Political Economy

Where will market or the Economy?
It is expected that a large number of Diasporas will come to Ethiopia to celebrate the millennium, and with them, enormous amount of foreign currency is expected to arrive into Ethiopia. But, the question is: where will that money end up, to commercial banks and then to the economy; or the Black market and then vanish through the sands. Foreign currency is the fuel to develop a country’s economy; from the fertilizer used by the farmers to the foreign goods that are cramming the shops of Addis are bought using foreign currency. Ethiopia’s long term plan for the construction of roads, dams and factories could only be realized through the power of foreign currency, but this could be possible if each foreign currency coming to the country is directed to the economy. Among Ethiopia’s sources of foreign currency, the Ethiopian Diaspora are significant contributors, for example, reliable sources estimate that 341 million dollars were received from the Ethiopian Diaspora through inward remittances in 2004/2005; this figure is almost equal to 44% of what the Ethiopian export was able to generate in the same year, which indicates that how much the Ethiopian Diaspora are supporters of the country’s economy. Irrespective of such contribution, a big question is still remained unanswered: Does Ethiopia is utilizing the full potential of the foreign currency coming through the Ethiopia Diaspora? Thanks to the Black market shops opened in each corners of Addis, the Ethiopian Diaspora are forgetting currency, in stead they are directly heading to the Black Marketers, and it is becoming the normal life style of the Ethiopian Diaspora, and I am afraid that this will be so even during the Millennium festival i.e. If the black marketers are left untouched during the Millennium festival, a significant portion of the foreign currency coming to this country will end up in the black market leaving commercial banks empty handed. This should not be so and it has to be corrected at least during the millennium festival period as the amount of foreign currency expected to arrive into-Ethiopia is enormous; and no one but the economy should be the beneficial of such fortunes that comes once in a thousand year. In order to correct such future event, however, harmony and cooperation is needed among the Ethiopian Government, the National Millennium committee, the National Bank of Ethiopia and commercial banks in the objective of ending up each foreign currency coming during the Millennium festival in the hands of Commercial Banks by developing different types of strategies that could range from a hard-line strategy to moderate ones, and the following are the few possibilities:
Law Enforcement
Law enforcement, which is closing Black market shops and bringing individuals involved in Black market into justice, could be one of the solutions of driving all the foreign currency coming during the Millennium festival to commercial banks. This is from the fact that if the black shops are closed, those that planned to go to commercial banks. However, this should not be taken as a permanent solution in eliminating black market from Ethiopia because as long as there is a gap in the demand and supply of foreign currency, Thus, if each individual coming to celebrate the millennium festival are made fully aware of consequences of exchanging in the black market, it will be possible to draw a large number of the Diasporas which could have gone to the Black Market, to come to commercial banks and exchange their foreign currency. The Law enforcement, if used, could bring the desired result during the millennium festival as there is little difference between the buying rates offered by the Black Market and Commercial Banks. If we take recent market rate: For 1 USD, Birr 8.9 was offered by the Black market, while 8.8 was offered by Commercial Banks; For Pound Sterling, 17.40 was offered by the black market, while 17.3630 was offered by commercial banks; For Euro, 11.85 was offered by the black market, while 11.80003 was offered by commercial banks. And, a sensible person does not take the risk of falling in the hands of the law for insignificant benefits. Adjusting the Buying rates without touching the Selling rates:
Extensive promotion in the side of Commercial Banks There is a saying that “bas event will not leave the mind easily”, many individuals are still thinking in the old times, remembering when one dollar was two birr, and still run to the black market whenever a dollar gets into their hands,. They still think that there is huge rate difference between the black market and bank rates; this greatly lies in the inadequacy of promotion in the sides of commercial Banks in promoting the prevailing rates by comparing it with the black market rates. People are not interested that one dollar is 8 birr; they are interested how much the rate differs with the black market, and The other option is the National Bank of Ethiopia adjusts the buying dollar rates to be competitive with the Black market rate during the Millennium Festival.
This goes to the root of the problem and eliminates the reasons to visit black market shops, this strategy could be implemented as the difference between the two markets is around 0.1 cents However the NBE should be careful not to touch the swelling rates as it will have a diverse effect making imported goods to be expensive, which will add fire in the current high inflation rate. On the other hand, adjusting the buying rates without touching the selling rates reduces the selling buying margin, which in effect decreases the Foreign exchange income of banks, however, this will be compensated by the volume of foreign exchange processed as the purpose of the strategy is to direct as much foreign currency as possible from the black market to commercial banks i.e when the NBE adjusts the buying rates to be competitive with the black market, more and more foreign currencies will end in the hands of commercial Banks, and the volume to generate higher income, which compensates the income losses due to reduction in the buying and selling rate margin. However this strategy as has a short coming if the black marketers adjust their rate benchmarking the buying dollar rate issued by the National Bank, this strategy will end up in the waste basket. Their rate benchmarking the buying dollar rate issued by the National Bank, this strategy will end up in the waste basket.
Extensive promotion in the side of Commercial Banks:
There is a saying that “bad event will not leave the mind easily”, many individuals are still thinking in the old times, remembering when one dollar was two birr, and still run to the black market whenever a dollar gets into their hands.
They still think that there is a huge rate difference between the black market and bank rates; this greatly lies in the inadequacy of promotion in the sides of commercial Banks in promotion in the sides of commercial Banks in promoting the prevailing rates by comparing it with the black market rates. People are not interested that one dollar is 8 birr; they are interested how much the rate differs with the black market, and this has to be included in the promotion agenda of commercial banks. For example, if individuals know that one Euro is 11.8003 in commercial banks and 11.85 in the black market, it may make them to forgo the insignificant benefits and come to commercial banks to exchange their foreign currency.
The other hurdles that are still in the mind of individuals is “the old communist procedure” Previous, under the Military government, individuals was burdened with questioned whenever they come to exchange a dollar-questions like. “Where did you bring this foreign currency”, “who gave it that to you”, “bring this document, bring that document” –questions that the free world wants to avoid. Not few still think that there are still such procedures in commercial banks and fear that they come to commercial banks to remove such hurdles from individual minds. Thus, much such promoting should be made during the Millennium festival in making the Ethiopian Diaspora to be aware of the rates and the procedures of exchange foreign currency in commercial banks in the objective of attracting as much foreign currency as possible in to the hands of commercial banks.
Creating awareness
Foreign currency is a key resource to develop Ethiopia economically and if Ethiopia is developed it is the benefit for us all.
The development, however, needs the full cooperation for its citizens. Much work has to be done in initiating each Ethiopia citizen for development, and coordinating each resource to the common goal. However this requires more than rules and regulations, it requires the willful cooperation of Ethiopians based on understanding and knowledge. Each has to leave insignificant selfish motives and start thinking for his/her country. In such context, the value and importance of foreign currency has to be taught widely, and the damage of directing precious foreign currency to the hands of the black marketers has to be stressed. It is possible to convince people by teaching what is right and what the truth is. As one of Ethiopian nationals, the Ethiopian Diaspora should be clearly informed about the value of their foreign currency- its impact tot the economy through concrete evidences-that it is not only their loved ones that are benefiting from the foreign currency generated through them, but also the economy as long as they send it using the right channel
To conclude, the Millennium festival has to be directed in the objective of bringing short and long term benefits to the economy, one value is to focus upon the foreign currency coming with the Ethiopian Diaspora to celebrate the Millennium. To make such fortunes, however, it needs the cooperation of each stakeholder to develop and implement possible strategies in the objective of ending up the foreign currency into the hands of the commercial banks. The article is written in the purpose of initiating the stakeholders to do something on the issue before and during the Millennium Festival Ethiopia will be rescued from poverty, and the time that to happen will not be far away.
By Anteneh Mekonnen

Kinfe Gebremedhin: The Once Elusive Man

We live and die without any hope for compensation...."
Arthur Rimbaud



In the seventies, he joined the political movement of his preference. He was 21. And as an ordinary fighter, he managed to survive the difficult early years of the Tigray People's Liberation Front (TPLF) when the first few battles were fought, and lost and won. And survive he did the TPLF's critical political outgrowth of the eighties when its top most authors gave way to junior comrades in what was to be a historic departure in the life of the front in agrarian Tigray -- so much blessed with a righteous indignation for an equal representation. That was the seventies. The Ethiopian revolution was into its second year; but before it went too far, the tumult assumed another form and thwarted the whole course of events. In practically no time, the military regime gave way to a full fledged dictatorship. 

Kinfe Gebremedhin was born in the historic northern town of Axum. His family then moved to the lesser known town of Dabat (his younger brothers in fact grew up in Endaselassie, Shire, Western Tigray) some few hundred kilometers south of his native Axum, and then to the most famous Gonder where he shaped his early childhood. When he died last week at the hands of an army Major, he arrived at the last count of his age: 46. He was too powerful with enormous authority to wield and too young to die. His passing left a miserable void that will take some time to fill.

Kinfe’s life was linked to security issues, 23 years by the last count. A year after he joined the TPLF as a fighter in 1976, he began work as one of the coordinators of what was then known as Halewa Woyane, "06", or the Front’s security wing that was also primarily overseeing the prison system. In another year, he managed to be the head of that wing. Around that time, Kinfe saw the death of his elder brother Yohannes Gebremedhin, alias Walta, who was one of the commanders of the battle at Adi Da’ero, western flank of Tigray. "Kinfe is perhaps one of the few guys who managed to climb the political ladder without ever slopping downward in nearly two decades and half which, perhaps, is unprecedented in TPLF's political history," says a close colleague who served under him in the seventies and early eighties. "That is largely due to his skills at adapting to complicated situations and changes that were in the making at various times in the movement."

In the 1983 TPLF’s second organizational congress, Kinfe was elected a member of the Front’s central committee. A couple of years later, he rose to its Politbureau that got him to the heart of the group that rallied few influential people who shaped the course of the TPLF in the years to come. That was the year when Aregawi Berhe and Gidey Zeratsion, two of the Front’s prominent leaders left the organization in a bitter ideological dispute that lasted for months on end. The aftermath saw the coming to power of a fresh brand of leadership led by Meles Zenawi and included three of the current dissidents. However, even before he joined the top rank of the organization, Kinfe was always taken as "first among equals," remembers the same colleague.

With the rise to prominence in an organization that largely undermined individual exploits he has seen several side assignments. He was a political officer of the army in the southern region of Tigray (one of the three regions classified at the time for the purpose of field operations) in late 1987 with the legendary commander Hayelom Araya. At about the same time, he also worked in the propaganda section with Meles and at least one other leading member of the Front, and edited a paper that was circulated among the army. In the final battles staged in the last days of the Dergue, Kinfe was credited for having taken a leading role particularly in the offensives the Ethiopian People’s Revolutionary Democratic Front (EPRDF) waged in North Wollo and Debre Tabor areas. "His skills at executing complicated assignments was phenomenal," says a friend who spent years with him in key battle fronts. "I will never forget the ease with which he managed to do that at a time when the TPLF joined ranks with other political organizations eventually culminating in the establishment of the EPRDF."

Soon after the EPRDF landed in Addis Ababa, Kinfe continued with what he started years ago in the remote corners of Tigray. He began organizing the nation’s security afresh, and in a few years time he was credited for having established a fairly robust institution that later came to be known as the Security, Immigration and Refugees Authority. In just a few years time, he changed the whole mode of operation of the Immigration office to an efficient service giving enterprise. "Thanks to whoever did that," a middle aged woman who was in a hurry to have her exit visa issued five years ago at the office told me, "deserves unprecedented praise; I am picking up my visa in two days." It used to take weeks to do that.

Colleagues say he decentralized power within the institution and rarely

interfered with activities of subordinates. And he must have decided women were a disenfranchised lot. "Perhaps we have the highest number of female executives in his office than anywhere else in the country," says a top female executive in the media business.

For ten years after the coming of EPRDF to town, Kinfe was an elusive figure and the only top official who was all too powerful but rarely seen in the media. He quite regularly traveled abroad but very few noticed his ins and outs. No one would say that this is in keeping with the dictates of the position he had assumed as Chief of Intelligence. Many of his closest friends, in fact, argue that he cherished his liberty very much. And that sense of liberty took him anywhere in town. From the top places that offer cosy evenings to the vibrant and loud quarters that are typical scenes for an Addis night life, Kinfe is said to have been ready to enjoy the best of what Africa’s diplomatic capital had to provide. His ubiquity was amazing. In large measure, it was highly likely for one to run into him in the most unlikeliest of places: an ordinary café along the Bole road or a mere roadside restaurant in Dukem. It was almost beyond comprehension that we saw the nation’s top spy alone and everywhere. "And he had an astonishing mix of friends," a colleague told me. "You name any class or ethnic variety, and he had that uncanny ability to have at least one friend hailing from each; he was a classic cosmopolitan figure." They may look like strange bedfellows, but he was also friends with Professor Mesfin Woldemariam. A young street vendor who sold him cigarettes was a friend that he regularly invited home for Sunday lunches. His untimely death had created an uneasy silence and a very long shriek from every quarter. The young street vendor could not be consoled when he heard that Kinfe was shot dead.

Right from the very beginning Kinfe is said to have refused the pleasures of personal body guards. And metropolitans who recognize his face were quite often bound to see him in a white T-shirt cruising alone along the boulevards of Addis in his posh white Cressida. Most of the colleagues I spoke with say he had remarkable qualities as a person and a friend, leading a substantial member of observers to believe that he was more of a messiah than a man who had to deal with the security issues of Ethiopia. The list of his merits, they claim, is too long. He rarely spoke out loud but was known to have a short temper that surfaced once in a while and subsided in no time. He did not stomach injustice and never drew conclusions from isolated incidents. He quickly came to the support of friends who needed his comfort and was refined in rehabilitating colleagues who had gone down the precipice. "You would never believe me, he was so compassionate that he took all the pains to go out of his way to help people," says a very close friend. However, like men his trade, he was reportedly capable of being decisive and ruthless for a cause he believed was right.

At work, Kinfe, we are told, was rigorous even on himself. In times of real emergencies, he is said to lock himself in for days. In almost all incidents that transpired during his tenure, he succeeded in hitting the mark. (He loved playing dart). When an assassination attempt on a prominent Ethiopian politician and a string of bombings unsettled several hotels in Addis and the eastern city of Dire Dawa in the mid nineties, Kinfe quickly settled down to work and managed to track down the terrorist cobweb that transcended the Ethiopian border. Even with the terrorists being from Somalia, Kinfe did not throw every soul from that country in the same basket. "That is the wisdom we are all going to miss with the death of Kinfe," underscores a friend. "You know, he even played Schindler (the German who saved hundreds of Jews from the clutches of the Third Reich) in other seemingly unrelated events that followed."

At another time, when an attempt was made on the life of Egyptian President Hosni Mubarek, he directed the whole operation that turned out to be an all out manhunt. He was called in from Great Britain where he was doing his MBA. "On such occasions, no one, not even his very close confidants could reach him," one of his cousins told me right after the terrorists were tracked down. "If Kinfe is not around, then, trust me, something is certainly going on."

And as such, the question remains to be not 'who killed him' (one man was caught red handed in broad day light on that fateful day May 12, exactly 10 years after his arrival in town), but, 'why?' In the meantime, no one can augur about what will happen without him around in the coming months and eventually years, but there is definitely going to be an empty place for a very long while; and a significant one at that.