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Ethiopia: The shocking truth about the 'double-digit growth'

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06/23/11

  03:07:44 am, by admin, 1988 words  
Categories: Ethiopia

Ethiopia: The shocking truth about the 'double-digit growth'

Ethiopia: The shocking truth about the 'double-digit growth'

By Geletaw Zeleke

June 21, 2011

Development is knowingly understood as a positive and desirable change. Whenever this kind of progress takes place in a given country it has a positive impact on the day to day lives of fellow citizens. Farmers, civil servants, businessmen and citizens as a whole will benefit from the much needed rain of development.

The Ethiopian government has trumpeted rapid development since it has been in power. It claims to have achieved “double digit” growth over the last seven years even in the face of a worldwide recession. The inundation of double digit growth however happens in rare cases over the globe.

The failure of Ethiopian development is uncovered when we follow the path of “double digit” growth onto the dinner table of civil servants. Civil servants as citizens must reap the benefits of economic growth to say that growth is real. Development is not something that can be defined as existing apart from the day to day lives of citizens, rather, they should be able to grab it, use it, taste and enjoy it.

The true experience of nowadays Ethiopian civil servants is revealed by observing their relative income. Given a more successful economy it would have been fair to compare the current Ethiopian development with that of South Korea, Indonesia, Taiwan or Singapore; ጽድቁ ቀርቶብኝ በቅጡ በኮነነኝ. However, as a result of the failure of the Ethiopian economy to compete with the growth of the world’s economies, we can only instead compare the relative income of today’s Ethiopian civil servants to the relative income of of civil servants during the years of the former Derg dictatorial military regime.

As we can see from the graph at right, Birr income shows an upward growth of 300 per cent when we compare the starting salary of today’s Ethiopian civil servants to that of civil servants in the years of 1990/1.When we compare the same salary in the hard dollar value, however, the income shows a continual decrease over the last 20 years. In 1990/1 a recent graduate was hired with a starting salary of 500 birr which equaled 247.5 US dollars. After 20 years “rapid growth” the same degree holder was hired with a starting salary of 88.2 US dollars. This means that 159.3 dollars of civil servant salary was steadily lost over 20 years at an average salary reduction rate of 14 per cent per year and at a total reduction rate of 280.6 per cent from 20 years ago.

We can predict from this continuing decrease that in 2020/1 one degree holder might get paid one dollar per month as an average starting salary, or that civil servants themselves will entirely lose their grasp of the economic ladder even sooner than 2020. We are examining the Ethiopian civil servants incomes in terms of dollars because the Ethiopian trade deficit (importing more than exporting) is very high and the value of the decrease of Ethiopian Birr against the dollar affects citizens negatively.

In addition to lose of value in comparison to the dollar when we take into account the increase in the price of goods in Ethiopia, which has risen alarmingly over the last 20 years, we can see the depth of the downward spiral of the Ethiopian Birr.

In the years of 1990/1 one small loaf of bread could be purchased for 10 cents Ethiopian Birr, now after 20 years, the cost has risen to an alarming one Ethiopian Birr. This means that the price for a loaf of bread has risen 1000 per cent in 2011. When we look at the price of other food items we see increases greater than one thousand percent increments. For instance, one egg could be purchased for 10 cents Birr in 1990 but now after 20 years the price hits 1.50 Birr. This disparity shows that the price of one egg has risen 1500 per cent. Looking back to the salary of a civil servant degree holder, which was 500 Birr in 1990/1 and increased to 1,500 Birr in 2011 and wherein the salary increased approximately 300 percent and the price of food items shows an minimum of a 1000% increase, we can see that there is a gap of more than 700% between the relative increase of Ethiopian civil servants salary in Birr and the relative increase of the price of goods.

Problem by definition is a deviation or a gap between what should happen and what actually is happening. The place where Ethiopian civil servants economic problems are found is within this huge gap. The shocking truth is that a degree holder who is hired as an Ethiopian civil servant today cannot experience the same quality of life as that which was enjoyed 20 years ago.

This huge money loss has exposed many civil servants to desperate problems of survival. For instance, the number one problem for civil servants is that they have to work additional jobs for their mere survival. This makes them over worked and exhausted. Because of this they cannot be productive in their regular jobs. To invest their full skill and knowledge they obviously need barely enough calories and adequate living environments.

According to Lester R. Brown in his article “The New Geopolitics of Food”, Americans spend one tenth of their income on food whereas the planet’s 2 billion poor people spend 50 to 70 percent of their income on food. Ethiopian civil servants in contrast would need to spend their entire income to get barely enough calories and this still would not be sufficient. If this is the case, then without the active participation of these citizens, how could “double digit” growth be said to prevail?

The second largest problem for Ethiopian civil servants nowadays is that they are not able to be self-sufficient. As we can see from their income, civil servants cannot afford housing so they are subject to dependence on family members or fellow citizens for survival. Not being able to establish households at the expected age brings about a problem of dysfunction for generations to come.

The third worst problem facing Ethiopian civil servants today is psychological deterioration and emotional distress. While on the outside the world’s citizens are moving ahead competitively the Ethiopian civil servant is falling increasingly behind. This disparity creates feelings of uncertainty about the future. Continued stress and feelings of hopelessness lead to health problems.

Hopeful Ethiopian young men support their poor parents who sent them to school with bare feet hoping they would be able to support them in the future cannot lead separate lives. It is very difficult for families to afford the bare necessities like health care or other basic necessities. Young beautiful Ethiopian women are unable to buy shoes, clothing, necessities or other products to complement their appearance. For youths it is not easy to invite their friends out during their teen years. These gaps can impact the spirit and resilience of individuals. Seeing the future as gloomy is a reason for Ethiopians to emigrate.

For the last 20 years the Ethiopian government has taken a huge amount of money from civil servants monthly income. Where does this money go? No one except TPLF officials actually know its whereabouts. We can speculate that the money is either tied up in non-developmental things like strengthening the military, or it is put away in outside banks. Since the EPRDF came to power an estimate of nearly 40 billion dollars has been received from the International community. In addition to this money sent to Ethiopians from family members living abroad hits 3 billion dollars each year.

According to sources taxes hit 35 billion Birr and as we see from the salary decrees the government has taken multi-billions of dollars from civil servants monthly income. But, life altering development is still unfound in Ethiopia. Recently, the UNDP (United Nation Development Program) exposed that for the last 18 years, between 1990-2008, some 8.4 billion dollars left Ethiopia illegally. According to reliable sources Ethiopia is one of the frontiers in corruption since the EPRDF came to power.

The other irony of the EPRDF is that since they have come to power they have continued to claim that they are growing the Ethiopian economy, but the reality is that the Ethiopian Birr has devalued several times.

The main question is not why the Ethiopian Birr has devaluated, even the strongest of monies have devaluated in history, but instead it is a question of economic policy. If there are not enough products to export then devaluating money has no advantage for the Ethiopian people long suffering from the effects of harsh economic austerity programs.

When we look at our situation there are not enough domestic products to induce competitive devaluation. Devaluation instead aggravates the inflation rate. But the true question remains, if there is so called double digit growth, then why hasn’t the civil servants’ relative monthly income increased following the devaluation of the currency and the price of goods increase?

An EPRDF member once said that the inflation rate is caused by rapid economic growth but, this argument can be seen from another perspective, that if growth caused inflation it means regression of growth can reduce inflation. This argument is not acceptable. Growth cannot cause inflation. When we talk about growth it is not a question of printing too much money, rather it is a question of an increase in products and lugubrious production.

Competitive devaluation of currency can sometimes have a positive impact by discouraging spending on imported goods and encourage spending on in land products. However, when we look at the Ethiopian situation we see that inflation has reached 30% and that inflation in the price of food has reached 92 percent by July 2008. This increase in inflation itself shows that there are not enough in land products. This translates to the fact that there is a lot of money looking for goods which do not exist due to the limitation of supply. As a result of this those who have still more money will buy these limited products for their own consumption while the remainder of the limited supply of these products will be exported at the higher price. This trend is bringing about endless price increases not to mention starvation and likened social problems.

The problem now is that the fixed pay civil servants cannot afford the continuous increment in the price of goods. The government is continuing to print a lot of money which is unbalanced with GDP (Gross Domestic Product) and this trend does not have a positive impact but in fact brings about a huge crisis.

In conclusion double digit growth and its positive effects and development in the lives of Ethiopian civil servants’ is proven to be a myth. Those who were supposed to be the motors of development are instead thwarting the Ethiopian economy into huge and continuous regression. In The Fund for Peace 2011 Failed State Index Ethiopia ranks number 20 and receives a rating of 7.7 out of ten in the sharp or sever economic decline classification.

Inflation and the huge decrease of the salary in dollars value shows that Ethiopia is not experiencing life changing development for citizens or competitive economic growth. Of course responsible governments collect money from their citizen’s in the form of regressive taxation for example the V.A.T. (value additional tax) for speedy development, but this is not the same as embezzling citizens like we see in the case of Ethiopian civil servants who are losing a lot of money as a result of the constant reduction in their income. By any measurement the case of the disappearance of salary of Ethiopian civil servants is not a result of taxation rather it is robbery. Showing a high number of salary increase when that same money has an extremely low purchasing power is a misrepresentation and even a crime when those responsible misrepresent it.

To restore Ethiopian civil servants rights to development there should be a fundamental change in Ethiopia. Unless these citizens say enough is enough then life will continue to deteriorate. Therefore all Ethiopian citizens have to work unyieldingly to bring about justice and democracy.

---
The writer can be reached at geletawzeleke@gmail.com

19 comments

Comment from: mesfin_b [Member]  
mesfin_b

Dear Mr. Zeleke, such kind of realty facts are covered up by the looter circle EPRDF. Meles at the helm of this so called EPRDF is there to tell outright lies and rob Ethiopia blind fold. THE IMF,World Bank are nothing but facilitators for the Western capitalist nations to amass the debt which the interest alone is unbearable. yet they don’t add accountability when this greedy meles the shifta is allowed to put his hand on the hard currency.
The whole world knows that with downward tumbling of Ethiopian economy this midget shifta with his henchmen is looting left and right.
The above analysis by Mr. Zeleke is pure fact which is even enough a cause for the whole Ethiopia to up rise and get rid of this stealing EPRDF now.

06/23/11 @ 07:39
Comment from: addiszemen [Member]  

The dooms day preachers seem to awaken from their graves.
The dishonest and deceptive diaspora economists keep misinforming us, avoiding the reality on the ground. They’ll never mention or admit the real factors what really cuase the inflation.
The ever increasing urbanization caused by the booming construction in our cities, and some other busineses, and more incomes have brought unexpected higher demand of goods.
None basic items like suger, coffee,..etc what we can call luxeries items have increased unproportionally.
Meanwhile the global food and fuel crisis is in alarming state which have brought many govts on their knees.
Back home in Ethiopia where people’s way of life is changing day by day unnoticed. Meat mostly beef was eaten once in a week or during holidays, where our people are mostly vegeterians. Now a days beef is consumed in alarming level never before. With the daily ritual of consuming raw meat QUIRT SIGGA and KITFO “filet mignon” a selected part of beef, where in the west only the few celebrities and the rich are lucky enough to eat.
The ever growing number of small meat shops “LIQUNDAS” are not even enough to satisfy our meat lover Ethiopians. Can we change that life style or eating habit? I don’t think so. Instead we keep complaining about the price. I had a chance of traveling around some African countries. Believe me eating beef is only a dream.

06/23/11 @ 08:10
Comment from: Bonger [Visitor]
Bonger

Nice Article

IT is one of the logical anti EPRDF article I have read.I really appreciate how the writer tries to present things about the our economy. I still believe that Ethiopia is growing but I will reconsider the facts presented in this article.

But the article do not discuss about the Ethiopian farmers I think which are different from the civil servants.
The fact is more than 80% of our population lives in rural areas and are farmers. Eventhough this analysis provides a good point regarding the impact of our economy in the civil servant failed to represent the impact on the majority.

EPRDF Economic policy is mainly focuses on the farmers.
It is very difficult for me to conclude whether the double digit growth claimed by EPRDF benefits the Ethiopian people or not.

06/23/11 @ 08:16
Comment from: Chala [Visitor]
Chala

Is it me or those extrimist g7 members thinks all ethiopians are domn.
1.Civil servant in ethiopia is only represent 5% of the popoulation. as 85% is farmer and the rest is living doing his own buss. or working for private company.
So the eg. you talk is bulshit.
2. the $8.4 the one U.N talking is 75% is lost from private inv. hiding the forgine exchange when they do export. instead of bringing to the cantry as a dollar the cheat on recits.

That include you the idiate who sent money to eth through delalas than banks. when you send money to your family through agents instead of the banks ethiopia looses dollars.

So please as you are ignorant and blind with hate dont think all ppl will fall to your dark propoganda.

06/23/11 @ 08:29
Comment from: Imperial Body Guard [Visitor]
Imperial Body Guard

‘Our concern is with the many and not the few. The benefits of education must be enjoyed by every Ethiopian. Health facilities must be made available to all who require them. The ownership of a plot of land must be brought within the capacity of everyone who so desires. The benefit of an expanding economy must be enjoyed by all.’ Important Utterances of HIM Negus Haile Selassie I, page 106-7

Haile Selassie entitled every Ethiopian family to a gasha of freehold land to be past down from generation to generation in order to increase their standard of living. Both the derg and the current regime of secession have failed to recognize the Constitutional Monarchy and land rights of the Ethiopian majority but have chosen to impose their views by force alien to Ethiopian culture and tradition. The alien imposed federation of secession claims to own all rural land holdings (I and I burn down that illusive dream), it leases these lands out in exchange for money which the Ethiopian poor majority do not have, especially when their main source of income from farming is being deprived from him whose toil has produced the crop. Ethiopians are being evicted from land they have been tilling for generations to make way for wealthy outsiders who are exploiting Ethiopian farmers with wages below the poverty threshold, and using harmful intensive agricultural techniques with polluting chemicals and slash and burn all to make a quick buck in the shortest possible time without regards to the long term consequences that their actions may bring. It is no wonder that during the past 36 years of secession Ethiopians have been fleeing their motherland in droves like never before as they have lost hope in their future domestically due to political repression and injustice.

‘But let him who would despoil the Ethiopian nation beware. Let him think, and think again. Our policy is clear; our position unshakeable. We are a united people, spared from tribal differences. For all this We thank Almighty God.’ Important Utterances of His Imperial Majesty Haile Selassie I, page 103

‘Experts have forecast that today’s rapid population growth will have far reaching consequences in the future. Food production is envisaged to fall short of the need of the world population, thus threatening mankind with the scourge of hunger. As We have said in the past, a view which is shared by many, Ethiopia, besides satiating her local needs, could also become the granary of her neighbouring countries, provided her agriculture is fully developed through modern means. Therefore, it is necessary for Us to continue Our endeavours to improve on our agriculture so that We can realize and develop our great potentials in this regard.’ Important Utterances of HIM Haile Selassie I, page 156

‘The soil of Ethiopia is a fertile soil. And it is loyal and dependable. Given but the proper attention and care, the Ethiopian soil remains, however much it is tilled, a dependable source of livelihood and dignity and wealth. It is thus ill-advised and indeed unreasonable to abandon the honourable and rewarding livelihood of farming in quest of other forms of employment in urban areas. A renewed dedication and diligence in farming would surely be a venture of more rewarding and lasting value.
It is not only that Ethiopia is ideal for the development of agriculture but the preponderant majority of its people also happen to earn their livelihood from farming. Draft legislations aimed at accelerating the tempo of agricultural development have been therefore prepared, following a thorough study of the existing systems of land administration and tenure in the various governorates-general.’ HIM Negus Haile Selassie I

‘In our own times, there are those expansionists who by shedding blood, desire to achieve their ambition and by dismembering themselves they are seen as tools for alien interests. Our people from Ethiopia shed blood, to save them from disintegration. Those personalities who believe in freeing a country by secession are selfish and prey to outsiders. We will not accept their motives.’ Selected speeches of HIM Negus Haile Selassie I, page 426

Long Live the Constitutional Monarchy!
Long Live the Solomon Dynasty!
Fire burn down the ethnic federalism satanic star of secession
‘The wealth of Eritrea is the wealth of Ethiopia, and the wealth of Ethiopia is the wealth of Eritrea.’ HIM Haile Selassie the Rise with the Lion of Judah!
Long Live Independent Ethiopia!

06/23/11 @ 09:59
Comment from: AGB [Visitor]
AGB

It is a professionally well written article uncovering all false stories about the double digit economic growth.
I am sorry that some people like Chala are not capable to understand it.
The standard of living of the Ethiopian farmer is even worst than the civil servants and the degree holders.
Please Meles, leave your office now.

06/23/11 @ 11:32
Comment from: C'moi senait [Visitor]
C'moi  senait

This dud is completely screawed by Marxisit economy and capitalist economy.
I do not know where you went school, but comparing the weyannes Alibaba economy with Mamo J i L L O economy is like Diging a Dracula coffine as evidence of the past and the present. Nothing stands for ever, every nation economy growths depends upon what they export and import.
And do not forget that ethiopia population were under 55 millions and now over 70-80??? More mouth to feed means is not like telling your neighbour that you eat fish all the time as weyannes telling us LIE of FALS 10%GDP. If there is a LIE detecter of dictators weyannes will win a nobel price of LIE and i give them 10 out of 10 point of FALSE GDP.

06/23/11 @ 12:40
Comment from: TEDDY [Visitor]
TEDDY

Double Digit Economic Grow ,a childish
useless ,STUPID TPLF bandits propagandas to entertain Fool Diaspora
Guys ,Ignorant Diplomatic Corps and Aderby Bandas .While 90% of the peoples are starving .
SHAME ON TPLF THUGS AND FOOL DAIASPORA
KERFAFAS !!!!

06/23/11 @ 16:07
Comment from: Abel [Visitor]
Abel

You guys ,keep talking.
One day sooner You will be ashamed.
May God bless Real Ethiopians and the government.
PS. come to your senses and contribute little to your country.

06/23/11 @ 17:57
Comment from: ene [Visitor]
ene

This is a voodoo analysis of ethiopian economy. How the hell did you believe your data when it tells you that the monthly salary of a person with a degree will be $1.00 per month. If you were a real statistician, you could have detected this comparative falasy and refrained from writing this stupid article. I like your writing ability and composition skill though.

06/23/11 @ 18:06
Comment from: hcapitalm [Visitor]
hcapitalm

I don’t think the dollar is a hard currency, therefore not a good comparison. For example the euro is higher than the dollar, but when you compare it to real money which is gold, the euro is downward spiral. So when you put usd/birr it does not show you the truth both are paper money that has been losing value and are confetti, i would have put birr/gold..From my perspective the Ethiopian Economy is like a child that was born say five years ago, and is figuring out how to stand and walk straight. Which also needs good parenting to discipline the market place. In this case, the rule of law, Liquid Capital Markets, including government bonds that could be issued to fight inflation etc.. The only mistake i believe the government committed is this, in order to enjoy the free market, without chaos is to have first put the legal framework, the basic things the free market needs to function properly first. Then you can talk about growth. Second whoever is the economic adviser to the prime minister needs to be fired. If he thought price caps was the solution to fight inflation, he must stop giving the few good economist a bad name.

06/23/11 @ 18:50
Comment from: john john [Visitor]
john john

We know the reality from our own family our nation is heading to the right direction and we are much better than we were for the past 3000 years and thanks for EPRDF leadership under PM. Meles Zinawi. Day dreamer keep up with your fake assumtion and deception.

06/24/11 @ 00:57
Comment from: Nanopure [Visitor]
Nanopure

From this article author to the commentators above me please attempt to convey your ideas in a clear, concise prose.

Why Ethiopians write so much and say so0000 little..almost gibberish..

we are not reading Amharic here and don’t use English with all Amharic indirectness.

06/24/11 @ 11:38
Comment from: Tolla [Visitor]
Tolla

I agrre with the projected loss in value of the Birr around 2020/21 as Meles has promised us a trillion birr economy. What does a trillion Birr economy means? More printing of Birr for circulation,therby, killing the purchasing power of the Birr!!! I commented long ago that Meles should have predicted the future economic growth of Ethiopia in Dollars or Euro where he cannot have the capability to manipulate their values. He rather chose the Birr where he knows he can print tens of trillions of Birr, if he wants, and he will say to us that I said so!!! In Zimbabwe one US dollar has reached the rate of millions of their currency, and this could be repeated in Ethiopia as long as Woyanne prints more birr for circulation as a confusing sign of “growth".

06/24/11 @ 12:13
Comment from: belew [Visitor]
belew

Addis Zemen you ust be the bigest moron in the universe you must like meat a lot. Only the hodams are finishing the meead the poor people don’t even have enough money to buy shiro. You need to use your head. but you know what they say when the stomac is full the brain is empty. that is why your brain is empty it is full of meat!!!!

06/24/11 @ 12:25
Comment from: addiszemen [Member]  

Belew,..

When I read your blubber, I picture you as a diaspora qunizram hodam, majiratam looser. Thank God you’re not in Ethiopia. Feeding your kind of qunziram would have been a big loss for Ethiopia. Eziyaw balhibet burger yechalih!!

06/24/11 @ 18:39
Comment from: john john [Visitor]
john john

MY dear fellow Ethiopian
Let’s leave those people who try to divide us based on their own failed agenda and there is nothing wrong with our current self-determination system. My other point is the name calling of one of our African tribe as to blame for everything happen in past which is really wrong no single tribe ever lead Ethiopia through out it’s existiance if you read history this is the oldest succefully diversify nation for thousands of year. By the way there is nothing wrong to be patriotic if you understand the true meaning.of brothers and sisters next door.

06/24/11 @ 21:43
Comment from: Lema [Visitor]
Lema

Bright future:
“South Boulder are currently targeting 1.5 billion tonnes of potash at 20% KCL, which has an in ground value of about USD $150 billion”
South Boulder Mines feasibility studies continue to define a world class potash project in Eritrea.
Hopefully Ethiopians will learn to work hard as Eritrean.


06/25/11 @ 02:35
Comment from: true [Visitor]
true

Addis Zemen,

Thank you for insulting yourself. Who used to eat meat during Derg? This indicates the arrogance of Weyane and the likes of you, rich enough to afford meat daily. Yes, indeed I agree with you. Weyane /EPRDF has gone so low Ethiopians even if they were rich for spirtual reason would not eat meat. Now of course they can’t afford it even if they want to only TPLF and Weyane can afford it and good we can filter out the evil in our society. You didn’t insult Ethiopian society but you thought you did but you insulted your lovers TPLF/Weyane, THANK YOU!

hcapitalism,

nice try, Ethiopia has no gold to compare to remember? It was looted by Weyane and TPLF and left Ethiopia with painted brick in the bank. Admit, which ever way you go,TPLF are bad news supported by IMF/Worldbank.

Anyways, every act TPLF/Weyane is doing is order from World bank and IMF. False double digit growth is to market themselves and to silence people from criticism. By making Ethiopian lives dependable means, more corporations are coming to Ethiopia taking resources and jobs making the Ethiopoans slaves that is what is happening because Meles is taking many loans from IMF/WB and when Ethiopia can’t pay, there will be a demand from IMF/WB to take over businesses of Ethiopa by foreign corporations as it happened in other countries such as Argentina, Bolivia, etc. This helps Meles to survive indefinitely to be in power.

06/26/11 @ 03:17

rebtel

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