Ethiopian Illicit Outflows Doubled In 2009, New Report Says
By Christopher Matthews | Wall Street Journal
Ethiopia lost $11.7 billion to outflows of ill-gotten gains between 2000 and 2009, according to a coming report by Global Financial Integrity.
That’s a lot of money to lose to corruption for a country that has a per-capita GDP of just $365. In 2009, illicit money leaving the country totaled $3.26 billion, double the amount in each of the two previous years. The capital flight is also disturbing because the country received $829 million in development aid in 2008.
According to GFI economist Sarah Freitas, who co-authored the report, corruption, kickbacks and bribery accounted for the vast majority of the increase in illicit outflows.
“The scope of Ethiopia’s capital flight is so severe that our conservative US$3.26 billion estimate greatly exceeds the US$2 billion value of Ethiopia’s total exports in 2009,” Freitas wrote in a blog post on the website of the Task Force on Financial Integrity and Economic Development.
The report, titled “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” drew on data from the World Bank and the International Monetary Fund on external debt and trade mis-pricing to calculate illicit capital leakage. The study, which will be released later this month, measures the illicit financial flows out of 160 different developing nations.
Ethiopia is one of the poorest countries on earth as 38.9% of Ethiopians live in poverty, and life expectancy in 2009 was just 58 years.
“The people of Ethiopia are being bled dry,” Freitas wrote. “No matter how hard they try to fight their way out of absolute destitution and poverty, they will be swimming upstream against the current of illicit capital leakage.”
They include two Swedish journalists – Martin Schibbye and photographer Johan Persson – who were charged a fortnight ago with terrorism. The two men were arrested in early July after crossing from Puntland into Ethiopia‘s troubled Ogaden region.
In the last two weeks Ethiopian security forces detained two Ethiopian journalists, Eskinder Nega and Sileshi Hagos. Ethiopian government spokesman Shimelis Kemal accused the journalists, of plotting “a series of terrorist acts that would likely wreak havoc.”
Two other Ethiopian journalists were detained over the summer and have been held on terror charges for writing articles criticising the government.
Wubishet Taye of the Arawamba Times and Reeyot Alaemu, a part-time columnist, are currently held in Maikelawi prison in Addis Ababa awaiting trial. They could face sentences of up to 20 years.
“In the past four months, authorities have used sweeping terrorism laws to detain six independent journalists in an attempt to wipe out the few critical voices left in the country,” said CPJ’s east Africa consultant, Tom Rhodes.
“If the authorities have credible evidence against any of these journalists, let them present it publicly. Otherwise, they must release them.”
Anti-Terrorism proclamation of 2009
In 2009, the Ethiopian government passed anti-terror legislation, with definitions of terrorist activity that are broad and ambiguous.
It permits a clampdown on political dissent, including political demonstrations and public criticisms of government policy that are deemed supportive of armed opposition activity.
It also deprives defendants of the right to be presumed innocent and of protection against the use of evidence obtained through torture.
Mohamed Keita, coordinator for the CPJ’s Africa programme, says: “Ethiopia is certainly one of the most restrictive nations in Africa in terms of press freedom. It has one of the most appalling press freedom records on the continent.”
International broadcasters harassed
The free press expanded under the Ethiopian government when the ruling party, the EPRDF, first came to power in 1991.
But in the aftermath of the 2005 elections, when the contested results caused civil unrest and the massacre of 193 civilians, there has been a relentless crackdown on the independent press.
Many publications were shut down and 13 editors imprisoned. Today, most of the media in Ethiopia is state-owned. Even the international media are not immune to political interference.
Both Voice of America (VOA) and Deutsche Welle (DW) have had their radio and internet services jammed within the country.
This occurred particularly during the May 2010 elections and in 2011 against the backdrop of the revolt in North Africa.
A VOA spokesperson said: “Three VOA stringers have had to flee Ethiopia because they were harassed for reporting VOA’s Horn of Africa service during the 2005 national election.
“Another stringer fled Ethiopia because she was being repeatedly harassed, even after she stopped working for the service.”
Ludger Schadomsky, head of DW’s Amharic service, said: “The government is putting a lot of pressure to bear on DW and VOA to have certain opposition people removed from the airwaves.”
DW have allegedly been told by Ethiopia’s minister of communications, Shimles Kemal, that the jamming of their services was “owing to interviews DW had conducted with ‘terrorist organisations.'”
It is alleged that this relates to an interview with the Ginbot 7 political opposition leader, Berhanu Nega.
Schadomsky said: “We have made it clear we will not be arm twisted into self-censorship. The present climate of fear leads many of our prospective partners in Ethiopia, and even in the Diaspora, to decline our interview requests. ‘We have family back at home’ is the standard line.”
A cable released by WikiLeaks [05ADDISABABA3915] reveals that in 2005 the Ethiopian government also exerted pressure on US diplomats over VOA broadcasts.
The document is an interesting commentary on the government’s position on the media. The US diplomat reports that, the Ethiopian government “remains focused on issues of control and restraint… rather than positive engagement and outreach.”
When the foreign minister, Tekeda Alemu, met diplomats at the US embassy in Addis he expressed his concern at VOA’s biased reporting.
He contended that VOA was “not working as a news outfit but was instead carrying out political activities intended to damage the EPRDF and the Ethiopian people with no sense of embarrassment or proportion.”
Journalists in Ethiopia
In Ethiopia, the threat of imprisonment for political journalists is constant.
Dawit Kebede is editor of the Awramba Times, one of the few independent publications in the country.
He was arrested and imprisoned for two years on charges of treason and genocide following the 2005 elections when he wrote a column suggesting that the EPRDF may have lost the elections.
He said: “The recent atmosphere in Ethiopia for journalists is the state of insecurity and fear of what tomorrow might bring. Journalists who write on political issues work under a shadow of fear.
“When it comes to giving aid, donors should ask about the democratic status of Ethiopia. If they could bring up issues of ‘What does freedom of the press look like’ as a precondition of their aid, I believe it would create better conditions in Ethiopia.”
The bureau has asked the Ethiopian government on numerous occasions for a comment about the media in Ethiopia. It has declined the chance to respond.
This is an installment in the CBS WorldWatch series, “The world’s enduring dictators,” inspired by events in Tunisia and Egypt, in which CBSNews.com takes a look at the men who continue to rule their lands unimpeded by law. See a complete explanation of the series and a list of others profiled here.
Meles Zenawi, Ethiopia
Length of rule: 16 years. Zenawi helped lead the rebel movement that overthrew a brutal military dictatorship in 1991, and in 1995 was elected prime minister, a post he still holds. After heavily disputed elections in 2005 that featured his ruling party announcing victory in a close election before the votes were counted, Zenawi’s Ethiopian People’s Revolutionary Democratic Front and a small coalition of affiliated parties won 99.6 percent of all parliamentary seats in May elections this year which “fell short of international commitments,” Amnesty International writes.
Feature page: The world’s enduring dictators
Most despotic acts: While Eritrea was officially blamed for starting its infamous war with Ethiopia from 1998 to 2000, Zenawi did little to prevent the escalation of what many described as a pointless conflict that left at least 70,000 dead on both sides and cost two of the world’s poorest countries hundreds of millions of dollars. Zenawi has centralized control of many state functions within his political party, and while that has led to impressive economic growth, it has also spawned numerous reports of politically motivated killings, mass repression of freedoms and torture by state security services, which is saying nothing of the exclusion of non-party members from government services. After the disputed 2005 elections, security forces killed 200 protesters. Many claimed there was a clear victory for opposition politicians in 2005, but the ruling party said it won before results were announced, and it has maintained power since.
Outlook for change: In 2009, Zenawi indicated he was ready to step down, but his party “convinced” him to stay on to ease any potential transition. As many as 200 people in the political opposition have been arrested in recent months, apparently in reaction to the uprisings in Tunisia and Egypt. Zenawi has faced several insurrections and secessionist movements within Ethiopia in his time as ruler, but it is unclear whether he will step down willingly or be forced to step down any time soon. That said, dissatisfaction with the Zenawi regime must exist as, yet again, swaths of Ethiopia are facing a critical food shortage.
Is there any question about who is taking the money out of the country? The Meles crime family has has been looting Ethiopia’s treasure for the past 20 years.
By TAMRAT G. GIORGIS
(Addis Fortune) — Ethiopia may be touted at international conferences on development agendas as one of the 10 fastest growing economies in the world, but it is also one of the top 10 out of the 45 least developed countries (LDCs) where foreign currency flows out in an {www:illicit} manner, worse than countries such as Sudan, Djibouti and Eritrea, a new study found.
Over 8.3 billion dollars left Ethiopia in 18 years after 1990, an amount comprising an average 3.6pc of its GDP, a damning and first of its kind study, conducted by the United Nations Development Programme (UNDP), revealed last week.
This is part of the one trillion dollars that is believed to have left LDCs over the years covered by the study, an amount estimated to be 10 times larger than what these countries receive from rich countries in the form of official development assistance (ODA).
Ethiopia’s loss of over eight billion dollars in the past nearly two decades represents an average of 3.6pc of the amount it has received from its development partners during the same period, the study revealed.
The worst period was in 2006, when illicit funds representing 9.2pc of foreign assistance for the year, amounting to 1.4 billion Br, was believed to have left the country.
Bangladesh stands above any of these countries found to be victims of the illicit outflow of foreign currency; it has lost 34.7 billion dollars (equal to 3.4pc of its GDP) to illicit money transfers, followed by Angola, which lost 34 billion dollars, 10.9pc of its GDP.
“This money could be used for the countries’ development efforts,” Helen Clark, UNDP administrator, said at a panel discussion held in Istanbul, Turkey, on the side of the UN’s fourth conference on LDCs.
The 63-page report by the UNDP was released on the afternoon of Wednesday, May 11, 2011, where Abdella Hamdok, an expert on the issue from the UN Economic Commission for Africa (ECA), was one of the panellists.
“It is an excellent report that has managed to capture the extent of the problem,” she said.
Although there are 49 countries listed as LDCs, and 45 of them were covered under the study, 70pc of the illicit outflows of funds as “any money that is illegally gained, transferred, or received” originated from Africa, according to Hamdok.
Another finding of the report that raised eyebrows among panellists was the revelation that the usual suspects of African dictators and their cronies do not have as much part in the money laundering scheme as members of the private sector. A staggering 79pc of money laundering out of these countries was funnelled through what the studies described as the “mispricing of trade.”
The mispricing of trade involves businesses under or over invoicing of their merchandise, according to Clark.
“When a ton of bananas is sold for a dollar, but the invoice says 50 dollar cents, the other half is slashed to be sent to an offshore account,” said Geraldine Fraser-Moleketi, a former senior official from South Africa who now serves UNDP as director of Democratic Governance Group.
The source of illicit money is tax evasion and an attempt to launder the gains through the international financial system, according to the UNDP study.
“That there is a lack of adequate global tax monitoring and the absence of information sharing has contributed to the outflow,” said Moleketi.
Macroeconomic problems such as high inflation, structural characteristics of an economy including non-inclusiveness of growth, and overall governance issues such as political instability were blamed by the UNDP experts as the reasons behind money laundering from poor countries.
Ethiopia, sharing all or some of these factors, lost an annual average of 491 million dollars over 18 years, the study disclosed. The highest amount to have fled the country, 2.1 billion dollars, was recorded in 2008.
It claims nearly eight per cent of the country’s GDP registered that year, according to the UNDP study.
Ethiopia’s loss of foreign currency to money laundering between 1990 and 2008 was 1.2 points below the 4.8pc average recorded for all the countries covered in the study, while 27 of these countries are above this average which bleeds their economy. Chad is the biggest prey with a loss of 15.4 billion dollars (27.3pc of its GDP).
Government representatives at the discussion were advised by the UNDP officials to modernise their customs systems and undertake public administration reforms to provide expertise to fight money laundering. No Ethiopian government delegate was present; while over 30 had arrived in Istanbul, they left the day before.
Apart from an Ethiopian working for the UN and stationed in New York, there were two other Ethiopians in the room where the discussion took place. Among them was a shareholder of a prominent importing company in Ethiopia, Garad Plc. They had also left before the recommendations of the UNDP were read out.
(BBC) — International Criminal Court Prosecutor Luis Moreno-Ocampo (4 May 2011) Mr Moreno-Ocampo’s office reviewed more than 1,200 documents and 50 interviews.
The International Criminal Court’s prosecutor is seeking the arrest of Libyan leader Col Muammar Gaddafi and two others for crimes against humanity.
Luis Moreno-Ocampo said Col Gaddafi, his son Seif al-Islam, and intelligence chief Abdullah al-Sanusi bore the greatest responsibility for “widespread and systematic attacks” on civilians.
ICC judges must still decide whether or not to issue warrants for their arrest.
The Libyan government has already said it will ignore the announcement.
Deputy Foreign Minister Khalid Kaim said the court was a “baby of the European Union designed for African politicians and leaders” and its practices were “questionable”.
Libya did not recognise its jurisdiction, like most African countries and the United States, and would ignore any announcement, he added.
‘Greatest criminal responsibility’
Earlier, Mr Moreno-Ocampo’s office said that after reviewing more than 1,200 documents and 50 interviews with key insiders and eyewitnesses, he would request later on Monday that the ICC’s Pre-Trial Chamber issue three arrest warrants.
The men are suspected of committing two categories of crimes against humanity – murder and persecution – under the Rome Statute which established the court.
The charges cover the days following the start of anti-government protests on 15 February.
Protester in Tobruk (24 February 2011) The application is expected to focus on the initial clampdown against protesters in February
“The evidence shows that Libyan security forces conducted widespread and systematic attacks against the civilian population and led to the identification of those who bear the greatest criminal responsibility for such crimes,” a statement from the prosecutor’s office said.
“Additionally, there is relevant information on alleged commission of war crimes once the situation developed into an armed conflict. The office will evaluate these crimes with the same standards, in particular allegations of rape and attacks against sub-Saharan Africans wrongly perceived to be mercenaries.”
An inquiry set up by the UN Human Rights Council is expected to submit its report on the alleged war crimes to the UN Security Council on 7 June.
The application for warrants is expected to focus on the initial clampdown against protesters by Col Gaddafi’s government. Between 500 and 700 people are believed to have been killed in February alone.
Mr Moreno-Ocampo said he was acting in accordance with UN Security Council resolution 1970, which referred the situation in Libya to the ICC, and stressed the need to hold to account those responsible for attacks on civilians.
The Pre-Trial Chamber’s judges may decide to accept the prosecutor’s application, reject it, or ask him for additional information.
If Col Gaddafi is named, it would only be the second time the ICC has sought a warrant for a sitting head of state. Sudanese President Omar al-Bashir has been indicted for crimes including genocide in Darfur.
Nato ‘abuses’
Meanwhile, the Libyan government has condemned British calls for Nato to bomb a wider range of infrastructure targets to put pressure on Col Gaddafi.
Continue reading the main story
If we do not up the ante now there is a risk that the conflict could result in Gaddafi clinging to power”
Gen David Richards UK Chief of the Defence Staff
Benghazi: ‘We’re all volunteers now’
A spokesman said the comments by the Chief of the Defence Staff, Gen Sir David Richards, was a threat “aimed at terrorising civilians”.
Gen Richards told the Sunday Telegraph: “The vise is closing on Gaddafi, but we need to increase the pressure further through more intense military action”.
“The military campaign to date has been a significant success for NATO and our Arab allies. But we need to do more. If we do not up the ante now there is a risk that the conflict could result in Gaddafi clinging to power.”
UK Defence Secretary Liam Fox said he agreed with Gen Richards, telling the BBC: “It’s legitimate to degrade the command and control and intelligence networks of the regime which are used to control those forces and provide that threat.”
Libyan Prime Minister al-Baghdadi Ali al-Mahmoudi later told the UN’s special envoy, Abdul Ilah al-Khatib, that his country wanted “an immediate ceasefire to coincide with a halt to the Nato bombardment and the acceptance of international observers”, according to the Jana state news agency.
Libya, he added, was committed to the unity of its territory and people and that Libyans had the right to “decide on their internal affairs and political system through democratic dialogue away from the bombing threat”.
Mr Mahmoudi accused Nato of “abuses and violations”, including “political assassinations, the unjust maritime siege, bombing of civilian sites and destruction of infrastructure”.
Overnight, Libyan state television reported said Nato aircraft had bombed an oil terminal in the eastern port of Ras Lanuf.
The alleged strike came after rebel fighters said they had taken full control of the western city of Misrata and said the situation was now “static”.
Digital censorship threatens press freedom, new report shows
New York, May 2, 2011—As journalists increasingly use social media to report breaking news and the number of people with Internet access explodes worldwide, governments are employing sophisticated new tactics to {www:suppress} information, according to a report by the Committee to Protect Journalists, issued today to mark World Press Freedom Day.
CPJ’s {www:assessment} of the 10 prevailing strategies for online oppression and the leading countries utilizing such tactics shows that traditional mechanisms of repression have evolved into pervasive digital censorship. The tools utilized include state-supported email designed to take over journalists’ personal computers in China, the shutting down of anti-censorship technology in Iran, monopolistic control of the Net in Ethiopia, as well as synchronized cyber-attacks in Belarus.
“These techniques go well beyond Web {www:censorship},” said Danny O’Brien, CPJ Internet Advocacy Coordinator and author of the report. “The Internet is being used to spy on writers and sabotage independent news sites where press freedom is most threatened. The aim is not only to censor but to block or disrupt the reporting process and the dissemination of news and information.”
The digital offensive is often coupled with physical {www:intimidation} of online journalists. In 2010, CPJ research shows that 69 journalists whose work appeared primarily online were jailed as of December 1, constituting nearly half of all those in prison.
“These sophisticated, often invisible, attacks constitute a new front in the fight for press freedom,” said O’Brien. “Bypassing censorship is important but basic protection of source data and identities should take priority as well. Combined, these digital attacks undermine our universal right to seek information.”
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CPJ is a New York-based, independent, nonprofit organization that works to safeguard press freedom worldwide
CPJ monitors Internet freedom and online press freedom violations, working to promote tools and techniques for a free press on the Web. In 2008, CPJ joined the Global Network Initiative, a coalition to ensure companies uphold freedom of expression in their policies and operations. Danny O’Brien tracks developments on a dedicated blog called the Internet Channel.
