A March to Stop Genocide and Dictatorship in Ethiopia/Africa will be held on Sunday, September 13, 2009 in Washington… [click here to read more]

By Wondwossen Mezlekia

The Ethiopian Commodity Exchange (ECX) was established with an ambitious goal of eliminating food shortages and hunger in Ethiopia by creating an efficient marketing system for agricultural commodities. Barely two months after its launch, the highly praised exchange platform found itself caught in the midst of the complex global coffee trade, an undertaking that is entirely different and farther from its original vision of “revolutionizing” the inefficient domestic commodity market.

In August 2008, the government enacted a new law that forces the trading of all of the country’s coffees through ECX and ECX welcomed the decision. Since then, the government confiscated stocks of coffee from exporters and revoked licenses, filled in the vacuum with the Ethiopian Grain Trade Enterprise (EGTE), and sold Specialty coffees at commodity grade coffee prices.

Following its first rough encounter, ECX is now engaged in talks with Specialty coffee buyers and faced with challenges of wining the hearts and minds of traders locally. But, the effect of ECX on coffee growers is yet to be noticed. This piece attempts to reveal the pitfalls of trading coffee through ECX and its impact on small-scale farmers.

Learning coffee on the fly

As it has now become apparent, ECX was not ready to accommodate trading operations of a complex global commodity when it embarked on coffee export. This partly explains why ECX has had to run into problems as soon as it started its coffee trade.

ECX was initially established to create a trading platform for domestic agricultural commodities, mainly grain. The ECX was created with primary purposes of eliminating the archaic marketing system whose inefficiency, according to ECX’s founder, Eleni Gebre-Medhin, are in part responsible for the recurring food shortages and hunger in parts of Ethiopia, and increasing the value of the domestic grain. Dr. Eleni described her vision in June 2007 at TED Talk as:

“Ethiopia’s domestic market is about $1 billion of value and we feel over the next five years, if Ethiopia can capture even 40%, just 40% of the domestic market and add jut 25% value to that market, the value of the market doubles. ECX, moreover, can become a trading platform for the Pan-African market in agricultural commodity. Ethiopia’s agricultural market is 30% higher than South Africa’s grain production; and, in fact, Ethiopia is the second largest maize producer in Africa.”

This ambition is founded on plausible assumptions about domestic grain trade but it did not take into consideration the state of coffee trade. Because the market system was designed to bring about changes in the grains trade – not in the coffee sector – ECX ended up further complicating the problems facing coffee growers when it suddenly decided to take on coffee trade.

Mandatory exchange

By requiring 100% of coffee trade be conducted through ECX, the government eliminated direct trades. The government says that was necessary in order to improve the sector and prices. This is frivolous.

Unlike grains, coffee trade is characterized by unregulated supply, market monopoly by a few multinationals companies, and stiff competitions among producing countries. Coffee is a global commodity. It is the world’s second most traded commodity next to oil with its prices determined at the New York exchange market. The trade is largely controlled by the world’s biggest coffee buyers. Five multinational companies, Nestlé, Philip Morris, Procter and Gamble, Sara Lee, and Kraft Foods buy about 70% of the world’s coffee and play pivotal roles in setting world coffee prices. Coffee growing nations do not have a say in this unregulated global market.

To mitigate the burden, other coffee growing countries are resorting to creating differentiations and to find a place in the Specialty niche market. The direct trade relationship with Specialty coffee buyers gives these nations a relative stability, premium prices, and incentives to increasing quality standards.

ECX, on the other hand, adopted a strategy of forced bulk trading through a warehouse receipt system and eliminated direct trade. Still, it hopes to improve prices and the sector.

Underestimating Specialty coffee

The global coffee industry is increasingly moving towards greater transparency of coffee origins and differentiation but the ECX system is heading in the opposite direction. Ethiopia is naturally endowed with the variety of coffees demanded by the Specialty coffee buyers. The fine quality of its coffees and the distinctive features of the sector, including its genetic resources, abundance of wild coffee trees, and the organic coffee production, earned Ethiopia a unique place in the global coffee marketplace. Ironically, instead of capitalizing on these unique attributes, ECX aims at bundling all of the coffees into commodity grades.

One possible explanation for this absurd strategy is ECX’s underestimation of the importance of Specialty grade coffees. “The “specialty-plus” market segment is only 3.7% of the total coffees exported, with the remainder to be considered as commodity coffee,” says ECX in its whitepaper titled What is in a Bean?

This unsubstantiated analysis has led ECX to a mistaken conclusion, thus its decision to neglect the Specialty market and focus on aggregate coffee production. ECX’s estimation is flawed and can be proved wrong by the following cursory appraisal of empirical evidences.

In 2008, Starbucks, the world’s largest Specialty coffee buyer, bought 192,500 tons of Specialty coffee, of which 5-10% (the company’s official numbers always fall within this range) was directly sourced from East Africa. (The major coffee growers in East Africa are Ethiopia, Kenya, Tanzania, and Rwanda.) Since Ethiopia is the largest exporter of Specialty coffee in Africa, and, given Starbucks’ long history of close relationship with coffee growers in the country, it is reasonable to assume around 3% of Starbucks’ purchase (or about 60% of its East African purchase) comes from Ethiopia. Meaning, around 5,775 tons of Starbucks’ 2008 purchases is practically from Ethiopia. Since Ethiopia’s export during that year was 170,888 tons, Starbucks’ purchase only represents 3.4% of Ethiopia’s export.

So, if at least 3.4% of Ethiopia’s Specialty grade was directly sold to Starbucks, one can imagine how the number can easily jump to a range of upper teens to twenties when the quantity that Starbucks bought through Germany (Starbucks buys most of its coffee from Germany which is also one of Ethiopia’s major export markets) and the coffees directly sold to other small buyers through direct trade.

It is thus extraordinary that ECX diminishes the roles of Specialty coffee in Ethiopia. Furthermore, it is unbelievable that ECX failed to see the fact that Specialty coffees drive the global coffee trade.

Marketing experts agree that the prestigious coffees such as Sidama, Yirgacheffe, and Harar serve marketers as ingredient brands. The prominent Oxford Professor Douglas Holt defines ingredient brands as: “brands that are used as one component “ingredient” of another branded product or service. Gore waterproof fabric and Intel computer chips are classic examples.”

Dr. Holt argues, “Consumers view the ingredient’s inclusion as a distinctive and valuable addition to the offer. The ingredient is revealed to end-consumers through some sort of distinctive mark (name, logo, etc.) so that the inclusion of the ingredient increases the perceived value of the offering.”

By undermining the roles played by Specialty coffees to promote the sale of Ethiopia’s aggregate coffee export, ECX’s bulk trading system poses a threat to commoditizing some of the distinct coffees in the world. Farmers that grow some these finest beans expect their produce to fetch them a price better than that of the run-of-the-mill beans. The lack of incentive for their hard work may have adverse effect on the country’s Specialty coffee production. As quality deteriorates, the country’s prestigious brands water down as well.

Unfair competition

When responding to criticisms about its position on direct trade, ECX cites as an example the cooperatives and commercial farms that are directly selling Specialty coffee outside of the ECX system. This is true but the problem is, by allowing selected group of growers to have access to the Specialty market, ECX leaves out the smallholder families that are not organized in cooperatives. This practice deprives farmers of the privilege of establishing business relationship with external buyers.

In addition, the current ECX system also subjects small-scale farmers to a potential market monopoly by a few exporters. Farmers are not represented in the ECX Board of Directors, a body that currently comprises three major coffee exporters, including Berhane Hailu, General Manager of EGTE, and seven government officials. This degree of power imbalance puts farmers at a disadvantage.

Coffee trade under current ECX system is far from being a level playing field. It is difficult to imagine a marketplace that is fair to farmers in a setting where the government owned enterprise, EGTE, working to maximize profit and ensure uninterrupted inflow of foreign exchange also directs ECX. As far as small-scale coffee growers are concerned, ECX has so far not been “fair, independent, and free.”

If ECX were to be of any benefit to the poor farmers, it should create an environment where the bulk trading system functions alongside a direct trading system for Specialty coffees and other certifications such as Bird Friendly, forest, and organic coffees. This is a lifeline for many smallholder farmers and that is where they have comparative advantage over competitors.

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

Teddy Afro is one of Ethiopia’s most popular singers. Afro, whom fans call Ethiopia’s Bob Marley, is in prison. Many are convinced that his legal troubles are related to his music. Some of Afro’s songs seem critical of Ethiopia’s government… [more]

By Muhammad Yamany, Wael Naguib

CAIRO (Xinhua) — Some Egyptian experts accused the United States and Israel of raising differences among Nile Basin countries to affect Egypt and Sudan, warning that Nile Basin countries may fight for water in the future.

They referred that Egypt, with a population of about 77 million people, would never give up its historic rights in the Nile water.

There are foreign hands pushing some of Nile Basin countries to amend the 1929 agreement, which organizes the relations among these nations and the proportion of water to each country, so as to put pressure on Egypt and Sudan, said Dr. Abed al-Monem al-Mashet, Director of Search and Studies Center in the prestigious Cairo University.

Al-Mashet told Xinhua late on Wednesday that these hands are Israel, which has some old projects to affect Egypt’s quota in the Nile water especially in Ethiopia, and the United States which has an influence in southern Sudan.

He added that differences among the Nile Basin countries could be normal if there was not an agreement organizing the relations among them signed in 1929 and so no country can change the water quota for each country.

Earlier this week, Egypt’s Minister of Public Works and Water Resources Mahmoud Abdel Halim Abu Zeid said that Egypt is suffering from a serious shortage of water.

“Egypt has already entered the cycle of water poverty,” said Allam.

On the other hand, Egypt’s Ministry of Foreign Affairs said that Egypt’s need of water is a red line that no one can come across and Nile Basin countries should consult Egypt before carrying out any projects that could affect Egypt’s share of water.

Asked about the outbreak of war due to differences among Nile Basin countries, al-Mashet said that Nile water is a matter of national security to Egypt and in the past Egypt’s former president Mohamed Anwar Sadat threatened to use military power if any of the Nile Basin countries tried to amend the 1929 agreement.

However, al-Mashet said that he does not think it could reach war at the time being as there is no big water projects in the Nile Basin countries, but it would happen in the future.

He called for negotiation in good intentions among the countries, expressing his belief that negotiation needs a summit for presidents instead of water ministers.

Meanwhile, Dr. Eglal Rafat, professor of political science at Cairo University, warned that differences in this issue could lead to war in the future if countries did not reach an agreement about sharing water.

She told Xinhua that Egypt sees that the past agreements about sharing Nile water are legal and the international law is in its side, so it is impossible that Egypt would compromise any of its historical rights as it is already suffering from water poverty.

Egypt reiterated that it would not recognize any agreement or any organization for the Nile basin countries unless it admits clearly the Egyptian rights in Nile water and that Egypt should be consulted before carrying out any project on the Nile which could affect the water quota of Egypt.

Egypt’s water needs will surpass its resources by 2017 because of its population. A recent report by the cabinet’s Information and Decision Support Center said that Egypt would need 86.2 billion cubic meters of water in 2017 while its resources would only be 71.4 billion cubic meters.

Egypt’s water resources stood at 64 billion cubic meters in 2006, of which the River Nile provided 55.5 billion cubic meters, or 86.7 percent, the report said.

Egypt says that the Nile water is enough for every country if these countries concentrated on how to mange and use it.

On Tuesday, Nile Basin countries delayed signing a water-sharing agreement rejected by Egypt and Sudan, which opposed any reduction in their quotas.

“Wars could break out for water in the future unless an agreement is reached on how to share the river’s water,” said Rafat.

By Alemayehu G. Mariam

Escapees of Conscience or Deserters From a Sinking Ship?

Over the past month, there has been a spate of reported official “defections” from Ethiopia. The alleged “defectors” said to be seeking asylum in the U.S. include a high level official attached to the “State Minister of Government Communications Affairs”, an individual identified as the “Director of Ethiopian Telecommunication Agency” and another person said to be a member of Ethiopia’s rubber-stamp parliament. A well-known Ethiopian novelist is also reported to be seeking asylum in the U.S. Three officially sponsored Ethiopian “exchange students” sent to England for a three-month program “vanished during a trip to the Houses of Parliament” and are believed to be seeking asylum there. The grapevine in certain circles is abuzz with rumors that a number of the head honcho’s ambassadors in various countries have either refused to return to Ethiopia or are forestalling their return. Over the past few years, dozens of diplomatic officials are reported to have deserted the crippled ship of state of the dictators in Ethiopia.[1]

The question is whether the recent defections signify the proverbial desertion of a sinking ship, or are simply episodic instances of individual “escapees of conscience”.

Why Defect?

There is a long tradition of individuals fleeing tyranny and despotism in their homelands. Over the past three decades, thousands of Ethiopians have escaped oppression, persecution and dictatorial rule in their homeland and obtained political asylum in various countries. Receiving asylum in a host country does not necessarily make an individual a “defector”. There is no formally cognizable status of “defector” under international law. Such persons are generally treated as “refugees” under the 1951 Convention Relating to the Status of Refugees and the 1967 Protocol Relating to the Status of Refugees. The U.S. Government in its administrative manuals defines a “defector” as a “person who repudiates his or her country when beyond its jurisdiction or control.” When the Soviet Union existed, a “defector” was an individual who “committed treason by cooperating with a hostile foreign intelligence service”.

There is no single prototype of a defector. Defectors from the former communist countries have included generals, diplomats, scientists, artists, musicians, atheletes, and even children of supreme dictators. For instance, among well-known Russian defectors to the U.S. include KGB general Oleg Kalugin; pianist Dmitry Shostakovich, Olga Korbut, the four gold and two silver medal winning gymnast and chess grandmasters Viktor Korchnoy and Boris Spassky. In 1967, Stalin’s daughter, Svetlana Alliluyeva, defected to the U.S. In 1993, Fidel Castro’s daughter, Alina Fernandez Revuelta, did the same after entering the U.S. disguised as a Spanish tourist. Far fewer numbers of Americans have defected to the Soviet Union, mostly for ideological reasons.

Individuals defect for a variety of reasons. Some do so for purely personal reasons; and others for moral, philosophical, political, intellectual or ideological ones. Soviet defector interview data and autobiographies suggest that among the major factors motivating defections included strong beliefs and perceptions that: 1) the Soviet regime lacked popular legitimacy and mandate and rules by means of lies, intimidation and violence; 2) communism as an ideology is bankrupt and that the Soviet regime uses it to justify its monopoly on power; 3) basic human rights and the rule of law are disregarded and violated routinely by communist officials, and 4) since no legal opposition to the Soviet regime is allowed or tolerated, defection is one of the few ways for individuals to show their opposition and rejection of the communist system. Others have described Soviet defectors as “cynical people who understood the corruption of the Soviet system, used it to their advantage and turned against it only when it failed them in their self-centered pursuits or somehow victimized them.”

Life as an Official of the Ruling Dictatorship

Anecdotal evidence obtained from some Ethiopian defectors paints a portrait of the inhumanity, depravity, cruelty and decay of the dictatorial regime there, and the existential trap in which the defectors found themselves. These defectors reported facing a variation on the excruciating question: “How could I serve in good conscience a brutal, corrupt and ruthless dictatorship?” Witnessing injustice, abuse of power, unfairness, exploitation and outright criminality everyday, yet being part of a system that perpetrates and perpetuates it, created a hellish situation for many of these defectors. They reported being tormented by the proverbial little voice in their consciences telling them: “This is so wrong. Don’t do it. Don’t be a part of it!” They described facing an endless struggle between their consciences and the harsh reality they faced servicing the dictatorship. They lived each day overwhelmed by a sense of powerlessness and helplessness. They felt they had sold out their consciences to make a daily living and put food on the table for their families. Dependent on the dictatorship for their daily bread, a number of these defectors reported living a life of self-loathing, duplicity and quiet desperation: They were afraid to speak up against the injustices they witnessed for fear of retribution; they were tormented by guilt because they felt completely powerless to change their circumstances; they felt they had to live a life of pretension just to survive and not to arouse suspicion of disloyalty; they were overcome by unrelenting anxiety and insecurity about possible official retaliation for something they had done on not done; and they seethed with anger for being bossed around by a herd of ignoramuses.

These defectors also reported seeking escape from a daily existence of humiliation, shame and self-loathing before defecting. Many withdrew into the world of alcohol and self-indulgence to escape their misery and contain their moral outrage. Some waited and schemed in secrecy for that one opportunity to travel to the West for some training program or a diplomatic assignment. When they got that chance, they quietly slipped away from their delegations to seek political asylum. Others not fortunate enough to travel and not drowning themselves in alcohol are said to seek alternative relief by consorting with opposition elements, or seeking solace in prayer and other spiritual pursuits. Those who could not take it anymore treaded the risky waters of opposition politics, and soon find out there is a huge price to pay for standing up against the dictatorship. They found themselves out of a job or worse. Some are said to be so overcome by fear and anxiety about their personal well-being that they simply want to drop out the officialdom and be left alone. But dictatorships are like the devil; and as the old saying goes, once the devil catches you by a single strand of hair, you are his forever until you save yourself or are redeemed.

Defection as a Moral Act of Outrage and Redemption

Defection made for the right reasons could be a supreme act of moral redemption for the defector. Those who have been involuntary agents of oppression and criminality have the ability to morally purify themselves by openly and publicly repudiating their previous official life. But the moral duty of defectors transcends self-atonement; it includes a collateral duty to help those who suffer under the yoke of dictatorship. As Victor Kravchenko, one of the early Soviet defectors observed, it is the duty of a defector to speak his mind once in freedom because “an understanding of the Russian reality by the democratic world is the precondition for my country’s liberation from within.” It is because of the work of Soviet defectors who exposed the brutality and depravity of the Soviet system that an underground dissident and human rights movement in the Soviet Union was able to take root in the 1980s.

Defectors, Duties and the Diaspora: Doing the Right Thing

Foreign officials who defect in most Western countries have legal rights to seek political asylum. It is the duty of all Ethiopians in the Diaspora who believe in freedom, democracy and human rights to help those escaping oppression and persecution as victims of human rights abuses. It is commendable that many Ethiopian legal professionals in the U.S. particularly, and other charitable institutions, have offered or extended assistance to those who have sought asylum in the U.S. as defectors or otherwise. Many individuals and American civic organizations deserve gratitude for their efforts in facilitating the social integration of those fleeing persecution in Ethiopia.

Until we walk a mile in the defectors’ shoes, we have little moral basis to prejudge them for taking the courageous act of defecting from a ruthless dictatorship. Fundamental fairness requires that we give them the benefit of the doubt: They shall all deemed escapees of conscience doing the right thing until proven otherwise!

We do not know if we are witnessing the tip of a defection iceberg from the reports of this past month. Perhaps these defections will open the floodgates for an exodus of officials escaping oppression and persecution, or such defections will continue to trickle. Regardless, we must be careful not to malign these official defectors, or arbitrarily impugn their motives as some may be inclined to do. It may be that these individuals are abandoning a slowly sinking ship, or just doing the right thing and cleansing themselves. It does not matter. In the struggle for the hearts and minds of Ethiopians, it is the duty of those in the Diaspora to lend aid to such individuals as victims of human rights abuses. It is the moral duty of all well-intentioned defectors to name and shame their former masters and tormentors. Above all, it is their supreme moral duty to speak their minds once they find themselves in freedom; and, to paraphrase Victor Kravchenko, bear witness against injustice and human rights violations because “an understanding of the Ethiopian reality by the democratic world is the precondition for our country’s liberation from within.”

[1] http://www.addisvoice.com/PR/defections.htm

(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])

By George Ayittey

Next week, Secretary of State Hillary Clinton will be visiting 7 African countries in 11 days: Cape Verde Islands, Liberia, Nigeria, Congo DR (Goma, in particular), Kenya, South Africa and Angola. Part of the purpose of the trip is to smooth over ruffled feathers. Recall that Kenyans were miffed over the fact that President Obama skipped his fatherland and visited Ghana instead. And Nigerians felt his trip to Ghana was an insidious plot to destabilize their country. So Hillary is being dispatched to soothe frayed nerves and douse the flames. There are also genuine concerns in the Obama administration about Nigeria’s stability and China’s forays into Africa.

The purpose of our dinner at the State Department was an effort by the Secretary of State, Hillary, to reach out of the bureaucratic cocoon to independent “gurus” and seek alternative viewpoints before her trip to Africa. We were given a set of questions to respond to in order to frame the discussion at the dinner forum and help prepare her for the trip. What she should be looking for, what she should say, how she could be helpful, etc.

The dinner was quite extraordinary. The protocol was stultifying; everything was planned to the minutest detail. Yet the atmosphere was relaxed. There were 26 of us at the dinner table with Secretary of State Hillary Clinton at the center. Half of the guests were State Dept. operatives — speech writer, policy planner, and a retinue of deputies and assistants — assistant this, assistant that, deputy assistant this, if you know what I mean. The remaining 13 of us where the “experts.” There were only 5 blacks there, including Asst. Sec. of State for Africa, Ambassador Johnnie Carson. I was the only African but, at least, it was a start.

The reason why I was invited was because Brian Phipps, Clinton’s policy planner, had read my book, Africa Unchained, two years ago and said it had “a profound influence” on his thinking about Africa. So I asked him if it would be OK to bring two copies of my book — one for Hillary and the other for Obama. He said who would refuse such a gracious act of generosity.

So I took two copies along. One for Hillary which I autographed as: “I am a big fan of yours. Africans are grateful for your concern for the continent.” Hey, a little fawning adulation never hurt nobody. My students do that to me all the time to get good grades: “I learned a lot from your class,” “You are my greatest teacher,” they often tell me. A quick check of the grades of those praise-singers tell a different story. Rascals.

The other book was for President Obama. I autographed it as: “This wont’ get me a BEER at the White House but we are proud of you as a son of Africa. Don’t mind what the Americans say.”

I hope Obama has a sense of humor but don’t try this with President Musugu Babazonga, President-For-Life of the Coconut Republic of Tonga somewhere in the Gulf of Guinea. He is the author of the “Green Book,” which everybody must read. All other books are banned.

I told the group that there was no need to re-invent the wheel and that the West should deal with Africa the way it dealt with the former Soviet Union. There it didn’t form partnerships with communist regimes and hand over money to them on promises of reform. It helped solidarity movements and established Radio Free Europe. Why not Radio Free Africa? Sec. of State Hillary Clinton said it is a great idea and she likes it.

To the consternation of everyone, I commended Hillary highly and told her I was humbled by her invitation and I wish African governments would reach out and seek alternative viewpoints. Instead, they tossed me into jail, raided my hotel room and even fire-bombed my office in Washington, DC. Hillary was listening attentively.

She is very sharp, witty and a good sport. She is quite warm and open. The dinner lasted for two hours and at the end, I gave her the book and posed for a photo.

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