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Toronto – This week, the Ethiopian government has announced a market-based foreign currency regime – apparently a condition International Monetary Institutions put to release loan and grant – a decision that weakened the purchasing power of birr overnight.
Ethiopian Citizens For Social Justice Party (EZEMA) – one of the opposition parties that is widely criticized for its relation with the ruling party – on Wednesday released a statement criticizing the government for the measure the macro-economic policy decision it took.
“Although we have been advising the government, in its effort to overcome deep-rooted foreign currency problem, not to fall under the influence of lender’s policy it was not accepted and that the government has passed a decision for market-based currency exchange regime,” EZEMA said.
The party also noted that the government has announced that it has secured funds from international monetary institutions based on the policy changes it made.
The decision that the government took is something that will worsen inflation and price rise in the country. Possible measures that the government could take to address the price rise situation could not resolve the problem in a lasting way. Salary increases, subsidies, SafetyNet programs and other measures will not solve the price hike situation, the party said.
Dependency on import, lack of institutions that are capable of rectifying problems of implementation and a security situation in the country that does not favor productivity are among the reasons why EZEMA says that the decision it took will not solve the problems the government has been facing. It forecasts that the problems could reappear.
The key to address the problems are, according to the party, increasing productivity, overcoming lack of peace which is hampering deployment of productive forces to production activity and the ethnic-based federalism that is hampering growth.
Devaluating the purchasing power of Ethiopian birr before making necessary reforms will not address Ethiopia’s economic problem. The decision was untimely, said EZEMA.
“EZEMA has been repeatedly expressing, to the government and the people, its stand on the on the issue. Therefore, the government that passed the decision will be fully responsible for any economic, social and political crisis as a result of the decision of market-based foreign exchange [regime],” It said.
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Too little, too late folks. Is there exists any real opposition party worth the name and with backbone in the country right now that scamming Abiy neither co-opted nor banished from poltical scene and country? I seriously doubt. I’m afraid egoistic and dabbler Abiy and his cash-strapped regime have already decided to extend further the internal war and killing machine and other concocted external conflicts regardless. And to accomplish exactly that mission Abiy wants to finance it through this huge and overbearing loan scheme and on the back of poor citizens untill the economy runs aground and system eventually collapses under the enormous weigh and pressure. The vexing question now how can he prevail and even preserve his grip on power for a while after such catalytic and fatalistic decision and what is his endgame, if any? Perhaps an Oromumma republic out of the ashes? Hard to pinpoint.
There is no country in the world today where inflation has not adversely affected citizens standard of living. Grocery items show prices stabilizing and coming down on one Saturday and then going back up in the next one. Meat and dairy prices are getting out of reach for lower income people. Housing is in crisis in almost every country with more and more people going homeless. Since the commies in Beijing unleashed the deadly pandemic COVID-19 that resulted in the wreckage of the once strong supply chain, the entire world has been in economic crisis. When we think we are seeing a light in a tunnel, then there comes another bully from Moscow that invaded an independent country that seriously damaged the recovering supply chain. Don’t forget the crisis terrorists triggered in the Middle East.
My understanding is this new currency policy was enacted in accordance with The IMF and World Bank suggested outline. I chose to wait and see what effects this policy will have on the grinding inflation. The two major financial institutions of that country are being led by two over qualified experts, H.E. Ahmed bin Shide and Governor H.E. Mama bin Mihretu. They still have and will continue to have my confidence in their capabilities.
That country’s economic problems is not the result of foreign factors only but anlso its own internal crisis. Due to lack of peace and stability inside the country production has been adversely affected. Civilian workers are being murdered or kidnapped for ransom on their way to work by thugs in both Oromia and Amhara regions. Corruption is still a throbbing headache. Are you trying to tell me that the black market does not have the hands of corrupt officials in it? How about the Diaspora playing a big part in perpetuating the currency exchange black market? So, what’s up doc?