ADDIS ABABA, Ethiopia (Reuters) — Libyan leader Muammar Gaddafi was elected chairman of the African Union on Monday and made clear he would pursue his vision of a United States of Africa despite reluctance from many members.
Resplendent in golden robes and cap and hailed as “king of kings” by traditional African leaders who accompanied him, Mr. Gaddafi accepted a gavel from the outgoing chairman, Tanzanian President Jakaya Kikwete, at a summit in Ethiopia.
He told fellow summit leaders that his project to create a united continental government would be approved at the next meeting in July unless there was a majority against it.
The AU normally relies on consensus in reaching decisions.
“If we don’t have a quorum for rejection, that means we have accepted it,” Mr. Gaddafi said.
“There is a rule in Islam. It is that silence is approval. If you say something to somebody and he is silent then it means that he has accepted.”
Mr. Gaddafi’s election was treated almost like a coronation by a group of customary African leaders dressed in colourful robes and headgear who accompanied him to the conference hall.
“On behalf of the traditional kings, on behalf of all the sultans, on behalf of all the princes, on behalf of all the customary rulers, I want to say thank you to the King of Kings who we have now crowned,” declared one of them, King Tossoh Gbaguidi of Benin.
The group, said to represent all Africa’s customary rulers, attended a conference sponsored by Mr. Gaddafi in Libya last September and he flew them to Addis Ababa for the summit.
Mr. Gaddafi, supported by some AU members like Senegal’s Abdoulaye Wade, has been pushing for a unity government for years, saying it is the only way to meet the challenges of globalization, fighting poverty and resolving conflicts without Western interference.
But others, led by regional economic powerhouse South Africa, see the idea as a distant and impractical prospect that would infringe the sovereignty of member states, although all 53 members of the AU say they agree with the idea in principle.
Mr. Gaddafi spent three decades preaching Arab unity before turning most of his attention to the African project, saying the continent was closer to him than Middle Eastern countries who had rebuffed his attempts to forge union.
One delegate, who asked not to be identified, told Reuters: “African countries should work closer together, yes. But a United States of Africa is not something that could happen overnight. Many countries have reservations.”
He said Mr. Gaddafi’s election would not change the situation.
An often heated three-day summit devoted to Mr. Gaddafi’s project in Ghana in 2007 did not reach a deal despite the participants being berated by the fiery Libyan leader.
The first day of this summit on Sunday again pulled back from accelerating the process.
Mr. Kikwete told reporters the meeting had agreed to replace the African Union Commission with an “authority” rather than an immediate pan-regional government as it had proposed. This would be launched at the next summit in July.
He said this would move it closer to a federal government but he was vague on how much real new power the authority would have.
By Jiro Honda | IMF African Department
The IMF approved a $50 million loan for Ethiopia to help its economy adjust to the steep increases in international prices of fuel, fertilizer, and cereals in 2008.
The price increases considerably weakened Ethiopia’s international reserves position and contributed to inflationary pressure.
The IMF Executive Board’s approval of the loan, based on sound policy commitments from the authorities, will help the East African country rebuild international reserves and catalyze financing from other international partners.
Recent reversal of some international commodity price hikes suggests that the exogenous shocks to Ethiopia’s economy may prove temporary. Nevertheless, the authorities, while pursuing macroeconomic adjustment, intend to take advantage of this opportunity to rebuild foreign exchange reserves to levels covering 1.8 months of imports by the end of the current fiscal year, in line with their medium-term objective.
Ethiopia’s loan was approved under the rapid-access component of the Exogenous Shocks Facility. “Together with stepped-up assistance from Ethiopia’s other international partners, the IMF’s financial support under the Exogenous Shocks Facility will help to mitigate the risk of an erosion of Ethiopia’s gains in poverty reduction in recent years.” said IMF Deputy Managing Director Takatoshi Kato.
Policy commitment
To mitigate the impact of exogenous shocks on the balance of payments, address domestic economic imbalances, and protect Ethiopia’s most vulnerable people, the authorities have taken or intend to take key policy measures including
• Eliminate domestic fuel subsidies. The fuel subsidy was abolished in October 2008 by adjusting regulated domestic prices to import parity. From now on the authorities will review domestic fuel prices monthly, adjusting them as needed but keeping a margin above world prices in order to repay the debt of the Oil Stabilization Fund.
• Mitigate the impact of high food prices. In late 2008 the government imported wheat equal to more than 3 percent of domestic crop production and distributed it to low-income families and flour mills at import cost—well below domestic prices. It is prepared to do so again if necessary.
• Significantly tighten fiscal policy and eliminate domestic borrowing. In the revised 2008/09 budget, general government domestic borrowing is targeted at zero —down from 2.7 percent of GDP in 2007/08—by containing expenditures and enhancing revenue mobilization through administrative measures such as integrating the three revenue agencies.
• Reduce domestic borrowing by public enterprises. Such borrowing will be kept to 4-8 billion birr, 1.1-2.2 percent of GDP, in 2008/09, down from 4.4 percent in 2007/08, by limiting investment activities and also by repaying the debt of the Oil Stabilization Fund. The authorities have established an inter-agency committee to monitor key public enterprises and public institutions.
• Tighten monetary policy. The National Bank of Ethiopia plans to reduce broad money growth to less than 20 percent in 2008/09 from about 23 percent at the end of the previous fiscal year. It also intends to closely monitor and control money creation arising from its net lending to the government.
• Increase exchange rate flexibility. Reflecting this commitment, the official exchange rate against the U.S. dollar depreciated by 5 percent on January 15, 2009. This, together with a similar-size depreciation on January 2, brings the cumulative depreciation since end-2008 to over 10 percent.
Partners to raise support
Tighter economic policies to adjust to the shocks and domestic imbalances are expected to significantly slow Ethiopia’s economic growth in 2008/09. Given the intensifying global economic downturn, the planned adjustment path is also subject to considerable risks and uncertainties, particularly because Ethiopia is highly dependent on external resource flows from remittances, aid, and foreign direct investment.
Stepped-up donor assistance will help to soften the impact by providing financing for capital projects and foreign exchange for essential imports. This, along with lower import prices, should make it possible to rebuild foreign exchange reserves over the medium term. Ethiopia’s international partners have recognized the country’s difficult situation and plan to substantially raise concessional project financing and budget support.
Implementation key to success
Kato stressed that forceful implementation of Ethiopia’s adjustment policies is essential. This would not only ease the pressures on the balance of payments and domestic prices, but also lay the basis for sustainable economic growth.
“In the current global economic environment, there are significant risks that exports, remittances, and foreign direct investment may fall short of expectations. If this proves to be the case, additional policy tightening will be needed to preserve the viability of the balance of payments.” Kato stated.
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EDITOR’S NOTE: Peace is returning to Somalia after two years of terror by the U.S. Woyanne regime. Meles and gang who are ruling Ethiopia are the worst terrorists in the world. They have caused the death of over 10,000 civilians and in Somalia alone in the past 2 years.
By Lisa Schlein | VOA
The U.N. refugee agency reports for the first time in two years, displaced Somalis are beginning to return to their devastated neighborhoods in the capital Mogadishu. The UNHCR says the returns in the last two weeks follow the withdrawal of Ethiopian {www:Woyanne} troops from Mogadishu.
In the past few years, Somalia’s capital, Mogadishu has been the scene of some of the worst fighting in the country. Tens of thousands of terrified civilians have fled their homes. They prefer to live in squalid makeshift camps than to chance the violence and insecurity of a capital at war.
But, now, the U.N. refugee agency says there are signs that the situation may be changing. It says more than 16,000 internally displaced people who had fled to various parts of Somalia have returned to three districts in the capital.
UNHCR spokesman, Ron Redmond, tells VOA the three western districts were scenes of some of the worst violence and human rights abuses witnessed in Mogadishu some months ago.
“The returnees are families who say they intend to stay for good in the city,” he said. “What we have seen in the past is maybe the heads of households, men going back and checking out their houses and their property, but not bringing their families back. Now the whole family is going back.”
“So, that is a good sign. The bad news is that despite these returns, the security situation in Mogadishu remains extremely volatile. And, only this week, some 10,000 civilians fled from two districts in northeast Mogadishu to escape advancing Islamic militia who wanted to seize control of the neighborhood,” he continued.
Redmond says most of these 10,000 displaced people have moved to other neighborhoods within Mogadishu or to the outskirts of the city. So, he says, a lot of instability remains, with some people returning to Mogadishu and others fleeing the city.
For now, he says most of the city’s residents who fled Mogadishu are still reluctant or fearful to return to their homes. The UNHCR reports an estimated 300,000 internally displaced people live in makeshift shelters in the Afgooye area, some 30 kilometers west of Mogadishu.
Redmond says conditions there are very hard. Nevertheless, he says the IDPs are afraid conditions in Mogadishu will be even worse. He says they are deterred from returning by lack of water, sanitation and health services and the threat of renewed fighting in the capital.
About one million Somalis have fled Mogadishu since February 2007, when fighting erupted between the Ethiopian Woyanne-backed Transitional Federal Government soldiers and rebels. The UNHCR says 1.3 million Somalis are displaced within their own country.
