By Lemma W. Senbet

After twenty years of departure, I visited my home country on a two-week trip in August. The trip was filled with excitement, sadness, and at times hopelessness. My remarks focus on my observations of the current developments in Ethiopia primarily along an economic front. I would then hope that my remarks would stimulate our attention to opportunities and obligations facing us as Ethiopians here toward Ethiopia.

My visit lead me to conclude that, despite the enormous problems facing the country, Ethiopia has immense untapped resources and vast investment potential virtually in every sector of the economy. I came back convinced that Ethiopian’s future is dependent upon how successfully its government can implement a radically redesigned economic system, one based on the principles of the market economy.

The Problems
Ethiopia is currently an economic basket case! It is uniformly viewed as a beggar country and widely considered as the poorest in the world. It faces billions of dollars of foreign debt and growing budget deficit. As soon as you get out on the streets of Addis Ababa, you are struck by the semi-starved and painful looks of pedestrians.

Agriculture, long the backbone of the economy, is in dire straits. The government owns and runs losing agricultural farms. These farms take much needed government funds but nothing in return.

The infrastructure, such as rural roads, irrigation facilities, health care facilities, water supplies, soil treatment facilities, are either in extreme shortage or devastated by wars. There is persistent drought, massive deforestation, overgrazing, and over- cultivation.

The industrial sector is also in a disastrous situation. The government owns everything and mismanages it utterly. The state-owned enterprises carry surplus employment reportedly ranging from 50 to 70%.

A third of the nearly 150 factories (by official estimates) are no longer in operation. The remaining are run grossly undercapacitated. This is partly due to shortage of raw material inputs and shortage of foreign exchange reserves. The industry is heavily reliant on foreign exchange reserves, because it needs imported inputs. The export sectors are all losing, because goods are shipped overseas below cost to generate foreign exchange.

Company managers grapple with both commercial and non-commercial objectives. These objectives are governed by periodic guides formulated by officials of the Ministry of Industry (or the relevant Ministry, such as defense) and passed down to managers. These objectives are often in conflict with each other, but more importantly, managers do not know the right tradeoffs between commercial and social goals. In the event that things go bad, which is more often that not, the poor performance is blamed on social goals. The perverse managerial incentives are actually magnified by the lack of performance-based compensation such that managers obtain their fixed salaries no matter what.

Pursuit of social goals is the ultimate goal of an economic system. However, it cannot be achieved through distorted production, pricing, employment, and wage policies. An economic entity should be run with maximum efficiency to make the available “pie” as large as possible.

To address the issue of equity (or fairness), then direct means and distributional rules, such as taxation or other transfer mechanisms, may be used to split the pie in any socially desirable way.

Another enormous economic problem arises from severe shortage of foreign exchange reserves. By some estimates (unofficial), only about US $3 million was available after the alleged depletion of foreign exchange by Mengistu. This pitiful situation has sawned its own humor: Mengistu, confronted with the allegation that he embezzled Ethiopian money, responded: “I did not take any Ethiopian money; I only took U.S. dollars.”

Unemployment is yet another major economic obstacle. It is getting out of control. The universities have minuscule space relative to demand, and they can accommodate only a very small fraction of high school graduating students. Thus, some of the country’s brightest students are left to join the rapidly growing ranks
of unemployed young people. Further, massive demobilization of the defense forces under way has added hundreds of thousands of former soldiers to unemployment roll.

Token Economic Improvements
There are some pockets of improvements over the last seventeen years. I made a trip to Hosanna area through the Gurage and Kambata regions, and I saw a modest improvement in the road system, urban planning, and health facilities. I was told that such uneven and token improvements existed in some other areas as well, such as in Sidamo (e.g., Awassa area), Wollega, etc. Nevertheless, ecologically those areas seemed in danger with dense population, overgrazing, over-cultivation, and deforestation. A forest in my birth place, for instance, is completely gone.

I was told those meager signs of development were the results of private initiative of the people themselves, and not the past regime. The regime’s inaction must have unintentionally helped these areas. It is then a reflection of what Ethiopians would be able to accomplish on their own initiative, despite severe shortage of resources, if they are free from government intrusion and mismanagement. Here, it is worth mentioning another prominent example — the famous Ethiopian Airlines. For some strange reason, Mengistu left the carrier alone, and, by all standards, it has become one of the most competitive airlines in the world.

The Task Ahead
We have an abundance of horror stories about Ethiopia. But what can we do for Ethiopia? We may continue to send charitable contributions as we react to some vivid TV images of Ethiopian famine. This is certainly helpful in alleviating the short-term difficulties, but it accomplishes little for the long-term.

I know that there is a surplus of movements on a political front here and in Ethiopia. There is no doubt that we need political pluralism in Ethiopia, but the people must also be economically liberated.

The other side of the economic debacle and depravation in Ethiopia is the existence of immense economic opportunities now on the brink of opening up for private initiative. Ethiopia must begin cleaning up after the legacy of Mengistu and move into a free market economy with adequate social cushioning.

I must point out that sooner than later, state-owned enterprises would go up for sale or for transfer of ownership to the private sector. Who are the potential private owners of these enterprises?

During my trip I was invited by the Ministry of Industry to give a talk to industry officials. Note that industry officials, including managers of major corporations, such as beverage and cement, are employees of Ministry of Industry, and hence government officials. Thus, the audience included top officials, including the minister, vice- ministers, and also some members of the Council of Representatives.

After a two-hour speech and break, there was an hour long discussion of the issues by the audience. I must say that it was heated. My talk included heavy dosage of the functioning of the market system and succeeded in “shocking” the audience consisting, in part, managers of predominantly Marxist orientation. I was keenly aware that no one would become a “capitalist” by baptism. A successful transition to a market economy requires a thorough understanding of how markets work. In my speech on August 28, 1991, at the Ministry of Industry, I called for wholesale privatization of state-owned enterprises and public services, including financial institutions, such as banks and insurance companies.

Proposals for Privatization
The fundamental job of the government is not to run industry, commerce, or hotels, but to formulate policies. A growing economy is the key (perhaps the only) answer to unemployment; a government cannot create jobs simply by adding layers of people to its payroll.

I strongly disagree with the view that ownership transfer to the private sector makes no difference. Of course, the net worth of the public sector is unchanged by a mere transfer of ownership through the privatization process. Perhaps that is what the proponents of continued government ownership have in mind. The real economic gains from privatization come from productive efficiency improvements to the way in which the assets are deployed. The efficiency gains are generated from the exposure of the corporation to the disciplines of the market place through the stock market, the private banks, security analysts, and various monitoring mechanisms built into the private system itself.

When corporations are owned by the government, ownership rights are not transferable within the market place. The non- transferability of ownership rights has far- reaching economic consequences. It prevents the existence of markets for corporate control in the sense that entrenched managers who run corporations inefficiently cannot be disciplined or replaced through the takeover market. The threat of takeover alone is a powerful discipline on managerial behavior and increases efficiency for the overall economy. Takeover opportunities are absent in the absence of transferability of ownership rights through an open financial market system.

Another efficiency gain of privatization comes from the recognition that a government-owned enterprise is in principle owned by all citizens, and hence the corporation is diffusely owned. That is, owners are much more widely dispersed than when the corporation is owned through the private market. No individual alone has a sufficient incentive to monitor the management of the enterprise on his/her own when it is costly to do so.

Of course, the more obvious advantage of privatization is an enhancement of the development of the capital market itself through a spread of shareownership. It is a widely held view that capital markets enhance allocational and productive efficiency. By extension, there is then a positive relationship between capital market development and economic development.

As a general principle, I believe in the privatization of every enterprise or service. This view does not allow the supremacy of the so- called mixed economy. In my view the market economy predominates. That is not to say that the society should leave the entire range of economic activities to be determined by market forces.

My idea of privatization includes financial institutions. These include banks, insurance companies, investment banking firms, etc. These institutions intermediate between lenders and borrowers, between supplies and users of funds. Privatization of financial institutions creates competition among financial institutions for funds to lend and earn a fair (competitive) rate of return on their savings.

Second, it promotes efficiency. Competing financial institutions will seek out the most profitable investments. Thus, the financial system can be thought of as the brain of the economy. It determines how scarce resources are allocated to the most productive uses.

The seemingly adverse consequence of privatization is that some people would be simply unable to be employed productively upon private and efficient ownership. I argue that the problem be solved directly through a transfer system, such as unemployment insurance and social security system. There are already resources expended on surplus work force, and these funds should be used as an initial pool for unemployment benefits. In the long-run, the social security system should be funded by contributions from both the employees and employers. I also think that the country can solicit financial/technical support from international/foreign agencies in setting up the system, since it is entirely motivated by considerations of productive efficiency.

The system should be designed with care, though. The objective should be to prevent the standard of living of those affected (the unemployed and dependents) from falling below some minimum standard. The level of support (employment benefit) should be such that it gives minimal incentives for some to quit existing jobs and maximum incentives for the unemployed to seek and accept new employment (part-time or full- time) and to acquire new skills.

It seems relatively easy in Ethiopia to create a disincentive for existing workers against quitting jobs to join the unemployment benefit pool. Those on unemployment benefit can be used to build infrastructure (roads, irrigation, railroad system, health care facilities, etc.) and other public goods not easily accessed by the private initiative. Thus, the system can lead to greater efficiency both in the agricultural and industrial sectors.

The government should move with speed and establish a Privatization Commission to dispose of a range of state-owned enterprises, including financial institutions. Banking laws and practices should also be brought in conformity with international standards.

The World Bank and The International Finance Corporation have facilities to help with privatization and restructuring of the commercial banking services. For instance, the Commercial Bank of Ethiopia would be denationalized so that its branch network can be restructured into multiple newly formed competing commercial banks. Consequently, I recommend a two-tiered banking system consisting of a single independent central bank with regulatory control over a network of competing commercial banks.

The international financial community should and will respond positively to such an economic reform program. In countries with such reform programs (e.g., Pakistan), local investors have become partners with the world Bank and other international agencies in carrying out large-scale projects. Also, the Export-Import Bank of the US has jointventures with local investors in implementing projects, such as power plants, highways, and river projects. These joint partners often seek indigenous expertise, and we Ethiopians here should play a role in providing such expertise.

Opportunities and Risks
The movements toward the market economy are irreversible. Ethiopia is a country with a vast, largely unexploited investment potential, accompanied by tremendous opportunities for growth and profit. The country is predominantly agricultural with about 90% of the population living on farms. In terms of national output, agriculture is said to account for about 50% of the gross domestic product annually. However, only 12% of the total arable land is known to be currently under cultivation, principally due to lack of proper infrastructure. Farming is highly traditional and weather dependent;
poor rains meant crop failure and famine.

There are large, unexploited investment potentials virtually in all sectors of the economy. The industrial sector is wide open and it is in its infant stage of development. Opportunities are abundant in various handicraft, small (cottage) and large-scale industries, including textiles, chemicals, fertilizers, beverages, processed food, leather products, etc. Opportunities in the construction industry include residential housing and urban development, commercial and residential buildings, and infrastructure projects.

Agricultural opportunities include dairy and meat products, cattle ranching, poultry, and animal feed processing. Mining opportunities include oil and gas exploration. Mining may emerge as a major component of the economy. The rivers in Ethiopia have great potential for hydroelectric powers; only a minute fraction of the potential has been exploited.

These investment opportunities are not left unnoticed. I was invited to a gathering of the founders of Corporation of Ethiopian Entrepreneurs (CEE) in Addis Ababa. It is headed by a founding member, Ato Debebe Habte Yohannes, former owner and chairman of Addis Ababa Bank. The corporation is committed to a free market system, and its primary objective is to rehabilitate and promote the private economic infrastructures for the self-reliance of Ethiopia. Its goal is to identify projects and proposals and promote business investments in all major areas that I mentioned above.

I believe that this is a very promising avenue to rehabilitate and privatize Ethiopia by Ethiopians themselves. This promises to be mutually beneficial for the country and the CEE members. CEE is recruiting associate founders (100 members) internationally on the basis of a member’s potential to contribute 1) talent, 2) initiate projects, or 3) capital.

Ethiopia is at a cross-roads. We have an opportunity and obligation to move it forward, and we can. We also represent a vital force capable of contributing to an efficient and productive market economy in Ethiopia. The alternative of inaction is a choice facing us, but it would be a missed opportunity and quite regretful. I already visualize a day (not far away!) when the party headquarters of Mengistu would be the headquarters of the Addis Ababa Stock Exchange in a pluralistic, peaceful, and prosperous Ethiopia.

Dr. Lemma W. Senbet is the William E. Mayer Professor of Finance at the University of Maryland, College Park. The above article is based on his recent keynote speech at the Second Annual Gatherings of Ethiopian Business and Professional Association, Washington, DC.

By Dr. Araya D. Negash and Dr. Afrasa M. Zamanel

In his sour and vile commentary (Ethiopian Review, August 1991) projecting his parochialism and ethnocentric resonances, Ato G.E. Gorfu displayed his difficulty in distinguishing between fact and fantasy. He accused Menelik and the Shoans of treason and deceit. Surely, if he is a historian even without the credentials and the gift of masterfully narrating his subject as does Dr. Getachew Mekasha, one might forgive him. However, not only is his essay malicious but every word he wrote is untrue. Hence our urge as students of Ethiopian history, to wield our pens in dissent, both to delineate the “truth” in public interest and as a duty to our conscience. And if we may add, the remains of some seven of our ancestors and their brothers from Borana, Gojam, Menz, and Selale lie beneath the arid earth of Adowa, having fallen defending the forbearers of Ethiopia’s present tormentors. In the veins of one of us also flows abundant patriotic Tigrean blood, for that matter.

A Misplaced Assault
Gorfu portrays Menelik as a villain who did everything for sordid motives. He implicates him in the assassination of Emperor Yohannes and charges him for trading Bahr Midir (Eritrea) in exchange for arms. He is entitled to his views. But judgment requires rectitude and a critical faculty of discernment. It is dangerously easy to look for and discover links between otherwise isolated incidents and one’s own figments of hostile imagination if one is struggling to establish or support a theory in which one has more than a passing interest. Should Gorfu, with the advantage of hindsight attack Menelik for crimes of treason, it is merely a misplaced assault that rather befits the Tigrean
king, Yohannes. Was it not Yohannes who found it expedient to serve the enemy flag for gadgets and gold when Britain invaded Ethiopia and breached the nation’s sovereignty for the first time? Was it not his venality and humiliating servility that prompted him to spearhead the British invasion? Did he not give the British his blessings when they looted Ethiopia’s invaluable relics and emptied the national treasury? Above all, did he not facilitate the untimely demise of Tewodros, the valorous emperor who chose to defiantly turn his gun on himself rather than surrender to the enemy?

Menelik was a magnanimous monarch who led a consensus government. His cabinet included gallant men such as Balcha, Gobena, Habte-Giorgis, Mekonnen, Mulugeta, and his wife Taitu, to name but a few of the proud and patriotic mortals who could not be accused of treason. Wheeling and dealing is rather in character with the Tigrians whom Gorfu implicitly adores, at least judging by their own description of themselves. Without sounding irreverent to Tigrinya-speakers, the literal meaning of the word “Tigre” is after all “trader.”

Casting Aspersions
However much Gorfu dislikes him, it was Menelik who having trounced Italian aggressors and their Tigre-speaking mercenaries at the battle of Adowa, that guaranteed Tigrai’s freedom. In falsely accusing Menelik of treason, Gorfu is enviously casting aspersions on Shoans perhaps to redeem the contemptible mercenaries of the North.

Menelik’s alleged submission to Yohannes is a frank delusion too. The latter, an ex-bandit who had emerged emperor by brute force, was disposed to fits of jealousy and suspicion. He had never, for instance, entrusted a single non-Tigrean to high office. He saw potential enemies even among the rank and file of his own long-serving army. A case in point is the fear Alula’s victory at Dogali evoked. Yohannes replaced the legendary commander with his own cousin. Yet, eager to test a solo triumph and outdo Alula, he marched towards the remaining Italian forces. But the sheer size and force of the Italian force prompted the Emperor’s unceremonious retreat. Thus, Italy occupied the coastal province unchallenged.

Instead, he set out to harass his loyal subjects whom he conveniently accused of “defiance”. Emboldened by the arms he received from the British for his errand duties, Yohannes unleashed terror by plundering and burning Begemdir, Gojam and Wollo in 1988. He personally tortured and blinded Wollo’s king by plunging a red-hot knife in his eyes. The following dirge of aggrieved men and women from Gojam just about sums up the callous conduct of the supposedly pious guardian of his country:

“Pious”, he was. But for no other reasons than his unrelenting prayers even while he was in his killing fields and the missionary zeal with which he aspired to convert the “infidels”, the Muslims, whom he rendered landless by decree:

He then moved southwards to also lay Shoa waste. But his advances were halted by the forces of Beshah Aboye, Menelik’s rather junior army officer. Against the better judgment of his brilliant advisers (Mekonnen, Habte Giorgis, and Balcha) who had opted to rudely rebuff the challenge, Menelik went along with the Archbishop’s intervention to arbitrate. The negotiated settlement between Menelik and the bullying Yohannes hence averted a bloody civil war. It was with the following well-chosen reconciliatory phrase that Menelik concluded the
treaty with Yohannes:

Without any domestic excuses available to him now, Yohannes could no longer defer the external challenges he had hitherto evaded. Abandoning the hope of driving the Italians out, he accepted their incursions in Eritrea as fait accompli. Instead, he sought victory against the Mahdists whom he had considered an easy prey. As fate would have it, he was made to take his last breath in the hands of the Dervish, the “infidels” that he had hoped to beat.

Menelik Inherited Occupied Eritrea
So, Menelik in effect had the misfortune of inheriting an occupied Eritrea which Yohannes had relinquished to Italy lacking the nerve to pursue Alula’s victory at Dogali. At Adowa, Menelik competently performed the homework his predecessor had not even dared to venture. He devastated the Italian army and its Tigrean Shumbash and Buluqbash contingent (well over 300,000 strong), frustrating the enemy’s grand design of colonizing the rest of Ethiopia.

A man of noble character, Menelik was devoid of the nepotistic and ethnocentric dispositions of the `pious’ emperor. Most of Menelik’s illustriously brave commanders, Balcha, Gebeyehu, Gobenna, Habte, and Mekonnen, all came to the highest positions on merit. Not only were they not related to him, but they were men from three distinct linguistic groups. Adowa endeared Menelik in both liberated Tigrai and occupied Eritrea. The high frequency of his name among the forbearers of the generation that today vilifies him, certainly could not have been a reflection of a hostile sentiment.

If the ungrateful lot lampoon Menelik for not having purged Eritrea of its white masters, the allegation is unfounded. For not only did Britain and France threaten to attack Menelik if he did not stop at Adowa, but they had already made incursions on Ethiopia’s southern regions. Replenishing the supply of food in arid Tigrai and combating epidemics which had already left the army enfeebled, were the other formidable problems which stood in Menelik’s way to reclaim the occupied coastal province. Why accountability is shifted from the `culprit’ to the blameless king amply reveals the fine sense of justice of the likes of Gorfu.

A Qauntum Leap Into Ethnology
Gorfu then makes a quantum leap into ethnology, deriding Mengistu and Fisseha Desta’s regime as “Shoan” in direct reference to the alleged trade of Felashas for money. However, Fisseha Desta is a Tigre, and whatever else Mengistu may well be, he is not a Shoan either. At any rate, brutality, betrayal, cowardice, and venality have no nationality, and neither have nobility of spirit and courage. The fact that the region that had the dubious distinction of producing Africa’s most ruthless mercenaries also bred Alula Aba Nega, Lorenzo Taezaz, and Zerai Deres, to mention only a few patriots who died defending Ethiopia, proves the point.

Like the current Ethiopian “rulers”, the learned commentator is as well unleashing insult against “Shoans”, a veiled term to mean Amhara. It is an irony of fate that Tigreans who refer to Amharas as “adgi” (donkeys) and other Ethiopians as “baria” (slaves), are today heard championing equality and fraternity. Judgment is reserved to the Ethiopian people.

Shoans certainly differ from Gorfu’s heroes. They are like great oaks who have fought a long and testing battle for the unity, instead of the fragmentation of their country. Like their kins inhabiting the heart of Ethiopia and beyond, the fiercely independent lot have resisted and conquered the storms of enemies from within and out. They have bowed out never broken even before seemingly insurmountable forces. By subordinating their ethnic interest to that of Ethiopia, Amharas have singularly borne untold suffering and humiliation. Over the last 17 years, thousands of peasant Amharas in the South have been brutally murdered by the Derg. Only two years age, the Eritrean Liberation Front in conjunction with its instruments in Wollega, burned alive over 300 fugitive Amhara peasants in a resettlement camp for being native Amharas. Having subdued their legitimate indignation, Amharas still refused to be seen to be drawn in an ethnic strife.

The flirtation of the OLF with the TPLF is profoundly humiliating for those Ethiopians who by blood and nurture consider Oromo culture their own. The people of Balcha and Abdisa Aga have never been known to betray their country.

Today, the Tigrean oligarchy calling itself EPRDF to elude the gullible Westerners and appease its foreign pay-masters, is waging a relentless campaign of malice to divide Ethiopians along ethnic lines. A third of the nation’s population, the Amharas, are objects of media insults. Not surprisingly, the majority of Ethiopians have rejected the call for ethnic strife. True, as a result of EPRDF-incited anti- Amhara propaganda many unarmed peasants have been killed and violently evicted from their ancestral homes in the South.

Glory be to all brave Ethiopians who transcend vile ethnocentrism and fight it tooth and nail, despite its dignified status as an official ideology of the EPRDF, more correctly the TPLF. Playing one group against another is perfectly within the scheme of things of the foreign-sponsored EPRDF.

However much we wish to differ, many believe that Amhara liberalism will doom itself to impotence until such time as it acknowledges itself to be Amhara and nationalist. Historically, Amhara liberalism was a richer and more radical tradition than is admitted by the current tribal potentates in Addis Ababa. We trust, however, that the indomitable Amhara spirit would stand above the temptation of using national sentiment to punish the traitors and their equally contemptible accomplices by tarring them with the same brush in revenge.
_______________________________________
Dr. Araya D. Negash is an Associate Professor of Aeronautic Engineering, Maarsen, The Netherlands. Dr. Afrasa M. Zamanel is an Anthropologist, London, Great Britain.

By Herman J. Cohen

The thirty years of civil war, including seventeen years of brutal Communist dictatorship have ended in Ethiopia. At last, Ethiopia has the opportunity to concentrate on forming a government that will enable its people to earn a livelihood and have a say in the political and economic decisions which affect their lives. While Ethiopia needs and will probably receive substantial assistance from the international community, the issue of whether or not permanent peace and stability are achieved will be up to the Ethiopian people themselves.

The task ahead is formidable. Ethiopia has never had a democratic form of government. Ethiopian politics are still very volatile, and a legacy of ethnic and political rivalry remains. However, Ethiopia has many assets, including a long and noble history, a talented people, and abundant physical resources. The commitment to democracy that has been expressed by all political factions in Ethiopian politics gives cause for hope that Ethiopia has made the first steps in the direction of a society in which its people are free to make their own political and economic choices.

The broad-based transitional government in Ethiopia has made great progress in the few months it has been in existence. The Representative Council has adopted a charter of basic principles to guide the government, to promote fundamental human rights, and to hold free elections within two and a half years. Real political debate is heard in Addis Ababa for the first time in years, and political life — which atrophied under Mengistu — is beginning again. In September, an independent weekly newspaper began publication. Local and regional elections will probably be held before the end of the year.

While there is much to be done to develop institutions and practices which will ensure democracy and respect for human rights, the government appears to be moving in the right direction. However, we are concerned about the large number of officials from the Mengistu regime who are being detained. We continue to urge the transitional government either to charge these persons with an offenses and give them a fair trial or release them.

The Ethiopian government has wisely decided upon a two-year transition phase in which it will seek to revive the economy, rebuild infrastructure, and establish a democratic government and society. During this time, the international community should more quickly assist Ethiopian refugees outside Ethiopia to return to their homes.

After the transition phase, Ethiopia should be able to undertake projects to achieve sustainable economic growth and provide effective social services for all its citizens.

To help Ethiopia revive its economy and rebuild its infrastructure, the international community can assist Ethiopia in acquiring essential commodities and spare parts to get trucks rolling and factories working. Thirty to forty percent of the nation’s industries are now closed for lack of raw materials and spare parts and the vital transport sector is operating at less than half of capacity. Many of the country’s roads, bridges, telecommunications, schools, and clinics were destroyed or damaged by the war. Returnees, displaced persons, and ex- soldiers will need a range of assistance, such as seeds and tools, oxen, and job training, in order to reintegrate productively into Ethiopian society.

While Ethiopia will continue to require emergency assistance, consisting ostly of food, the United State’s goal is to move gradually out of emergency assistance programs and into development assistance programs. The United States government will support, and will encourage other donors to support, UNHCR’s efforts to promote voluntary repatriation for long-time Ethiopian refugees in Sudan, Kenya and Djibouti and Somali refugees in eastern Ethiopia and Djibouti. This would effect a durable solution for over one million refugees in these countries, both lessening the refuge burden on asylum countries and promoting stability in the Horn of Africa.

Also during the transition period, Ethiopia may need assistance as its officials develop new strategies, policies, and options for fostering political, economic, and social development. Areas in which such assistance could be provided are privatizing the economy, decentralizing the government, creating an environment in which freedom of expression and association can flourish, and establishing the rule of law.

At the present time, U.S. legislation enacted during the Mengistu regime is still in effect, restricting the type of assistance we can provide to Ethiopia. We are seeking the repeal of, or enactment of exception to, legislative restrictions on aid to Ethiopia. The U.S. no longer opposes loans and grants to Ethiopia by international financial institutions on human rights policy grounds.

As soon as we are legally able to do so, the United States will coordinate with the international donor community to provide development assistance to help Ethiopia during the transitional phase and over the long term, as long as it continues to progress in democracy and human rights.
_____________________________
Ambassador Herman J. Cohen is Assistant Secretary for African Affairs at the United
States State Department. He was the mediator at the London Peace Conference
that was held in May.

By Getachew Mekasha

It all seems unreal. Four months into the Transitional Government’s administration, Addis Ababa still remains an enigma. Apart from the removal of the disgraced top echelons of the former Derg regime, and the wholesale incarceration of the remnants of what used to be “the mighty” armed forces of Ethiopia at various concentration camps around the city, little seems to have changed. Addis Ababa still maintains the air and trappings of a drab and gloomy Marxist city. The outdated and faded slogans and banners are still in display on old and dilapidated arches and public buildings. These are the silent and symbolic legacies of the Mengistu era.

In a way this is not at all uncharacteristic of the administrative life of the country since the EPRDF takeover. Virtually none of the Derg laws, edicts or decrees, however unjust or offensive, have been lifted or repealed. The bureaucracy is paralyzed and uncertain about what is expected of it in the absence of clear and decisive instructions. The courts, municipalities, local and provincial offices are in a state of suspended animation.

The sense of jubilance and euphoria that was clearly visible 3 months ago is now gone. Skepticism, pessimism and cynicism are overtaking public attitude. The EPRDF is slowly learning that it is much easier to fight a war than administer a nation.

The question of Eritrean secession has been a catalyst of public opinion. There is considerable controversy surrounding the Charter, the organic document, adopted by the Council of Representatives. It is an open secret that the Meles administration regards Eritrea’s secession as an accomplished fact, and treats the matter as closed, “as it was already decided by the 30 years war.” To the administration the planned referendum in 2 years is a mere formality. They are intolerant to suggestions that the matter might legitimately concern the rest of Ethiopia. Such views are dismissed as “warmongering.”

The Charter for the Transitional government contains a clause which grants all ethnic groups in Ethiopia the right of self-determination, including total independence. This clause is borrowed from the Stalinist constitutions of the Soviet Union and its former Eastern European allies. It has never been actually practiced in those countries. Most Ethiopians regard the clause as a direct invitation and blatant encouragement of secession and national fragmentation.

Needless to say, this particular provision of the Charter has offended the sensitivities of many mainstream national political groups. All of the political parties that recently mushroomed into existence in Addis Ababa in preparation for the projected general elections have categorically rejected the Charter on account of this clause. They have called for a total boycott of all those who approved and signed the Charter. They have also refused to have anything to do with all those who were signatories to the charter, and have gone to the extent of calling on the original signatories to disassociate themselves with it as a condition for their cooperation and collaboration.

On the other hand, the Oromos and other ethnic groups who are clearly favored by the EPRDF seem to have gone somewhat overboard on the issue. These leaders are busy conducting vigorous campaigns interspersed with divisive and inflammatory speeches attacking other ethnic groups, especially the Amharas. In some cases this has triggered serious intercommunal violence. All this, of course, is blamed on the EPRDF, the principal authors of the Charter.

Now, the main challenge to the EPRDF administration in this regard comes from the National Democratic Unity Party (NDU) led by Ato Tsegaye Abiye. Ato Tsegaye, who was born in Eritrea, has emerged as one of the most articulate and dynamic leaders in the Ethiopian political horizon. Ato Tsegaye’s party stands for one, undivided Ethiopia. It strongly opposes and condemns any attempt at dismembering the country through what they regard as underhanded and manipulative machinations. Ato Tsegaye openly accuses the EPRDF administration of not living upto its promises of maintaining a free climate conducive to exercising full democratic rights, especially in the area of free speech, access to the media and freedom of assembly. So far, he claims to have been twice refused permission to hold public meetings and mass rallies in Addis Ababa. His rallies attract huge crowds and his ideas seems to have a wide appeal among the general public. The authorities are clearly alarmed by Ato Tsegaye’s personal popularity and wide appeal. His public rally recently attracted over 10,000 people. EPRDF troops dispersed the crowed by shooting firearms in the air. Ato Tsegaye’s popularity is rising so fast, it is rumored that the EPRDF government will disallow him from participation in the process. If this should happen it will be a sad day for the fledgling democracy in Ethiopia. Others are following EPRDF’s actions against Ato Tsegaye’s party with keen interest. Similarly, General Jaggamakello’s party, unlike his other fellow Oromos, strongly stands for Ethiopia’s unity and integrity.

Ethiopia’s present officialdom is threatened by the “U” word. For the government and those in the circle of the administration “Unity” is a subversive word. And anyone advocating it is regraded as a suspect. No wonder a few had the courage of their convictions to come out openly and talk about the age old unity and integrity of Ethiopia. It is, however, clear where the people of Ethiopia stand on the issue unity. The main problem is EPRDF’s monopoly of the mass media. Despite the government’s claim to the contrary, press censorship is still very much a fact of life.

In such a climate it is impossible to show the overwhelming support that the forces of unity and national cohesion generally enjoy in the population. Foremost among the forces enjoying a central and unique position is, of course, the Ethiopian Monarchy whose time has now come. This is recognized by all sides, which is both a source of joy and worry, depending on which side of the fence you are on. In pursuit of its goals, Mo Anbessa continues to make considerable strides in maintaining close links with all mainstream national parties. To this end Mo-Anbessa has already acquired pledges of support from most of them, based on unequivocal mutual commitments, and binding common interests and principles. But it is a long process which demands a lot of patience, hard work and sacrifice.

In other developments, in a recent press release President Meles Zenawi strenuously denied Libyan President Qaddafi’s “allegation” that Meles was a Yemeni, and that Ethiopia was an Arab state. The irrepressible Qaddafi’s riposte to that is no doubt being anxiously awaited.

The former regime’s top officials (with the exception of Tesfaye Gebrekidan, Addis Tedla and Berhanu Bayih, who are still enjoying the hospitality of the Italian Embassy as “uninvited guests”) are all undergoing interrogation and indoctrination at the Yekatit 12 Political School under the Derg (the former Crown Prince’s compound) near Sidist Killo. Interestingly, most had managed to send their wives and children abroad before the collapse of the regime. The task of hauling food and other essentials to them had fallen on the shoulders of relatives and mistresses, who apparently were overdoing it by lavishing them with luxury items such as whiskey, choice beef, and other delicacies at the start of their incarceration. However, when Addis Ababa residents expressed their outrage, the authorities tightened the condition of their imprisonment. No date has been set for their trial.

Tollei, Tatek, (Gaffarasa), Sendaffa, Holetta and Urso are among the scores of places which have become notorious overnight. Detainees, former soldiers and officers, in their tens of thousands are held at these locations. Relatives voice bitter complaints about conditions at these camps. Inadequate food and water for drinking or washing, poor sanitary conditions, wide spread illness and even outbreaks of epidemics resulting in deaths are reported in this camps. From the general outcry it appears every family in Addis Ababa and other major towns seems to have someone (usually the breadwinners) detained in one of these congested concentration camps.

On a recent T.V. interview given on two separate occasions Ato Seye Abraham, the Defense Minister, talked in detail about the military situation prior to the collapse of the Derg, and leading to spectacular victory of the EPRDF forces. Among other things, Ato Seye gave some highly interesting statistics, and provided an insight into EPRDF policy for the future defense posture of Ethiopia.

According to Ato Seye, even though his Ministry’s record books show a figure of a million and a half for the total number of Ethiopia’s armed fores, the actual figure never exceeded 530,000. The Derg allegedly pocketed millions of dollars paid out by way of salaries to this nearly million-strong non-existent fanthom army for over 15 years! The Derg allegedly inflated the number to justify the overhead in order to loot and plunder the already over strained resources of the national treasury.

Another piece of information provided by Ato Seye was that out of the 530,000 soldiers, nearly 250,000 were now under custody as prisoners. Nearly 200,000 are presumed dead. The remaining 80,000 are unaccounted for (presumably they are still in the bush scattered all over the place). Questions about the possible inclusion of these surviving forces into a reconstituted future Ethiopians armed forces dismissed by Ato Saye who said he saw no possible future role for an army of “cowards, mercenaries, and killers and butchers of brothers, sisters, fathers, mothers!” “They are a totally demoralized lot, and they have proved themselves useless as a fighting force.” He said, as Ethiopia “has no external enemies, the country, has no need for a large standing army anyway.”

Asked as to what he would do in case of external aggression from any quarter, the young and cocky defense minister confidently assured his T.V. audience that after they saw how easily his forces had crushed the bloated Derg army, none of Ethiopia’s neighbors “would dare to challenge our awesome
power.”

Ato Seye also said that the total cost of the war was nearly 20 Billion dollars, out of which 18 billion birr was spent on “salaries” alone, and another 9 billion dollars was spent on imported military hardware and equipment. He concluded his comment with a sad but painfully true observation that “it would have been much better to throw all this money into the sea, rather than spend it on decimating
our people and wasting our nation.”
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Dr. Getachew Mekasha is currently in Ethiopia.