Pomy Ketema, Esq.
May 28, 2019
Throughout its lengthy history, Ethiopia has had a myriad of political and economic systems and forms of government. While the country often excelled in global affairs, its domestic agenda fell short of creating a harmonious and prosperous society. The current administration is trying to change that. However, the continued ethnic violence and displacement of large groups of people show that the problem is foundational in nature.
A lasting solution to the various challenges that continue to face this nation of immense diversity needs to come from within.
The existential framework that replaces ethnic federalism must offer tangible fundamental inclusiveness, prosperity that is shared by all through a well-balanced system of public and private ownership, a strong sense of community emanating from individual responsibility and effort, and engagement with the broader global community through cultural respect and common interest.
The author proposes the gradual migration of ethnic-based states toward commonwealth states based on a framework that focuses heavily on economic relationships. The framework should combine the best attributes of capitalism and socialism, and adopt them into a market-oriented community-focused development model.
The term “commonwealth” generally means common good. Notwithstanding the taint attributed to the term due to colonial history, its basic tenet is to bring together people with ethnic, historic, geographic and religious ties to work toward a common vision of prosperity.
The term “pluralistic” is simply a broader and more innocuous term to describe diversity, multiculturalism or other differences among groups of people.
The term “market-oriented” means subscribing to the fine attributes of capitalism, including identification of economic opportunities and nurturing them to create value in the most efficient way possible.
The racial, ethnic and religious diversity of Ethiopians is unparalleled. Although it should have been a cause for celebration, it has been the source of much discord and conflict. This is unfortunate considering the country’s immense ability for compassion. In contrast to the perceived migration crisis in other parts of the world, Ethiopia is host to a substantial number of refugees and its borders remain open. The average Ethiopian will feed a hungry stranger without asking for anything in return. Our inability to find a framework to channel this kindness into a feeling of community among the various ethnic groups is unfortunate.
Ethiopians need a uniting factor that will transcend their perceived differences. I have yet to encounter an Ethiopian who is a “pure” something. Historically, threats of foreign invasion were a uniting factor that drew Ethiopians of all stripes into the battlefield to fend them off at all costs. Our modern-day enemy is chronic poverty, caused by apathy, greed, lack of know-how and mismanagement.
We need community orientation and individual responsibility to co-exist. This requires each individual to strive for excellence and act for the common good, and pluralistic communities to see value in collaborating for mutual benefit and view each other as allies in a common goal. What it takes is a paradigm shift in the national conversation that re-directs efforts and thinking toward a cause that will improve the daily lives of ordinary people.
- Individual Development Through Self-Awareness; Good Citizenship Through Self-Restraint:
It is easier to destroy than to build. At the most basic level, do no harm. Ideally, you manage your affairs so you benefit others around you.
When was the last time that you littered in public spaces? Storm drains serving the streets of Addis are plugged up because people use them to dispose of their waste. There are entire neighborhoods that look desolate because people didn’t bother to plant anything. Amazingly enough, Ethiopia is in the tropics and things grow in many parts of the country without a great deal of effort. We should aim higher.
Underused spaces should be developed into vegetable gardens, flowerbeds or some other schemes that are environmentally friendly, have pleasing aesthetics and improve community economics. The government is spending billions to clean up Addis when the city’s residents could have handled much of it through volunteerism. We should encourage every person with physical space to clean up and beautify their surroundings with simple things like locally made pottery, indigenous plants and creative decorations made of things that we throw away everyday.
When was the last time that you complained about the substandard quality of things that you bought at the store? Have you thought of making things for yourself? Cottage industries, which are beginning to take hold, offer a path to entrepreneurship and are a welcome step toward providing affordable necessities closer to where they are made. Simple household staples can be made into personal care products, such as olive and soybean oil for hair, anise extract as an antiseptic for use as a mouthwash or to treat wounds, and bleach and lemon juice for cleaning and disinfecting the home.
Are you happy when others give you money for doing nothing? You shouldn’t be. The culture of something-for-nothing has been one of the most detrimental aspects of our culture. Everyone should be expected to earn his or her keep. We should celebrate individual success, and disparage complacency and dependence as part of the country’s mainstream culture. On the flip side, we should learn to compensate each other monetarily for goods and services. The lack of financial compensation is a disincentive for anyone to meaningfully participate in any endeavor. More on this below.
When was the last time you repeated something that someone told you because you believed what you were told? What if they were wrong? We need to nurture a desire for well-informed knowledge, and improve access to information that is accurate and based on the physical and social sciences. Curiosity should fuel reading habits to understand the many disciplines that shape a civilized society, and use the gained knowledge to better manage our resources and affairs. Repeating what is heard from others without verification or, at a minimum, simple common sense examination will destroy even the most advanced societies.
2. Community Wealth:
Capitalism is the epitome of natural selection. It rewards individual genius and offers the potential to create immense wealth. This miracle of capitalism should be preserved through a business and tax climate that provides incentives for individual effort and achievement. For the remainder who struggle to afford even the most basic necessities, there has to be an alternative path to success.
The commonwealth model provides a flexible approach for balancing individual and community-based prosperity through a tailored regulatory framework, and effective governance and policies. The nation’s culture of “maheber” has proven to be a successful model for pooling wealth for centuries. It should be encouraged and further developed to make it easier for local groups to own and manage large local enterprises, particularly in rural areas where individual farming continues to be the main source of income for many.
Some of the basic needs of low income Ethiopians could be addressed through the maheber system, which can be used to compensate locals for helping each other with the construction of their homes, irrigation systems, underground water pumps where feasible, ranching and milk production, and many other endeavors that improve their daily lives and generate income. Ethiopians tend to be shy about taking money for their services from those they consider to be a friend or neighbor. A well-organized maheber system may mitigate that by eliminating the one-on-one dealings and running community affairs more like a business.
Government administration of business laws is also in serious need of a facelift. As a preliminary step, the Commercial Code of Ethiopia, enacted in 1960 (the Code), needs to be improved to provide detailed and clearer rules. The skeletal nature of the Code leaves agencies with wide latitude in interpretation, which could be vague, inconsistent or even incoherent. An improved Code that incorporates best practices from the developed world will encourage foreign investment.
By way of example, the Code provides no mechanics for how amalgamations between companies are to be effected, and concepts such as corporate divisions/split-ups, redemptions of private limited company shares, the conversion of debt into equity or vice versa, scope of director/manager liability and indemnification by the company, and other conventional corporate law concepts are missing. This is just the tip of the iceberg. Western investors typically expect a law firm to give them an opinion that their transactions will be availed of specific corporate and tax law treatment before they feel comfortable about engaging in a transaction. If the law is nonexistent, a law firm can’t issue an opinion and the foreign investors may choose to just sit on the sidelines.
Even if they choose to risk it and invest, what awaits foreign investors is not for the faint hearted. Critical decisions are expected to be made based on the verbal declarations of the person sitting behind an agency desk for the day who may not be there the following day. Casual and unreliable advice has real consequences and could result in the loss of substantial time and money. Guidance to large investors should be provided in writing, signed by the head of the agency having jurisdiction, and should be binding on that agency. I assure you that they would be happy to pay a fee for such written advice, as it provides much needed certainty, thereby improving the investment climate immensely.
In conclusion, the freedom to enter into legitimate business deals through individual negotiations is the basic tenet of a market-based system. To be attractive to and integrate with global markets, the regulatory framework needs to stay current on best practices and allow maximum flexibility for people to design their own deals. As currently written and administered, it poses a challenge for both domestic and foreign investors.
3. A Collective of Communal Local Governments:
The commonwealth concept is a grassroots wealth creation scheme that has local control and management of resources as its core principle. Ethnic violence in Ethiopia, particularly in border towns, has yet to abate. It isn’t happening from a lack of effort or appropriate tone from the top. Rather, it boils down to a simple case of economics.
Much of the disputes between various ethnic groups involve entitlement to land, water or other natural resources. For most of these communities, natural resources are their most valuable asset and they will resort to violence to preserve it. It seems changing the economics and basic discourse may be the only option to end the violence and bring about lasting peaceful co-existence in pluralistic communities.
But how do we do that? As a preliminary step, the author humbly suggests creating communal governments in border towns to promote, manage and regulate enterprises in which pluralistic communities can participate. We should make land and other natural resources less significant as an economic opportunity. As the population grows, natural resources per capita shrink, exacerbating what is already a delicate situation.
What should the enterprises be? This would largely depend on the types of enterprises a particular community’s resources can support.
How do we figure that out? I recently read an article about how some of the nation’s higher education institutions, particularly privately owned schools, are not living up to their promise. Perhaps, they could be given an opportunity to redeem themselves. The nation’s schools should participate in an annual competitive process of ideas to demonstrate their capabilities in crafting tangible practical solutions.
What would that process look like? A joint program by agencies of the federal and regional governments should administer an annual forum for schools to research local communities’ capabilities and resources, and submit a “wealth-creation plan” for the subject communities. The school that produces the best plan for each community will receive recognition and a financial award that it could use to improve its programs.
How should the plans be administered? Regional governments that share borders should form commonwealth economic units that are open to participation by communities on both sides of the border. The economic units should be managed by an independent board, which reports to the regional governments. The elected officials of the regional governments will appoint the board members, and give them sufficient autonomy to govern this subunit of their government. The focus of the commonwealth communities should be purely economic in nature, promoting shared opportunities and economic alliance between different groups of people.
If the initial experiment is successful, we should expand the concept to reach more areas. Eventually, as the conversation migrates from identity politics to prosperity, ethnicity-based regional states should be replaced with a collective of commonwealth communities, culminating into states whose governance structure is based on secular policies that foster economic development. This could take decades.
Some will look at this proposal and say it is naïve or easier said than done. However, we have to start somewhere to change our national platform of ethnic-based membership, privileges and dialogue. The flare-up of violence is scaring off investors, dampening growth and slowing down the process of wealth creation from which all Ethiopians would benefit. If the conversation is toxic and the points-of-view venomous, we have to address the fundamental problem before we can turn the corner. I would argue that a process, however long it takes, to shift our focus and priorities and create a social system that is more productive, inclusive and impactful is a worthy experiment.
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