By Wondwossen Mezlekia

The next few days are full of activity for the executives of the Ethiopia Commodity Exchange (ECX) and the government as they get ready for the big day — the day they hope will earn the exchange the much needed acceptance by the Specialty Coffee Association of America (SCAA) and favorable media coverage for the government. This confidentially held event is, according to a document that briefly appeared on ECX’s website and removed early last week, currently scheduled for October 20 – 24, 2009. ECX, the government run company that touts transparency, is tightlipped, for no apparent reason, thus this scrutiny of its negotiations with SCAA, the changes it made to address concerns of the specialty coffee trade, and its roles in the corrupt control of the coffee sector.

Early this year, when ECX’s system was hastily utilized by the government to take control of the coffee trade, the problems of the commodity trading mechanism caught the attention of the international media. The government scrambled in vain to contain the unexpected shift in the media’s position from praising ECX to criticizing it. ECX’s leader, Dr. Eleni Gebre-Medhin, even went to as far as risking a futile face-off with the Seattle Times business reporter, Melissa Allison in an attempt to defuse the hostile criticism without realizing the driving forces behind the media frenzy. ECX didn’t comprehend the complexity of the coffee trade and the powers of the international stakeholders until it encountered the Specialty coffee importers at SCAA’s 21st annual exposition held in Atlanta, GA in April, 2009.

The issue with ECX was one of the sideline agenda at the SCAA conference. On April 15, 2009, Ethiopia’s delegation led by Dr. Eleni, Phillip Schluter, and Tadesse Meskela held an information delivery session regarding ECX and the new coffee trading system to a group of importers. A heated engagement erupted between participants and the presenters as soon as they presented the last slides about the implications of the system. The intense dialogue continued next day at a roundtable meeting between the parties. One of the attendees of the discussions described the situation in an email to this writer as:

“The roundtable today was intense. So much complexity. Dr. Eleni is assuring SCAA and buyers [that] she is here to listen and gather information to bring back and devise a way for a “second window”. Currently there is none (except coops). Buyers are very upset. They have so much invested – and so do farmers! This season is pretty much done, very few got the coffee. Next season… maybe. Everyone needs to work together.”

At the end of the exposition, Dr. Eleni wrote an open letter to SCAA and buyers summarizing her experience at the event and a proposal to establish a joint working group formed by SCAA and ECX to resolve the problems. SCAA, the most influential body in the market, had already written a letter to Prime Minister Meles Zenawi expressing its concerns and demanding immediate solutions.

The joint working group was formed and has been at work for the past six months under strict confidentiality. The ECX event scheduled for later this month hints the culmination of the dialogue. ECX is expected to announce some changes to its trading mechanism but the detail is withheld from the public to this day. The only word from ECX is what Dr. Eleni casually mentioned last month during her appearance on Tefera Gedamu’s show Meet ETV on the Ethiopian Television. She stated that SCAA and ECX had reached an agreement and they will publicize late in October the changes that ECX made to its coffee grading system.

SCAA is more transparent and accessible than ECX. In an email response to this writer, Ric Rhinehart, Executive Director of SCAA said, “We have been actively engaged since April of this year with the ECX in addressing the concerns of the specialty market and how the commodity trading mechanism has impacted our access to coffees.” Mr. Rhinehart, along with other members of SCAA, is traveling to Ethiopia to attend the event. He said, he can’t give details of the matter at this time but, “I can say that we have had input from virtually every part of the trade and feel that we have a good grasp on what success will look like… We have assembled a working group from the specialty trade that has defined the objectives from the consumer perspective and that is committed to working with the ECX and the Ethiopian trade to develop viable solutions to meeting those objectives.”

After all, SCAA may get what it wants. Mr. Rhinehart said, “I am very pleased to say that we have had an excellent working relationship with ECX and that together we continue to pursue solutions that will meet the needs of the specialty coffee sector but more importantly deliver the highest and most sustainable value back through the supply chain to the working coffee farmers of Ethiopia.” The details of the said change including whether it satisfies SCAA and its members, and whether it alleviates the burden on the farmers will be known shortly. Regardless, ECX’s gesture in addressing SCAA’s concerns is a step in the right direction.

In the mean time, as we prepare to embrace another wave of media stunt from ECX and the government, it is necessary to be aware of the root causes of the coffee controversy and define what success looks like from Ethiopia’s perspective. If delivering the value to the farmers “through the supply chain” means disenfranchising individual farmers, it is unacceptable. If the new system addresses only one end of the equation (without allowing direct contact between buyers and farmers), such a change is nothing more than window dressing the current coffee exchange. At a larger scale, if the market doesn’t accommodate the needs of all participants in the value chain, including private businesses and benefits only the government and the parastatals, sustainability of the sector will be in jeopardy. This view is shared by many in the coffee sector.

Emebet Taffesse Kidanemariam, Vice President of the Ethiopian Coffee Exporters Association recently told the Ethiopian Reporter that “the sector is not benefiting the country at its current level,” and called up on authorities to work together with the private sector. She said, “Many exporters are returning their licenses. We, the remaining ones, are in trouble too.” Emebet is not opposed to ECX as a market. In fact, she says, “I am [one] of those who strongly appreciate the importance of such a market. … But what I notice here is that when exporters are not able to enjoy a fair benefit, they shift their businesses to some other area.” She added, “Previously, when the New York market fluctuated, our prices also fluctuated. But now, this is history. You are expected to buy on the basis of the daily high selling price.”2

Likewise, coffee farmers say the burden is unbearable. Last month, Addis Fortune quoted Alemayehu Teshome, coffee and tea development team leader at the ministry of Agriculture and Rural Development saying: “farmers in areas that have access to transport are dropping coffee in favour of khat, which is contributing to reducing the total coffee harvest the country expects.” The article also sites Abdulkadir Mohammed, a former coffee farmer who said: “I used to grow coffee previously, [but] when the price declined, I cleared the coffee plantation and substituted khat plants.” Fortune noted, “He [Abdulkadir] is not only making more money from the khat, but he is also a two time winner for best farmer in the Harari regional state. Abdulkadir makes 300 to 500 Br per kilogram of export quality khat, for which the consumers pay up to 1,000 Br. When he grew coffee, he said that export quality coffee only brought him 25 to 35 Br.”

Yet, the government is all about controlling the trade. The state owned Ethiopian Grain Trade Enterprise (EGTE) is planning to supply 10,000 tons of coffee for local and foreign markets during the current year, according to Birhane Hailu, General Manger and a member of ECX’s Board of Directors. Guna Trading, PLC, a member of the largest conglomerate EFFORT, which is reportedly owned by leaders of the TPLF (Tigrian People Liberation Front), had already announced its plans to export 10,000 tons of coffee and 30,000 tons of sesame this year. Guna is joining the coffee export trade club for the first time after “it stopped the business (coffee export) for five years.”

Ethiopia produces an average of 330,000 tons of coffee per year and about half the amount is exported; the rest consumed locally. During the last fiscal year (July 2008 – June, 2009), the country exported 134,000 tons, sharply down from 170,888 tons exported in the previous year. The government wants to increase the volume of exported coffee but it plans to do so by controlling the marketing chain and forcefully routing coffee stocks to ECX. Any attempt by coffee growers and traders to shop around for better prices outside of the government controlled channel is illegal. Walta Information Center (WIC) recently reported the establishment of 37 coffee trading centers in Jimma zone to control “illegal coffee trading and alleviating wastage of coffee produce.” WIC quoted Nezif Abachebsa, Jimma zone Agriculture and Rural Development Office Deputy Head, saying “individuals found dealing coffee out of the centers will receive a 20 year prison term and up to 50,000 birr fine.”

The total annual production in the country is not commensurate with the needs of the government and the coffee drinking public. Because of the imbalance of supply and demand, local prices are generally higher than export prices. When the government imposes mandatory exports, it never considers the idea of compensating farmers, suppliers, or exporters, for the price differential between domestic and export markets. The government wants to generate foreign exchange without investing a dime to earn it. This practice is perpetuating the vicious cycle of low quality, low productivity, and low production on one hand and low selling prices, insignificant or no profit margins, and shortage of foreign exchange earnings on the other. The root causes of the problems in Ethiopia’s coffee sector are complex but the major ones include: low productivity (less than a quarter of the average productivity in the world), lack of incentives for quality production, inexistent access to capital and infrastructures including roads and coffee washing facilities, and lack of institutional capabilities. These systemic problems cannot be resolved by introducing superficial and cosmetic changes in the marketing platform.

In the short and medium term, the government’s policies and donors’ funds are best directed at increasing productivity by spending on research, and at enticing quality production by compensating farmers and traders for exporting coffee at the petty international prices. The government’s continued engagement in micromanaging the coffee trade will only exasperate the sector. By the same token, ECX also had better focus on building a principled marketing system, and stick to its stated goals of helping eliminate famine and increasing the value of domestic commodity grain trade rather than facilitating for such short-sighted government policies that legalize coffee exploitation.

(The author can be reached at [email protected])

Alemayehu G. Mariam

Mother of All Troubles

It is not only Mother Ethiopia that is in deep trouble today but also the millions of mothers in Ethiopia. Hanna Ingber Win, the World Editor of the Huffington Post, was “invited by the U.N. Population Fund to visit its maternal health programs in Ethiopia, which has one of the world’s worst health care systems.” Her investigative findings are shocking to the conscience; her analysis is compelling and convincing, and her conclusions are profoundly distressing but not lacking in cautious optimism. In a five-part series entitled, “Mothers of Ethiopia”, Ms. Win paints a portrait of a country that is the epicenter — the ground zero– of Africa’s maternal and child health crises . Here are snippets from her report[1]:

Zemzem and her husband, a poor farmer, collected 50 birr (US$4) from their neighbors for the trip to a hospital… and traveled 20 hours, while in labor, from her rural village to get to the hospital in the closest big town. By the time she arrived at the hospital, her uterus had partially ruptured. A resident and health officer were able to save her life and that of her baby… If she [had been delayed] two or three hours more, the baby – and even the mother – would have lost her life… No one else in the ‘Septic Room’ can empathize with Zemzem’s joy. The other three patients all had fully ruptured uteri and lost their babies…. When I enter the maternity ward at Jimma Hospital, the stench practically smacks me in the face. The smell, a combination of urine and feces and other bodily fluids, overpowers all my other senses…

Ethiopia ranks among the top 10 countries for child marriage, according to the International Center for Research on Women’s Analysis… Early marriage can cause higher rates of maternal and infant mortality, vulnerability to HIV/AIDS, abuse, isolation and long-term psychological trauma from forced sex, according to UNFPA… Two centers in Addis serve about 600 girls between the ages of 10 and 19, says Habtamu Demele, the project coordinator of the center. Most of them have escaped early marriage. Even though the legal age to marry in Ethiopia is 18, more than 30 percent of girls living in rural parts of the country are married by age 15, according to the Population Council…

The white tile floors in the Ayder Referral Hospital in Mekelle, a large city in northern Ethiopia, look so clean they practically sparkle. Unlike the maternity ward in Jimma that wreaks of human waste and sickness, this hospital smells sterile and clean. Nurses gather at their station writing down their patients’ information in orderly files, and a small handful of visitors wait patiently in the corridors. The multistory hospital with a manicured garden and televisions in the hallways looks so modern and fancy it could easily belong in New York. There’s just one problem: many of its new beds go empty. The hospital, which opened in September 2008, does not have enough doctors or medical equipment for the facility to be fully used. Of the 450 beds in the hospital, only about 65 percent can be filled…

In Ethiopia, the maternal health statistics suggest that the nation’s health care system needs an overhaul. Less than six percent of women have access to a health professional while giving birth, according to Ethiopia’s 2005 Demographic and Health Survey. The maternal mortality rate is one of the worst in the world. For every 100,000 live births, 673 women die giving birth, according to the survey.

In the United States, eight women die during childbirth for every 100,000 live births, according to the UN Children’s Fund (UNICEF). In Ethiopia, 673 women die, making the maternal mortality rate 84 times higher. UNFPA considers every single maternal death preventable. In the U.S., a woman has a 1 in 4,800 chance of dying from complications due to pregnancy or childbirth in her lifetime.

‘This government has failed at the very important task of training the professionals,’ says Dr. Beyene Petros, chairman of the opposition United Ethiopian Democratic Forces party and a member of the Ethiopian House of People’s Representatives. ‘You can put up huge buildings, but if you don’t have a program to properly train and maintain the manpower, what’s the value?’

Win’s Anecdotal Data is Consistent With the Macro Level Health Data

One may be tempted to critique Ms. Win’s report as anecdotal based on episodic observations of a few isolated cases. That would be erroneous because the general statistics on the country’s health system are more frightening than the reports in individual cases. According to World Health Organization (WHO) (2006) data Ethiopia’s population was estimated to be 77 million. To serve this population, there were 1,936 physicians (1doctor for 39,772 persons); 93 dentists (1: 828,000); 15,544 nurses and midwives (1: 4,985), 1,343 pharmacists (1: 57,334) and 18,652 community health workers (1: 4,128). Total expenditure on health as a percentage of gross domestic product was 5.9 per cent. General government expenditure on health as a percentage of total expenditure on health was 58.4 per cent, and private expenditures covered the balance of 41.6 percent. Hospital beds per 10,000 population was less than 25. Per capita expenditure on health was US$3 at an average exchange rate. WHO’s minimum standard is 20 physicians per 100,000 population, and 100 nurses per 100,000 population. What more can be said? The numbers speak for themselves!

Health and the Empty Rhetoric of Economic Development

If empty political rhetoric and grandiose claims of double digit development were medicine, Ethiopia would have been the healthiest country in the world. Addressing the opening session of Ethiopia’s “parliament” recently, Girma Wolde Giorgis, the putative president, repeated the cockamamie fabrication of runaway economic development over the past half dozen years: “The fact that our economy has been able continuously to register growth rates of more than 10 percent annually for the last six consecutive years in such difficult global and domestic circumstances is an attestation of the success of our policies and strategies designed to speed up our development.” But Girma and his confederates seem to be clueless about the singular importance of heath in economic growth and development. In fact, health is considered so important that five of the eight targets of the Millennium Development Goals (adopted by 189 nations and signed by 147 heads of state in September 2000) to be achieved by 2015 are directly related to improvements in health care services and nutrition: eradication of extreme hunger and poverty, reduction in child mortality, improvements in maternal health, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability, achievement of universal primary education, promotion of gender equality and empowerment of women and development of global partnership for development.

It is a cruel joke to talk about runaway economic development in “one of the world’s worst health care systems”. There can be no economic development in a society that is ravaged by pandemics, suffers from a high incidence of child and maternal mortality from child birth, devastated by preventable and vector-borne diseases and abysmally lacks basic maternal and prenatal services and rational public health policies. To believe in the fantastic blather about a “10 percent plus annual economic development for the last six consecutive years” is to believe in the purple cow that no one has ever seen and the pink elephant that some see too often in the Land of Living Lies.

The empirical data overwhelmingly shows that heath is a fundamental determinant of economic development and poverty reduction. The health status of a population affects economic growth directly through labor productivity and the negative effects of morbidity (i.e. fewer worker illnesses, lower absenteeism rates, diversion of scarce resources for treatment of ill health from other activities, etc.). There is vast scientific evidence to show that improvements in health care services lead to significant increases in per capita income directly as each individual is able to produce more per unit of labor input. Beyond the immediate effects of poor health care services on productivity, the impact of child malnutrition and poor maternal and children health services as evidenced in Ethiopia has a devastating impact on the country’s future. It is well established that malnutrition-related health problems of children have lifetime functionality effects. Simply stated, sick children perform poorly in school and that poor performance negatively impacts on future individual income and overall labor productivity of citizens in society. Without massive investments in health care services, training of health care providers, improved child nutrition and maternal care and establishment of clinics, health centers, hospitals, dispensaries, etc., Ethiopia’s future economic growth, labor productivity, and most importantly, its precious youth, are doomed.

“What is the Value of…?”

So, we must ask some obvious questions: “Why does Ethiopia have ‘one of the world’s worst health care systems’?” What is the value of “economic development” that completely ignores the heath care needs of the vast majority of its citizens? What is the value of an alleged 10 percent plus economic growth if 85 percent of the population has little or no health care services? What is the value of exporting flowers but not importing basic pharamaceutical drugs and essential medical equipment? What is the value of putting up shiny new buildings that offer little health care services but stand as magnificent political show pieces? Is there anything that has more value than ensuring the good health of a nation’s citizens? Is there even a ghost of a chance that Ethiopia will meet its Millennium Development Goals?

What is Ms. Hanna Ingber Win Really Saying?

Ms. Win’s manifest purpose was to investigate certain projects supported by the U.N. Population Fund and report her findings. Her report sheds considerable light on the fact that the country’s health care system is terminally under-staffed, under-resourced, under-developed, mismanaged, over-bureaucratized and over-politicized, and its few health professionals under-trained. But her findings also focus a laser beam of scrutiny on some stark policy questions: Why are scarce resources being wasted on shiny buildings and not in the recruitment, training and retention of physicians and other health care providers in Ethiopia? Why isn’t there a comprehensive program of retention of Ethiopian doctors and other health professionals fleeing the country? Why is health care dominated and controlled by centralized planning in a country that is allegedly “federalized”? Why isn’t health care planning decentralized to empower local communities? Why is there little investment in health education, prevention and disease control? What happens to all of the aid money given by donor countries earmarked for health?

There are major policy prescriptions that flow Ms. Win’s findings. First, it is clear that something must be done to stave off the exodus of Ethiopian doctors and other health professionals. It is a national tragedy that there should be a pervasive belief among health professionals in Ethiopia that there are “are more Ethiopian doctors practicing medicine in Chicago than in Ethiopia” as Ms. Win reported. But Ethiopian doctors are leaving the country for many compelling reasons: they do not want to practice medicine in unsafe and wretched conditions; they are frustrated by their inability to meet even the most basic needs of their patients; they do not want to work in a health system that lacks basic medical equipment, medications and trained providers; they object to being overworked, underpaid and underappreciated; and they would like to earn fair compensation for their services.

In March 2007, Zenawi, responding to a question on the Ethiopian “doctor drain” shocked health officials and physicians attending a conference by declaring, “We don’t need doctors in Ethiopia… Let the doctors leave for wherever they want. They should get no special treatment.” When the life and well-being of 80 million people hangs in the balance, such callow reaction and arrogant attitude must condemned. No effort must be spared to retain Ethiopian doctors to remain and serve in the country, particularly in the rural areas. It is also an obvious fact that the flight of Ethiopian doctors necessarily means importation of expensive foreign ones; or the vast majority of Ethiopians will continue to die from common preventable diseases and lack of basic health services.

It would be misleading and unfair to leave the impression that Ethiopian doctors who have left the country have been totally disengaged. There are indeed some Ethiopian Diaspora physicians and other health professionals who have done their share to help out. These unsung heroes have organized periodic medical mission trips to Ethiopia with colleagues from other countries. Some have even gone to extraordinary lengths to establish foundations for the principal purpose of acquiring much needed medical equipment and supplies to meet critical medical needs. They are refreshing points of light on the dark sky of “one of the world’s worst health care systems.”

The second area of policy concern underscored in Ms. Win’s report is the need to undertake a broader initiative to establish a more equitable health system between the urban and the vast rural areas where health services are virtually nonexistent. Something has to be done to provide incentives to health care professionals to work in underserved rural areas. Instead wasting scarce resources on state of the art half-empty hospitals that have few doctors and other health professionals, it makes more sense to use those resources to build rural clinics, train health officers and community health workers, attract students from rural areas who are likely to remain in their communities to be engaged in public heath services and supplement the salaries and benefits of other health care providers to go into the rural areas. Donors may be in the best position to help bridge the urban-rural gap and improve the overall quality of rural medicine. What is also implicit in the interview responses of Ethiopian health workers is the need to reassess the roles of nurses, mid-level health workers, and community health workers and explore ways of diversifying their responsibilities through training.

Speaking Truth to Dictatorship

Ms. Win deserves our gratitude and appreciation for calling attention to the massive health care problems plaguing the mothers of Ethiopia. She told her story as she saw it. Her findings may prove embarrassing to the dictatorship which seeks to paint a portrait of a country panting for air from galloping economic development. The fact of the matter is that when the lives of millions of mothers and their children is at risk, there is only one way to tell the story: The truth, the whole truth and nothing but the truth. That is what Ms. Win has done in her anecdotal report visiting facilities supported by the U.N. Population Fund. Her report will ultimately serve to empower Ethiopian women by forcing the dictatorship to face the fact that it needs to provide resources to protect Ethiopian women’s basic right to maternal and reproductive health — one of the cornerstones of the Millennium Development Goals.

There is another fact that we can not afford to gloss over. Ms. Win’s report showed an apparent gap in the location and sophistication of health infrastructures. For instance, the stark contrast she draws between the state of the art hospital in Mekelle and the deplorable conditions in Jimma could potentially leave a bitter aftertaste in the mouth of a reader who had digested all of the other facts about “one of the world’s worst health care systems.” It would be an egregious mistake to dwell on such distinctions without focusing on the real outcomes of the health system. It is therefore necessary to belabor the obvious: The residents of Jimma and Mekele are in the same boat. Neither one is getting basic medical care. Even with a state of the art modern hospital (with 450 beds, — of which 157 beds could not be used due to staffing shortages — and 14 doctors, (consisting of 1 surgeon, 1 pediatrician, 1 gynecologist, 2 internists and 9 general practitioners), people still do not have access to the most basic clinical procedures!

Save Mother Ethiopia!

It is simply preposterous and irrational to talk about economic growth or development when a country has ‘one of the world’s worst health care systems’. The ultimate question is whether a regime described by the Economist magazine as “one of the most economically illiterate in the modern world” is capable of meeting the dire health challenges facing the Ethiopian people. No need to hold our breaths waiting for an affirmative response to that question. But there is no question on what we need to do: We must work together in unity — with malice towards none and charity for all — to save Mother Ethiopia and the mothers of Ethiopia!

[1] http://www.huffingtonpost.com/hanna-ingber-win

The writer, Alemayehu G. Mariam, is a professor of political science at California State University, San Bernardino, and an attorney based in Los Angeles. For comments, he can be reached at [email protected]

The government of Japan said it will provide 180 million Birr support to implement safe water units in Raya Azebo Woreda, Southern Tigray Zone.

Japanese ambassador to Ethiopia, Kinichi Komano and President of Tigray, Tsegay Berhe on Wednesday visited rural areas exposed to safe water shortage in the woreda.

[After 18 years of rule and billions of dollars in foreign aid, the Tigrean People Liberation Front (Woyanne) cannot even provide clean water to Tigray.]

Experts of the woreda mines and energy office on the occasion said safe water service coverage stands at 43 per cent at present in the woreda.

The ambassador on his part said the fund will be used to dig water wells, install water pipelines and construct reservoirs.

Tsegay also said the regional government will work together with the Japanese government in the efforts to curb shortage of safe water. (Source: state-owned ENA)

Ethiopia should take urgent steps to curb animal smuggling that is cutting into export earnings worth tens of millions of dollars to the poor country every year, a senior official said.

Livestock exports are an important source of hard currency for Ethiopia, which boasts 50 million cattle, 50 million sheep and goats and more than half a million camels. It made $53 million from exports last year, but Berhe Gebreigziabher, at a top official at the Ministry of Agriculture and Rural Development, said smuggling was slashing revenue.

“A significant number of live animals … are being smuggled to neighboring states to be re-exported to Middle Eastern countries,” he told Reuters on Friday.

“Our animal sector resources are being stolen and taken to other nations. The government must adopt strict policies and control mechanism to stop the illegal trade undermining us.”

Berhe, who heads the ministry’s Animal and Plant Regulatory Department, said the authorities should support economic growth by adding value to their exports, not just selling livestock.

The government has converted tens of thousands of acres in the Oromia, Amhara and Somali regions to rangeland for the leather goods sector, which it hopes will earn $200 million from exports in 2009/10 (July-June), up from $100 million in 2008/09.

The country used to export mostly raw hides and skins to markets in Europe and Asia, generating about $30 million a year in the late 1990s. It has since built dozens of tanneries, shoe factories and other leather-working facilities.

Among the major buyers of Ethiopian-made shoes are Germany, Italy, China, India and the United States. (Reuters)