Archive for May, 2012
China brings jobs to Ethiopia but at what cost?
By James Melik
While Europe is struggling with recession, it is a very different story in Africa where the continent overall is expected to enjoy growth of 6% in 2012.
But there is concern that the fruits of economic expansion and foreign investment are not being evenly shared around.
One example of Chinese investment is a shoe factory just south of the Ethiopian capital Addis Ababa, on a huge industrial site known by locals as China Town.
Two production lines make 2,000 pairs of shoes every day for global brands, including Guess and Tommy Hilfiger.
Despite perks such as the factory having its own canteen and tennis courts, and the workers being supplied with their own uniform, the workers often receive a wage which is only a fifth of what a worker in an indigenous factory would receive.
Delivering skills
The shoe factory is run by the Huajian Group, whose vice president Helen Hai says that instead of receiving higher wages, the workers are trained in shoe-making skills.
“I took 86 Ethiopian graduates to China to teach them how to make shoes,” she says. She is adamant that after their training, workers can choose to remain or to work for other shoe factories.
“We offer tennis courts, uniforms, food – and in the future we will also offer free accommodation,” she says. “And we are also in the process of applying for a Fairtrade certificate as we definitely treat our workers fairly.”
She adds: “In the past China has given a lot of money to African countries, but now we want people here to have the capability to make goods themselves – that is why training is always the core in our strategy.”
Local sourcing
Shoe manufacturing has something of a tradition in Ethiopia, and another smaller factory is run by Bethlehem Tilahun Alemu.
“I wanted to show that it is possible for a local person to be globally successful,” she says, “And that is exactly what we have done.”
It is a powerful idea which has provided an example for many young women and men in Ethiopia.
Her Sole Rebels company employs 75 people, making the soles of shoes from recycled car tyres and the uppers from Ethiopian spun cotton.
“The culture of recycling has been in Ethiopia for a long time, and recycled tyres have long been used for shoes,” she notes.
She explains how it is her ethos to employ local people, and says that 99% of the shoes they produce are exported.
“This is a local grass-roots business that we built from scratch. We have a brand and authenticity,” she says.
She is also proud that her company is certified as Fairtrade.
“We pay our people four or five times what other people are paying,” she says, adding that she is not worried about her workers getting trained and then going to work for Chinese factories – because they will not get paid as much.
Local attraction
Helen Hai says the Huajian Group plans to invest $2bn (£1.3bn) in Ethiopia for a variety of reasons, including Ethiopia’s “good economic policy”.
Its competitive labour in the global market was also an attraction – compared with China, it is one-seventh cheaper to employ someone in Ethiopia.
The good supply of raw materials – leather for making shoes – and its good geographic location, allowing easy access to Europe and the rest of Africa, were also factors.
“We signed an understanding with the Africa Development Fund,” she says.
“We will jointly invest $2bn in the next 10 years – which will create job opportunities for 100,000 people.”
She maintains that the biggest challenge for investing in Ethiopia is that people are not familiar with doing international business, although she is confident that will change over time and her company is working closely with the government to solve that issue.
Investment encouraged
Long-time Africa campaigner Sir Bob Geldof says people should not worry about Chinese investment in Africa and rebuffs the idea of economic colonialism.
“China is not interested in that. Africans are not going to go through that kind of experience again, ever,” he says.
“Shut up, get down here, get on with it and it is mutually beneficial. You can talk about what sort of government works best, about values, about rights.
“Those things are being talked about. When they are ignored, there is no growth, just instability, war and hunger.”
He further maintains that democracy is not a prerequisite for growth.
“How do we know that? Look at Singapore or China. Business leaders there work with whatever government they have to – their job is to create business.”
ETHIOPIAN athletics legend Haile Gebrselassie has failed to qualify for the London Olympics.
Race is over: Ethiopian running great Haile Gebrselassie (centre) has failed to qualify for the London Olympics. Picture: AP
Gebrselassie overnight could only finish seventh in the 10,000 metres in an event in the Dutch city of Hengelo which Ethiopia was using as a qualifier for the Olympics.
The 39-year-old two-time Olympic 10,000m champion – who had already failed to post a qualifying time for the marathon – admitted his hopes had been dashed after his disappointing performance against 12 of his compatriots.
“The Games in London, is over for me,” he said.
“I ran a good race till the last lap. I felt good but I manifestly didn’t have the speed to compete against my rivals.
“That’s life. I am not disappointed,” added Gebrselassie, whose epic defeat of Kenyan great Paul Tergat at the 2000 Olympics in Sydney, his second Olympic title, is one of the great finishes of all time. Indeed for the ever cheerful Ethiopian great it is to be his last track race.
“The ‘spikes’, it is finished for me. I am 39. I have failed to qualify for the Olympics. And there is a very strong younger generation in Ethiopia now.
“I tried to qualify for my fifth Olympics. And I don’t regret trying to do so. “I simply came up against stronger rivals on Sunday.”
Tariku Bekele and Leleisa Desisa Benti finished first and second respectively – with the former posting the best time in the world this year of 27min 11.70sec – to book their tickets for London.
The third spot is being kept for Bekele’s older brother and world record holder Kenenisa, who has been struggling for several months with a calf muscle problem.
Gebrselassie said that he felt he was handing over the baton of Ethiopian track running to a golden generation.
“I am leaving the track in a calm frame of mind because there is a super generation taking over,” he said.
“I haven’t in any case run on the track since the Beijing Games (2008).
“Ethiopia will be stronger in London.
“I gave all that I had. It is why I am not sad or disappointed. I am always happy to run. These next months, I will devote solely to marathons and half marathons.
“In three years, I envisage a political career. I would like to become a member of parliament.”
Gebrselassie, a four-time world 10,000m champion, had come into the race boosted by his victory in the 10km Great Manchester Run in northwest England last week in 27min 39secs.
SOURCE AP
Ethiopia: How Meles Rules The Country
Ethiopian leader Meles Zenawi
By Richard Dowden
Meles Zenawi is the cleverest and most engaging president in Africa – at least when he talks to visiting outsiders. When he speaks to his fellow Ethiopians, he is severe and dogmatic.
But he entertains western visitors with humour and irony, deploying a diffident, self-deprecating style which cleverly conceals an absolute determination to control his country and its destiny, free of outside interference.
He was one of four African presidents to be invited to the Camp David G8 meeting last weekend. The aid donors love Meles. He is well-informed, highly numerate and focused. And he delivers. Ethiopia will get closer to the Millennium Development Goals than most African countries. The Ethiopian state has existed for centuries and it has a bureaucracy to run it. So the aid flows like a river, nearly $4 billion a year. And Meles is the United States’ policeman in the region with troops in Somalia and Sudan. He also enjoys a simmering enmity with his former ally, now the bad boy of the region, President Isias Afwerke of Eritrea. “It’s Mubarak syndrome,” a worried US diplomat told me. “We only talked to Mubarak about Egypt’s role in the region, never about what was happening inside Egypt. It’s the same with Ethiopia.”
In the 2005 election when the opposition won the capital, Addis Ababa, and claimed to have won nationally, the government arrested its leaders and tried them for treason. Some were imprisoned, others fled into exile. Now with 99.6% of the vote, the ruling Ethiopian Peoples Revolutionary Democratic Front (EPRDF) has created a virtual one party state. In an interview last week Meles told me he did not know of a single village in the whole country that voted for the opposition.
This is subtle totalitarianism, dubbed ‘Authoritarian Developmentalism’ by some. If you do what the government says, you get assistance – land, water, services. If you don’t, you get nothing. The basic principles of political freedom enshrined in the constitution are frequently undermined by subtle edicts from government departments. Press freedom is clearly spelt out and recently a minor ruling stated that printers must take responsibility for everything they publish and can refuse to print anything the government might consider illegal. Hardly a devastating blow to press freedom you might think until you discover that the only presses in Ethiopia capable of printing newspapers are government-owned.
Meles’ remarkable achievement since he took power in 1991 has been to attract foreign companies to Ethiopia through a policy of low taxes and a free hand. Growth has been between 8 and 11 percent over the past eight years thanks to the private sector (both western and eastern.) The economy has doubled over the last five years. Meles is rushing to develop the country as fast as he can. Using the Chinese model he has attracted foreign investors to develop agriculture and manufacturing. As he told me: “The criticism we had in the past was that we were crazy Marxists. Now we are accused of selling the family spoons to foreigners. It’s a balance.”
Meles has leased more than 4 million hectares of land to foreign or domestic companies to grow food or flowers. And to provide them with water and power he has built dams which he says are environmentally much better than power stations since they are built in gorges with little water loss through evaporation. But it is not a completely free market solution. There are government monopolies in banking and telecoms. Nor will the government give people title deeds. All land is state owned. Meles has made it clear he will keep it that way.
“Have we created a perfect democratic system? No it’s a work in progress. Are we running as fast as our legs will carry us? Yes. And it’s not just Addis but also the most remote areas. Unlike previous governments we have really created a stable country in a very turbulent neighbourhood. Our writ runs in every village. That never happened in the history of Ethiopia. The state was distant, irrelevant.”
He fiercely defends his policies, in the face of Western NGO criticism, that this development is environmentally unsound and indigenous people have been removed forcibly from their land. He insists that in every case they were consulted, dismissing a report by the Oakland Institute in the US which said people had been forcibly removed as “bullshit”. When I suggest that pastoralists should be allowed to continue their nomadic way of life, he says I am a romantic westerner. But he adds that it is their right to continue their way of life.
It is the same with the politics. Having taken power by force in 1991 and coming from a minority, Meles created a safety valve by writing into the constitution the right of every “nation” in Ethiopia to declare independence. Whenever there are local political problem he re-asserts that right to leave but it is unlikely the clause will ever be put to the test through a referendum.
The current trouble spot is the southern region of Gambela where land has been given to agricultural businesses. Meles is defensive about reports of recent forced removals. “We are making sure that the Gambela people are settled and have land and that young people can go to farms not as guards but as farmers,” he said, assuring me that the people who have been moved were consulted. Only when all those in the region who want to work have jobs will other workers be recruited from other parts of Ethiopia.
Is the Meles plan for rapid, state directed capitalism working? At the recent World Economic Forum meeting in the Ethiopian capital Addis Ababa earlier this month, criticism came, not from western NGOs , but from China, Ethiopia’s closest ally. Gao Xiqing of the China Investment Forum, warned Meles: “Do not necessarily do what we did”. Policies of “sheer economic growth” should be avoided, he said. “We now suffer pollution and an unequal distribution of wealth and opportunities… You have a clean sheet of paper here. Try to write something beautiful.”
Has any Chinese official ever publically criticised an African leader in such terms before?
And some foreign investors are not happy either. They have driven Ethiopia’s growth but now the government and Ethiopian firms are desperate for a greater slice of the profits. Flower and horticultural companies have been suddenly ordered by the government to only use Ethiopian companies for packing their produce, transporting it to Addis Ababa airport from where only the state-owned Ethiopian Airlines must be hired to fly it to Europe. As the distraught owner of one of the biggest flower farms told me last week: “Ethiopia does not have such companies yet”. But if they refuse, their licences will be withdrawn. It appears that having lured foreign businesses into Ethiopia, the government is now tying them down and taking their profits.
Meles is caught in a bind, under pressure on several fronts with problems that economic growth may not solve. Inflation is coming down but has been running at almost 50 percent. Everyone I spoke with in Ethiopia said that the cost of living was the highest they had ever known. There is real hardship among the poor as the staple grain in Ethiopia, teff, has quadrupled in price recently. The universities are pouring out graduates but there are few jobs. One recent graduate I spoke with said she was one of about 10 out of more than 100 in her class who had a job. The government’s hope is that it can grow the economy even faster. It is promising mining as the next bonanza and Meles hinted last week that oil has been discovered.
But this is the scenario he may soon be facing: a mass of urban poor hurt by the price rise of the staple food and large numbers of educated but unemployed urban youth. Sounds familiar? The Arab Spring was watched closely by Ethiopians. Watch this space.
Richard Dowden is Director of the Royal African Society and author of Africa; altered states, ordinary miracles.
Ethiopians take a stand against leader-Meles Zenawi
The Ethiopian Community Association in Sa protests outside the Sandton Convention Centre against Ethiopian President Meles Zenawi, who is attending the Global African Diaspora Summit. Photo: Dumisani Sibeko
By Yusuf Omar
About 300 Ethiopians descended on the streets of Sandton on Wednesday, almost bringing business to a standstill. They gathered at noon on the corner of Alice Lane and 5th Street, outside the Sandton Convention Centre, which is hosting this year’s Global African Diaspora Summit.
“Freedom!” they cried. “Allahu Akbar (Arabic for “Praise be to God”),” they yelled. “Viva South Africa, viva!” they cheered.
Most of the participants were political asylum-seekers from Ethiopia now living in Joburg. Their banners read “Meles Zenawi, most notorious, evil, brutal east African dictator Terrorist alive!”.
Zenawi, Ethiopian president for the past 21 years, arrived in Joburg on Wednesday to attend the three-day summit.
Mulugeta Felkea, chairman of the human rights organisation Better Ethiopian, left his home country seven years ago after family members were killed by the regime’s security forces.
“We can’t protest like this in Ethiopia. The soldiers would just shoot us,” he said.
“We want the South African government to influence the international community to take action against Zenawi. He must stop the harassment, release political prisoners and have real elections,” said Felkea.
He said there were officially more than 50 000 Ethiopians in SA, but reckoned there were many more under the radar.
Fana Dereje, general secretary of the Ethiopian Community Organisation, said: “We would return to Ethiopia tomorrow if peace was restored.”
“Right now we are second-class citizens in our own country. The people are hungry, but Zenawi gives us bullets.
The Ethiopian community thanks South Africa for hosting us during these hard times,” he said.
The strongest voice on the loudhailer, leading the men at the front of the march, was that of a woman – actress, journalist and activist Gelila Mekonnen.
She was due to leave on Thursday for Amsterdam, where she works at the Ethiopian Satellite Television headquarters.
“The Ethiopian government calls our independent television station a terrorist channel, but we are simply struggling for democracy,” said Mekonnen.
On Sunday night, more than 1 000 Ethiopian migrants met at the Standard Bank Arena in Joburg to raise funds for the tv station, which they hope to launch in SA this year.
yusuf.omar@inl.co.za
IPI World Press Freedom Heroes condemn imprisonment of journalist Eskinder Nega
(IPI/IFEX) – VIENNA, Twenty international journalists who have been recognised as World Press Freedom Heroes by the Vienna-based International Press Institute (IPI) have condemned the Ethiopian government’s decision to jail Eskinder Nega and other journalists on terrorism charges, and called for their immediate release.
Eskinder Nega, an online writer and critic of the current Ethiopian government, was arrested in September 2011 and is accused of supporting terrorism, for which he could face the death penalty if convicted. He was jailed shortly after having criticized the government’s use of anti-terrorism laws to jail other journalists and opposition figures.
This is hardly Eskinder’s first brush with the authorites – he and his wife, also a journalist, were jailed for 17 months on treason charges in the aftermath of the disputed 2005 elections. Their son was born in prison. Since then, Eskinder has been banned from journalism but has continued to speak out and write.
Ethiopia, which is set to host the World Economic Forum on Africa in May 2012, jailed Eskinder and four other journalists on anti-terrorism charges over the past year.
Woubshet Taye, deputy editor of the now-defunct Awramba Times, and Reyot Alemu of Feteh newspaper were convicted and sentenced to 14 years in prison this January. In December, Swedish journalists Martin Schibbye and Johann Persson were sentenced to 11 years in prison for aiding terrorists. They had been arrested last year in the company of rebels in the Ogaden region.
Last month, IPI Executive Director Alison Bethel McKenzie called on United Nations Secretary General Ban Ki Moon to speak out against Ethiopia’s use of anti-terror laws to jail journalists, which IPI said “makes a mockery of the universal right to ‘hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers’.”
IPI noted that this practice also undermines “the fight against real terrorists, who use violence – and not words – to achieve their ends”.
Each of the men and women who signed this petition has been honoured for their contributions to freedom of the press in their home countries and around the world. Many have themselves been jailed for their work – indeed Turkish author and investigative reporter Nedim Sener’s battle against terrorism charges, believed by observers to be designed to silence him as a journalist, is not over yet. Read their call for Ethiopia’s journalists to be freed, A letter to H.E. Meles Zenawi. Read below at: http://www.ifex.org/ethiopia/2012/04/23/nega_petition/
Source: IFEX
Coffee – Ethiopia’s Gift to the World
The global spread of coffee growing and drinking began in the Horn of Africa, where, according to legend, coffee trees originated in the Ethiopian province of Kaffa. It is recorded that the fruit of the plant, known as coffee cherries, was eaten by slaves taken from present day Sudan into Yemen and Arabia through the great port of its day, Mocha. Coffee was certainly being cultivated in Yemen by the 15th century and probably much earlier. In an attempt to prevent its cultivation elsewhere, the Arabs imposed a ban on the export of fertile coffee beans, a restriction that was eventually circumvented in 1616 by the Dutch, who brought live coffee plants back to the Netherlands to be grown in greenhouses.
Initially, the authorities in Yemen actively encouraged coffee drinking. The first coffeehouses or kaveh kanes opened in Mecca and quickly spread throughout the Arab world, thriving as places where chess was played, gossip was exchanged and singing, dancing and music were enjoyed. Nothing quite like this had existed before: a place where social and business life could be conducted in comfortable surroundings and where – for the price of a cup of coffee – anyone could venture. Perhaps predictably, the Arabian coffeehouse soon became a centre of political activity and was suppressed. Over the next few decades coffee and coffeehouses were banned numerous times but kept reappearing until eventually an acceptable way out was found when a tax was introduced on both.
By the late 1600’s the Dutch were growing coffee at Malabar in India and in 1699 took some plants to Batavia in Java, in what is now Indonesia. Within a few years the Dutch colonies had become the main suppliers of coffee to Europe, where coffee had first been brought by Venetian traders in 1615. This was a period when the two other globally significant hot beverages also appeared in Europe. Hot chocolate was the first, brought by the Spanish from the Americas to Spain in 1528; and tea, which was first sold in Europe in 1610. At first coffee was mainly sold by lemonade vendors and was believed to have medicinal qualities. The first European coffeehouse opened in Venice in 1683, with the most famous, Caffe Florian in Piazza San Marco, opening in 1720. It is still open for business today. The largest insurance market in the world, Lloyd’s of London, began life as a coffeehouse. It was started in 1688 by Edward Lloyd, who prepared lists of the ships that his customers had insured.
The first literary reference to coffee being drunk in North America is from 1668 and, soon after, coffee houses were established in New York, Philadelphia, Boston and other towns. The Boston Tea Party Of 1773 was planned in a coffee house, the Green Dragon. Both the New York Stock Exchange and the Bank of New York started in coffeehouses in what is today known as Wall Street.
In 1720 a French naval officer named Gabriel Mathieu de Clieu, while on leave in Paris from his post in Martinique, acquired a coffee tree with the intention of taking it with him on the return voyage. With the plant secured in a glass case on deck to keep it warm and prevent damage from salt water, the journey proved eventful. As recorded in de Clieu’s own journal, the ship was threatened by Tunisian pirates. There was a violent storm, during which the plant had to be tied down. A jealous fellow officer tried to sabotage the plant, resulting in a branch being torn off. When the ship was becalmed and drinking water rationed, De Clieu ensured the plant’s survival by giving it most of his precious water. Finally, the ship arrived in Martinique and the coffee tree was re-planted at Preebear. It grew, and multiplied, and by 1726 the first harvest was ready. It is recorded that, by 1777, there were between 18 and 19 million coffee trees on Martinique, and the model for a new cash crop that could be grown in the New World was in place.
But it was the Dutch who first started the spread of the coffee plant in Central and South America, where today it reigns supreme as the main continental cash crop. Coffee first arrived in the Dutch colony of Surinam in 1718, to be followed by plantations in French Guyana and the first of many in Brazil in the state of Pará. In 1730 the British introduced coffee to Jamaica, where today the most famous and expensive coffee in the world is grown in the Blue Mountains.
The 17th and 18th centuries saw the establishment across Brazil of vast sugar plantations or fazendas, owned by the country’s elite. As sugar prices weakened in the 1820’s, capital and labour migrated to the southeast in response to the expansion of coffee growing in the Paraiba Valley, where it had been introduced in 1774. By the beginning of the 1830’s Brazil was the world’s largest producer with some 600,000 bags a year, followed by Cuba, Java and Haiti, each with annual production of 350 to 450,000 bags. World production amounted to some 2.5 million bags per year.
The rapid expansion of production in Brazil and Java, among others, caused a significant decline in world prices. These bottomed out in the late 1840’s, from which point a strong upward movement occurred, reaching its peak in the 1890’s. During this latter period, due mainly to a lack of inland transport and manpower, Brazilian expansion slowed considerably. Meanwhile, the upward movement of prices encouraged the growth of coffee cultivation in other producing regions in the Americas such as Guatemala, Mexico, El Salvador and Colombia.
In Colombia, where coffee had been introduced by the Jesuits as early as 1723, civil strife and the inaccessibility of the best coffee-growing regions had hampered the growth of a coffee industry. Following the “Thousand Days War” of 1899 to 1903, the new peace saw Colombians turn to coffee as their salvation. While larger plantations, or haciendas, dominated the upper Magdalena river regions of Cundinamarca and Tolima, determined peasants staked new claims in the mountainous regions to the west, in Antioquia and Caldas. New railways, relying on coffee for profit, allowed more coffee to be grown and transported. The opening of the Panama Canal in 1914 permitted exports from Colombia’s previously unreachable Pacific coast, with the port of Buenaventura assuming increasing importance.
In 1905 Colombia exported five hundred thousand bags of coffee; by 1915 exports had doubled. While Brazil desperately tried to control its overproduction, Colombian coffee became increasingly popular with American and European consumers. In 1914 Brazil supplied three-quarters of U.S. imports with 5.6 million bags, but by 1919 that figure had fallen to 4.3 million, while Colombia’s share had risen from 687,000 to 915,000 bags. During the same period Central American exports to the U.S. had risen from 302,000 to 1.2 million bags.
In spite of political turmoil, social upheaval and economic vicissitude, the 20th century saw an essentially continuous rise in demand for coffee. U.S. consumption continued to grow reaching a peak in 1946, when annual per capita consumption was 19.8 pounds, twice the figure in 1900. Especially during periods of high global prices, this steadily increasing demand lead to an expansion in production throughout the coffee-growing regions of the world. With the process of decolonisation that began in the years following the Second World War, many newly independent nations in Africa, notably Uganda, Kenya, Rwanda and Burundi, found themselves in varying degrees dependent on coffee export revenue.
For US coffee drinkers, the country’s wettest city, Seattle, has become synonymous with a new type of café culture, which, from its birth in the 1970s, swept the continent, dramatically improving the general quality of the beverage. This new found ‘evangelism’ for coffee has spread to the rest of the world, even to countries with great coffee traditions of their own, such as Italy, Germany, and Scandinavia, adding new converts to the pleasures of good coffee. Today it is possible to find good coffee in every major city of the world, from London to Sydney to Tokyo; we are drinking more and, more importantly, better coffee.
The importance of coffee to the world economy cannot be overstated. It is one of the most valuable primary products in world trade, in many years second in value only to oil as a source of foreign exchange to producing countries. Its cultivation, processing, trading, transportation and marketing provide employment for hundreds of millions of people worldwide. Coffee is crucial to the economies and politics of many developing countries; for many of the world’s Least Developed Countries, exports of coffee account for more than 50 percent of their foreign exchange earnings. Coffee is a traded commodity on major futures and commodity exchanges, most importantly in London and New York.
Source ICO
Ethiopia shoe factory widens footprint of China in Africa
DUKEM, Ethiopia–A steady drone of machines hum as workers assemble shoes in a Chinese-built industrial park outside Addis Ababa, the first in Ethiopia by the Asian giant deepening its presence in Africa.
A handful of Chinese supervisors at the Huajian factory watch hundreds of Ethiopian workers trim leather, glue soles and lace up boots in the Eastern Industry Zone in Dukem, 30 kilometers (20 miles) south of the Ethiopian capital.
It marks a shift in China’s traditional investments in Africa, which mainly involve heavy infrastructure development and oil production, while for Ethiopia it offers an alternative to export of unprocessed raw materials.
“The two sides have a commitment, they say ‘you should have something, I should get something,’” said Qian Guoqing, the deputy director of the Eastern Industry Zone.
Huajian, one of China’s biggest shoe manufacturers, plans to invest up to US$2 billion (1.5 billion euros) in Ethiopia to make shoes for export to Europe and North America.
Construction of the industrial park started in 2009, and rows of three-storey green and yellow buildings now stand on a patch of the expansive land. The government says it plans to build five more industrial zones throughout the country to attract further foreign investment.
When completed in 2014, the US$250 million project will host over 80 factories and create 20,000 local jobs. Currently six Chinese-run factories operate in the zone, including a car assembly plant and a plastics factory.
However, analysts say large-scale investment in Ethiopia has risks and its financial benefits are still uncertain.
“It’s not a risk-free strategy and it’s not necessarily clear that it will work,” said Stefan Dercon, development economist at Oxford University.
“The Chinese … take the opportunities now in Ethiopia where they make the trade-off between very high rewards. That’s pretty risky in the first few years of doing this, and we’ll have to wait and see.”
To minimize risks and attract investors, the Ethiopian government is offering four-year tax breaks, cheap land and free electricity to investors in the industrial zone.
But challenges abound: foreigners complain of poor telecommunications, overbearing bureaucracy and the absence of a port in the landlocked Horn of Africa country.
Cultural differences, the language barrier and a poor work ethic among the locals also pose hurdles, said Paul Lu, Huajian’s human resource manager, but noted that the availability of labour and raw materials were key attractions.
“We came to make shoes and we had to consider the resources — Ethiopia is very rich in leather,” said Paul at the factory’s entrance, where about two-dozen people were waiting for job interviews.
Source China Post
Indian horticulture farm to sprout in Ethiopia this year
Addis Ababa, May 17 — A second Indian company, Esimo Flower & Agro Industries Plc, is investing $100 million in Ethiopia to produce flowers, fruits, and vegetables for the European, Russian and Middle Eastern markets.
The company has acquired a 71-hectare farm in Debre Brehan, northeast of capital Addis Ababa. It will start planting flowers in July and has constructed a pack house, where harvested flowers are to be processed for export in 2012, according to Sanjaye Bangali, owner and general manager of Esimo.
Debre Berhan Mayor Getaneh Zeke also confirmed this. Esimo is set to become the second flower farm in Debre Brehan after ASK Flowers and Greens Plc, run by another Indian, Shahab Khan.
Producing flowers is a high-risk but high-profit business and Bengali thinks his company has a good opportunity to succeed within a few years.
“We are planning to buy a seedling for 0.52 dollars and sell the flowers with prices ranging between 0.71 dollars and 1.1 dollars, depending on the stem of the plant,” he said.
Bangali foresees growing roses that are bred locally and are similar to Ecuadorian and Colombian breeds after setting up its drip irrigation system.
Ethiopia has a stable year-round temperature and strong sun, and the region is acknowledged as one of the best growing areas, according to an expert from the Ethiopian Horticulture Producers & Exporters Association (EHPEA).
The EHPEA earned $178.3 million dollars in 2010/11, making flowers the third-largest export earner in the economy following coffee and khat.
The firm plans to grow 75,000 rose plants on one hectare, which would enable a harvest of 80,000 to 90,000 stems in the first phase of production, covering 15 hectares. In the second phase, the plan is to increase its harvest to 90,000 or 100,000, according to Bangali.
Source Daily News
Ethiopia’s Meles Blames African Corruption on Foreign Investors-Finger pointing
By Peter Heinlein
What is the poison that corrupts many African leaders, no matter how honorable their intentions when they take office? That was the question put to a panel of that included heads of state and government at the World Economic Forum on Africa on Thursday. The question received a surprisingly candid answer.
It was promoted as a conversation on Africa’s leadership. Among those on stage were the leaders of Africa’s two most populous nations – Nigeria’s President Goodluck Jonathan and Ethiopia’s Prime Minister Meles Zenawi.
The conversation was routine until the floor was opened to questions from youth leaders. A young South African woman stood up to ask the question that many had pondered, but few dared to pose.
“Good day. My name is Gobano Madnamaraso,” she said. “When our leaders are young – most of our African leaders – they are visionaries. They have wonderful visions for our continent. They are admirable. The speak good, they do good. But something happens to them once they are seated in those chairs of power. My question is: We want to see our continent change, but we are afraid of this power that corrupts even some of the best, most admirable leaders on our continent, and what is this poison that happens in these chairs of power and how can we prevent it? “
But perhaps just as frank as the question was the reply.
Ethiopian Prime Minister Meles Zenawi pointed to greedy foreign corporations as a main driver of corruption.
“What is the poison that leaders face when you go to national palaces, and transforms people with vision sometimes into ordinary thieves? Let’s start with the total amount of loot in Africa, and what our role as leaders in that loot[ing] is,” said Meles. “The vast majority of the loot[ing] is done by properly organized companies through all sorts of accounting gimmicks.”
Meles said African leaders are forced to be facilitators for foreign companies who demand favors in return for their investment that might means jobs for their people.
“It’s a difficult thing to manage because our bargaining cards are very limited,” he said. “We need these companies to create jobs, in order for them to come to Africa. The image is very negative, so the risk is artificially spiked. And if the risk is artificially spiked, the return has to be commensurate with the risk. And so it’s difficult to attract them without extraordinary returns.”
The Ethiopian leader said that sometimes leaders give in to temptation.
“Sometimes we facilitate without being paid,” he said. “At other times we say, ‘Okay, if your family’s farm is being looted, why not join in?’ I think that is the most insidious form of corruption. It affects everybody, including those whose hands are not in the till.”
Another question that was less confrontational, but no less pointed, came from young Sudanese woman who wanted an explanation for the lack of female representation among African leaders.
“Hello, I am Jihada Bonefice from the Khartoum hub in Sudan,” she said. “It’s quite wonderful to see all you gentlemen up there. But my question is: How do you envision the role of African women in shaping the future? And is there any way you are trying very hard to maybe to get African women where they belong – right up there [on stage]?”
Gabon’s President Ali Bongo Ondimba answered, saying “Women are Africa’s chance for success tomorrow.” But panelists agreed that solutions to the continent’s leadership gender imbalance will be difficult.
Increasing the ranks of female leaders will be among topics discussed at Friday’s closing forum meetings, along with China’s rising prominence in Africa.
Taming Hunger in Ethiopia: The Role of Population Dynamics
Ethiopia has been deemed a population-climate “hotspot” – a place where rapid growth and a changing climate pose grave threats to food security and human well-being.
By Laurie Mazur for the Wilson Center
Certainly, the landlocked East African nation faces outsized challenges. One in ten Ethiopians is chronically food insecure, and nearly one in five go hungry in drought years. With almost half its people under the age of 15 and an average fertility rate of nearly five children per woman, Ethiopia’s population is the fifth fastest-growing in the world.
Given these challenges, does continued rapid population growth consign impoverished Ethiopians to chronic hunger? Some, in the spirit of Thomas Robert Malthus, would answer yes. Malthus famously argued in the 19th century that human numbers would inevitably outstrip food supply, because population grows geometrically while food supply can only increase arithmetically. Others, inspired by Ester Boserup, contend the opposite is true: population growth spurs invention that keeps supply ahead of demand.
A closer look at Ethiopia shows that neither the Malthusians nor the Boserupians quite get it right. The connections between population and food security are extraordinarily complex. Numbers matter, but so do other dynamics, such as migration and age structure. And context is paramount: the right policies are essential to encouraging – and reaping the benefits from – positive demographic trends, but those policies must be tailored to local circumstances.
Contrasts and Contradictions
Ethiopia is a land of stunning contrasts and seemingly contradictory truths.
Most Ethiopians live in brutal poverty, their per capita income among the lowest in the world. And yet, Ethiopia is one of the so-called “African lions:” its economy grew at a brisk 7.5 percent last year, more than twice the rate of emerging economies as a whole.
Ethiopia is a nation where small farmers struggle to eke out a living on tiny, degraded plots of land: in the densely populated highlands, roughly half the land is significantly eroded. Yet Ethiopia is also the target of aggressive “land grabs.” Since 2008, the government has leased or sold nearly 10 million acres of prime farmland in the less-populated lowlands to investors from China, India, Saudi Arabia, and elsewhere, according to Human Rights Watch.
How do we reconcile these contrasts?
First, national averages are of limited use in a country like Ethiopia, with its diverse topography and staggering inequities. Geographically, Ethiopia’s regions are as distinct as, say, Arizona and Minnesota – and the outlook for environmental quality and food security vary accordingly. There are also huge disparities between rural and urban Ethiopians. To understand the relationship between population dynamics and food security, then, it is helpful to remember that there are many Ethiopias.
It is also helpful to set aside any preconceived notions about population and food.
Malthusians argue that population growth inevitably leads to hunger, as the resource “pie” is divided into ever smaller slices. The most obvious flaw in this theory is that technology has thus far allowed the size of the pie to increase. Another is that food and other resources are not distributed equitably; some people get much larger servings than others. The pie as a whole may be big enough for everyone, but only the slices of the poor continue to shrink.
The Malthusian narrative doesn’t fit Ethiopia, where the areas with the highest population densities are not usually the hungriest. In The Demographic Transition and Development in Africa: the Unique Case of Ethiopia, Charles Teller found that “high density can either increase vulnerability or strengthen resilience,” depending on a host of other factors, including technology, infrastructure, education, urbanization, and effective implementation of population and development policy.
On the other hand, Boserupians would contend that population growth can actually diminish hunger, by forcing societies to modernize agriculture and improve productivity. But realities on the ground in Ethiopia don’t fit that narrative, either.
Tewodaj Mogues of the International Food Policy Research Institute said in an email, “The [Ethiopian] government’s various attempts at increasing agricultural intensification have not been very successful, therefore continued population growth creates substantial pressure on the land, especially in Ethiopia’s northern highlands.”
Of course, agriculture is modernizing in Ethiopia, but the benefits don’t necessarily accrue to the nation’s hungry. In the western lowlands, where land grabs are underway, tens of thousands of small farmers have been removed from their land to make way for agribusiness. According to Oxfam International, Ethiopia now supports the export of fruit, vegetables, and flowers worth $220 million a year. Those exports boost the nation’s foreign exchange, but they may also undercut the food security of poor farmers and reduce production for the domestic market. One displaced farmer told Human Rights Watch, “We want you to be clear that the government brought us here…to die….They brought us no food, they gave away our land to the foreigners so we can’t even move back.”
Beyond Malthus and Boserup
If the Malthusian and Boserupian explanations fall short, what are the root causes of hunger in Ethiopia, and how might they be addressed?
Mogues cited several “deep determinants” of hunger, including geography (for example, rugged mountainous terrain and a changing climate) and institutions (a broad term that includes the rule of law, governance, policies, investments and property rights). Many small farmers in Ethiopia lack secure land tenure, for example, which removes incentives to improve the land and discourages them from seeking employment off the farm, lest their land be taken away. The government’s ineffective aid to small farmers and concessions to agribusiness also fall under this heading.
Population dynamics matter too, especially at the household level. Mogues observed that high fertility rates affect food security in several ways:
In Ethiopia, women in rural areas play a key role in agricultural production, food purchases, non-production activities in the agriculture value chain, and in home preparation of food. Thus, high fertility rates mean that women are less able to devote time to these agricultural activities as they need to allocate more time and resources to child rearing, which has food security implications above and beyond the fact that produced or purchased food will have to be shared with household members in a larger household.
Age structures are also important. Nearly half of the Ethiopian people are “dependents” – under age 14 or over 65. This high dependency ratio diminishes productivity in agriculture and other sectors, because a lower share of the population is in the workforce.
Finally, migration – or the lack of it – plays a role. Government policies aimed at keeping ethnic groups in their home regions suppresses migration to cities and more productive rural lands. Freer migration could reduce pressure on overworked land, allow more appropriate division of labor, and energize development.
A Comprehensive Approach
How can the government and donors address the myriad causes of hunger in Ethiopia? With a “comprehensive approach to food security that includes attention to the full spectrum of population dynamics and geographic distribution,” said Charles Teller in an interview.
That means a robust safety net for the most vulnerable, integrated with ongoing programs to bolster nutrition and health. It means flexible migration policies and stronger rural-urban linkages, coupled with better planned urban development.
It also means agricultural policies that help small farmers improve their productivity, rather than displacing them. According to Ethiopian development expert Fantu Cheru, those policies can include foreign direct investment, as long as the government negotiates terms of engagement that are transparent and fair. For example, the proceeds from cash crops should be invested in improving production of staple foods through extension services, infrastructure, and better equipment for poor farmers.
And it means policies that support – and capture the benefits from – the transition to lower fertility. That demographic transition could improve food security in Ethiopia by freeing up women’s time and lowering the dependency ratio. But the transition is not automatic; it requires supportive policies, such as girls’ education, employment opportunities for women, and enforcement of laws against child marriage.
Importantly, it requires access to family planning and reproductive health services. Today, just 27 percent of married Ethiopian women use modern contraception. One in four have an “unmet need” for family planning – they wish to prevent or delay pregnancy but are not using an effective method of contraception. Addressing that unmet need would have important benefits for women and their families, and it could also help fight chronic hunger.
In this land of contrasts and contradictions, the causes of food insecurity are numerous and complex. Neither Malthus nor Boserup could fully capture that complexity, but both perspectives offer insight on the limitations of current policy – and help point the way to a less hungry future.
Laurie Mazur is a consultant on population and the environment for the Wilson Center’s Environmental Change and Security Program and director of the Population Justice Project.
Sources: CIA, Central Statistical Agency (Ethiopia), Food and Agriculture Organization, Human Rights Watch, Journal of Peasant Studies, MEASURE DHS, Overseas Development Institute, Population Action International, Population Reference Bureau, Rodrik (2002), Teller (2011), The Economist, The Global Mechanism, UN Population Division, U.S. Geological Survey, United Press International, World Bank.
Photo Credit: “Early morning in Lalibela,” courtesy of flickr user Dietmar Temps
