By Samuel Estefanous
The last remark of the Premier that had concluded the Macro-Economy Committee meeting still rings in my ears. Unfortunately not like a soothing musical soft note but as a persistent maddening tinnitus.
I believe that is what everybody feels after paying a 10 birr taxi fare for a distance he used to pay 2.50 birr a year or two ago; after paying 95 birr for a humble square meal of fasting diet that used to cost under 30 birr; after settling a 12 birr bill for a cup of coffee that used to cost under five birr and right after hear the Premier declare that the economy is performing great on all scores and indicators but inflation.
At the beginning of the month of August, Reuters reported that the rate of inflation for the month under consideration is hovering around 33.5%, so technically I can’t use the term ‘hyperinflation’ as the increase hasn’t hit the 50% mark. But I know what I am paying and I know what I used to pay a year or two ago, so it is hyperinflation for me alright.
Just consider this; I am a big fan of the Coach Bus operators in Ethiopia. They are punctual, tidy, organized and comfortable. They would depart with half full seats to honor the declared departure time. And guess what? The fares are so affordable to all classes of the society that an investor and a shoeshine could share a seat. Until recently, that is…alas! The 250 birr one way trip fare from Addis to Hawasa has jumped to birr 540. That is why I am having great difficulty processing the state of the economy as made public by the Premier.
To begin with the Committee itself is of dubious legal origin and status. I mean according to the website of the Office of the Prime minister, it is invested with sweeping powers as ‘the Central Organ that coordinates Economic Policy making within the government.’ I assume it is a Secretariat/Office established by the House of People’s Representative as provided under article 14 of proclamation 1263/21 to provide for the definition of the power and duties of the Executive Organs of the Federal Democratic Republic Ethiopia. However the website of the Prime Minister Office betrays no hint about that and I wonder if its designation, power, duties and most important of all its accountability are duly determined by constitutional means. Anyway this is beside the point and it requires an extensive study per se.
In my view the combined purposes of the other indicators-remittance, foreign direct investment, export, GDP etc – should have been to help keep the cost of food and other consumer items as well as accommodation and everyday bills low. With this in mind, successive governments (including the incumbent) have established and maintained Public Enterprises that cater for the low income communities. If any Secretariat or Office is to be established it should have been one that is totally committed to address this question of survival and all eyes at the PM office should have been trained on the said enterprises.
I don’t agree with those who summarily contend that the rest indicators might as well go to hell, though I am very much tempted to. But under the circumstances, I sure do sympathize with people who argue that it isn’t fair to expect impoverished folks to appreciate the aesthetical values of the public parks and glorify the engineering feat of the Kera area tunnels on empty stomachs. You see, presently the meager and average wage earners might be forced to walk the distances past endless streams of seven and eight digit worth SUVs; skip lunch and forego coffee but in the event of war or any other National calamity, they are the ones to readily enlist to defend the honor and Sovereignty the country. Who would contest the fact that, in large measure, this is a Country balanced on the shoulders of the ‘les Miserables’? The rest is an illusion; it will be gone at the snap of the finger.
Here is something that keeps me thinking, the World Bank and the EU had long included in said development indicators the level of reduced inequality of wealth distribution. How come the Macro economy Committee doesn’t tally that up? It is true, yielding to pressure from labor advocacy activists, the government is trying to address the question of setting the National minimum wage but would it ever disclose in monetary terms the wages in the highest paid income category? Unless the yawning gap is too wide to release for the public consumption, it should have long commissioned a study and tried to narrow the rift by revoking privileges bestowed on the rich and the glam in the vain attempt to boost investment if need be.
At the end of the day, the regular end line consumer pays VAT and Excise taxes as well as all kinds of custom duties. The government is yet hatching schemes to add Property and Development tax to the list. The property owner readily transfers the tax levied on the lessee and keeps enjoying life as usual. The consumer is expected to bear this extra burden and he is being told it is for his own good. As usual the rich will get richer while the poor is fast becoming destitute.
This kinda reminds me the irony of the tragic co-existence of filthy wealth and destitution as depicted by Brehanu Zerihun in his epic trilogy ye’Abiyot Wazema, Mebacha and Magst. In the middle of narrating the harrowing starvation of Biblical proportion visited up on the people of Tigray and Wollo, one of the characters was constantly being interrupted by radio commercials for imported Madeira wine and Courvoisier whisky, recommending the latter brand as a relieving medium for the problem of over stuffing on raw meat and other delicacies.
Judging by the tweets of the Premier, the other indicators that had grown by leaps and bounds are Foreign Direct Investment, Green legacy, volunteer services, remittance, automation performance, export, job creation and guess what? Decrease of inflation in the past two months as reported by the Ethiopian News Agency. The macro-economic development indicators have long become familiar to us courtesy of the cable news networks but I refrain from getting technical lest I should lose the privilege of looking at the said growth with untrained eyes. Let professionals handle that with expert eyes and debunk the claims in a scientific manner complete with projections of tendencies, opportunities and threats.
Only for God’s sake don’t begin with ‘America has got it even worse’. I would rather the economists reflect on the famous rendition of the perils of globalized economy by the late Premier who had noted that our economy is too fragile and vulnerable to let it loose on the high seas. He had told us that his government had chosen to keep it safe from the turbulences of the deadly tsunami on the high seas by anchoring ours to the village stream. May be there is some wisdom in that ‘macro-economy policy’ to keep prices of local consumer items low.
Bottom line? Since we – the end line consumers- cannot ignore the constant rumbling in our tummy; we too have something to say on the subject. After all, no high sounding jargons are going to bake any injera for us. If you ask me, the greatest practical economists and budget experts are retired poor folks who make the survival of a family of five possible on a meager monthly pension allowance of 2,500 birr.
They feed, shelter, send kids to school, pay all sorts of bills like electricity, water, medical, local security, garbage disposal, edir, the list of the bills keeps growing. To make things even worse, electricity and water bills have incredibly soared these past three years. Where else could a family of five survive on $50 per month? The fate of the civil servants isn’t any better. In this respect, I wish all luck for Labor advocacy activists who are pressing the government to issue a National minimum wage limit.
Here is a simple random indicator of the extent and magnitude of the problem of public servants in the country. On the occasion of finalizing the report of the performance of the Federal Courts for the year ended on 30 Hamle 2014, the officials of the Court had held an interesting and extensive press briefing. One of the high points of the occasion that had caught my attention was the disclosure by the President of the Federal First Instance Court to the effect that 80% of the employees at his Court earn a gross salary less than 4000 birr. In the event you are wondering, that is the average monthly rental value of a bachelor’s one room pad in Addis Ababa.
Thus, when the overwhelming majority of the public isn’t living in the true sense of the term but simply surviving by the Grace of the Good Lord, it is like swimming against the current to make any sense of development as measured by any kind of growth and development indicators fashioned by institutions of higher learning in the West. At the high risk being taken for a simpleton, I have to note this- at the end of the day the kind of economic development indicator the consumer appreciates and understands is the reduced price of teff per quintal at the grain bernda of mercato, the regularity of public transport fares, most important of all the availability and affordability of accommodations to lease.
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