The UN: What is an Apology Worth After Inflicting a Massive Injury?

“It is important to note that even though an apology has been offered, the media will not carry it with similar intensity and zeal, to undo the indelible dirt on Ethiopia—a reliable UN partner involved in multiple peace-keeping missions in some of the most intractable parts of the world,” says The Queen of Sheba, who has been anonymously sharing his thoughts on this platform.

The Queen of Sheba
December 15, 2020

Following an incident involving the Ethiopian army and the UN staff, which the international organization apologized for, this author wrote an earlier piece under a heading “The Rude Outlaw: The UN Staff or the Ethiopian Army?”. That story narrated how the UN staff broke the terms of its agreement with the Ethiopian government by breaching two check points and only stopped on the third one after a warning shot.

Initially, the organization accused Ethiopia of violating the agreement; and later its UNHCR head further pronounced Ethiopia as “out of control”. This triggered an avalanche of media attack by armchair analysts, biased journalists, and more so hired guns, painting Ethiopia and its government as outlaws. As a consequence of the twisted—and outright wrong—narrative generated by phony, but dangerous, UN allegation, a major damage has been inflicted on Ethiopia. Already, a possible punitive bill is being peddled by two United States Senators largely attributed to the bogus allegation.

Apologies: Worthless Words?

According to the Fana Broadcast Agency(https://www.fanabc.com/english/ethiopia-calls-on-humanitarian-workers-to-follow-security-guidelines/), the Ministry of Peace, on 13 December 2020, reported that the Government of Ethiopia received and “welcomed the apology given by Dr. Catherine Sozi, UN Resident and Humanitarian Coordinator for Ethiopia, on the [recent] incident [which the UN staff breached two checkpoints and forced to stop on the third one]. It also expressed its hopes that the UN will put mechanisms in place to prevent similar breaches in the future as it undermines humanitarian coordination and poses serious security risks.”

In the first place, the reporting, which was the subject of the apology, was based on misleading news and outright wrong information. These have raised the stakes for the Ethiopian government and its people so high that reversing the narrative remains a very daunting, and expensive, exercise.

It is true that the UN apologized for the actions of its staff, though belatedly. Already virtually all the major international media and many others around the world reported Ethiopia as a culprit in blazing headlines and blistering narratives. A bad picture has already been painted on the standing of the country which cannot be erased overnight, if ever.

It is important to note that even though an apology has been offered, the media will not carry it with similar intensity and zeal, to undo the indelible dirt on Ethiopia—a reliable UN partner involved in multiple peace-keeping missions in some of the most intractable parts of the world.

Ethiopia must insist on an appropriate restitution for the severe loss on the political, economic, social, and diplomatic front as a consequence of the UN’s blunder. The UN and others must help to rectify the situation. They must be part of a sustained effort to reverse some of the drumbeat of sanctions, threats and adverse propaganda against the country and its people. The UN can start the effort by forwarding that apology letter to the senators mentioned above.

This as it may, I find it exceedingly baffling why the UN and the so-called international community is wildly scrambling to support some 45,000 Ethiopian citizens of Tigrayan ethnic group when they have mostly been dead silent as several millions from multiple ethnic groups faced a grimmer situation in the last three years. It is disturbing to witness such a blatant double-standard with, of course, implications for the sanctity of these institutions.

Other Culprits

On the media front, well-established outlets such as, primarily Reuters, the BBC, the Guardian, and Aljazeera, as well as the New York Times and CNN, have been spewing hostile, sloppy, and, at times, outright falsehoods on Ethiopia since the outbreak of the conflict. Many observers attribute this trend to the well-oiled machinery of the TPLF cabal which managed to coopt and strategically plant rogue reporters in these organizations.

In a number of cases, some of these media houses invited unduly critical and well-known government adversaries to their popular programs and shows which often lacked balanced views as decent journalism demands. One glaring—and scandalous—story carried by the New York Times was already effectively countered in the piece mentioned above as well as a more blistering one as this.

We also recently heard that, the BBC has apologized following government protest on its aggressive and biased reporting. One would hope that many others may probably follow suit given the serious breach of trust witnessed for over a month now. To be sure, trust is both an asset—and a liability. Oh, yes, trust is earned slowly—but often lost quickly.

Sham Journalism

In writing this piece, I opted to review the website of Mr. Martin Plautt, whose reporting since the outbreak of the conflict, I found, has been one of the most biased, if not the most dishonest. In a class of its own, some of the reports, quoted from his website (https://martinplaut.com/2020/12/13/situation-report-eepa-horn-no-24-13-december-2020/) below, exhibit that bizarre blubbering only a hired gun would commit.

Mr. Plautt, who pronounces himself as a “Journalist specialising in the Horn of Africa and Southern Africa” introduces his minion outfit, “Europe External Programme with Africa” (EEPA), as such:

Europe External Programme with Africa is a Belgium-based Centre of Expertise with in-depth knowledge, publications, and networks specialised, in issues of peace building, refugee protection and resilience in the Horn of Africa.

And yet his webpages are cluttered with astoundingly biased news and blatant lies as these ones:

“Reported situation in Tigray (as confirmed per 13 Dec)

Reported from within Tigray: serious problem of lack of water.

Serious looting still ongoing from shops in Mekelle, perpetrated by Amharic militia and Eritreans as well as poverty stricken people benefiting from the lawless situation.”

One needs to pay attention to just three words and phrases used here to legitimize, obfuscate and simply lie: “confirmed”, “lack of water”, “Amharic militia and Eritreans”.

Mr. Plautt, on his self-declared “Situation Report” unabashedly pronounced the statements “as confirmed” but cowardly disclaims that “All information in this situation report is presented as a fluid update report.” The key word here is a “fluid update report” which may translate as self-selected, if not self-cooked account.

In this “Reported situation in Tigray” as “confirmed”, he unashamedly blurted a “serious problem of lack of water”. And yet one of the chronic infrastructural challenges known in Tigray, specially Mekelle, is exactly that problem which Prime Minister Abiy Ahmed has identified as a priority, allocating billions to fix it, when the TPLF cabal was clandestinely prepping to wage a war against his government.

To be sure, the so-called “Situation Report” has conveniently ignored the cabal’s disastrous acts—of destroying bridges, powerlines, and airfields; massacring innocent and unarmed civilians, including women and children; and scorching everything on its tracks. In his pathetic effort to cover up for his cabal handlers, the “good” EEPA reporter has indecently overlooked these atrocious crimes which directly impacted, oh yes, water delivery.

The recent closed circuit footage released by the Ethio-Telecom in Mekelle, which shows forced disruption of services by the cabal, has proven beyond any doubt who the culprit is and also how far it would go in its unmatched criminal behavior—without regard to the dire needs of the Tigray people it pretends to represent.

Mr. Plautt in the “confirmed” report cited looting by “Amharic militia and Eritreans as well as poverty stricken people benefiting from the lawless situation”. For the ‘distinguished’ journalist to misstate the Amhara militias for Amharic militias is more than a slip of a tongue, well may be a slip of a keyboard. More so, as a main cook of “the Eritreans in Tigray” fiction, the UN Secretary General António Guterres’ statement which discounts this persistent falsehood may be sufficient to quash that fabricated story. But this may not seem to deter this and other hardcore operatives, paid guns and shenanigans of the cabal whose credibility is dissipating like a cloud in a windy day.

As an avid BBC listener growing up—I recall Mr. Plautt’s regular reporting and analysis. Now, I feel utterly betrayed and deceived—and feel foolish—for trusting his words and analysis without much reservation.

In my earlier piece, “The “International Community” and Ethiopia: The Good, the Bad, the Ugly—and the Gullible”, I concluded by citing the story of the poor Humpty-Dumpty who could not recover from his bad fall. Neither Mr. Plautt nor his handlers nor his benefactors can undo the fate of the Humpty-Dumpty cabals. The dogs bark, but the caravan goes on.

In Conclusion

It is true that the UN, the BBC and many others have and will in the future apologize for their misdeeds—inadvertent or deliberate. But this comes at a huge price for Ethiopia, its people and government.

Ethiopia thus should not bear the brunt of the burden of these misdeeds.

The UN could start with sharing that burden by advising the two US Senators to drop the bill largely produced on the account of frivolous—and dropped—charges.

The Queen of Sheba may be reached at QueenOfSheba2020@outlook.com

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Join the conversation. Like borkena on Facebook and get Ethiopian News updates regularly. As well, you may get Ethiopia News by following us on twitter @zborkena

The article below was published in Ethiopia, South America, and worldwide nearly 20 years ago. The analysis and recommendations contained there in still apply today.

Donald Trump withheld aid to pressure Ethiopia in favor of Egypt. Now the European Union is doing the same to favor the TPLF junta which they hoped would continue to create havoc and weaken Ethiopia in favor of Egypt and other adversaries. The white powers of this world might in fact might have bigger and comprehensive goals of hurting Ethiopia for her leadership in the liberation of African countries from colonialists in the 60s, defeat of apartheid in South Africa and liberation of Zimbabwe, establishment of the African Union, and defeat of another white colonialist Italy. They hate the fact that Ethiopians do not consider white any superior than blacks, thus promoting the pride of blacks everywhere.

When Emperor Haile Sellassie visited the USA when Kennedy was president, the network television CBS interviewed him on live TV, and one question asked was: did the Emperor consider himself and Ethiopians to be “Negroes”, no doubt meant to create wedge with the black population. The Emperor’s response was that he considered God created all humans in his image and did not want to categorize himself, Ethiopians, and others along racial lines.
The interviewer seemed to have hated the answer since that was counter to the racist US policy of considering blacks as 3/4 of whites.
————————————————————————————

The Fallacy of Foreign Aid as Engine of Economic Growth

By Teketel Haile-Mariam
Addis Tribune
October 4, 2002

The World Bank and International Monetary Fund held their annual meetings in Washington, D.C. this past weekend, and repeated their promises at previous such meetings to make the poor nations of the world more prosperous. And Ethiopia had sent its own delegates to the meetings to plead for more loans. Protesters from across the globe, who believed these institutions had done (and continue to do) more damage than good through their ever increasing loans and misleading policy prescriptions, had also gathered to demonstrate their opposition to the activities of the institutions, which they also believed contributed to environmental degradation (and the changing weather pattern around the globe) and economic rape of the world’s poor.

What roles did the international financial institutions play (and continue to play) in Ethiopia? Did their policy prescriptions and loans have significant and sustainable impact on improving macroeconomic performance and standards of living of ordinary citizens?

Ethiopia had (and continues to have) a history of dependency on foreign assistance, whether that be in the form of food donations, military hardware, or loans for public investment. Although this history applies to all three recent successive regimes, non-military loans contracted by the current government over the last eleven years exceeded similar loans obtained over a span of about sixty years by the two prior regimes combined. And there had been negative correlation between the ever increasing loans and the levels of poverty. As loans increased, the per capita income (brute measure of the level of economic development) had stayed virtually unchanged, poverty had spread and deepened, and even by African standards, Ethiopia had lagged miserably and had become an example of most things wrong in that unfortunate continent, rather than being a symbol of freedom, unity, and prosperity.

Then why borrow more? And why do international lending institutions want to repeatedly extend additional loans (often for the same intended purposes) when previous loans did not have much positive impact?

The most common explanation given by the Ethiopian government to justify more borrowing is a fight against poverty. It usually quotes common statistics on widespread poverty, hunger, diseases, low level of agricultural technology, the AIDS epidemic, high level of unemployment, and such other indicators of a seriously ailing economy, and how foreign loans help in the fight against those ailments. Rarely does the government mention whether or not past loans had generated more benefits than their costs. It also does not mention the recent catastrophic consequences of high external indebtedness in countries with much more powerful economies like Argentina and Brazil, and other states in Latin America and Africa.

There is another less obvious explanation as to why countries like Ethiopia need to borrow more despite the poor records of past loans, which is rooted in inferiority complex. Insecure governments usually consider their relationships with international lending institutions as forms of legitimization of their regimes, and they believe those perceptions would help them prolong their hold on to power. They get opportunities to attend international meetings organized by such institutions to be seen as legitimate members of the international community, and use such forums to lash out at their domestic opponents. They also use the staff of the international institutions to write reports favorable to their policies (similar to recent scandals in the United States securities industry where research analysts have been caught writing favorable but misleading reports on companies in the hope that would give their brokerage firms competitive edges in accessing investment banking businesses with the companies), and use those reports as affirmations of their repressive political and economic policies. We have heard and read this many times before, where the Ethiopian regime proudly stated the approval it had received from international financial institutions (such as the World Bank and International Monetary Fund) about the soundness of its policies of state ownership of land as well as ethnic regionalization under cover of decentralized administration.

The international financial institutions know all too well that they have the upper hand in their dealing with insecure governments (and their employees), and are prepared to capitalize on the insecurity to advance their own agenda; the more insecure a government (and its employees), the better for the lenders. They are interested primarily to lend more for their own survival and to promote exports from the industrialized countries, rather than to help promote the economic development in the borrowing poor countries. They use academic, professional, and intellectual discourse and reports as covers to advance their real and hidden agenda of lending more, often by replicating previous programs under different name designations (such as policy adjustment, structural adjustment, sector adjustment, numerous variations of sub-sector rehabilitation, emergency recovery, emergency demobilization, and multiple variations of same project investment programs across all sectors and sub-sectors under different nomenclatures).

As amply demonstrated in Ethiopia, the long record of borrowing by successive regimes had been ineffective in promoting sustainable development and in alleviating poverty. In fact, the reverse might have been true where more lending had driven the country into deeper poverty. As export earnings from traditional sources (such as coffee) decline, ever increasing shares of those earnings would be used to pay the rising debt services, thus leaving ever diminishing proportions of foreign exchange earnings for economic development (and poverty reduction).

To add insult to injury, the loans can be used as instruments of foreign policy, as demonstrated during the Ethio-Eritrean conflict when donors (led by the above mentioned international financial institutions) attempted to withhold their funding as a leverage to get political concessions from Ethiopia. The more the dependency, the more the exposure to international political arm twisting and blackmailing.

The typical and predictable response of the Ethiopian government to the above would be: you are only criticizing us for what we are trying to do, but what alternatives do you have to offer? Here are my suggestions.

The first suggestion concerns principle. The key principle must be that government control of resources and micromanagement of economic activities by the public sector have not worked anywhere in the world, and there are no convincing reasons to believe such a policy framework would work in Ethiopia. Instead, private sector based economic policy framework is a superior prescription for economic success. That key principle must be modified slightly while dealing in international trade, which these days is commonly referred under the general term of globalization.

While recognizing that exports are the key to future economic prosperity (and hence policies should focus on improving the country’s international competitiveness), allowing indiscriminately imports of goods that unfairly kill domestic manufacturers would not be prudent. The most prudent approach should be to first promote competition among domestic producers while protecting them initially from outside competition. As the domestic producers mature, protection can be lifted gradually. All developed economies have used this approach (and are still using it) under cover of “infant industry protection” or some other similar justification. Just see how the domestic textile and leather manufacturers are being decimated by cheap imports from Asia and second hand products from North America and Europe. Of course, the lending institutions would not support protection to be extended to the domestic manufacturers, often at the urging of exporting nations from behind, because that would undermine the market in Ethiopia for such imports.

And the second suggestion concerns fundamental policy measures the government should take to promote rapid economic development and poverty reduction. Without being exhaustive, such policy measures should include:

(a) letting the private sector be the engine of growth,
(b) privatizing all land ownership, including agricultural land, which is the foundation of the economy and a source of employment for about 80 percent of the labor force,
(c) purging all other policies that have been designed to stifle entrepreneurship, such as political parties’ ownerships of businesses and their involvement in commerce,
(d) building strong financial system to promote saving, borrowing and investment. The nucleus for this exists since there are already many private banks which can be used as a base for strengthening the system,
(e) maintaining small groups of highly paid professionals to manage the normal functions of government under a free market environment, and reducing the number of people working as government employees. These managers should contract with the private sector to handle as much as possible of the government’s work,
(f) restructuring the federal system of government to organize regional administrations along geographic rather than ethnic groupings, with strong federal laws to protect the interests of minorities anywhere. This will promote free movements of capital and labor, and exchanges of ideas, as these are essential features of private sector based economy,
(g) strengthening the rule of law to protect civil liberties and private property rights, and to strengthen commercial transactions,
(h) aggressively containing the population explosion, and
(i) making it easier for citizens to manage their own affairs by, for example, eliminating bureaucratic bottlenecks that encourage corruption and taking other small but tangible pro-citizenry actions.

In summary, Ethiopia should proceed with vigorous programs of economic growth (which in due course would also reduce poverty) by harnessing her own resources first, supplementing those with foreign grants to the extent possible rather than with foreign loans. The government should refrain from investment in directly productive activities and engaging in commerce, and leave such undertakings to the private sector. Public investment should focus on improvement of infrastructure that would promote private sector investment and economic growth (such as in telecommunications, power, and transportation) and education. Under no circumstances should foreign loans be used to finance items that have dubious investment merit such as vehicles, studies by foreign “experts”, and any items that can and should be financed using domestic human, material, and financial resources. Local capacity building should be given top priority by giving preferences to domestic rather than foreign consults and contractors, and by strengthening local training institutions rather than sending trainees abroad. If necessary, foreign experts should be contracted to conduct their training in such local institutions rather than sending the trainees abroad since that would be more cost effective, sustainable, and best for building the human resource base.

The above suggestions, if implemented, would surely reduce the need for heavy external borrowing, while at the same time promoting domestic resource mobilization, local capacity building, and the emergence of critical mass of middle class entrepreneurs. The suggestions would also provide a more solid basis for well-anchored, gradual, and sustainable development that would reduce poverty.

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6 COMMENTS

rezen December 15, 2020 At 4:49 pm
Subject: “The UN: What is an Apology Worth After Inflicting a Massive Injury?”
Humble Reaction
I CONFESS, I did not read the Article word by word. I know the inherent message of the Article and thousands of such Articles when it comes to the attitude of Europeans (and ‘others’ too) toward Africans. I even dare to say that the negative attitude will NEVER go away. We will live with nuances but NEVER change the DEEP negative attitude towards BLACK AFRICANS. NEVER! And so, I knew the Article without reading word by word. But permit me to quote the following
QUOTE: “worthless words” “The dogs bark, but the caravan goes on”. UNQUOTE
Yes, the apology is simply as the Ethiopian proverb goes >>> “ WIND ABOVE THE HEAD”.
wedinakfa December 15, 2020 At 6:52 pm
It is baffling the way the free media is peddling on hear and say, I suppose they enjoy the bloodshed so that they fill their belly and play god.
Ittu Aba Farda December 15, 2020 At 11:07 pm
What they did was utter reckless. What they were doing was so obvious. They were not there to help the needy but it was just to find dirt on the federal defense forces. They did not even stop when they were repeatedly told not to proceed. That was after the UN and the Ethiopian Government reached a written agreement where the government will be the sole coordinator of the aid transportation and distribution. These rogue employees didn’t even care about sovereignty of the nation like these bigots who have been spewing poison everywhere these days. Hello! You don’t barge in somebody’s sovereign nation and wonder around. You want to give aid to the needy? That’s good and dandy but you to come to the capital, register, take a number, stand in line and wait until your number is called up!!! Then you will be provided with security details and told to go where. Understand? Capeesh?
Alex December 16, 2020 At 1:45 am
There was a recent dishonest piece dated Dec. 13 written by none other than Plaut enitled “Taking stock of the Ethiopia – Eritrea – Tigray war” in which he injects his own wishes on the situation hardly becoming of an independent journalist. To paraphrase some of the contents and mind you this article was written after the Federal Government has taken over control of Makele and the Tigray region,
Begin quote –
“Rather it (in reference to the law and order operation underway in Tigray) is a full-scale war, involving the Ethiopian federal forces and Amhara militia, together with the Eritrean army who have combined to attack the Tigrayan forces.”
“What began as a “policing operation” against the Tigrayan leadership on 4th November looks increasingly like the guerilla war that the Ethiopian military became bogged down in between 1974 – 1991.
As the war in Tigray continues, and the involvement of a foreign power – Eritrea – becomes increasingly obvious, many Ethiopians may come to question why their children are being sent to fight and die in the mountains of Tigray.
This is likely to be a long and bitter conflict – which threatens the integrity of the Ethiopian state, and the wider Horn of Africa.”
— End quote
This is what I wrote as a comment response to the above mentioned article but which, you guessed it the hosts of the pro TPLF cabal website in which it appeared, opted to cover up.
Once again, the conflict entrepreneur Martin Plaut is at it again spinning fake news, uncorroborated news, regurgitating past news and grasping at straws just to throw a lifeline to his TPLF accomplices. Unfortunately for him a) The law enforcement operation is on its last stage, only catching the last TPLF cabal remnants which are on the run remains, b) Rebuilding Tigray region back from the tremendous destruction that the junta has wrought has already started, 3) The federal and the newly constituted state government are working as one to actively coordinate humanitarian action. Pretty soon we’re going to see marked improvement on the ground which should shut up this so called expert but really a war profiteer once and for good. They say, with old age comes wisdom, however in this case, guess what springs to mind? Deceptive Con Artist! That is the so called journalist Martin Plaut!
Awash Lemma December 16, 2020 At 2:17 pm
Well said compatriots.
Their propaganda on behalf of the ‘mighty’ TPLF – battle- hardened, well armed fighting machine, the eruption of ‘civil war / ethnic war’, and later guarrella resistance, etc. as the consequence of the law enforcement steps, all blew in thin air. Their stories changes from one day to another hoping one of their predictions of mayhem will hold. These were just things created in their rotten minds.
Do you think these Western network of doomsayers will change their attack on Ethiopia? I don’t think so. The resentment of Europeans and Americans from the success of Ethiopian forces is in fact getting more obvious by the day.
The new Tigrean govt and the Federal govt. are working tirelessly to rebuild infrastructure and social services destroyed by the TPLF cowards. How did the EU react to this fantastic development? Don’t laugh, but they slashed the aid they allocated for Ethiopia. How considerate!
Yes, they got mad – their great hope, the great disruptor, the force they trusted to dismantle Ethiopia, has been crushed in days. Just get alert to their next moves and the works of their propaganda machines. Their hope is not totally lost – their attention would move more to the OLF- Shene, another potential for their satanic plans for Ethiopia.
Worqu Belayneh December 16, 2020 At 2:28 pm
The article below was published in Ethiopia, South America, and worldwide nearly 20 years ago. The analysis and recommendations contained there in still apply today.
Donald Trump withheld aid to pressure Ethiopia in favor of Egypt. Now the European Union is doing the same to favor the TPLF junta which they hoped would continue to create havoc and weaken Ethiopia in favor of Egypt and other adversaries. The white powers of this world might in fact might have bigger and comprehensive goals of hurting Ethiopia for her leadership in the liberation of African countries from colonialists in the 60s, defeat of apartheid in South Africa and liberation of Zimbabwe, establishment of the African Union, and defeat of another white colonialist Italy. They hate the fact that Ethiopians do not consider white any superior than blacks, thus promoting the pride of blacks everywhere.
When Emperor Haile Sellassie visited the USA when Kennedy was president, the network television CBS interviewed him on live TV, and one question asked was: did the Emperor consider himself and Ethiopians to be “Negroes”, no doubt meant to create wedge with the black population. The Emperor’s response was that he considered God created all humans in his image and did not want to categorize himself, Ethiopians, and others along racial lines.
The interviewer seemed to have hated the answer since that was counter to the racist US policy of considering blacks as 3/4 of whites.
————————————————————————————
The Fallacy of Foreign Aid as Engine of Economic Growth
By Teketel Haile-Mariam
Addis Tribune
October 4, 2002
The World Bank and International Monetary Fund held their annual meetings in Washington, D.C. this past weekend, and repeated their promises at previous such meetings to make the poor nations of the world more prosperous. And Ethiopia had sent its own delegates to the meetings to plead for more loans. Protesters from across the globe, who believed these institutions had done (and continue to do) more damage than good through their ever increasing loans and misleading policy prescriptions, had also gathered to demonstrate their opposition to the activities of the institutions, which they also believed contributed to environmental degradation (and the changing weather pattern around the globe) and economic rape of the world’s poor.
What roles did the international financial institutions play (and continue to play) in Ethiopia? Did their policy prescriptions and loans have significant and sustainable impact on improving macroeconomic performance and standards of living of ordinary citizens?
Ethiopia had (and continues to have) a history of dependency on foreign assistance, whether that be in the form of food donations, military hardware, or loans for public investment. Although this history applies to all three recent successive regimes, non-military loans contracted by the current government over the last eleven years exceeded similar loans obtained over a span of about sixty years by the two prior regimes combined. And there had been negative correlation between the ever increasing loans and the levels of poverty. As loans increased, the per capita income (brute measure of the level of economic development) had stayed virtually unchanged, poverty had spread and deepened, and even by African standards, Ethiopia had lagged miserably and had become an example of most things wrong in that unfortunate continent, rather than being a symbol of freedom, unity, and prosperity.
Then why borrow more? And why do international lending institutions want to repeatedly extend additional loans (often for the same intended purposes) when previous loans did not have much positive impact?
The most common explanation given by the Ethiopian government to justify more borrowing is a fight against poverty. It usually quotes common statistics on widespread poverty, hunger, diseases, low level of agricultural technology, the AIDS epidemic, high level of unemployment, and such other indicators of a seriously ailing economy, and how foreign loans help in the fight against those ailments. Rarely does the government mention whether or not past loans had generated more benefits than their costs. It also does not mention the recent catastrophic consequences of high external indebtedness in countries with much more powerful economies like Argentina and Brazil, and other states in Latin America and Africa.
There is another less obvious explanation as to why countries like Ethiopia need to borrow more despite the poor records of past loans, which is rooted in inferiority complex. Insecure governments usually consider their relationships with international lending institutions as forms of legitimization of their regimes, and they believe those perceptions would help them prolong their hold on to power. They get opportunities to attend international meetings organized by such institutions to be seen as legitimate members of the international community, and use such forums to lash out at their domestic opponents. They also use the staff of the international institutions to write reports favorable to their policies (similar to recent scandals in the United States securities industry where research analysts have been caught writing favorable but misleading reports on companies in the hope that would give their brokerage firms competitive edges in accessing investment banking businesses with the companies), and use those reports as affirmations of their repressive political and economic policies. We have heard and read this many times before, where the Ethiopian regime proudly stated the approval it had received from international financial institutions (such as the World Bank and International Monetary Fund) about the soundness of its policies of state ownership of land as well as ethnic regionalization under cover of decentralized administration.
The international financial institutions know all too well that they have the upper hand in their dealing with insecure governments (and their employees), and are prepared to capitalize on the insecurity to advance their own agenda; the more insecure a government (and its employees), the better for the lenders. They are interested primarily to lend more for their own survival and to promote exports from the industrialized countries, rather than to help promote the economic development in the borrowing poor countries. They use academic, professional, and intellectual discourse and reports as covers to advance their real and hidden agenda of lending more, often by replicating previous programs under different name designations (such as policy adjustment, structural adjustment, sector adjustment, numerous variations of sub-sector rehabilitation, emergency recovery, emergency demobilization, and multiple variations of same project investment programs across all sectors and sub-sectors under different nomenclatures).
As amply demonstrated in Ethiopia, the long record of borrowing by successive regimes had been ineffective in promoting sustainable development and in alleviating poverty. In fact, the reverse might have been true where more lending had driven the country into deeper poverty. As export earnings from traditional sources (such as coffee) decline, ever increasing shares of those earnings would be used to pay the rising debt services, thus leaving ever diminishing proportions of foreign exchange earnings for economic development (and poverty reduction).
To add insult to injury, the loans can be used as instruments of foreign policy, as demonstrated during the Ethio-Eritrean conflict when donors (led by the above mentioned international financial institutions) attempted to withhold their funding as a leverage to get political concessions from Ethiopia. The more the dependency, the more the exposure to international political arm twisting and blackmailing.
The typical and predictable response of the Ethiopian government to the above would be: you are only criticizing us for what we are trying to do, but what alternatives do you have to offer? Here are my suggestions.
The first suggestion concerns principle. The key principle must be that government control of resources and micromanagement of economic activities by the public sector have not worked anywhere in the world, and there are no convincing reasons to believe such a policy framework would work in Ethiopia. Instead, private sector based economic policy framework is a superior prescription for economic success. That key principle must be modified slightly while dealing in international trade, which these days is commonly referred under the general term of globalization.
While recognizing that exports are the key to future economic prosperity (and hence policies should focus on improving the country’s international competitiveness), allowing indiscriminately imports of goods that unfairly kill domestic manufacturers would not be prudent. The most prudent approach should be to first promote competition among domestic producers while protecting them initially from outside competition. As the domestic producers mature, protection can be lifted gradually. All developed economies have used this approach (and are still using it) under cover of “infant industry protection” or some other similar justification. Just see how the domestic textile and leather manufacturers are being decimated by cheap imports from Asia and second hand products from North America and Europe. Of course, the lending institutions would not support protection to be extended to the domestic manufacturers, often at the urging of exporting nations from behind, because that would undermine the market in Ethiopia for such imports.
And the second suggestion concerns fundamental policy measures the government should take to promote rapid economic development and poverty reduction. Without being exhaustive, such policy measures should include:
(a) letting the private sector be the engine of growth,
(b) privatizing all land ownership, including agricultural land, which is the foundation of the economy and a source of employment for about 80 percent of the labor force,
(c) purging all other policies that have been designed to stifle entrepreneurship, such as political parties’ ownerships of businesses and their involvement in commerce,
(d) building strong financial system to promote saving, borrowing and investment. The nucleus for this exists since there are already many private banks which can be used as a base for strengthening the system,
(e) maintaining small groups of highly paid professionals to manage the normal functions of government under a free market environment, and reducing the number of people working as government employees. These managers should contract with the private sector to handle as much as possible of the government’s work,
(f) restructuring the federal system of government to organize regional administrations along geographic rather than ethnic groupings, with strong federal laws to protect the interests of minorities anywhere. This will promote free movements of capital and labor, and exchanges of ideas, as these are essential features of private sector based economy,
(g) strengthening the rule of law to protect civil liberties and private property rights, and to strengthen commercial transactions,
(h) aggressively containing the population explosion, and
(i) making it easier for citizens to manage their own affairs by, for example, eliminating bureaucratic bottlenecks that encourage corruption and taking other small but tangible pro-citizenry actions.
In summary, Ethiopia should proceed with vigorous programs of economic growth (which in due course would also reduce poverty) by harnessing her own resources first, supplementing those with foreign grants to the extent possible rather than with foreign loans. The government should refrain from investment in directly productive activities and engaging in commerce, and leave such undertakings to the private sector. Public investment should focus on improvement of infrastructure that would promote private sector investment and economic growth (such as in telecommunications, power, and transportation) and education. Under no circumstances should foreign loans be used to finance items that have dubious investment merit such as vehicles, studies by foreign “experts”, and any items that can and should be financed using domestic human, material, and financial resources. Local capacity building should be given top priority by giving preferences to domestic rather than foreign consults and contractors, and by strengthening local training institutions rather than sending trainees abroad. If necessary, foreign experts should be contracted to conduct their training in such local institutions rather than sending the trainees abroad since that would be more cost effective, sustainable, and best for building the human resource base.
The above suggestions, if implemented, would surely reduce the need for heavy external borrowing, while at the same time promoting domestic resource mobilization, local capacity building, and the emergence of critical mass of middle class entrepreneurs. The suggestions would also provide a more solid basis for well-anchored, gradual, and sustainable development that would reduce poverty.
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