The death of the Ethiopian economic dream of prosperity

The International Monetary Fund is so pessimistic about Ethiopian growth it refused to give a report

The conquest obsession of Abiy Abid is rapidly fading any future of economic growth and financial independence for Ethiopia. They seemed to have missed out on the first lesson in any college freshman economic class about the “guns vs butter” trade off.

This month the inflation rate for Ethiopia will reach a record 50% in one year the highest in the world. The consumer price index is expected within a short time to also reach a new high of 300 points above normal. The Central Statistical Agency which normally posts this finding has actually closed its normal reporting website.

The Ethiopian government probably has less the $400 million to run the country for the next 11 months which normally requires about $2 billion. The International Monetary Fund has decided that Ethiopia’s finances are in such disarray that it cannot issue a report on growth. Although the official government report is 6.6% growth this year most analysts are saying it will exceed -2% net loss. Fantasy will not feed the hungry nor create sustainable businesses to drive economic growth.

Prime Minister Abiy Ahmed has spent all cash reserves and transferred most gold reserves out of the country. France and China are trying to broker a new repayment plan for debt that exceeds $40 billion requiring payments of at least $2 billion year alone in debt service. Meanwhile Abiy Ahmed promises to guarantee private loan deals between private companies in Ethiopia and foreign interests have been discovered adding another $25 billion in debt previously hidden. His armies have destroyed hundreds of billions of birr worth of businesses and industries in Tigray. The war damage blight to Tigray now extends to much of Amhara with Ethiopian and Eritrean blanket destruction adding billions of birr in economic production loss and human life. 

At this point the continued war and misery are no doubt going to leave what was formally the prosperous state of Ethiopia in tatters. Severe austerity measures will need to be imposed just to get any country to fund loan repayment and it is likely that natural resources will likely be the mechanism of repayment but not at any significant profit to Ethiopia. The dream of Ethiopia being a second world country that escaped poverty is gone. The previous decades of progress will be just a memory traded for the false promise of conquest and repression. Ethiopia has become another Eritrea. 

Does Abiy Ahmed want to be the Christopher Columbus of Africa?

Once revered now history paints him in a different light. Currier and Ives print of Italian explorer Christopher Columbus (1451-1506), landing in the West Indies on October 11, 1492.

The current war in Ethiopia begs comparison of the similarity of Amhara dominance over what we call Ethiopia with the European conquest of the New World. In America the once toted celebration of Christopher Columbus Day has become instead a day of solemn reflection on forced conquest and cultural obliteration. The blindness to the devastation of American European influence reminds me of the blindness of Amhara obliteration of other Horn of African societies.

The current Ethiopian conflict is not a really new phenomenon but really a repeat event of a recurring theme against central authority in the empire we now call Ethiopia. The expansion of the old Abyssinian empire under the Amhara monarchy since the mid 19th century has repeatedly tried to create a single nation state identity. To some extent international interests have at various times encouraged this to promote the development of a “civilized modern Ethiopian” state as defined by greater world powers. Whereas today many Abiy Ahmed supporters see his leadership as a new pro-Africa anticolonial movement in reality it is shaped into a redo of the reign of the late Haile Selassie into an internal colonization. Like Haile Selassie he portrays an Ethiopia that welcomes major power involvement in economic development but only through him. Like the European settlers who exterminated large groups of American Indians especially those who did not adopt European language and ways of life, Abiy Ahmed has advocated for non-Amhara extermination.

In the New World over the past century we have lessened the idea of Christopher Columbus as a discoverer of the New World in favor of him bringing a dark period of cultural obliteration and forced submission of the aboriginal population of America to that of Europe. The cause of bringing modernity to society is not a justification for tyranny.

Listen to the rhetoric of Amhara news sources and you hear frank open discussion of the inferiority of many ethnic groups and religions of Ethiopia except Amhara. The Amhara culture like Christopher Columbus forced its language, religion, trading practices, government, and even complete civil obligations of the Tigray, Afar, Somali, Beningshagul, and Southern Ethiopian Peoples. Those that argue that the Tigray dominated too much the previous Ethiopian People Revolutionary Front are making a similar point they fail to see about the Prosperity Party which is now an Amhara substitute. I suspect this is why many Tigray do not want to remain in Ethiopia. Many will be happy to see the other regions of Ethiopia find their own destiny. The current war of the Tigray is not about who dominates Ethiopia but rather whether the Tigray, Oromo, and others can choose their own path for self determination.

Like Europe learned in World War II where Hitler dreamed he could unify Europe under a German firm hand and Yugoslavia in the 1980s the times of monocultural dominance over large multicultural dominion are coming to an end. If the region of Ethiopia wants to prosper and find peace, to end the wars that come every generation, it needs to find a new solution. Christopher Columbus has no place in Ethiopia.

 

 

Ethiopian and Eritrean destruction will crash Ethiopian Development Bank

The Development Bank of Ethiopia has seen continuation of many loan failures under the government of Abiy Ahmed

Already failing Development Bank of Ethiopia strategies to successfully finance targeted Ethiopian business success are now crashing completely due to the Ethiopian, Eritrean, and Amhara forces destruction in millions of dollars of industrial projects which were 70% financed by the Development Bank of Ethiopia. Now these loans will never be paid and foreign investor interest has been severely discouraged.

The Development Bank of Ethiopia was created to be a mechanism to finance industries deemed vital to the economic development of Ethiopia because there was insufficient private or international alternatives. The Ethiopian Commerce Bank of Ethiopia which held 57% of deposits 18% of profits from private lenders was just not big enough to handle the load. The low interest rates paid by Ethiopian Commerce Bank were just too low to sustain financing for large projects.

Unfortunately over the past decade ongoing inflation and business failure of large projects in government targeted industries was creating a difficult situation to sustain the development bank. In 2020 just before the Ethiopian Tigray conflict began the Prime Minister of Ethiopia, Abiy Ahmed, began to take over policy determination of the Development Bank of Ethiopia. Despite this the number of distressed loans increased to one third of all projects. Under the PM the Ethiopian Investment Commission tried to help 485 troubled government targeted business ventures with additional cash disbursements and loan refinancing sometimes trying to encourage some help from the Ethiopian Commerce Bank but little improvement occurred.

As reported by the Tigray Interim Administration in February 2021 just in Tigray over 100 billion birr of destruction was done by the Ethiopian and Eritrean forces in the so-called law enforcement operation. Thousands of workers lost jobs and foreign investors had no choice but to abandon the projects financed to tens of millions of dollars through the Development Bank of Ethiopia when they saw the destruction and theft of equipment and materials to Eritrea.

Now with the complete destruction of cities and businesses along the highways extending north from Dessie in the Amhara region by poorly controlled carpet bombing and artillery of the Ethiopian forces even more hundreds of millions of dollars in outstanding loans will default to the Development Bank of Ethiopia likely resulting in its collapse. 

Destruction of 100 billion birr businesses in Tigray now spreads to Amhara

The $26 million investment by Velocity in Mekelle which was 70% funded by loan from the Development Bank of Ethiopia was a total loss due to destruction by the ENDF and Eritrean forces. Thousands of jobs and loan repayment are gone.

Abiy Ahmed and Esaias Afwerki beserk destruction destroyed thousands of workers lives, millions in foreign investment, and cancelled the future repayment of millions of dollars in loans made by the Development Bank of Ethiopia to foreign investors in Tigray.  The false message of liberation of the Tigray from the TPLF by Abiy Ahmed’s genocide which continues today was countered by some like Abera Niguse in the interim administration of occupation. Now with carpet bombardment of Amhara killing thousands of civilians and businesses, the Abiy Ahmed war machine continues the same in Amhara.

The false message of liberation of the Tigray from the TPLF by Abiy Ahmed’s genocide which continues today was countered by some like Abera Niguse in the interim administration of occupation.   Niguse appointed as Head of the Bureau of Justice for the Tigray Interim Administration during the Ethiopian occupation complained in February 2021 that the destruction of factories and businesses in Tigray was illegal. He noted that the procedure undertaken was a “law enforcement operation” that should not have constituted mass destruction in a radio broadcast on FM 104.4 in Mekelle. The damage done would require an investment of over 100 billion birr to repair he stated. Essentially every factory and business including pharmaceuticals, construction, mining, truck and agricultural equipment manufacturing, garments, steel, poultry, farming, cement production, etc. was destroyed.

I was involved in trying to help Velocity, an Indian and Dubai based garment company in Mekelle which also produced oxygen for industrial use, be allowed to produce medical oxygen but instead Eritreans were allowed to destroy the factory and take components to Asmara. The Velocity investment in Mekelle was $26 million dollars with a 70% loan from the Development Bank of Ethiopia. Now thanks to Abiy Ahmed’s destructive mania thousands lost jobs and loans outstanding to the Development Bank of Ethiopia will never be paid. This is just one example of many examples of how Abiy Ahmed’s will ultimately help break the economy of Ethiopia.

Niguse complained “This is not about getting rid of TPLF or capturing some clique. This war had no discipline. It has created insurmountable social and economical issues for the foreseeable future for the people of Tigray. It has caused serious insecurity in the region. Tigrayans are abused and suffering. Churches are burning. Women and young girls are being raped. Improper house checks and raids. All types of machinery, cars and many other properties of Tigray have been looted and taken out of the country’s border, some are taken to central Ethiopia”.

 

Abiy Ahmed Tewahedo supporters are violating their Donatist beliefs

Donatus Magnus, A Berber Bishop, who proclaimed Donatism a central theme in the Ethiopian Orthodox Church (Painting from the Nuremberg Chronicle 1440)

Ethiopian Orthodox Church clergy and their Evangelical allies supporting Abiy Ahmed’s policy of no negotiation and deprivation of human needs to deal with the Tigray are blasphemous to Donatism a unique theological tenet of the Ethiopian Orthodox Church. The conduct, preaching, and speeches made to members of the United States Congress as well as the Ethiopian public that the Tigray need to be wiped out and no peace talks should be held is a severe violation of the Donatist principle espoused for hundreds of years.

Since early in its development, the Ethiopian Orthodox Church has strongly held valid that the clergy must be a church of “saints not sinners”.  Church leaders had to live their lives everyday following the Biblical teachings of love, charity, sacrifice, forgiveness, loving both neighbor and enemy, and avoiding hate and violence. Donatists opposed the idea of joining church and state as noted in the book of Samuel in the Old Testament because leaders of men tend to become corrupt and sinful. The Church had an imperial relationship to rulers but careful in how it advised. Similarly the Church had a long history of co-existence with differing faiths. Unfortunately as the Church moved somewhat to Amhara in last two centuries it did show some signs of Calvinist pre-selection where Cushitic Southern Ethiopians were not seen as equals allowing their enslavement. There are also some issues of Apostolic succession in the Amharic Synods of the Ethiopian Orthodox Church as they cannot clearly trace to Saint Peter through the 5th century Syrian missionaries as do the Tigray. This is especially noted for Synods in the foreign countries which has lead to current divisions within the Ethiopian Orthodox Church.

Abune Mathias, the recognized head of the Ethiopian Orthodox Church by proper Apostolic succession, has been held in house arrest under Abiy Ahmed. He was prohibited from communication to the world until taped interviews where smuggled out of Ethiopia. He has decried the Tigray Genocide as unjustified and evil. 

The Ethiopian Orthodox Church origins begin in the 4th century CE when the Axumite King in what is now Tigray was converted from Judaism to Christianity by Frumentius a Syrian Christian monk who also followed Jewish Law. Frumentius and his brother Aedesius were shipwrecked and became prominent advisors to the Axum royal family leading to Ezana’s baptism.  Judaism had come to Axum many centuries before following the visit of the Sabian Queen Sheba to Israel who subsequently bore the son of King Solomon. There is also the Biblical story of the Ethiopian enuch (royal official) who on a pilgrimage to Jerusalem met Saint Philip who explained that Jesus had come as prophesized in the Old Testament.

The Ethiopian Orthodox Church developed with distinct theological differences from the Byzantine Eastern Orthodox Church and the Roman Catholic Church. Syrian Christian missionaries who preserved many Jewish traditions such as kosher diet spread their message throughout what is now Northern Ethiopia. No contact occurred with the Roman Church for almost 800 years isolating it from that influence.  While Church fathers from Northern Africa and Alexandria such as St. Augustine as well as those from the Byzantium had influence in the Ethiopian Church it still developed its own way.  Sometimes the church is referred to as Tewahedo which refers to the concept that Jesus God and human parts are indivisibly mixed. Some of its most recognized saints are lesser known or not clearly recognized in the West. The story of the Axumite empire in the Negus became a part of their religious tradition.

However one of the most important differences and one that really characterized the Tewahedo Church is Donatism. Donatus Magnus was North African Bishop who believed that for clergy to have the power to lead their flock and celebrate the Eucharist they had to live perfect lives. Otherwise their prayers, sermons, blessings, granting of forgiveness, and preparation and celebration of the Eucharist would be rendered invalid. Whilst prominent church father, St. Augustine disagreed as did the Roman Church, this principle has remained a pillar of Tewahedo through today.

 

 

Tigray administrator exposed Eritreans and wish to preserve borders flees

Although Gebremeskel Kassa ,Chief of Staff for the Interim Tigray Administration appointed by Ethiopian Prime Minister, Abiy Ahmed, supported Ethiopian action to take over the Tigray Regional state from the TPLF he  would soon become critical of Ethiopian, Amharan, and Eritrean actions in the region leading to his seeking refuge outside Ethiopia.

Gebremeskel Kassa  complained during the Ethiopian occupation of Tigray that Eritrean troops should have withdrawn from Tigray and that the violent expulsion of ethnic Tigrayans from Western Tigray was wrong. At the time the Tigray Interim Administration took power he stated emphatically that their goal was to maintain the current borders of Tigray previously ruled by the Tigray Peoples Liberation Front and not to give Western Tigray to Amhara.  He and others also pushed unsuccessfully for the Prime Minister to seek talks to resolve the crisis.

In January 2021 he told Reuters News Service that 2 million people were displaced in Tigray but Mitiku Kassa of the Ethiopia’s National Disaster Risk Management Commission contradicted his pronouncement with a lie that it was only 110,000. Then in March 2021 in an interview with BBC he complained that Eritrean and Amhara military authorities blocked the Tigray Interim Administration from setting up local civilian services and also blocked action to provide any law enforcement protection, health care restoration, food aid, or investigation of violations of human rights which he admitted had been done by the occupying forces.

Kassa left Tigray when the Tigray Defense Force resurged in June 2021. He joins other former Tigray Interim Administration officials who have grown increasingly critical of the Abiy Ahmed directed policy of lies, abuse, deprivation, and genocide toward the Tigray state and its population. Now he has fled Ethiopia and asking for asylum in an unnamed country after he became the subject of an inquiry blaming him as well as other officials for the military defeat. 

Ethiopian intentional punitive defunding and diversion of Tigray medical supplies

Ayder Comprehensive Specialized Hospital campus of Mekelle University

Intentional starvation and complete blockade of medical supply are primary strategies of the Ethiopian government towards the Tigray state in violation of not only moral propriety but also international law. How this unfolded will be told in this writing.

In discussion with displaced and in place faculty of Mekelle University this week I have learned that Ayder Comprehensive Specialized Hospital has more than 60 infants and children dying of starvation in the hospital averaging 2 or more deaths per day. Today there is no medicine, no nutritional supplements, no baby food or bottle formula, no laboratory, no x-ray, and the staff is all working voluntarily without pay. Every day children and adults are dying of simple treatable acute and chronic conditions such as hypertension, diabetes, childbirth, pneumonia, and accident just to name a few.  This intentional complete abandonment of the Ethiopian government’s responsibility to care for innocent noncombatants is a violation of international treaties and the Genocide Convention of the United Nations to which Ethiopia is a signatory. 

I previously published that we now can accurately estimate that the crude death rate, that is the number of expected deaths per 1000 population per annum will raise from its pre-war level of 6 by %500 to 32 (its level in 1950 when there was almost no health care) meaning over 228,000 people will die in Tigray each year due to complete lack of health care.

For the previous year while the Ethiopian, Eritrean, and Amhara regional governments were planning their invasion of Tigray there was also a plan to defund Mekelle University with reduction and stoppage of many routine payments such as for a routine repair of the MRI scanner and CT scanner.

Then following the Ethiopian Eritrean occupation of Mekelle in late November 2020 the medical supply, maintenance support, and even communication with Ethiopian Ministries of Science and Higher Education and Health were gradually completely cut off to the federally funded Ethiopian Mekelle University and it’s referral and teaching hospital Ayder Comprehensive Specialized Hospital.  

The acting President of Mekelle University, Dr. Fetien Abay, and Chief Academic Head of the College of Health Sciences, Dr. Hayelom Kebede,  went to see the military commander of the Ethiopian occupying forces in early December when the hospital’s supplies were already near exhaustion at Planet Hotel. He told them that the Ethiopian military and government had no responsibility to care for the civilian population. Subsequent discussions with Mulu Nega, the first appointed governor of the Tigray Interim Administration appointed by Prime Minister Ahmed to preside over the occupation, and then the Eritrean Abraham Belay, long time supporter of Isaias Afwerki, dictator of Eritrea and now the defense minister for Ethiopia who replaced  Nega he was too “lenient”. Communications with Belay were that Ethiopia had no responsibility to offer any civilian support or assistance because civilians were not supporting the Ethiopian government.

Since the occupation and extending even up to the recent few months intermittent conversations with Dr. Lia Tadesse by Dr. Hayelom  Kebede and others have proven failures. She has expressed regret in telephone conversations that she is not allowed to take any action to supply Ayder Hospital or the Tigray Regional Health Bureau because the Prime Minister has forbid it.

Almost two years ago I was consulting with a group working with multiple international nongovernmental organizations to propose a plan to help improve the function of Ethiopian government purchasing. This included discussions about joint ventures on producing medical consumables in Ethiopia. The plan was rejected after our presentation to the Ethiopian Investment Commission because the funder of a factory wanted to build it in Tigray. Out of this work came a discussion with high officials of the Korea Hospital that they had tried a similar goal  before and discovered that Ethiopia was selling some of the supplies it purchased at discounted price or partially subsidized price to other African countries at higher prices to get “hard currency”. It now appears that some supplies that were collected and meant to be shipped to Tigray since the onset of war may have been just given to Eritrea or instead sold as means to collect hard currency.

Financial researchers discover Ethiopian debt perilously higher than previously estimated

Map shows Chinese loan projects in Africa of which many are in Ethiopia and in trouble

Researchers at William & Mary Global Research Institute in the USA have discovered that Ethiopia’s previous thought debt to foreign lenders of $30 billion does not take into account “hidden debt” which involves private institutions from both borrower and lender but still carrying government guarantees of repayment. How much higher is difficult to measure but it may be an additional 5% of the Gross Domestic Product  higher then previously thought. 

This is apparently involved in China’s “high risk high reward” loans to developing countries which have natural resources. Typically the loans involve credit payments much higher than those available from Western democracy sources.  Ethiopian Prime Minister Abiy Ahmed in February 2020, had wanted to try getting Europe to replace China as a creditor because of the high interests and obligations of Chinese lending.  China cancelled all previous interest free loans to Ethiopia in 2019 when the Ethiopian economy under Abiy Ahmed after his first year began to deteriorate. Europe has become cold to dealing with Ethiopia and given its dim view of the developing despotic government and falling economy is not going to be willing to jump in soon. Western financial analysts warn China is creating situations where they can control infrastructure and natural resources in the developing countries to whom they lend development capital.

Ethiopia has to make payments on its debt of over $2 billion per year while its usual baseline whole country budget is only $2 billion per year. Ethiopia’s Gross Domestic Product of 2020 at $ 107 billion is expected to fall precipitously due to war costs exceeding $2.5 billion, abnormal rain patterns, locus swarms, inflation due to currency devaluation, and loss of confidence of foreign investors due to the ongoing Ethiopia Tigray conflict. Economists warn that debt burdens greater than 10% of GDP are very risky. Ethiopia having debt burden approaching 40% will have to suffer agreeing to severe fiscal austerity from the International Monetary Fund contributors to its debt, mainly China.

Abiy Ahmed plans Ethiopian economic realignment to Cuba, Eritrea, and Iran scheme

Abiy Ahmed freed Andargachew Tsige in 2018 who now appears to have growing influence in Amhara based media.

It is no secret that Abiy Ahmed is moving away from alignment with the Western democracy capitalist based economic model and moving towards the state dominated economic model of Eritrea, Cuba, and Iran as well as Turkey problem child of NATO. This action is being somewhat camouflaged by pro-Africa anti-colonization rhetoric given to falsely buoy his supporters in the wake of catastrophic economic failure now on the horizon.

This week, Andargachew Tsige, former ally of the Ethiopian Peoples Revolutionary Democratic Front who was imprisoned by the previous government then released by Prime Minister Abiy Ahmed, is making the rounds on the Amharic media calling for a new economic model like that of Cuba and Eritrea. 

Coincidently it was revealed this week that Canadian mining companies had tried to make a secret deal for rights to $ 2 billion in gold reserves in Tigray without any knowledge of the Tigray state many months before the Ethiopian Tigray conflict. Canadian courts had found that Canadian mining interests had violated the law by cooperating with the Eritrean government to pay slave wages to workers resulting in high profits for Esaias Afwerki, despot of Eritrea and the mining concerns. The embarrassment caused the Canadians to sell all but 10% to Chinese less scrupled interests. Canada has been remarkably quiet about the Ethiopian situation.

No doubt Abiy Ahmed can see the writing on the wall that his economic future with the West is poor given the inevitable sanctions coming soon unless he radically changes course and sues for peace with the Tigray Peoples Liberation Front. Now eleven months into a war that has seen the Tigray Defense Force initially on its knees to now controlling much of the Amhara region many such as United Nations Secretary General Gutierrez believe Ethiopia cannot obtain a military victory.  Even so Abiy Ahmed has promised to never negotiate with those he has deemed terrorists. The failing economy may become more of an enemy then the TPLF for Abiy Ahmed.

Ethiopian military drones face major obstacles in mountains of Tigray

Satellite photograph of Semara, Afar, Airport in August 2021 showing Mohajer-6 drones

The network is busy now, try again later! spoken by that all too familiar female voice to Ethiopian cell phone users may also be heard by Ethiopian armed forces military drone operators trying to use imported military drones in the mountainous terrain of Tigray. Multiple reviews of drone images taken by satellite and analysis by world renowned weapons experts seems to consistently point to few possible drone models being used. The most common is Iran’s Mohajer-6.

Although these drones can carry weapons they do not have the sophisticated live satellite link guidance of super power countries drones. Instead they are limited to line of sight flying no more than about 100 miles from the ground control station. This may also account why the Tigray Defense Force is keeping a margin of safety in Amhara and Afar distant from the border of Tigray. Mountains, bad weather, etc. can block the signal. Those with experience operating them say it is not uncommon to frequently lose signals. They can be set to attack on a set GPS course but it will not be very accurate without live visual confirmation which requires line of sight constant communication.

Exact location of targets is difficult other than by visual recognition. How sophisticated that is would depend on how much “extras” were added to the purchase. On board Global Positioning Systems can give location of the drone but not the target. Many countries are now employing GPS blocking systems which can easily block those of line of sight drones.