhere else. Sad..Sad…Sad….Sickening sadness!!!!!

    May God Bless You All!!!

  19. Dr. Seid Hassan,

    It is good analysis in general but I believe not even to consider and much less to apply in Ethiopia or any other corrupt African regimes. You could ponder you points in most developing countries like in south east Asia and Latin America and some West African were there is economic independence for businesses from the political systems. Were courts have some sort of limited independence to set rules of game in economic matters at least for small to medium business. I contrast in Ethiopia and other African rough regimes the economic pressure and corruption is not limited to the regime trying to control state crown assets and the big players on key sectors but the economic pressures and corruption is spread to any kind of economic activity even for very small it could be as the regime cadres room in the country as lords of every piece of asset theirs and other people’s as well. You are pondering if it wise to invest your hardly earned money in this kind of environment, and my view is I would not even consider it for being to risky. To put my point clear, let me bring the example of the micro financing guru Nobel price that worked with the poor in south east and the system is working for the poor people as well for the investor (which also turned him a very wealthy man). Now coming to even consider that in Ethiopia is almost a failure unless you aliniete politcally with the regime as the regime not only has economical interest on those poors (e.g. farmers) but also a political one. So you will not make money unless you engage with the political control part of it and you economic venue is as well be lined by the degree of your association with the regime. Believe ma we all love our country and most people including non-Ethiopians would like to engage in some kind of investment if there were a bit “fair” game that exist in South East Asia or Latin America or West Africa.

    Cheers,

  20. Thank you so much, Ato Jawisaw Metta. While enjoying your rejoinder piece and being happy with the help I got from you to educate (communicate with) the Diaspora community, I weep due to the fact that our Homeland is unable to use such highly educated sons and daughters of her own like yourself.
    We should not give up, my countryman, never give up, until our country is free and the necessary and required policies fall in the proper place. Keep hope alive.
    Incidentally, I just got an email message privately from a fellow that I do not know before, and he thinks we, that is, economists and business-oriented Ethiopians need to create a forum so that we can discuss and exchange ideas on the way out of this mess. Maybe his idea is worth considering.
    I suggested for the same thing and opened myself for those who may want to collaborate, but to no avail so far. There were only two respondents to my suggestion, but I strongly suspect these two individuals to be members of the TPLF!
    One of them have told me that he may have some resources to do the research! I hope this suggestion would not amount to be let’s join the hoddams!
    Seid

  21. Ato abc-hahu:
    Thank you for comment and suggestion. It is a good one, too.

    However, I decided not deal with the positive aspects of handling the Ethiopian economy by the current regime, but decided not to do so for number of reasons, among them being:

    1. Whenever I begin enumerating the “positive” things, logic dictated me to follow with a “but,…..” and the “but”s outnumbered the positive looking arguments. Just to satisfy abc-hau’s thirst for me to say something positive about handling the Ethiopian economy by the current regime, one thing that stands out is the handling of the exchange rate system, especially compared to Derg and other regimes in other countries. The way the regime reacted lately forced me to refrain from saying too much about it, you know.

    2. I have decided, for good reasons, such a talk about positive accomplishments by the current regime, would lead me to compare the two regimes, Derg and TPLF. However, such a comparison is totally misplaced and a slippery slope. If a comparison is attempted, the entire situation would have to be compared, including comparing the socialist and communist systems, which we (at least most of us) have rejected.

    3. If I begin talking about the positive contributions of the TPLF, what else could the cadres and the hodams do? If I were to begin talking positively about this regime, the souls of those millions of Ethiopians who lost their lives due to the economic mishandling by this regime will curse me, I am afraid. I have neither the backbone nor the mental capacity to talk about the positive contributions of this regime, and I am being extremely polite here!

    4. As an educator, my place is to show the shortcomings of the ruling government so that it could do better. That is exactly what I do in my classes. The difference is that, the government I criticize – in my case, the US government, take the criticisms as valuable and important.

    5. In general, the opposition is neither morally nor politically and legally obligated to act as a lawyer for the ruling government- talking about its positive contributions. If they do, they would cease to be opposition parties. I brought this last point mainly because similar criticisms have been labeled against the opposition. In my view, such criticism that is possibly coming out of the TPLF cadres sounds like: “OK opposition members, we are tired of lying to the public that the Ethiopian economy is growing in double digits, while at the same time millions of the country’s citizens are starving. Please lie on our behalf so that the public would trust us if we tell them the same thing….” I think the opposition should not fall in to such TPLF created trap.

    Having said that, there are situations/scenarios where one is expected to compare the positives and the negatives. Such an article that I presented is not one of the venues for such presentation, though.

    I thank the admins for letting all of us communicate with each other here. I also thank all of you who took your time to leave your comments.
    Seid

  22. Dear Ato Seid,

    I thank you for starting this platform available for people like me to use it in airing our opinion. I am not a political expert by any means. But I have developed an instinct with which I can tell where to go next for favorable manufacturing environment. But one thing I got tired is some of these exaggerating excuses I am hearing all the time that external forces are the main factors for our backwardness. One fact we have to be ready to swallow is all these western countries are free enterprise societies. They have to make money (profits). That is their right too. There should be a return from their investment. If conditions are not right, they may try to create favorable conditions where they will be able to open factories and make products they need at profits. If we expect something else from them, then we are so naive or incognizant of the basic tenets of free market. America did this to us, Russia did that to us. Italy did all those things to our people
    ( sometimes I think it might not have been a bad idea if the Italians had stayed 5-10 more years) blah..blah.. won’t cut the mustard. I am not saying that the door should be wide open for looters. But we should work with these free enterprise countries and thankfully copy them. Some of us may say: Well we are black people and most of these western countries don’t like people like us to advance. That is just a cop-out. Am I being told that an identical commodity product, say a 24oz. spray bottle, one made in China will have better reception by western companies than the one made in Ethiopia even though the one made is Ethiopia is 10-20% cheaper(at landed cost)? I don’t think so. Free markets love their money, love their profits. If price, service and quality are in place and beat the competition, then that is the winner.

    I would like to take this opportunity to thank Mr. Elias in creating this form so we can exchange ideas pertinent to economy. I am going to continue praying to Almighty God to descend upon all those concerned and in charge back home with enlightenment like yours. May God Save This Beloved Country We All Call Mamma Ethiopia!!!! Otherwise, I am afraid that another irreparable corrupt society like Nigeria is in the offing. That is where you go to college to sharpen your skills of stealing.

  23. Dear Dr. Seid,

    Thanks for your earnest participation in the comment section and giving clarification.

    As an educator you are in a better position to evaluate and explain the pros & cons of a situation including political parties and governments provided you are not affiliated with a certain group. I envisioned you as an independent intellectual who is sharing his views in the current affairs of our country not as an affiliated individual. Therefore, my concern was that is there any positive aspect one to invest in his home country irrespective of the many hurdles and difficulties one faces in the third world, in our case Ethiopia.

    For how long can we wait to do something in our country?
    This has nothing to do supporting or opposing government/party, but social responsibility. As an individual one might opt to be politician and pursue that line. What about the mass? Should all be politician?

    I am sure you will agree with me that there are many honest people who are striving to change their surrounding in a very difficult situation and surviving in a hellish environment. Change however small is a change.

    To make it easy & plain, if anyone who return to his country should be called traitor? I know you are not saying that but there is no clarity in the public to that effect. I hope you can help too.

    Anyways, once again many thanks.

  24. Dear Ato Jawisaw Metta:
    What else can I say about you – you sound as if you are me – we are reading each other’s minds! Wow! Thanks Elias for helping me find this good and intelligent Ethiopian!
    While accepting all of the statments you have made, I would like to strongly echo about one of those statements you have made- excuses by the Ethiopians for our own failures.
    The sad part is that even those who have been in politics for decades use such excuses, time after time, without any appreciable success. They should recognize the fact that no ferenji was expected to do our job. Continuing to blame superpowers, etc. rather than doing something tangible is indeed a copout. Such a state of mind should not have been expected from people who have never been colonized and dominated. In some respects, the state of mind presented by some of the Diaspora is similar to the black fellows whose anscestors were brought to this country as slaves. Some of them decided to defeat themselves instead of fighting the odds and trying to achieve the desired results. Nothing can be accomplished if one defeats himself at the outset and uses the excuses from shouldering his share.

    Ato abc-hahu:
    I am in favor of doing an honest business in Ethiopia and you should care less about what people say as long as you or your business are not involved in the rampant corruption. Calling every investor a traitor without knowing the facts would be totally uncalled for.

    By the way, some people suggested recentaly that we should begin preparing a list of people who are doing business in Ethiopia in order to blacklist them. Such an action is a slippery slope. Even though I am open to this idea, I understand that it requires extreme care and, if done, it should be done with high secrecy and by reputable people. If people and their businesses are blacklisted wrongly, such an action would be counterproductive and downright dangerous, as its consequences would be long-term- even after this regime is gone!
    Seid

  25. Dear Dr. Seid,

    One more thing, there are many who have returned and invested in their country with mixed return, i.e. successful or “lost”. Even those who “lost” have at least contributed to the well being of the country & people in one way or another like our saying “melted butter in the pot”. Haji will help to decipher our saying, a hint from an old & forgotten friend.

    Cheers

  26. People must be out of their sense thinking of investing their hard-earned asset in weyane’s Ethiopia.

    In Wayne’s Ethiopia, it is not only asset, but also life is on the line. I knew two non-tigrean Ethiopians, both in mid 40ties who were killed, one with suspicious circumstance and the other within 24 hours of his impressments. I am sure so many people are killed by Tigreans mafia for being succeful and competitive.

  27. Dear Ato Seid,

    I am sure you have noticed one more cancerous habit that spread like wild fire since the 1960’s among our educated people with at least high school education. That is the quickness to name-calling of others with different ideas and convictions. Here we have one of the poorest nations in the world economically but it is not very hard to find one who is an expert in labeling others. He/she does not have any ides a simple screw driver is made but knows how to disassemble an AK-47. It is almost scary to air an opinion if it different because of what is about to follow. Like you I have read comments and articles calling others ‘fascists’, ‘traitors’, ‘bandas’ you name it. ‘Dictators’ ‘Hoodlums’ ‘boot-lickers’ might have been more fitting than those I mentioned above. I have seen articles and announcements calling for example the ‘Derg’ and the current regimes ‘fascists’. Mind you calling these regimes ‘fascists’ in stead of ‘ruthless dictators’ will be putting this so backward country with the 1930’s Germany, Italy and Japan. I wish it were technologically. I remember a funny story a gentleman who fled the Derg regime in the 1970’s told me about the conversation he had with one of the top Derg members. I think this gentleman was trying to give the officer a sliver of some economics of supply and demand. The officer was thinking about and limited to the depot he was once guarding. He had no idea of how technology evolves and how it strives. Such mooncalves were the ones who used to be compared with Hitler, Mussolini and Tojo. They were just a bunch blood sucking hoodlums bunched together at the helm a dictatorship. I wish Ethiopia was the same with Germany and Italy or Japan of the 1930’s technologically in the 1970’s or even now for that matter. I think this name calling disease will stay with us until the regimes become freedom and people-loving themselves.

    I spent most of my time here in Hong Kong and Taiwan. I have a home in the USA. I will make sure I keep in touch with in the future.

    As I mentioned before I will not stop praying for the better in our old country where people like you and me will be able to invest, start factories and do what is long-lasting to improve the livelihood of those people. That is with out the need to worry of being rudely called names or destructive red tape. I will not give up on the Good Lord/Allah. The people have suffered enough.

  28. Dear Jawisaw Metta:
    This last message of yours made my tears drop, you know. There were so many mistakes made, some of them even by those who genuinely wanted to “liberate” the country from bad governance. I now think that a few twists and turns in their endeavors would have saved this poor country from where the is now.
    The sad part is that, some of those who want to hurl insults continue to do so even today, at the most opportune time when we all need to collaborate. I don’t even know if they have any sanity at all. Why do people repeat the same mistakes over and over again after being in the “struggle for freedom” for a few decades? It beats me. For some of them, biting other opposition groups/persons like mad pitbulls (dogs), sitting behind a computer and using the so-called pal-talk show on every day basis (do these people have real jobs or are they the abusers of the western welfare system?) makes them at the forefront of the “struggle”. They should know better.
    Sorry folks, Mr. Jawisaw Metta, led me astray here. Let’s blame this nice fellow.

    Dear Ato Jawisaw Metta:
    Please try to communicate with me using my official email address which you can find at the bottom of the article. Please remind me who you are and all that so that I would be able to remember you. I have written many (and some of them highly technical) professional articles, but I did not have any clue how many people have read them, These 3 short articles that were posted on Ethiopian related web pages (thank you admins and webmasters!)are not only read by so many people, but they also have brought me several friends who have been helpful to me. I can’t believe that there are so many intelligent and humble Ethiopians all over the world!
    Please send me an email message privately, Ato Jawisaw Metta. I will put you in my pool of friends.
    Keep hope alive!
    Let God help our people and Homeland.
    Seid

  29. This was a rather lengthy article saying the same thing over and over again, don’t invest in Ethiopia and don’t even think about moving back. It is true EPDRF is not democratic government and it is even tyrant. The Government is responsible for the killing of many. But it is also true that several people have moved back to their home land and continue to move back and positively contribute to their country. I agree with you there are several things missing that are necessary to encourage free market and freedom of expression. And yet it is possible and even probable one can invest, teach, and successed in Ethiopia, not an easy task and risky at times but within reach. Risk is everywhere some more visible than others we risk when we drive or use the subway or invest in the stock market or doing any activity. But doing nothing not an option and if Ethiopians don’t hope for Ethiopia who will for everyone knows the negative the question is what positive can we do.

  31. Thank you elias for the post of this analysis that makes the people aware . I sent my money to ethiopia two years ago to put in ethiopian bank but because of the inflation I lost more than 20% percent of my money value .So I advice all ethiopians and others not to invest their money until there is stabil economy in ethiopia . It is better invest where they live until the situatioin of the country is improved .

    I sent two years ago 50,000 dollars exchanging currency 11 birr .total 550,000 .If I send that money at this time it will be 850, 000 , so I lost 300,000 birr.

  32. abye#31,
    Why? Why? Why? Haven’t you seen and read enough how TPLF operate in Ethiopia and outside of Ethiopia? Sorry to say it, but you deserve what you got.

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