The New York Times reports that Ethiopian superstar athlete Haile Gebreselassie’s phone has been tapped and that he is facing blackmail, confirming an earlier story by Ethiopian Review. NYT’s source is Haile’s agent Jos Hermens. No doubt Woyanne propaganda chief Bereket Simon will force Haile to go on TV and deny that he has been targeted, or else face grave consequences. Read the full story below.
Haile Gebrselassie of Ethiopia, the distance-running star who stunningly announced his retirement after dropping out of the New York City Marathon on Nov. 7, said Monday that he had reconsidered and would continue racing.
“Running is in my blood, and I decided to continue competing,” Gebrselassie wrote on his Twitter account. “My announcement in New York was my first reaction after a disappointing race.”
Jos Hermens, Gebrselassie’s agent, said from Addis Ababa, the Ethiopian capital, that Gebrselassie had reacted emotionally after leaving the New York course at 16 miles of the 26.2-mile race. He also felt guilty for having dropped out of a half-marathon in New York earlier this year.
“He wasn’t thinking when he said he wanted to stop,” Hermens said. “He was too emotional.”
Hermens also provided new details about the injury that caused Gebrselassie to drop out of the race, describing it as more of a muscular problem than a knee problem, as New York City Marathon officials had reported.
Hermens also suggested that Gebrselassie’s emotional decision to retire might have stemmed in part from political pressure he was feeling in Ethiopia. His phone has been tapped by government officials and he has faced some sort of blackmail attempt, Hermens said of his client.
“There is a lot of pressure on him in Ethiopia,” Hermens said of Gebrselassie. “I don’t know all the details.”
Gebrselassie could not be reached by phone Monday, and it was impossible to confirm independently the accusations about phone-tapping and blackmail.
Ethiopia held national elections in May, and the government of Prime Minister Meles Zenawi was accused by opposition figures of intimidation, harassment and vote rigging.
The Ethiopian Review, an opposition online journal based in Washington, reported this month that the prime minister’s wife and her associates were attempting to force partnerships with Gebrselassie on a new hotel that he had built and on other real estate ventures.
The mayor of Addis Ababa, an ally of the prime minister and his wife, had also recently ordered the confiscation of land that had been leased to Gebrselassie, the journal reported, citing sources in Addis Ababa.
Officials at the Ethiopian embassy in Washington could not be reached for comment.
In one of the world’s poorest countries, Gebrselassie, who has made a lucrative career from running, has become one of the most visible and popular figures. He employs more than 600 people in various businesses and has built two schools. He has also spoken about the possibility of seeking political office once his running days are over.
Frustration over the injury and political tensions perhaps led Gebrselassie to overreact after dropping out of the New York marathon, Hermens said.
“All this pressure came out; he was emptying his heart,” Hermens said.
Once Gebrselassie returned home, many of his countrymen urged him to continue running as an inspiration to Ethiopia’s youth, Hermens said. Having set 27 world records and won 2 Olympic gold medals at 10,000 meters, Gebrselassie is widely considered the greatest distance runner ever. He holds the world record for the marathon: 2 hours 3 minutes 59 seconds.
“In Ethiopia, there were discussions on radio and TV, and people were saying he had to continue, that he was an important role model,” Hermens said. “He just needs time to fuel his battery again.”
Gebrselassie next plans to run the Tokyo Marathon in February and wants to compete in the 2012 Olympic marathon in London. Although his reputation is secure, he has yet to show that he can win a marathon against a deep field of elite competitors. His fastest times have come with pacesetters on flat courses in races that were time trials more than competitions.
About a month before the New York City Marathon, Gebrselassie felt some pain in the quadriceps near its attachment by tendon to the right kneecap, Hermens said. Massage seemed to cure the problem and Gebrselassie thought he was in tremendous condition for the race, Hermens said.
Six days before the marathon, though, Gebrselassie went for a final training run, apparently overexerted himself and again felt pain, Hermens said, adding, “That’s the problem with athletes, they always want to push more, more, more.”
The pain had ebbed, but it flared on a final run the day before the marathon, and Gebrselassie underwent a magnetic resonance imaging test and had fluid drained from the quadriceps, Hermens said. New York officials described the injury as tendinitis after Gebrselassie dropped out.
With tears in his eyes, Gebrselassie announced that he was retiring, saying he was tired of complaining.
“He was so disappointed, he just broke down mentally,” Hermens said.
In an article posted on The New York Review of Books today, William Easterly and Laura Freschi question why Western nations finance the brutal repression in Ethiopia with an annual donation of over $3 billion to the corrupt junta [read below]. It is good to see that Western scholars and writers are finally taking the World Bank and other poverty mongers to task. However, ultimately it is up to the people of Ethiopia to get organized and overthrow the apartheid junta. Woyanne is not as powerful as it currently appears. A well-coordinated nation-wide economic boycott campaign can bring it down in less than a month. A simple act of cash withdrawal from banks by a large number of people would cripple the financial system and bankrupt the regime. — Elias Kifle
Why Are We Supporting Repression in Ethiopia?
By William Easterly and Laura Freschi
Foreign aid observers have often worried that Western aid to Africa is propping up autocratic regimes. Yet seldom has such a direct link from aid to political repression been demonstrated as in “Development without Freedom,” an extensively documented new report on Ethiopia by Human Rights Watch. Based on interviews with 200 people in 53 villages and cities throughout the country, the report concludes that the Ethiopian government, headed by prime minister Meles Zenawi, uses aid as a political weapon to discriminate against non-party members and punish dissenters, sending the population the draconian message that “survival depends on political loyalty to the state and the ruling party.”
A moving, inspiring, and galvanizing speech by Dr. Gregory Stanton, President of Genocide Watch, is a blessing in disguise for all of us Ethiopians, especially for some of our Tigrean brothers and sisters who are intentionally or unintentionally ignoring our every day calls to them to openly denounce the most oppressive government of Meles Seitanawi (Zenawi) and join the solidarity movement without hesitation.
Dr. Gregory Santon’s advice [watch the video here] and warning to the Tigreans are simple, direct, and clear: Meles Zenawi is vicious, barbaric, criminal, and greedy; he wants to colonize the entire country of Ethiopia, using the old tactics — divide and rule, and at the same time exposing those Tigreans who support his goal for their own selfish benefits to a precarious situation.
Dr. Gregory, as a president of Genocide Watch, has the first hand knowledge about human tragedies in Ukraine, in Burma, in Ghana, in Sudan, in Uganda, in Ruanda, in Cambodia, and in many other parts of the world, and such wide range of knowledge and experience of his has enabled him to unequivocally predict what is going to happen to those Tigreans who are looting the country, selling its fertile lands to foreigners, and amassing great wealth for themselves and for their friends, leaving the other Ethiopians hopeless and desperate.
Since he knows very well what happened in Rwanda between the Tutsi and the Hutu tribes, Dr. Gregory expresses his innermost fear of such genocide may happen in Ethiopia against the minority tribe, the Tigreans unless they stop their support for the oppressive regime of Meles Seitanawi (Zenawi). God forbids, if genocide takes place in Ethiopia, it will first, Dr. Gregory foretells, destroy the Tigrean political elites who are now enjoying life to the fullest and send thousands of them to jail and many of them to exile.
Knowing the strength, the wealth, the greed, and the cruelties of dictators of our world, Dr. Gregory sends a strong message to all political opposing parties that such powerful dictators such as Meles Zenawi, who is armed to the teeth, will not easily be removed from power unless the opposing political party is well organized and united, regardless of ethnicity, religion, and geographical location. And the best place, Dr. Gregory suggests, for organizing solidarity movement is Washington that has attracted thousands of Ethiopian politicians. It was from this great city of ours, Dr. Gregory says, that the Ghanaian politicians were able to overthrow the dictator of Ghana, and from this Washington city the Ethiopian solidarity moment could bring down Meles Zenawi from his power.
Having freely offered to his, mostly, Ethiopian audience the techniques how to bring down Meles from power, Dr. Gregory denounces the atrocities Meles have committed on his own people, especially the genocide on the people of Gambella in 2003 in which over 1000 people were murdered; he recalls what happened in the 2005 election where Meles was defeated, but angry about the outcome of that election, Meles murdered over 100 Ethiopian civilians and sent to jail thousands of people on suspicions of opposing him.
Angry by the deaths of so many Ethiopians under Meles the dictator, Dr. Gregory recommends that we must track of each killer, and when these criminals come to Washington, they can immediately be caught and sent to jail. He believes democracy is the solution for genocide; genocide occurs when people are excluded from voting, and he firmly attests that women are the best for defeating genocide and bringing peace to the world. Of course, he is not talking about Jezebel (Azeb Mesfin) or about the wives of Al Amoudi here; he is talking about the great women such as the Burmese Aung San kyi,
Ellen Johnson Sirleaf of Liberia, and many other noticeable women who advocate democracy and the rule of law for their people in their respective countries.
Finally, his perfect message to all Ethiopians and particularly to the Tigreans who adore Meles Seitanawi (Zenawi) is related to Martin Luther King’s statements: “I think we all have moral obligations to obey just laws. On the other hand, I think that we have moral obligations to disobey unjust laws because non-cooperation with evil is just as much a moral obligation as cooperation with good.”
I agree with him that Ethiopia has the most ancient civilization, and I may add to his factual statement that the main factor for that ancient Ethiopian civilization is the existence of the Ethiopian Orthodox Tewahido Church, which he calls the Coptic Church. The Ethiopian Orthodox Tewahido Church has an absolute right to build a Church in Gambella or anywhere else in Ethiopia. Its mission is to spread the word of God to all people by building Churches, church schools, hospitals, training theologians and missionaries.
I often write about the trials and tribulations of Ethiopia’s independent journalists, sometimes in tones of lamentation[1], other times in wistful philosophical reflection[2]. I have always defended the constitutional and human rights of Ethiopian citizens “to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through other media of their choice.”[3] Unfortunately, I have had few opportunities to publicly celebrate and express my pride in the extraordinary deeds of Ethiopia’s emerging young and courageous journalists.
Courage, it seems, is fast becoming the common middle name for many young Ethiopian journalists. They are certainly racking up some of the most prestigious international journalism awards for courage. It is a special privilege for me to write a few words in honor of Ethiopian journalist Dawit Kebede and his young colleagues at Awramba Times (AT) and congratulate them for being the recipients of the Committee to Protect Journalists’ (CPJ) “2010 International Press Freedom Award”. This annual award is given to journalists who have shown extraordinary courage in defending press freedom in the face of attacks, threats or imprisonment. On November 23, Dawit, barely 30 years old, will accept the CPJ award on behalf of Team Awramba Times and all independent Ethiopian journalists who are still suffering and struggling in Ethiopia and others who have been forced into exile.
I am also privileged to congratulate another courageous young journalist, Sisay Agena, a former political prisoner and erstwhile publisher of Ethiop and Abay newspapers, for receiving the prestigious “Freedom to Write Award” from PEN Center USA. He will be honored in absentia on November 17 in Los Angeles. Last year this award was given to Liu Xiaobo, the imprisoned Chinese writer and human rights advocate and the winner of the 2010 Nobel Peace Prize. The PEN award honors exceptional international literary figures who have been persecuted or imprisoned for exercising and defending the right to freedom of expression.
In October 2007, another young journalist, Serkalem Fasil, received the prestigious “Courage in Journalism Award” given by the International Womens’ Media Foundation to women journalists that have shown extraordinary bravery in the face of danger. Serkalem and her husband Eskinder Nega, (both former political prisoners and publishers of Menelik, Asqual and Satenaw newspapers) today serve as the personifications of journalistic courage and integrity in Ethiopia. This past March, the Supreme Kangaroo Kourt of Ethiopia ordered Serkalem, Eskinder, Sisay and two other journalists, Zekarias Tesfaye and Fasil Yenealem, to pay the largest fines assessed against journalists in Ethiopian history. These journalists have been denied licenses to publish their newspapers for the past three years.
Dawit Kebede, a former political prisoner, and his young team at Awramba Times are part of a new breed of courageous young journalists in Ethiopia who continue to risk their lives and livelihoods every day to speak truth to power by exercising their constitutional and human rights to free expression. The members of Team Awramba Times, like the other independent journalists, do not hide behind clever pen names or concealed identities to do their work. They are always out there in the line of fire facing intimidation, threats on their lives, harassment, interrogations and imprisonment. I take this opportunity to single out and honor, congratulate and thank each and every member of Team Awramba Times: Fitsum Mamo, editor-in-chief and one of the founders of AT (and not long ago a victim of trumped up charges of defamation of state-appointed church head Paulos); Woubshet Taye (forced to resign on the eve of election in May 2010 following official threats); Gizaw Legesse, deputy editor-in-chief; Wosenseged Gebrekidan (a former political prisoner with Dawit Kebede and the others); Abel Alemayehu, senior editor; Elais Gebru and Surafel Girma, senior reporters; Tigist Wondimu (arts and entertainment editor), Abebe Tola and Solomon Moges, columnists; Nebyou Mesfin, graphics editor; Teshale Seifu, Sisay Getnet, Teshale Wodaj, marketing and advertising and Mekdes Fisaha, computer technologist.
Dawit is the managing editor of Awramba Times. If one were to ask him to describe himself, he would simply say he is journalist. He will say he is not “in the opposition”. He is not a politician. He is not partisan to any political party or ideology; but like his AT colleagues, he is uncompromisingly partial to the truth. He will not hesitate to report or write the truth regardless of who is in power. He will solemnly promise to continue to do his job as a professional journalist by exercising his constitutional and human rights for as long as he can given the intensity of press repression in Ethiopia.
The State of Press Freedom in Ethiopia Today
When I wrote “The Art of War on Ethiopia’s Independent Press”[4] last December, I argued that the regime of Meles Zenawi is conducting a search and destroy mission to completely wipe out the free press in the country. The history of the independent press in Ethiopia over the past five years is a chronicle of brutal crackdowns, arbitrary imprisonments and harassment of local and international journalists, shuttering of newspapers and jamming of international radio transmissions. In May 2009, the Ethiopian Free Press Journalists Association (EFPJA) reported: “Over 101 journalists are forced into exile, 11 are still facing serious plight in Kenya, Uganda, Yemen, Japan and India… Journalists Serkalem Fasil, Eskindir Nega and Sisay Agena are still denied press licenses. Editors of weeklies: Awramba Times, Harambe, Enku and Addis Neger are suffering under frequent harassments and the new punitive press law, which has become the tool of silencing any criticisms against the ruling party.”
Zenawi like all depraved dictators preceding him fears and loathes the independent press more than anything else. Emperor Napoleon Bonaparte of France expressed his deepest fears of the press when he said: “Four hostile newspapers are more to be feared than a thousand bayonets.” In Ethiopia, that could be translated as “one journalist is to be feared more than a thousand soldiers (‘ke shee toregna, ande gazetegna’). The informative powers of an independent press are so awesome that dictators and tyrants in history have lived in constant fear of having their crimes discovered by the press and reported to the people. As Napoleon explained: “A journalist is a grumbler, a censurer, a giver of advice, a regent of sovereigns and a tutor of nations.” It was the fact of “tutoring nations” — teaching, informing, enlightening and empowering the people with knowledge– that drove Napoleon “bat crazy”. He hated the press passionately because they exposed his vast network of spies that had penetrated every nook and cranny of French society and his failed military adventures. They relentlessly condemned his indiscriminate massacres of unarmed French citizens protesting in the streets and his killing, jailing and persecution of his political opponents.
Zenawi is no different. He wants to crush the few struggling independent newspapers in the country for the exact same reasons Napoleon wanted to crush the press. For Zenawi, the independent press is the mirror of truth that shows and tells it like it is. Whenever Zenawi looks into the press mirror, he asks the same old proverbial question: “Mirror, mirror on the wall/ Who in the land is the cruelest and wickedest of all?” The independent press is always there to answer that question for him truthfully. Zenawi fears and abhors criticism because he can’t handle the truth. His problem is that in the new breed of Ethiopian journalists he is facing his worst nightmare: the truth in the hands, hearts and minds of the youth. These young journalists have captured the hopes and aspirations of the millions of the young people in the country (which represent nearly 70 percent of the population). The youth armed with the truth and united can never be defeated!
Zenawi has used the “law” to crush these young journalists in much the same way as other dictatorships have crushed the free press in history. When the Nazis decreed the “National Press Law” in October 1933, propaganda minister Joseph Goebbels crowed that the “law is the most modern journalistic statute in the world! I predict that its principles will be adopted by the other nations of the world within the next seven years. It is the absolute right of the State to supervise the formation of public opinion!” Another decree known as the Law Guaranteeing a Peace of Right was proclaimed immediately after the press law imposing the death penalty on anyone who imports, publishes or distributes in Germany “treasonable articles” and 5 years for importing, publishing or distributing “atrocity stories” about the Nazis or “endangering public security and order.”
Back in April 2008, in a Newsweek interview, Zenawi triumphantly declared that his new press law “will be on par with the best in the world.” His “law” provided: “Whosoever writes, edits, prints, publishes, publicises, disseminates, shows, makes to be heard any promotional statements encouraging… terrorist acts is punishable with rigorous imprisonment from 10 to 20 years.” Dr. Goebbels’ press laws are still alive and well 75 years after he introduced them in Germany. This is proof that history never repeats itself; it just finds a new theatre to play itself out.
Knowledge Will Forever Govern Ignorance
Zenawi lives to control everything around him. He has been pretty successful in monopolizing political power by wiping out the opposition. He controls the economy by controlling aid handouts and cornering the lucrative international panhandling business. He controls the daily lives of the people with fear and intimidation. But there are two things he has been unable to control: Ideas and the minds of the people. It is not for lack of effort. Zenawi has tried to control the flow of ideas by shuttering newspapers, jamming radio stations, filtering websites, jailing and harassing journalists and intimidating the people from expressing themselves. But he has not been able to control the flow of ideas or the minds of the people. No one can do that. A good leader inspires with sound ideas and lofty ideals. She encourages the people to freely shop in the marketplace of ideas. To play such a role, a leader needs to have vision, insight, foresight, hindsight, the ability to “look at things the way they are, and ask why” and the courage to “dream of things that never were, and ask why not.” A man blinded by hatred can have no vision. He can only think and ask, “How can I can make things so crooked and so warped that they can never, ever be straightened out again.” A man with no vision lives in darkness and ignorance. As the father the American Constitution James Madison advised: “Knowledge will forever govern ignorance, and a people who mean to be their own governors, must arm themselves with the power knowledge gives.” It is the free press, “the tutor of nations”, that will help the people gain the knowledge they need to govern ignorance.
Kudos to All Independent Ethiopian Journalists
Ethiopia’s young independent journalists are fighting the armies of darkness against overwhelming odds. The Dawits, Serkalems, Sisays, Eskinders and all the rest man the frontlines with nothing more in their hands than pens, pencils and keyboards. They fight with the written word to inform and educate citizens and help them find ways to effectively participate in their own governance. I admire these young journalists for doing something that has never been done in the history of press freedom in Ethiopia. They have taught us by personal example what it takes to defend freedom of expression. They are inventing for us a new culture of free expression, societal openness, official accountability and transparency in Ethiopia. They are developing a style of journalism based on truth-searching, truth-telling and exposition of lies costumed as truth. They keep the candle of liberty flickering in the darkness of oppression.
I believe all independent journalists in Ethiopia are bonded together by a common cause of press freedom. They suffer the slings and arrows of a vindictive dictatorship together; they fight together, they rise and fall together and in the end they win or lose together. The CPJ, PEN USA and IWMF awards honor all of them. As we celebrate these young journalists, we should remember what it is all about: Press freedom in Ethiopia is not about protecting the rights of newspapers, editors, journalists, reporters or foreign correspondents and radio broadcasters. It is quintessentially about the right of every Ethiopian citizen “to seek, receive and impart information and ideas of all kinds, regardless of frontiers and without interference.” Zenawi believes that by keeping Ethiopians in darkness his regime and hangers-on will thrive on forever. He needs to borrow a cup of wisdom. Only three things thrive and propagate rapidly in darkness: mushrooms, hate and anger. Mushrooms proliferate in dark caves; hatred and anger mushroom and smolder in the hearts and minds of men and women who are oppressed and subjugated. Let Zenawi ask himself these questions: What happens to hate and anger deferred, to paraphrase a poetic line of Langston Hughes? Do they just sag like a heavy load, or do they explode?
LET ETHIOPIANS “SEEK, RECEIVE AND IMPART INFORMATION AND IDEAS OF ALL KINDS, REGARDLESS OF FRONTIERS.”
RELEASE ALL POLITICAL PRISONERS IN ETHIOPIA.
[1] http://www.pambazuka.org/en/category/features/61056
[2] http://www.huffingtonpost.com/alemayehu-g-mariam/ethiopia-information-with_b_551428.html
[3] http://www.pambazuka.org/en/category/features/63303
[4] See fn. 1
Al Amoudi’s aid Abinet Gebremeskel has apparently ordered his servants Ayaya, Fassil and gang at the ESFNA to stay firm on Birtukan disinvitation and ride out the storm, according to Ethiopian Review sources. Having Birtukan as ESFNA’s guest of honor is simply unacceptable to Al Amoudi and Abinet who are currently under the crosshairs of Meles Zenawi’s wife Azeb Mesfin and must demonstrate their loyalty to Woyanne more than ever.
Meanwhile, at least four of the nine executive committee members are demanding reinstatement of Birtukan’s invitation. Several teams have expressed their intention to go public with their demand. In Atlanta, which has been chosen to host the July 2011 event, community leaders and activists are preparing to give a warning to the executive committee that they will call for boycott of the event if Birtukan is not invited. As a way out of the quagmire, the Ayaya-Fasil group within the executive committee is now asking the host team in Atlanta to invite Birtukan without mentioning ESFNA’s name.
Birtukan’s invitation, however, is not the only issue at hand. Equally important is the rampant corruption and malfeasance inside the ESFNA leadership.
It is not a secret that the 27-year-old Ethiopian Sports Federation in North America (ESFNA) has been infiltrated and hijacked by Woyanne through billionaire businessman Sheik Mohammed Al Amoudi. As a result, for the past 5 years, the organization has been transformed into a political tool for Woyanne. On top of that, the misconduct of some of its officials has been a source of embarrassment for the Ethiopian community in North America. In recent events, we have heard reports about hotels being vandalized, vendors being abused, as well as increasing incidents of illicit drug use and sexual harassment during the annual events. Much of the money that is collected from soccer games and concerts has been embezzled by a group within the executive committee that operates like a mafia group. ESFNA’s 2008 tax return [see here], shows an income of $1.6 million and a total expense of $1.5 million. The bulk of the expense ($1.2 million) is simply itemized as “other expenses.” If an independent accountant combs through the return, it could be uncovered that much of money that is spent for “other expenses” has been misappropriated.
The misconducts, some of criminal nature, are too many to list here. To put it simply, the Al Amoudi-controlled ESFNA is a totally corrupt organization that is an embarrassment to the Ethiopian community in North America.
Is reform possible?
ESFNA’s corruption and shameful acts are recently brought to the surface by a group of concerned individuals within the organization who are determined to reform it and make it a genuine Ethiopian institution that reflects the values of the community. As a first step, the individuals who are striving to reform ESFNA have proposed two things at the board meeting that was held late last month in Atlanta:
1) hire an independent CPA to perform a thorough audit
2) invite Judge Birtukan Mideksa as a guest of honor
The executive committee has rejected both requests, and the Ayaya group threatened to physically attack the individuals who put forward the requests. Some of the team representatives who make up the 27-member Board of Directors fought back and forced the chairman to take a vote. The majority voted for inviting Birtukan. However, in a show of utter contempt to the board’s authority, the lawless Ayaya and gang demanded the members to withdraw their votes, and when they refused to do so, Ayaya, joined by Sebsibe, and Fasil demanded the chairman to reverse the decision. The chairman, who is a puppet of Al Amoudi, complied, causing five teams to walk out in protest.
Before a decision was to be made on auditing ESFNA’s fiances — another even more contentious issue — the executive committee hurriedly adjourned the meeting and started to hand out $2,000 checks to every team representative as a hush up money. The corrupt executive committee handed out a total of over $54,000 just to the board members at the end of the Atlanta meeting. Their hotel and other accommodations were also fully paid. The executive committee squanders the organization’s money in this manner.
Recommendations
1. Dismiss all the executive committee members — with the exception of three or four who are thought to be honest individuals.
2. Remove all individuals in the leadership who are associated with Al Amoudi and Woyanne, namely Ayaya (Eyaya) Arega, Sebsibe Assefa, Fassil Abebe, Endale Tufer, and Demis Lemma (Arawit).
3. Bring in an independent accountant and audit ESFNA’s finances.
4. Remove Al Amoudi’s ESFNA permanent guest of honor status.
If ESFNA is unable to reform itself due to the entrenched power of the Al Amoudi gang, it must be forced to cease operating in the name of the Ethiopian community in North America.
Bangalore-based Indian company, Karuturi Global, the world’s largest flower producer, couldn’t get enough land in India to compete with rivals. So the company went to Ethiopia early this year and leased 1,200 square miles of land—larger than the State of Rhode Island—to grow flowers. After a few years, the land will become useless due to heavy use of fertilizers. Millions of Ethiopians are facing food shortage and yet the World Bank-financed dictatorship leases huge tracts of land to foreign agribusiness to grow and export flower.
Read the whole story below.
Corporate India Finds Greener Pastures—in Africa
By Mehul Srivastava and Subramaniam Sharma | BusinessWeek
Indian billionaire Ravi Ruia has flown to Africa at least once a month for the past year and a half. He’s invested in coal mines in Mozambique, an oil refinery in Kenya, and a call center in South Africa. Soon, he may also have a power plant in Nigeria. “Africa looks remarkably similar to what India was 15 years ago,” says Firdhose Coovadia, director of African operations at Essar Group, the $15 billion conglomerate headed by Ruia and his brother, Shashi. “We can’t lose this opportunity.”
Faced with increasing competition and a welter of bureaucratic obstacles at home, Indian companies are looking to Africa for growth. Since 2005 they have spent some $16 billion on the continent, vs. at least $31 billion for the Chinese, according to data compiled by Bloomberg and the Heritage Foundation, respectively. Bharti Airtel, India’s largest mobile-phone provider, in June paid $9 billion for the African cellular operations of Kuwait’s Zain. In 2008, India’s Videocon Industries paid $330 million for two coal mines in Mozambique, and India’s state-run fertilizer maker bought an idled Senegalase phosphorus producer for $721 million.
Beyond those big deals are dozens of smaller acquisitions and investments by Indian companies. “Compared to India, valuations [in Africa] are quite attractive,” says Anuj Chande, who heads the South Asia Group at accounting firm Grant Thornton in London. “We’re expecting to see a lot of midsize deals across a variety of sectors.”
The Indians view Africa as a place where they can replicate the low-cost, high-efficiency business model they have honed at home. Like India, Africa has hundreds of millions of underserved consumers eager to buy products tailored to their needs. Consumer spending in Africa may double, to as much as $1.8 trillion, by 2020, McKinsey & Co. predicts, an increase that would be the equivalent of adding a consumer market the size of Brazil. As a pioneer in sales of single-use sachets of soap and shampoo (along with Unilever (UL) and Procter & Gamble) for lower-income Indians, Mumbai-based Godrej Consumer Products understands “low-cost, value-for-money products,” Chairman Adi Godrej said in a May interview. In June his company acquired Nigerian cosmetics maker Tura, and in 2008 it bought South African hair-care company Kinky. “We want growth. Whether it’s from inside or outside India, we are agnostic,” Godrej said.
Indian companies also see Africa as a hedge against a possible slowdown at home. “If tomorrow the Indian economy was to take a U-turn, then at least you have other markets which are growing,” says Neeraj Kanwar, managing director of Apollo Tyres, India’s No. 2 tiremaker. His company bought South Africa’s Dunlop Tyres for $62 million in 2006, giving Apollo two manufacturing plants on the continent and brand rights in 32 African countries. Apollo aims to triple sales, to $6 billion, by 2015, with 60 percent of revenue from abroad, vs. 38 percent today. “Africa is going to give me growth,” says Kanwar.
Essar has endured endless squabbles with Indian landowners who refuse to make way for steel mills. Like other Indian companies tired of regulatory headaches at home, it moved into Africa and now has 2,000 employees there. Bangalore-based Karuturi Global, the world’s largest rose producer, couldn’t get enough land in India to compete with European and African rivals. Many times flowers wilted on the tarmac as cargo flights were delayed or canceled, including a big Valentine’s Day shipment. So in 2004, Karuturi bought a small plot in Ethiopia, and sales have since grown elevenfold, to $113 million in the year ended Mar. 31. Karuturi now leases 1,200 square miles of land—larger than the state of Rhode Island—in Ethiopia and sells more than half a billion roses a year. “Africa offered us a scale we could never reach in India,” says Managing Director Sai Ramakrishna Karuturi. “I’d love to do more in India, but getting even 1,000 acres near Bangalore took years.”
