Ermias reminds us that, because of the economic crises which Ethiopia finds itself in, international institutions and other donor organisations which have helped hitherto the present government, are not willing any more to be benevolent as in the past. In short, Ethiopia is losing all the credentials to be helped and to get access to the American market as its counterparts use their available advantages. Surprisingly, Ermias tries no where that international financial institutions and other donor organisations are part of the problem. How?
As it is well known, after the seizure of power by the present government, just around September 1993, the IMF and the World Bank have dictated that the EPRDF government must follow the economic policy which they have formulated. With no changes in the formulation of the policy, the EPRDF government has accepted to implement it. After a few months, the Ethiopian currency which was 2, 05 birr during the time of the Mengistu government, was depreciated to 5 birr in comparison to the US dollar. In other words for one dollar, buyers must present 5 birr. After few years the amount of exchange to US dollar has arisen to 8 birr. The depreciation of the Ethiopian birr, it was believed, would bring favourable economic situations to our country’s exports, and the existing trade balance deficit will be reduced. Unfortunately, as experiences in other African countries had proved, instead of favourable export situations, Ethiopia is compelled to export more products in order to get the same amount of money which she used to get before. At the same time the depreciation of the Ethiopian currency has never created favourable export markets, because Ethiopia exports mainly coffee and other raw materials which are massively available on the world market. In between, Vietnam is one of the leading coffee producers and exporter of coffee. The World Bank has advised the government of Vietnam to concentrate on coffee production, though the world market is excessively overwhelmed by coffee products. At the same time the EU and the Wold Bank have insisted the Ethiopian government that coffee production should be expanded. Since almost 15 years there are almost 60 millions of tons of coffee overproductions which could not be sold on the world market. That means there is no equilibrium condition between demand and supply. As a matter of fact in the last 10 years we witness that the prise of coffee on the world market is going downwards year after year. As everybody knows, the prises of raw materials, especially coffee are dictated by multinational companies which are controlling the raw material markets. Neither the governments of the Third World Countries nor the direct producers of coffee or other raw material products have any influence to alter the world market situation in their favour.
This is one aspect of the problem which Ermias did not mention in his small article, and which such governments like the EPRDF, which has totally subordinated itself to the international institutions and to the American government could not influence the world market. Concerning the preferential trade agreement which America yields to few countries, it is a mockery and a trick at the same time. You can export goods or materials say for 20 million dollars to the American market, at the same time you have to open your market for American products say which are worthing 100 US $. By that you are not only in disfavour able situations, but also the industries which are not competing with American products will be destroyed. Because of this and the liberalisation of the import market the Ethiopian market is overwhelmed by foreign products, and as a matter of fact many medium and small size industries are destroyed, and many workers are overthrown out of the their work place. At the same time such kind of controlling the Ethiopian market has produced a new consumer class which only eager high quality foreign products. One should not wonder when the trade balance of deficit shots upwards, which our country, have never experienced before. This is just one of the many intriguing aspects of the so-called market economy of the IMF and the World Bank.
The privatization of the industries which is the main part of the so-called structural adjustment program(SAP), and other institutional measures which any African country, which comes to terms with the IMF and the World Bank programs, must accept, have one strategic aim. In the name of privatization to destroy your home market, and to create a new wealthy class, which we have seen in so many east block countries. In Ethiopia too, we experience that very few people which have good relations with the government have become rich overnight. In the last few years one could witness that a new wealthy and corrupted class has emerged in Ethiopia, which our country have never experienced in the 30 years of Emperor Haile Sellasie`s rule, starting the End of the Italian occupation and the 17 years of the military government’s rule. At the same time we have a government which is massively engaged in economic activities and controlling the strategic part of the market. Look the Energy sector and the telephone market. Instead of expanding the telephone sector by producing cables and related technologies, in order, on the one hand to learn the technology, on the other hand to ease the communications problem among the society, the EPRDF government compels the poor people to buy handy.
In a country where the energy sector is very weak and electrification is not expanded, it is very unwise to compel the people to buy handy. At the same time we must import Satellite dishes which consume part of the meagre hard currency which we have, and which we otherwise allocate for the importation of capital goods. Again, because of the weak energy power, the government is not investing in accordance of the need of the economy and the people, and the consumers are using electric supplies in shifts, and at least three times a day the electric supply will stop. In order to ease this problem the government is selling small generators and earns huge amount of money. To our surprise the Ethiopia is exporting electricity to the Sudan, and is planning also to export to Spain. Look how corrupted the government and its advisors are. The implication of such kind of handling the situation has wide range consequences for the economy and for the society as a whole. This is because that we have a government which is ignorant of economic development and social theory and including civilization. At the same time this is the result of the so-called structural adjustment program (SAP), and the massive intervention of international institutions in our internal economic planning system. Its so-called advisors are also incompetent and do not understand the sophisticated nature of international politics, and they are running how to become rich easily rather than thinking strategically how they develop and protect the Ethiopian economy.
Now the World Bank and other international organisations are organising seminars how they are going to deal with the Ethiopian economy as if they are not part of the problem. One must understand the intriguing nature of these corrupted organisations and other agencies which are working with the IMF and the World Bank, and advising the Third World governments. They have one strategic aim. To change the masses of the populations to human cattle and destroy the nation state concept which must be organized on science driven technology. Unfortunately I cannot go in detail how the world economy is constructed and how it is destructing the lives of so many people in the Third World countries. Step by step I will try to give detail theoretical and empirical evidences.
The problem which Ermias faces is that, he has totally a different paradigm, which is not compatible with the physical economic concept and nation building. He takes the world economy as given and natural and see it singularly and not in its totality. If one wants to analyse the economic situation which is prevailing in Ethiopia, one should go backwards and analyse the situation how the Ethiopian Economy is organised beginning the 1950`s. If somebody has that in his mind and tries to analyse the situation not from the neo-classical theoretical point of view, but from physical economic or machine-tool concept point of view, one has a clear idea how he grasps the crises, and which methodology he uses to analyse. Unfortunately, and for heavens sake we are totally neo-liberalised. As long as we are caught by such kind of destructive ideology, I am afraid that, we will not be in a position to contribute something which is historical to our country, and which helps economic development on wider scale which brings Ethiopia from the present economic, social and political crises which is muddling. If somebody wants to contribute something tangible and historical for his country, he must study the physical economy concept which is diametrically opposing the corrupted neo-liberal IMF paradigm. Only so, one becomes a historical figure and save Ethiopia from partitioned into mini-states.
