Salary Increment Implemented as of October This Year
Borkena
Toronto – On Tuesday, Ahmed Shide, Ethiopia’s Minister of Finance, held a press conference to update the public on the country’s economic performance since the implementation of macro-economic reforms six months ago.
The session was attended only by state-owned media outlets, as shown in the video footage published later in the day. There was no question-and-answer session.
The Minister reported that the reform implementation is gaining momentum, describing the results over the past six months as “excellent.” He credited this success to what he referred to as “extensive preparation” that preceded the reforms.
A key claim made by the Minister was that “inflation has decreased over the past six months.” He attributed this reduction to the government’s ongoing economic policies. However, this claim seems questionable, given that the Ethiopian Birr has continued to depreciate.
In July, when the government introduced a “market-based exchange rate regime,” the exchange rate for US$1 was 57 Ethiopian Birr. As of Tuesday, this rate had risen to 122 Birr per US dollar, according to the latest exchange rate data from banks.
The Minister also stated that revenue from remittances has increased in the past six months, and that foreign currency reserves have grown significantly.
Shide also highlighted changes in the export economy, claiming that revenue from exports had increased over the past three months. Specifically, he mentioned growth in the export of gold and agricultural products, though he did not provide specific figures.
As well, the government claimed that it has received unprecedented levels of “development finance” in the country’s history.
Another key claim made by the Minister was that the Ethiopian economy is expected to grow by 8.4 percent this year.
Regarding government spending, Shide discussed the salary increment implemented in October, which is aimed at “helping low-income groups cope with price fluctuations resulting from the macro-economic reforms.”
He also mentioned subsidies for fuel prices, stating, “The government is spending billions every month to subsidize fuel prices,” but did not provide exact figures.
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A face of a genius that has put bigots and connivers like those in Toronto and Minnesota including Af-Mishaar to shame. That includes those who steal personal information of their countrymen/women and sell it.
What is the 1929 US depression, 1990 Japanese recession, 2024 Chinese recession ( dubbed ” Balance sheet recessions” ) have in common?
Economist Richard Koo, who coined the above phenomenon as ” Balance sheet recessions” explaining it as corporate and small business stop investing & start saving, creating a glut of saving which slows down economic activity creating economic contraction.
Therefore, based on that, the finance ministers explanation of ‘improvement in economic-activity in the last 6 months’ was based on government-borrowing& spending, which increases government-debt creating a temporary-band-aid on the economic-activity not a long term solution, unless businesses and individuals start to spend creating real economic activity that generates tax-income (not borrowed money) to support government infrastructure spending to further galvanize economic activity & real growth (GDP).
There is a great lesson to be had by monetary policy makers and Central Bankers everywhere.
“Interest rate adjustments are neutral to economic growth, it simply is a tool to ‘transfer wealth’ from borrower to lender ( interest rate hike) , or Leander to borrower (interest rate decrease) ” (paraphrasing).
Link = youtube.com/watch?v=KRSpfG6hRTQ
There is a lesson Ethiopian government(s) must learn from the “Real State” crisis of Japan’s in 1990, US in 2008, now in China in 2024, and LKY Singapore’s 1960 public housing 7 house ownership program where 90% of its citizens own their own homes and those who cannot afford to own, rent in government built residential housing units, eliminating ‘housing’ based economic crisis in Singapore helping it build a prosperous economy in the world, and higher standard of living for its citizens in a narrow piece of land.
“How Singapore Fixed Its Affordable Housing Problem”
Link = bloomberg.com/news/articles/2015-03-23/the-housing-legacy-of-singapore-s-first-prime-minister-lee-kuan-yew-who-passed-away-last-sunday-at-the-age-of-91
Residential homes must not be used as an economic-tools, where at some point fall into fewer-hands and lead to a rampant homelessness and housing-bubble-crashes over and over again; it is not healthy or economically-sound.
Economies should be for built to support ‘citizens-wellbeing’ , not for ‘exploitations’ in that name of ‘progress’!
What is a progress, if only the 1% or even 10% hoard all the wealth and the 99% or the 90% are left penniless?
Its normal for a baby keeps falling after his/her first walking experiences, but not normal after his/her 2nd /3rd, 4th,…10th birthday; economic-developments should behave the same way, unless we all must follow the European “predatory” traditions ( “European Values”) , abandoning our own kinder & gentler society our ancestors kept dear; by not being greedy & not being tempted by what someone else has or does & by protecting and defending what is rightly ours, which our nation’s border, our traditions stand unchanged for melena is an example of that.
Be well.
When blind Government’s ambition of generating higher GDP without seriously focusing on the FOUNDATION of how and what is involved in these rises, the sudden FALL will become their undoing, bringing unimaginable and unnecessary suffering for the population that would be facing the harsh reality of deceptive & suddenly eroding GDP growth.
China that lifted 800 + millions of people from severe poverty and the government that is known for its long term planning and executions for the last 45 years may have dropped the ball when it comes to “residential housing”.
Uncontrolled ‘residential’ Real Estate market that created artificial-valuations based on ‘get-rich-quick’ motivation both by the builders and as well as the buyers generates higher GDP count for the state, until the ‘bubble-burst’ and hardship begins.
What makes China a special case is, its well developed strong ‘industrial manufacturing’ base that will help it overcome temporary slowdowns…
That is what is happening in China right now:
”
Northeast China Homes Unsellable at $100, Woman Buys Shandong Seaside Home for $11″
Link = youtube.com/watch?v=VhyQzkFVVaY
However, these phenomena are not unique to China, it happened in Japan’s 1990s property bubble , and in the US and Europe in 2008 Real Estate crisis, and now in China.
The 2020 ‘covid’ ‘lockdown’ and ‘free money’ along with 0% interest rate blinded many to go out and splurge and buy homes, new-cars 4 years later higher interest rate and rising inflation left many struggling. Now the value of their car is worth less than what they owe the bank, many also are behind on their mortgage payments in North America, even more so in Europe where skyrocketing energy prices are forcing many to struggle.
”
China’s Largest Audi Dealership Closes, 1,500 Buyers Demand Justice; Jaguar Land Rover Follows”
Link = youtube.com/watch?v=oWfebTfNdg8
At the same time the Bankers discovered that the profit they make from say a 30 year mortgage with 0% ( near 0%) interest rates is much less than the profit they huge profits they would generate forever by owning the houses and RENTING them, as a result banks and investment funds are buying houses hand over fist further inflating residential house prices; to compensate for their huge loses in their “commercial Real Estate” holdings that are sitting empty since ‘covid’ started and ‘work from home” became a reality for many.
At some point like in the past these “musical chairs rounds” come to a stop, when no one has the money to buy. A reckoning is coming to the West one of these days.
The Ethiopian economic situation is not isolated, it can even be worse with the government’s recent move to Open the financial-sector for foreign institutions and the untimely public property privatization scheme that has been introduced at this time of global unpredictability & uncertainty we are witnessing since 2020.
As seen in the video above all the foreign car makers closed door and left in China, meaning when the going gets tough, they are the first to grab what they have and leave, while the locals struggle.
It is important development has to be aimed & managed to make sure it serves the ‘wellbeing’ of the citizens, not just for the sake of ‘economic growth’ alone.
Affluence is meant to let people live a ‘better’ life, but unfortunately in the West 75% -80% of the population are on multiple prescription-drugs.
What is the point???
“The times that are a changin” BD.
Be well.
Why the case for Ethiopia to further strengthen its ‘BRICS + & Partners’ is crucial to its development path is getting stronger as we move into 2025 and beyond.
Western-economic assessment in the video below, Trump’s MAGA policy effect primarily on US’s Western-parteners-economies & industries in UK, EU, & Japan would be very very siviour, to the point of further decline in their economic competitiveness and their socio economic & geopolitical standings.
That is not to say MAGA itself would succeed as Trump imagined it, for a few fundamental reasons:
(1) US further rising debt level is one of the major obstacles, as fewer and fewer buyers are coming forward to buy ‘US Bonds’, as the recent Bond market evidence shows.
(2) Treamps “Tariff” would only make prices higher for US consumers.
(3) US manufacturing will not happen overnight, if and when it does the price consumers would have to pay will only be competitive to products coming from its Western partners (UK, EU, Japan) due to their higher Energy costs, but it will never be competitive to products coming from the BRICS+ & Partners where labour cost offsets their relative energy costs.
(4) Higher credit card debt & inflation Western consumers are already under huge financial pressure to be able to afford pricier products MAGA expected to produce.
The G7 decline began decades ago, and it’s not possible to turn it on the dime no matter how appealing the scheme politicians put forward may look, MAGA or otherwise.
Link = youtube.com/watch?v=IbMJ7ECAWrE
Be well.