Human Rights Facts (105): The Aid Curse, or the Negative Effect of International Development Aid on Democracy

March 13, 2009

Filip Spagnoli


Via Bill Easterly’s blog, I discovered this paper on the so-called “aid curse“: just as dependence on natural resources has a negative effect on the quality of a country’s governance and democracy (a phenomenon called the resource curse), so has international development aid (or official development aid, ODA), especially in countries which depend heavily on aid (and in which aid represents a large percentage of GDP).

This is surprising, because one of the aims of international development aid is to bolster the quality of governance, directly through aid targeted at this objective, or indirectly on the assumption that better education, health care etc. will ultimately lead to better governance.

It seems now that there is a correlation (and perhaps even a causal link) between high levels of aid and low levels of democracy. The explanation is that foreign aid , like the revenue of natural resources, provides an opportunity for governments and leaders to appropriate funds illegitimately. And, because they benefit from aid, they will try to exclude other groups from power. This obviously destroys democratic institutions or makes it more difficult to establish them.

 Foreign aid also reduces the need for a system of taxation. And without such a system, it’s a lot more difficult to construct a well-functioning government, and it’s less likely that forces for representation take root (historically, the principle of “no taxation without representation” has promoted democracy). When a government doesn’t depend on taxes for its revenues, then it will have less incentives to seek accountability.

These graphs from the paper show how the levels of democracy in countries decrease while the levels of aid (as official development aid – ODA - over GDP) increase:

None of this proves that we should give less aid to developing countries. Probably the opposite is true. What it proves is that aid is more than just sending money. Donors should check what happens to their money, should target the money, and should bypass the “sticky fingers” in government as much as possible. To some extent, donors should also make aid conditional on democratic reform because this reform is the way to avoid aid inefficiency. However, when doing so, they should be careful not to put the cart before the horse: one of the goals of aid is precisely democratization. more...
 
Commentary from TGW:
 
It is abundantly clear by now a country that receives more Foreign Aid is in a worst situation than those who do less. The dependence theory often focuses on the poor, when in actuality the urban élites and the administrators of the funds are the one who depends on Aid and sustain it by all means necessary to maintain their life style.


It is not uncommon to see the industry flourishing in a short span of time and takeing over the basic service of  governments by further expanding in other areas. It is customary government officials with their insider knowledge and connection setting up shop to take advantage of the massive infusion of Aid fund.

The cycle of dependence can not be broken until the élites' dependence on Aid is dealt with, and until they stop perpetuating problems geared on fund raising than problem solving.

CORRUPTION-AFRICA: A Crime Against Development

By Sholain Govender-Bateman

Dr. Jonathan Lucas says corruption is preventing the world from meeting the Millennium Development Goals.

     TSHWANE, Dec 9, 2009 (IPS) - Corruption is preventing the world from reducing extreme poverty, from averting child deaths and even from fighting epidemics like HIV/AIDS. And it will have a devastating effect on the attainment of the Millennium Development Goals if not tackled directly by each national government.

The way to do this, according to the United Nations Office on Drugs and Crime (UNODC) Southern Africa representative Dr. Jonathan Lucas, is through the full implementation of the United Nations Convention Against Corruption (UNCAC) which most countries are signatories to.
      Lucas was speaking to stakeholders on International Anti-Corruption Day in Tshwane on Dec 9. "The 2009 message is simple: Corruption is a crime against development, democracy, education, prosperity, public health and justice – what many would consider the pillars of social well being."

     He said corruption was no longer hidden. "It is now seen by people across the world as a serious crime, a crime which weakens societies, ruins lives, and spurs underdevelopment."
     The UNCAC agreement, which was signed in Merida, Mexico six years ago, sets out specific guidelines that countries should follow in order to combat corruption.
     On December 14, 2005, UNCAC came into force and became the first legally binding, global anti-corruption agreement, and was "a significant achievement in the fight against corruption" according to Lucas.
       In November this year more than 1,000 participants from the 141 signatory countries attended the third conference of the state parties to UNCAC in Doha, Qatar. The "Doha Mechanism of Implementation" was agreed upon as a mechanism to monitor the convention.
      According to UNODC executive director Antonia Maria Costa: "This agreement will not end corruption, but will enable us to measure and fight it."
      In a statement released today, U.N. Secretary General Ban Ki-moon said the Doha agreement meant that: "From now on, states will be judged by the actions they take to fight corruption, not just the promises they make."
      Lucas told IPS that with cases like the recent accusations of nepotism and other corruption made against Sierra Leone’s President Ernest Bai Koroma by opposition leader John Benjamin, Zambia’s unresolved corruption allegations against former President Frederick Chiluba and Uganda’s ongoing battle for democracy amidst claims of election rigging and dictatorship, UNCAC was committed to ongoing engagement with each state. He added each national government was responsible for the implementation of the convention.
     The convention is based on four pillars – prevention, criminalisation, asset recovery and international co-operation.
     Open, honest and efficient decision-making, fair competition and ethical procurement systems are some of the aims of the convention. UNCAC also calls for a ban on bribery in all investment decisions, both local and international and law enforcement and swift international co-operation that leaves no place for criminals to hide.
      "According to the World Bank," said Lucas, "the cross-border flow of money related to corruption is estimated to be 1.6 trillion US dollars per year."
       This reflects the huge impact that corruption has on developing states and is why UNODC Southern Africa launched the Asset Recovery Inter-Agency Network for Southern Africa (Arinsa) in March this year.
       Lucas said Arinsa was of critical importance in Southern Africa as it created an informal gateway for anti-corruption information exchange and co-ordination between law enforcement and judicial authorities in the field of asset seizure in countries Botswana, Lesotho, Mauritius, Namibia, South Africa, Swaziland, Zambia, Zimbabwe and Tanzania.
      In a major breakthrough for UNCAC, countries agreed on asset recovery as part of the UNODC/World Bank joint Stolen Asset Recovery Initiative (StAR) launched in 2007.
      Lucas said asset recovery was a challenge and particularly important for developing countries where corruption eroded much needed public resources. "The work of the StAR Initiative has proven successful in a number of pilot countries including Bangladesh, Haiti, Indonesia and Nigeria."
      Key to fighting corruption, is the inclusion of the private sector in the implementation of anti-corruption strategies, said Ki-moon.
     "The private sector should not lag behind governments. Businesses must also prevent corruption within their ranks, and keep bribery out of the tendering and procurement processes."
      He urged companies not to cheat and to open themselves up to peer review in line with the 10th principle of the UN Global Compact. This principle states that "businesses should work against corruption in all its forms, including extortion and bribery".
      As part of this process, UNODC in collaboration with PricewaterhouseCoopers, released the first edition of the "Anti-Corruption Policies and Measures of the Fortune Global 500" report in November this year. The report provides an overview of measures that 2008 Fortune Global 500 countries have taken to combat corruption and economic crime.
      "When public money is stolen for private gain, it means fewer resources to build schools, hospitals, roads and water treatment facilities," said the U.N. Secretary General.
     "When foreign aid is diverted into private bank accounts, major infrastructure projects come to a halt. Corruption enables fake or sub-standard medicines to be dumped on the market, and hazardous waste to be dumped in landfill sites and in oceans. The vulnerable suffer first and worst." (END)

The need to form Corruption watch in Diaspora to monitor the corruption of the official of the Government of Ethiopia and their associates is long over due. Opposition parties, the media, civic societies and international organization must peruse public disclosure of assets and fiancéial interst of all government officials of Ethiopia. Their accounts and asset holdings in foreign countries must be public, and international anti corruption fighters must be consulted to make them accountable.

The Case for Democracy: Where does Ethiopia Stands?

The Power of Freedom to Overcome Tyranny and Terror

Natan Sharansky and Ron Dermer

Source

In this work Natan Sharansky and Ron Dermer present a series of arguments as to how and why democracy makes the world safer. Sharansky sets out by dividing the world between "free" and "fear" societies. Then he employs a simple test to discern a free society from a society based on fear: Can one enter a public square and express any opinion without fear of being arrested? If not, one is in a society that runs on fear. Then, he describes the mechanics of fear societies, focusing on three basic groups: true believers, double thinkers, and dissidents.

Sharansky uses personal anecdotes to demonstrate what these categories mean, and to describe, for readers who have lived only in free societies, the experience of living in a fear society. He admits that he was, like most of the Soviet population, a double thinker, constantly performing a balancing act between his true feelings and his public feelings. As a child, he privately celebrated Stalin's death, and then joined the public expressions of mourning and praise.

Only those adept at reading these mechanics, Sharansky warns, can tell the true believers from the double thinkers. Most outsiders mistakenly accept the popularity of despotic states because these regimes spend great effort trying to conceal the difference between their true believers and double thinkers. The failure to see the difference between the two, however, is not just a question of political acumen; it is a question of moral clarity.
Sharansky then analyzes the inherent instability of fear societies. Their leaders lack popular support, and, over time, they lose true believers. So the regime must work harder to hold onto power. To prop itself up, the regime needs an external enemy, who serves a dual, if not contradictory, purpose. Because the fear society stifles creative thought, it lacks scientific and technological progress, and so must mimic those of its rival. It also uses the rival as the scapegoat for its own political malaise. By contrast, governments of free societies are accountable to the will of the people and the laws of their country. A democratic leader who pursues a reckless agenda cannot do so indefinitely.

Sharansky explains how freedom can guide free societies in their dealings with fear societies. He does so by raising three questions: Is freedom from tyranny universally desired? Is pursuing that goal universally desirable? And can it be done, even if imposing it on a nation is required? Discussing the United State’s role in the world, he responds to criticisms of so-called realists from both the left and right who believe that America's foreign policy should be guided only by interests--and not by ideals. He rejects the notion that certain cultures are incompatible with democracy. Exporting freedom to these societies, he argues, is moral since it helps oppressed people obtain basic liberties. But it is also pragmatic, because democratic societies tend to resolve their differences peacefully.
Sharansky advocates the use of well-calculated international pressure against tyrannies. In the Middle East, the dictatorships may be vehemently anti-American, but the people tend to favor the West. The West can influence undemocratic and anti-American regimes such as Iran's, Saudi Arabia's, and Syria's by insisting that their people enjoy some basic freedoms.

According to Sharansky:-

"We must understand the difference between fear societies and free societies, between dictators and democrats. We must understand the link between democracy and peace and between human rights and security. Above all, we must bring back moral clarity so that we may draw on the power of free individuals, free nations, and the free world for the enormous challenges ahead. "

Born in the USSR in 1948 Sharansky spent many years in opposition to the Soviet system which brought him to be imprisoned in a Gulag and, as he puts it himself, it was only after he was finally released by his Soviet jailers and was allowed to emigrate to Israel, he came to:-

"Understand a critical difference between the world of fear and the world of freedom. In the former, the primary challenge is finding the inner strength to confront evil. In the latter, the primary challenge is finding the moral clarity to see evil. "

Foreign Exchange: The Ethiopian regime on the Pursue of Dollar?

Governments in peruse to earn Foreign exchange subsidize the cost of production and services to the benefit of the urban élites, set the stage for official corruption at any cost. We believe that, it is one of the major reasons African countries became a primary commodity exporters on the expenses of the producers and service providers resulting in the long overdue lack of the indigenous economic reform. The following paragraphs argue the problem of government’s subsidizing one area of services at the cost of national long term interest.

As coffee commodity, the celebrated Ethiopian Airline (EAL) is another cash cow for the Ethiopian regime. Since its birth, the EAL like many of the public institutions that generate lots of hard cash has been serving the authoritarian regimes we are fated to be ruled under. If one observes carefully everything the current regime does, be it operating EAL, entreating the donors, export of cash crops, luring the Diaspora for investment or receiving remittance...etc. has been in search of hard currency, but nothing to do with the wellbeing of Ethiopians.

Not long ago, the CEO of the Airline was on the media telling us how he is running the Airlines to profitability…. won award and all. Off-course, he cannot talk about the highly subsidized operational cost of the Airline such as the free rent and airport services. Given Foreign Minister Seyoum Mesfin of TPLF is his boss as the chairman of the Board of Director of the Airline; the CEO’s comment is not surprising. It would be politically incorrect even may be deadly for the CEO to mention any truth to the operation of the Airline and the subsidy it receive from the government.

What is relevant and out of the ordinary about the Airline is that, even though it provides services to the public; it is owned and highly subsidized by the government without much competition just because it earns hard currency. Furthermore, no one actually knows where the generated revenue goes and who is accountable to the tax payers due to lack of independent oversight.

In terms of revenue, we have been hearing recently the Airline has made record profits. Such report was uttered by the CEO through the government media and by other Medias parroting the same source. Since the CEO is working for the regime and the source of the news is also the regime itself without independent media to verify, it could be a cheery-pick report. Strangely, the supposedly independent press in the country is mimicking the same source without being aware what the source meant by profit.

Here is where it gets humorous; the ‘profitable’ airline practically does not pay rent for the 100s of offices it ‘rents’ in the country. It merely pays a ‘symbolic’ rent for the government run Housing Authority that holds on to thousands of properties confiscated from private citizens during the brutal Derg regime on the bases of Marxist revolution…the exploiters…, Ethiopia Tekdim and all.

We know for fact, there are half a dozen offices in the center of town the Airline rents for less than 1000 birr per month from the Housing Authorities. It is unthinkable in the world of business that, a commercial Airline paying an equivalent of less than 100 us dollar to rent an office space in a commercial district of an urban center anywhere but only in Ethiopia whose slogan is drummed “Abiyotawi democracy…progress…free market and record profits”…,etc. If profit making was so much easy as it is claimed (one can pay practically no rent to run an Airline and claim to make a record profit) then, everyone would have started an airline business. Actually, according to the regime’s law no one can operate an Airline business in Ethiopia but the regime let alone not pay rent.

What is oxymoronic is that, the property the regime holds to subsidize the Airline – not to pay the appropriate rent belongs to someone who probably spent all his/her lifesaving to build it. But the regime feels it can rent it low to an Airline who made millions of dollar (not birr) ‘record’ profits. What is new in “Abiyotawi democracy” and its version of free market is that, it is free market only to the regime and its affiliate.

In terms of others, how many subsidized rent the regime offers to keep its extortion going? We do not know. But we have discovered an owner of a busy café who pays a mere 500 birr rent per month and turn around to built a six story building and rent it for thousands of dollars per month to a foreign entity. That is what the regime calls free market…progresses…growth, etc.

There are also commercial and residential properties the regime rents to ‘selected’ few that pays so little rent. They spent more for electricity than they do for rent. Some people we encounter even fly first class on EAL paying birr to an overseas 'business' conference to lecture about investment opportunities in Ethiopia, and spent more money on a dinner than they do for a government subsidized rent they pay on their residence back home. Such practice is a slap on the face of the original owners, who have been told not to apply to recover their properties by some cooked-up technicalities of the regime’s making.

In such system political cronyism and corruption is a standard procedure to acquire a confiscated commercial and residential properties for dirt cheap rent and lease land for foreign investors for dollar. Even the gullible Diasporas are lured to invest in building their dream homes; justifying their ill deeds as it is good for progress…the ‘economy is growing rapidly…, etc.

For political consumptions, the above situations are hipped up as progressive events by the regime. The fact is, progress itself is a questionable proportion, and the question is who is progressing and at what cost? For example, we know some of the regime’s right hand-men live in the government confiscated villas practically for noting and build a villa of their own and rent it for thousands of dollars for foreigners (not birr). How about the regime affiliated businesses? Do they pay rent? Do they pay taxes? Do they even allow any one to compete with them? Is this Abiyotawi democracy at work? Going back to the EAL profit making, one cannot help but raise the question, why does the Airline get subsidy? This question itself can get one in trouble, but we can assume it is a cash-cow that generates hard currency for the regime.

There is much more about the dollar curse than any one can imagine. For instance, coffee export is one of the main one. Facilitated by the new established Commodity Exchange - the exchange, we were told was “to transform the agriculture market of the country for the benefit of the poor farmers”.

Coffee has always been the #1 foreign exchange earner for the country. The country exports the raw coffee through the many traditional private exporters outside the control of the ruling regimes. In the past the Coffee Board facilitated coffee export and coordinated its effort with the coffee exporter until the new commodity exchange came disguised as an agriculture commodity market reformer; shortly after it went out looking to control coffee and recently sesame seed (more to come) armed by the regime’s proclamation.

Another cash cow for the regime unknown to the average person is Sugar export. The few sugar producing companies still owned by the government has high ranking TPLF’s leader as the Board of Directors of the factories. For example, like the Ethiopian Airline Wonji is under Foreign Minister Seyoum Mesfin. What is even bizarre is Ethiopians pay an equivalent of five to ten times more for sugar produced in the country than the exported sugar that is sold in the international market for dollar. Accordingly, the regime made it illegal to sell “export designated sugar” in the local market as it is illegal to sell export designated coffee. What it means is dollar is what the regime seeks not birr. Incidentally, many merchants were jailed and lost their commodities for selling ‘export designated sugar’ in the local market in the past, just like coffee traders were not long ago. Thus, smuggling exported sugar back to the country became a profitable venture itself for many merchants because it is illegal to import sugar in the country.

Other areas the regime targets for foreign currency earning are selling Bonds to the Diaspora to ‘provide electricity in the rural Ethiopia’

http://www.ethioconsulatela.org/eepbond.html, shutting down independent money transfer services to control Diaspora remittance money transfer, luring Ethiopians in Diaspora to invest in their birth country and offering ‘free land’ to build their dream home, etc. Our ancestor Lucy was not spared too, thanks to the Ethiopian Trade and Investment Council- a peculiar outfit whose primary activity seems touring Lucy, unlike trade promotion as its name and mission implies http://www.eatic.org/home.html,

In Ethiopia, everything leads to the appetite of the regime for hard currency regardless of the cost to the Ethiopian people. Even building dams is intended to do with dollar earning like ‘exporting electricity’ to Sudan and Kenya while the population is living in darkness. There is unprecedented compulsion to earn hard currency on the expenses of the indigenous economy.

In conclusion, there is a lesson to be learned by all; in peruse of dollar there is a lots of ill gained wealth through corruption and cronyism by the regime’s affiliates and others. This ill gained wealth must be tracked, confiscated, and returned for the people of Ethiopia. And those who are involved in corruption must be punished and shamed. To accomplish such accountability for the sake of the Ethiopian people; political parties, civic societies, religious institutions and the independent media must create a coalition and establish an institution that demands the rule of law for good governance.

It must be recognized that, the root causes of poverty, underdevelopment and the associated tyranny and absence of freedom are directly related with corruption of officials and business that are sustained by colliding with the officials. Therefore, we urge Ethiopian intellectuals to come forward to lead and challenge their peers who are involved in corruption, and the so called ‘businesses’ who collide with the regime on the expenses of Ethiopians and make them accountable for conspiring to be part of the elaborate crime of corruptions against the Ethiopian people.

Independent media and civic institutions must investigate individuals and their affiliate’s who facilitate corruption and expose the responsible persons. At the Individual level, Ethiopians must demand transparency and make sure not to get involved in corruption for short term benefits. Transparency at all level of governance is a must to free the Ethiopian people, and for good governance to flourish and move forward.

Transparency: Why is the Ethiopian Government Hiding?

There is hardly any government in the world who does not have a website to inform the world about the structure of its government and the activities governing its nation. Unlike such governments, the Ethiopian government lead by TPLF/EPRDF since it came to power over 18 years ago has no website. One wonders why? Is there a need to hide the activities of governance, if so what is it hiding?

For the curious researcher, Google search finds practically no website where one can find any useful information about the Ethiopian government. We found some in few embassies’ websites and the Ministry of Foreign Affairs with noting worthy of information. For instance, the Ethiopian Embassy London, lead by Ambassador Berhanu Kebede (Biography)

has a list of the regime's cabinets with no profiles or credential on it's website.

The Ethiopian Embassy in Washington DC, lead by Ambassador Samuel Assefa; a PHD in Political Science has no information on the Embassy’s website about the government he serves.

The Ministry of Foreign Affairs,

lead by Seyoum Mesfin (Biography) who oversees all the embassies around the world has no information on its government beside the name list of officials with no profile and credential.

The Supposedly Information Ministry lead by Berket Simon no longer exists and is replaced by Government Communication Agency with no website.

The Ministries in the country and the Embassies around the world have no worthy information on the government they serve in their official website.

The responsible persons failed to demand the regime they serve to be transparent enough to revile basic information on the identity and qualification of who is running the country, and the service they provide for the citizens. Their complicity to be part of the clandestine activity by rendering their professional responsibility useless is pitiful.

The question remains, why does a government who is supposedly responsible for over 80 million people and supported with multiple donors for the good portion of its budget chooses not to have a web portal to tell the world about itself, its policies, and put-out information vital to the citizens and the international community? How is it the loyal Ambassadors and Ministers of the regime choice to get along with out protest or accountability.

When one examines comparable governments in Africa, not only they have a comprehensive information portal to inform and promote their country, they list who is who in government with their credentials. For instance, the Government of Djibouti with a population of half a million has a comprehensive portal about its government.

The Republic of Kenya has comprehensive government information portal as well as the Kenya Ministry of Information, and various government agencies including Kenyan Investment Authority portal, to mention a few.

It is fair to assume that the ruling regime of Ethiopia monopoly of media infrastructure and suppression of IT technology with the lowest penetration rate in the world are part of a deliberate plan designed to hide its activity and the identity and credential of its cabinet, managers, and operatives. In contrast, the regime has a full service web portal only when it serves its political and economic interest like Ethiopian Commodity Exchange

or Ethiopian Human Right Commission , but block every thing else that expose its dismal record in governance, human right, investment, independent media and civic societies. It is obvious the conspiracy to hide important information to conceal its unqualified officials working for the regime, and to avoid accountability from Ethiopians and the world community.

The question still remains, in a day of information revolution, why is the regime hiding from world and operating in a clandestine fashion by concealing the activity of its governance? And why no one is not making the regime accountable.

Ethiopians and the international community must demand transparency from the regime and its affiliated agencies and require disclosure of the profile and credential of its officials and manager. Furthermore, the willing individuals who serve the regime knowingly conspire to keep the people of Ethiopia in the dark must be identified and be accountable.

Public institutions must be transparent to release all information on their agencies in order to be accountable to the public. Only then, the people of Ethiopia can make the decision of the leadership skills and trustworthiness of leaders to hold public offices.

The culture of authoritarian rule operating in clandestine fashion on the expenses of the people must end. Every Ethiopian must demand open governance and accountability of one and all.

Election: is the National Election Board of Ethiopia impartial and independent?

The regime that claims’ having an ‘independent’ election board is running the nation election to legitimize itself as a winner of the 2005 election and beyond could not be able to have a secure website under their control. The supposedly independent and the decider of the winners and losers of the national election do not run their own website. Instead they passed on this sensitive responsibility to an individual named Atnafseged Mahdere, who run an outfit called Afrolink Studio with an address 4921 Seminary Road Apt1416 City: Alexandria State/Province:VA Postal Code:22311 Country: US Registrant Phone:+1.2404634584 Phone Ext.:Registrant FAX:+1.0 FAX Ext.:Registrant Email:togi@afrolinkstudio.com according the Source network solutions.

Afrollink studio is also listed as a web design service http://afrolinkstudio.com/ located at Comet Building, 4th Floor, 401 (next to Axum Hotel) in Addis Ababa with US representative Atnafseged (Togi) Mahdere Tel. 001-240-463-4584. e-mail: togi@afrolinkstudio.com according its website.

No one knows why the most sensitive government run Election Board ‘appointed’ by the Prime Minster with the approval of the ‘parliament’ is runnng its website by an outfit that uses a server outside the country.

“Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing.” BARACK OBAMA

The concept of Democracy became a mockery of tyrannical rulers and their apologists. The Ethiopian regime and its intellectuals, who serve in such responsibility, took corruption to a different level. Their concept of Democracy became putting up show by an Election Board for the unsuspecting and gullible international community’s low expectation of African democracy. Noting can exhibit the crudeness of those who are willing to be actors and actresses of the ruling regime charade of election than the election board members.

In unprecedented submission to tyranny, the so called members of the Ethiopian Election Board were willing to participate in fraud election in 2005 and are preparing for another show 2010 election at the expenses of the rights, freedom and dignity of the Ethiopia people.

They are knowingly and willingly choosing to participate in the day-drama to legitimize a non -existence election to give a stamp of approval for the predetermined winner. In doing so, they are willing to put their moral, credentials and professional ethics on line and sacrifice, the people of Ethiopia, for what ever it worth.

Equally responsible in the history of authoritarian regimes are intellectuals who give cover in the service for a dictatorial governments. Their violation of transparency, accountability, and willingness to compromise their professional ethics continues to be the cause of poor governance in general and human right violations, poverty, corruption…,etc..

In the case of Ethiopia, it is saddening to see a nation with a population of 80 plus million people became a play ground of morally and ethically impaired intellectuals in the service of the ruling regime conducting business as usual without accountability for the people of Ethiopia or anyone else. It also says a lot about the callousness of the international community to look the other way when they help sustain unaccountable regime with a decimal record of election fraud, human right violations, the cause of massive poverty, and corruption.

We cannot help but ask who should be held accountable? According to the National Election Board website run by an outside outfit the following are members of the board listed.

www.electionsethiopia.org/Index.html

Mr. Kemal Bedri Kelo; Chairman of the board (photo)
Abdella Adem; Member (Photo)

Girma Jarso; Member (Photo)

Kebedech Erdachew Mamuye; Member (Photo)

Dr Tadios Munie; Member (photo)

Tesfaye Mengesha Abegaz; Member (Photo)

In a true democratic process – government by the people for the people, having an independent and transparent election board is critical. Therefore, we urge all Ethiopians to hold the election board members and the rubber stamp parliament members who ‘approve them as legitimate and impartial’ accountable for their inactions. Both the election board members and parliament members are conspiring to deprive the people of Ethiopia their right to elect their leaders and live in a democratic country to peruse their lives and liberties under the peoples’ government.

We advise all Ethiopians, to follow-up on individuals who serve and cover for the regime by documenting their misdeeds and corruption, so that they can be accountable in the near future.

Transparent Governance must prevail, and the intellectuals who prevent it must be held accountable in every venue.

Investment in Ethiopia: Is US economic interest undermined by poor policy choice towards Ethiopia?

US Policy towards Ethiopia neglects the most important human resources (the Ethiopian Diasporas) who are willing and able to promote US citizens economic interest and goodwill in Ethiopia. Instead, the policy directs US foreign assistants worth billions of dollars (the largest in Sub Sahara Africa) to the ruling regime, which ends neither up without much returns for the US citizens economic interest nor alleviates the poverty for the intended recipients.

It is not surprising that a policy that does not require accountability of the regime to be transparent abridged US investment, but also indirectly failed to demonstrate a good stewardship to the US citizens. Furthermore, it caused the US to loss the opportunity, to utilize the vast human and financial resources of the Diaspora, who would have been active in investing in the region, and protect the US interest which includes promoting the goodwill of the American people. For instance, there is no a single institution in the US that promote US investment in Ethiopia, nor the government of Ethiopia attempts to encourage the US citizen to invest in Ethiopia by providing transparent investment information and incentive, thus preventing millions of US citizens from participating.

The US embassy in Addis Ababa is not doing its job either; it seems the Embassy is dolling money as if it is a charity than a promoter of US interest in the country. With close to a million Ethiopian Americans in Diaspora, the only US businesses listed in the US embassy website are only two dozen businesses.

Also, there is not much effort by the US commercial officers in opening up the country to US investment or a follow-up to identify causes that prevents US investment in Ethiopia. In general, the regime in Ethiopia is not providing equal opportunity for US citizens for the massive Economic assistance it receives from US tax payers. Instead, it only promotes Diaspora remittance and more foreign Aid from the US and many other sources than investment. Thus, US citizens are left with forums and unreadable information from the government and different sources that have no transparency. For instance, some are organized by the ruling regime cadres out of Ethiopian embassies and consulate to lure unsuspecting Ethiopian Americans; others are simply taking advantage of inside information to make quick buck without putting much effort.

Another example is the Ethiopian Diaspora Business Forum which is a hollow salesmanship in investment promotion in Ethiopia. The forum is organized by The Ethiopian American online Magazine, and Precision Consult International to lure Ethiopian-Americans to invest in their birth country without providing any independent information or explaining the political and market risk caused by the absence of transparent policy of the regime and investment information.

The forum presented a personal opinion of the organizers and most of the panelists claim to plenty of investment opportunity with out illuminating sources. Sponsored by George Washington University, USAID and VEGA (Volunteers for Economic Growth Alliance), and by the invitation only forum without publicly reviling invitation requirements. However, the organizers claim there are “lots of investment opportunity in Ethiopia” see the video of the 2008 forum made public.

It seems the organizers and the sponsors must have privileged investment information that is not available for the public on the government’s own official investment portal-Ethiopian Investment Commission www.ethiomarket.com/eic/. What makes it rather unusual with the forum is that, the panelists who are invited to promote investment opportunity in Ethiopia are not investors or have any official capacity in government. Some are professors in unrelated fields and others are non governmental organization reps.

The US was represented by Ato Addisu Alemayhu of US Aid representative to promote African Growth and Opportunity Act (AGOA), that promotes Ethiopian products in US free of duty, but yet, there is no US agency that promote US products to Ethiopia.it was announced the forum held it’s forth gathering of 2009 on July 12 in Washington DC, (No information is public yet)

For an average observer, it is hard to ascertain whether it is out of fear or they are simply government agents’ who are attempting to lure unsuspecting Ethiopian Diasporas to invest their resources in the name of investment. The official government investment promoters (The Ethiopian Investment Agency and The Export and Import Promotion Agency), the known Chambers of Commerce (Ethiopian and Addis Ababa Chamber of Commerce) are nowhere to be found in all the three forums held in the past, but the same unknown individuals.

The Managing Director of Precision Consult International Mr. Henock Assefa, one of the ‘organizers’ and the panelist spoke about many investment opportunity with out sighting sources. It is clear the forum organizers and their regularly invited guests must have no idea of what a simple investment requires or took it up on themselves to say what they are told by the government without fact checking. Such action negatively impacts the Ethiopian Americans who can potentially change the course of the Ethiopian economy if there was transparent information and a coherent investment policy in the country than to rely on unknown individuals and firms about investment opportunities information.

In our previous expose we explored how the nation’s investment portal was run by rogue individuals out of the US by channeling foreign investment inquiry through www.ethiomarket.com. Our search for investment information on official government websites noting worth to consider investment is found. Once again, we are finding investment promotion by unknown consulting firm and individuals who are not officials or investors themselves, thus begging the following questions. Who are they? Where do they get the information to lure investors? How come they never raise many issues, like political risk, corruption, lack of transparency and the lack of coherent investment policy?

It is troubling to see an investment consultant who dose not raise key investment risks that would make and break an investment.

Henock Assefa, the point man of the forum and the Managing Director of Precision Consult international claimed Ethiopian economic growth of "5-12%" in the last five years with out mentioning any source, not even the government’s source. He even talk a lots about foreign investors who came to his office willing to invest and the potential of the opportunity “to make a good living” investing in Ethiopia. Looking at the official website of the firm, where all the investment opportunities may be and all the foreign investors he talked about being helped by his consulting firm Precison Consult International, we found not even one investor consulted by the firm. What we found are few non-governmental organizations, UNDP and two Chambers of commerce the firm claim consultant.

The only focuses of the firm seems raising capital from the Diaspora for real-estate development. In another website associated with the firm Diaspora Invest solicits Ethiopian Americans to invest by offering 100,000 share of real-estate. And once again the same firm is also affiliated with Ethiopian investor with noting worth investment information. Domain Name: ETHIOPIAINVESTOR.COM Registrar: TUCOWS INC. .tucows.com Updated Date: 05-mar-2009 Creation Date: 27-Jan-2008 Source: Godaddy.com

In contrast to what Mr. Assefa claims on the video presentation the firm does not have any thing that can be ascertained as a successful investment in Ethiopia on its official website nor investment opportunity information that would help the Diaspora to make a decision to invest.

The other organizer of the forum- Ethiopian America online Magazine as media serving the Diaspora also failed to ask the basic requirement of promoting investment in a given country or a company in regard to the government policy of suppressing investment information, rampant corruption, the ruling party affiliate business dominating the private sector and many other transparency issue important for any investor and the local business at home to help investors assess risk and reward.

As an “independent” media, the Magazine and its publisher Ato Yohannes Assefa who claim to be ‘a business and intellectual property attorney’ in New York, according the official website should have known better and have the responsibility to seek the facts so that investors get the whole story before they commit their resources in a country where independent information is hard to come-by and where transparency is a foreign language.

What we still could not understand is why unknown consultant with not much track record speaks on investment opportunities that are neither on its official website nor the official government’s investment agency? The record shows the domain name was registered through: GoDaddy.com, Inc. Domain Name: PRECISECONSULTINTERNATIONAL.COM Created on: 09-Mar-07 Expires on: 09-Mar-10 Registrant: Henock Assefa, 40 waterside plaza Apt. #14A New York, NY 10010 (Source) godaddy.com

How a company domain name registered two years ago with not much track record can speak with authority about investment opportunity in Ethiopia is a question that needs an immediate inquiry by the media and concerned institutions.

Therefore, based on the above observations, we warn Ethiopians who entertain investment in Ethiopia to be extra careful and ask the hard questions before they commit their resources. In a country where the investment agency has nothing resembling like an investment opportunity, being lured by individuals’ talk can have far reaching consequences for investors. We also urge the media, civic organizations, and the international community to make a concerted effort in investigating transparency of commerce in order to make those responsible agencies or managers accountable.