Open Letter to Prof. Joseph Stiglitz

Ethiopian economists
| February 16, 2011




Professor Joseph Stiglitz

University Professor

Economics Department, Columbia University
814 Uris Hall, MC 3308
420 West 118th Street
New York, NY 10027

Dear Professor Stiglitz,



First, we Ethiopian economists and scholars express
our sincere admiration for and recognition of your distinguished work in
advancing the frontiers of economic thinking and your world renowned
contributions  to the theory of
information which earned you and your colleague (Professor Grossman) the
highest esteem, the award of the Nobel Prize in economics.


In light of your stature, it will not come as a
surprise to you that those of us who hail from developing countries follow what
you say very closely. In this regard, we kept a keen eye and learned a great
deal of   your interest and involvement in matters
of development in the Third World over the past few years. You will agree with
us that all people—irrespective of race, religion, age or other attribute–
aspire to be free of oppression, poverty and corruption. The monumental changes
that are taking place in Tunisia and Egypt which are now raging in the rest of
North Africa and the Middle East are illustrative of the human passion for
freedom and dignity. Given this emerging trend, we were astonished by your
recent interview with Bloomberg (2. February 2011, “Real Risk of
Spillover from Egypt Unrest”), in which you discussed the situation in
Egypt.
[1] When
the journalist asked what advice you would provide to the Egyptian Government you
said  that, “at this point
they have to open up and democratize; I think there’s just no choice; I
think they’ve been very slow at doing this […] they ought to follow
what’s going on in Tunisia”. We would like to inform you how elated
we were to hear your unconditional support of the democratic aspirations of the
Egyptian people.  The first
important step toward democratization took place on February 11 when a peoples’
led popular revolution forced President Hosni Mubarak to step down from power
after ruling Egypt with an iron fist for 30 years.


What we find baffling is the contradictory signals you
voice. Your appreciation of the importance of democratization in Egypt clashes
with your long-held posture with regard to the application of the same
principles in Africa in general and Ethiopia in particular.  On a closer look, your critical approach
to repressive governance does not appear to be applicable to Africa. We say
this with justification and with the hope that you will reconsider your stand. In
the past two decades you lent incalculable support, through your words and your
actions,
[2] to
Ethiopia’s minority dictator, Meles
Zenawi, who has ruled Ethiopia for 20 years. We would like to draw your
attention to Peter Gill’s book Famine
and Foreigners. This insightful analysis
provides the world with a detailed
account of how you developed a warm and intimate friendship with the ruler of
Ethiopia, and how you and Mr. Meles became brothers-in-arms against the operations
of the International Monetary Fund (IMF) in the country. Our concern does not about
personal friendship but about the policy implications the friendship implies.
We are talking about the legitimacy that your warm friendship and endorsements
gave to the head of one of the most repressive regimes in Africa today.  



The Ethiopian ruler to whom you lent your undivided attention
and support is the same person who has inflicted untold brutality and pain on
innocent civilians, communities and the country through acts of] alleged genocide,
crimes against humanity and human rights violations. Mr. Meles Zenawi has
stolen elections repeatedly; massacred hundreds and mass-detained over 40,000
citizens in Addis Ababa and other cities in 2005/06. Genocide Watch, Human
Rights Watch, Amnesty International, the New York Times, the State
Department’s annual human rights reports and many other media, public,
and human rights agencies have given careful account of these and other atrocities.
The independent Global Financial Integrity group has documented billions of
dollars of illicit outflow of funds under his watch.


You will agree with us that there are real
consequences when internationally known intellectuals with power and influence
provide legitimacy to dictators such as Mr. Meles Zenawi. On the ground, the
lives of ordinary Ethiopians who are denied livelihoods, suffer from unemployment,
live with hunger and face the indignities of living under a repressive system
each and every day tell the real story.   These Ethiopians have been caught up
between your policy/ideological preference on the one hand, and your delight in
finding an African ruler who is happy to play the African anti-neoliberal Robin
to your Batman. Don’t you think this is unfair and unjust? We regret to
say that, in your ideological and intellectual battles with the IMF in
collaboration with Mr. Meles, you gave a dictator the benefits of your global
status as a leading economist. He has used this to polish his international
image. The cost to the Ethiopian people has been high. African intellectuals,
academics and fair minded leaders find this kind of affinity with African
dictators regrettable and unbecoming of leading economist like you. What
saddens and amazes us is your endorsement of Mr. Meles Zenawi’s knowledge
of economics and his intellectual acumen. This, we find utterly irresponsible
and intellectually dishonest. Ethiopia has many intellectual leaders scattered
around the globe. Mr. Meles Zenawi is not one of them. This disservice to the
Ethiopian people and to the rest of Africans is contained in your book, Globalization and its Discontents, in
which you state that Mr. Zenawi

demonstrated knowledge of
economics—and indeed a creativity—that would have put him at the
head of any of my university classes.


You speak highly of the way he rules the country, saying “Meles combined these intellectual
attributes with personal integrity: no one doubted his honesty and there were
few accusations of corruption within his government.”

.[3]


How
do we reconcile your assessments and conclusions with other experts and global
institutions such Human Rights Watch, Transparency International, Global
Financial Integrity, Mo Ibrahim, Oxford University and even the World Bank?  . As far as we are concerned he has several
times failed his economics tests miserably.  His economic policies and programs have
brought untold suffering to the Ethiopian people. In the event you are not
aware of his many failures, we would like to identify a most recent one.
Recently he imposed price caps on a dozen or so goods. When imposing his
ill-fated price caps measure, Mr. Zenawi told us that he was doing it in order
to curb the month-to-month double-digit inflation that the country was
experiencing. As any student who has taken principles of economics course would
have predicted, the colossal failure of the price cap measure has not only
backfired on his regime; it has also brought untold suffering to the Ethiopian
people. As we predicted, every negative and secondary effect of price caps that
any economist would theorize has been realized in Ethiopia. Mr. Zenawi’s
price caps measures qualify to be cited as lessons in how to mismanage an
economy. As if this is not enough, Mr. Zenawi tried to shift the blame on the Ethiopian
entrepreneurs and merchants. A few days before imposing the ill-fated price
caps measure, he gathered about 584 businesspersons and accused them of price
gauging, hoarding and engaging in unhealthy competition. He told them that he
would “cut their fingers” unless they cooperate with him. For
anyone who watched the entire taunting process (and the ones before it) and Mr.
Zenawi’s rants and the stunned faces and silence of the 584 businessmen and
women, it was clear that the attendees were scared and did not know what to
say. He  met with and freighted the
business community despite the fact that he had been informed (see, for
example,
http://www.pambazuka.org/en/category/features/67399)


that the root causes of the price hikes and runaway inflation were the supply
rigidities brought about by the opaque system that he imposed on the country.
These include the creation and support of party-owned
conglomerates which have dominated the vital sectors of the country’s
economy,
expansionary monetary policy (accompanied by negative real
interest rates) and government spending- both of which have played their part
in injecting liquidity into the system; lack of productivity; continuous
devaluation of the birr – the latest one being the 20% devaluation announced on
September 1st, 2010. To make matters worse, the latest information
we have indicates that Mr. Zenawi’s government is contemplating to expand
the price caps. The piling of mistakes continues unabatedly despite the fact that
some of us had illustrated the negative ramifications of price caps (see, for
example,
http://gadaa.com/oduu/7573/2011/01/12/the-futility-and-damaging-effects-of-ethiopian-price-caps/.)

The world knows Mr. Zenawi as articulate when speaking
with foreigners. Ethiopians know him as sinister and cunning, brutal and
repressive. For these reasons, we are puzzled by your unreserved praise of his
economics. It is a disservice to the majority of Ethiopians for you to give
legitimacy to a leader whose family, party and endowments control the economy
with an iron fist. He runs a party owned and controlled business empire through
his wife, decimates the private sector, and instills fear into farmers of
losing their land, and access to inputs. Worse, if they complain about
unfairness in rural service provision they will be punished.
[4]

Like us, the Economist magazine
strongly differs with your assessment about Mr. Meles’ economics acumen,
stating that the Ethiopian Government is “
one of the most
economically illiterate in the modern world”
.[5]

A
Wikileaked cable from the US Embassy to Berlin also stated: “Germany
reported addressing Ethiopia’s economic situation, namely hard currency and the
poor investment climate, with Meles directly and being struck by what they
described as Meles’ poor understanding of economics”.

In no small part to your contribution, Mr. Zenawi’s
appearance at Columbia University on 22, September, 2010, shocked the Ethiopian
community in the Diaspora and in the country.
[6]

His speech, the essence of which was the condemnation of neo-liberalism, was
preceded by your warm welcome and introduction. You invited Mr. Zenawi to speak
at World Leaders Forum at Columbia despite the fact that you were amply
informed of his regime’s atrocities by many people of Ethiopian origin.
Letters were sent to your institution via Lee
C Bollinger
, President of Colombia
University, the student paper at Columbia,
Columbia Spectator,
and through several faculty members at Columbia.
[7] 

Your University’s website
initially carried the following scandalous statement about the visit. We
presume that you were not unaware of the statement.

“Under the seasoned governmental leadership
of Prime Minister Meles Zenawi, now in his fourth term, and vision of the
Tigrai Peoples Liberation Front (TPLF) and Ethiopian People’s
Revolutionary
Democratic Front (EPRDF), Ethiopia has made and continues to make progresses in many
areas including in education, transportation, health and energy.”


Mr.
Meles Zenawi is hardly a “seasoned leader.” Ethiopians and most
objective observers know him as a brutal dictator and his regime is one of the
most repressive and corrupt regimes in the world today.   We would like to draw your attention to
the latest Freedom House report which downgraded Ethiopia’s position from
“Partly Free” to “Not Free.”  Using the newly installed
“Anti-Terrorism Proclamation” and “Charities and Societies
Proclamation” law (CSO law),
the regime has muzzled freedom of expression
and criminalized human rights activities. Yes, progress has been made in
infrastructure projects but at the expense of quality and fairness. For example
, some of our own research and the researches
of others indicate that, thanks to the huge sums of donor funds, enrolment
ratios have improved but quality has deteriorated. This fact has been
acknowledged On August 26, 2010, when the Ministry of Education issued a directive that
categorically banned all public and private higher learning institutions from
running distance education programs, and all private higher learning
institutions from offering on-campus law and teachers’ education
programs.

In light of the above and the ample reliable
documentation of repression, gross human rights abuses, alleged genocide,
single party and endowment command and control of the national economy, massive
unemployment, land grab and mismanagement of the national economy, we urge you
to no longer give legitimacy to the dictatorial regime led by Mr. Meles Zenawi.
We believe that you’re past support and endorsement may have overlooked
the real facts on the ground.  As a
Nobel Prize winner and a reputed leading economist you have provided Mr. Zenawi
status and legitimacy he and his regime do not deserve. He is universally
identified as one of the worst dictators in Africa today. The democratic wave
that brought down dictators in Tunisia and Egypt is not likely to stop there.   Foreign Policy
magazine reported that the
Tunisian and Egyptian ex-presidents are not alone.  It provided a line-up of the eight worst dictators
that fall into this category. Meles Zenawi makes this membership.
(“America’s Other Most Embarrassing Allies”.)
[8]
Your video of February 2, 2011 has shown that you are able to see the downfall
of autocratic rulers who choke their country and economy.


We
urge you to be part of a legacy of prominent voices around the globe who
believe in human freedoms and possibilities.  At the end of the day, economic
development is about people. You will agree with us that the nexus between
economic development and good governance is so compelling that any form of
dictatorship can’t be acceptable in North Africa, the Middle East or
Sub-Saharan Africa.


We
thank you in advance for your attention.



Ethiopian
Development Policy Focus Group

  1. Getachew Begashaw, Ph.D. Professor of Economics, W.R. Harper College, Chicago, IL (Member).
  2. Aklog Birara, Ph.D. Senior Advisor (recent retiree, World Bank) and Adjunct Professor, Trinity University of Washington D.C. (Member).
  3. Seid Hassan, Ph.D. Murray State University, Murray, KY (Member).