By Prof. Alemayehu G. Mariam
Africa’s First Responder for Peace, Ethiopia’s Globetrotter for Investment and Hardest Working Man in Politics
We are beginning to see hard evidence of PM Abiy Ahmed’s return on investments in domestic and regional peace initiatives, good governance and structural reforms and his unrelenting campaign to change the global image of Ethiopia as a land of opportunity for citizens and non-citizens alike.
I call this a “peace dividend”.
When you invest in peace at home and abroad, peace invests in you in ways that are infinite.
Peace and prosperity go hand in hand.
In July 2012, I issued my prescription for peace in Ethiopia in my commentary, “Dreams of an Ethiopia in Peace:
To restore Ethiopia to good health, we must begin national dialogue, not only in the halls of power, the corridors of the bureaucracy and the military barracks but also in the remotest villages, the church and masjid meeting halls and other places of worship, the schools and colleges, the neighborhood associations and in the taverns, the streets and markets and wherever two or more people congregate. We have no choice but to begin talking to each other with good will and in good faith.
Peace talks and peace actions are taking place all over Ethiopia despite the secret conspiracies and machinations of the warlords and lords of war to spread rumors of war, fear, loathing, strife and civil war.
The “peace infection” incubated in Ethiopia is spreading all over the Horn of Africa.
World leaders like what Ethiopia is doing with peace at home and abroad and are willing to put their money where their mouth is.
Over the past, several weeks, I have been observing with sheer amazement as Prime Minister Abiy Ahmed crisscrossed the globe trying to cash in his peace dividend by being Ethiopia’s drum major for trade, investment, business and tourism.
“He’s here in Africa. No, he’s there in Asia. Yes, he’s in the Middle East.”
Now, you see him, now you don’t. But when you need him, he’s always going around the world as Ethiopia’s promoter-in-chief.
The amazing thing about Abiy Ahmed is this: If he is not chasing peace in the Horn of Africa, he is chasing investors, business people and tourists all over the world and doing his best to bring them back to Ethiopia.
But that’s not all.
Whenever he goes abroad, he never comes back empty handed. He will at least bring back with him Ethiopian migrants held prisoners in foreign jails without due process of law or makes deals to send young Ethiopians to study on scholarships.
If James Brown was the “hardest working man in showbusiness”, Abiy Ahmed is surely the hardest working man in politics.
“People are looking at Ethiopia in a new way.”
During the year-and-a-half that you took office, you’ve become one of the most important and influential leaders in Africa. Your courage in promoting the standing of Ethiopia both internationally and regionally is exemplary, and I commend you on your achievements. You are making every effort to change the economy inside Ethiopia. I commend you for that, because frankly, Mr. Prime Minister, I do the same here, and it has results. People are looking at Ethiopia in a new way.
Our trade is small, only $300 million, and can grow 10 times [and] can cooperate trade and investments, as well as cooperation in security, agriculture, water management and technology.
Deciphering Netenyahu’s “diplomatese” (the esoteric language of diplomats), the message is this: Abiy Ahmed in a very short time became an African leader, primus inter pares (first among equals) through courage, integrity, decisiveness, consensus-building and sharing the limelight. He is “exemplary” because all other African leaders should follow in his footsteps. He is “changing the economy” just as Netenyahu did in 2004, by aggressively pushing free-market economic reforms and by reducing the public sector, privatizing major state owned industries including banks, the national airline and shipping.
Today, “people (around the world) are looking” at Ethiopia as a land of business and investment opportunity and a prized tourism spot.
According to the May 2019 World Travel & Tourism Council, Ethiopia recorded the biggest growth in its tourism economy with growth by 48.6% in 2018, the largest of any country in the world.
Just get a load of that!!
Israeli investors are willing, able and ready to put their money where their mouth is and increase investments and trade by ten-fold.
I am puzzled by Netenyahu’s cryptic remark the “people are looking at Ethiopia in a new way?
Pray tell, “What is the old way people looked at Ethiopia before PM Abiy took office?
Let the truth be told.
For the past 27 years, people looked at Ethiopia as Africa’s beggar nation, the land of famine and starvation, the land of corruption, the (4th worst jailor) jailhouse of journalists and the land of ethnic apartheid.
What did Netanyahu really mean when he said, “People are looking at Ethiopia in a new way.”
He did not explain, but his words are self-evident.
People are looking at Ethiopia in a new way because Ethiopia now has 1) a courageous leader who has risen to the very top of African leadership totem pole as a statesman and peacemaker, 2) a salesman-in-chief who is always promoting investments, trade, tourism and business in Ethiopia, 3) a reformer who has taken significant steps to change the domestic economy to make it more attractive to investors and businesses and 4) a visionary who has made Ethiopia a bellwether of change in Africa.
What gave Netenyahu so much confidence and certainty to say Ethio-Israeli trade and investment could expand ten-fold?
All I can say is the blunt-talking Netenyahu knows what he knows and means what he says.
I can also say Abiy Ahmed has no problems playing at the poker table of the card sharks of the Middle East.
When PM Abiy visited South Korea on August 26, 2018, he told the South Korean business community and investors that Ethiopia is open for business and they are all invited to take part in the country’s expansive growth:
Ethiopia has many features that make it attractive to foreign investment. The reform of business climate currently being implemented involves opening up sectors that were previously closed to foreign investors We hope to create more opportunities for attracting foreign direct investment, especially from our friendly country — Korea.
Ethiopia and South Korea have a very special common history written in blood, sweat and tears.
When North Korean troops crossed the 38th parallel 1950 to invade South Korea, 6,037 Ethiopian soldiers fought for 5 years to stop and repel them. Some 122 Ethiopians lost their lives defending South Korea and 500 were wounded. None were taken prisoner.
An Ethiopian veteran of the Kagnew Battalion who fought in the Korean War observed, “ We went with Americans to the front line and fought together. From that, we helped a great nation, South Korea, to survive.”
South Korea not only survived but today thrives as the fourth largest economy in Asia and the eleventh in the world.
Korean African Foundation (KAF) Ambassador Yeon-ho Choi was reassuring: “I believe the visit of His Excellency Abiy Ahmed Ali … and this business forum organized on the occasion of the visit of His Excellency will serve as an important opportunity to discuss further economic and business cooperation between Korea and Ethiopia.”
During PM Abiy’s visit to Japan on August 29, 2019 (the Seventh Tokyo International Conference on African Development (TICAD7)), Japanese Prime Minister Shinzo Abe expressed his full support for PM Abiy’s domestic economic reforms and encouraged Ethiopia to take a leadership role:
I highly value Prime Minister Abiy’s efforts to promote harmony within Ethiopia and to realize peace and stability in the region. I hope that Ethiopia will play a role in TICAD7 to promote business taking into account Ethiopia’s experiences in achieving economic development.
PM Abe commended PM Abiy for his role and “efforts to achieve the peace and stability of the Horn of Africa including the promotion of peace with Eritrea.” He said Japan will support democratization reforms in Ethiopia and will support the election in Ethiopia through “The Project for Electoral Support in Ethiopia”. He pledged to support Ethiopia in improving agricultural productivity and health and medical services and human resources development.
PM Abiy expressed his appreciation “for Japan’s cooperation in the Horn of Africa, and briefed Prime Minister Abe on Ethiopia’s ongoing political and economic reforms. He shared the vision of making Ethiopia one of the top 5 leading economies in Africa through “homegrown economic reforms” currently in the pipeline and called for increased Japanese investments in the Ethiopia’s agriculture, tourism, technology and mining sectors. He asked for educational and training opportunities for Ethiopia youth in Japan.
PM Abiy and PM Abe were on the same page moving forward in strengthened partnership and collaboration.
Abiy Ahmed’s peace dividend
Investments in peace yield returns in prosperity and progress.
Investment in war yields returns in death and destruction.
PM Abiy is using purposeful conflict resolution at home and in the Horn region to create conditions for free markets, investments, trade and tourism.
Let’s face facts.
No one wants to invest in a country that is wracked with conflict and strife.
No one wants to invest in a country whose leaders babble infantile complaints against neoliberalism or believe they can bring economic growth by sloganeering about “revolutionary democracy” and “developmental state”.
Ethiopia’s phrase-mongering rulers over the past 27 years fantasized about making Ethiopia an African tiger (patterned after the Asian tiger states).
Let’s cut to the chase.
Foreign direct investment (FDI), trade and tourism are the only viable options available to Ethiopia for long term economic growth.
Ethiopia is a country that has long suffered under central socialist economic planning and kleptocratic developmental state (state should lead economy development, not free market) corruption.
The “developmental state” and “revolutionary democracy” have saddled Ethiopia with crushing debt at 60 percent of GDP.
In July, the Ethiopian Ministry of Finance reported Ethiopia’s total debt from foreign and local lenders surpassed $52.3 billion
Last week, the United Nations Economic Commission for Africa told Ethiopia it “must attract new investment and reduce its debt if it’s to achieve the government’s economic growth and job creation targets.”
Bloating debt will create “debt distress” and discourage the “private sector because Ethiopia will not be a creditworthy country.”
In the World Bank’s 2019 “Doing Business” report, Ethiopia ranks 159/194 in the world and 29/48 out of Africa.
Having tried and miserably failed with centralized state economic planning, foreign direct investment (FDI) (open trade and business and tourism) seems to be the only practical lifeline for Ethiopia to become “an African lion”. (Let the tiger stay in Asia).
FDIs are generally regarded as the most efficient, stable and effective sources of capital for developing countries. They are a much better alternative to addiction to borrowing and foreign handouts.
As the experiences of the Asian tigers have shown, FDIs have a dynamic effect on the local economy by providing a source of direct capital, transforming existing domestic capacities,facilitating knowledge/technology transfer, improving use of existing resources, access to global markets and growth in productivity and so on.
Countries interested in attracting FDI have provided a variety of fiscal (tax holidays/lower taxes) and financial incentives (grants, subsidized credits, building of infrastructure, equity participation and other preferential treatment), and other preferential treatment. They have also used other incentives including subsidization of infrastructure projects, foreign exchange privileges, and in some cases even granting them monopoly rights.
Prosper Africa, Prosper Ethiopia
Ethiopian Americans are in a unique position to help their motherland with investment, trade, business and tourism.
The old African saying is, “When two elephants fight, it is the grass that suffers.”
I think we in Ethiopia have an opportunity to put that old adage on its head by showing the grass could indeed benefit from the rivalry of two elephants, better yet the rivalry of the eagle and the dragon.
The Trump Administration launched its “Prosper Africa” program at the Corporate Council on Africa’s U.S.-Africa Business Summit in Mozambique on June 19, 2019.
“Prosper Africa” seeks to promote prosperity, security, and stability in U.S.-Africa relations and use trade and investment as vehicles.
The recently-resigned National Security Advisor, John Bolton said the U.S. must counter the “predatory practices” of China and Russia by building up ties with African economies and creating opportunities for American businesses in Africa.
In March 2013, I wrote a commentary entitled, “The Dragon Eating the Eagle’s Lunch in Africa?” and noted:
For the past decade, the U.S. has been nonchalant and complacent about China’s “invasion” and lightning-fast penetration of Africa. It was a complacency born of a combination of underestimation, miscalculation, hubris and dismissive thinking that often comes with being a superpower. But the U.S. is finally reading the memo.
So far, we have heard a screaming Eagle grousing about the unfair advantage, immorality, amorality, opportunism and new colonialism of the Dragon. But will we ever see a fightin’ Eagle standing up to a fire-breathin’ Dragon in Africa and “win”?
I am gratified to say my “memo” was “delivered” to the White House six years after I wrote it.
To me, Prosper Africa is proof that the screaming eagle has become a fighting eagle in Africa.
There is no more fiddling around with AGOA (The African Growth and Opportunity Act (AGOA) which passed in 2000 and offered as a one-way, non-reciprocal preference program that rewards about 40 African countries with a significant degree of duty-free access to U.S. markets.
AGOA essentially seeks to enhance select Sub-Saharan African countries’ access to U.S. markets provided they meet certain criteria such as establishing a market-based economy, an implementation of the rule of law, elimination of barriers to U.S. trade and investment, system to combat corruption and bribery etc.
Prosper Africa is a two-way trade and investment program.
The aim is to create a 200 percent increase in investment, trade and business between the U.S. and Africa by helping companies, investors, and workers both in Africa and the United States.
Prosper Africa aims to provide a one-stop shop that makes the full range of services available to U.S. and African businesses and investors. Among important services include “loan guarantees, market intelligence, building greater awareness of African investment opportunities in the U.S., matching US and African companies, expanding and strengthening US trade and investment hub, leveraging USAID’s private sector teams to help facilitate deals and providing support for trade and regulatory reform in African countries.”
Prosper Africa should deliver on the promise of the 1903 Treaty of Commerce Between the United States and Ethiopia.
There is little doubt that trade, investment and business are the most direct productive paths for the future relations of the U.S and Ethiopia/Africa.
US businesses and investors have many reasons to invest in Ethiopia and the rest of Africa:
Six of the ten fastest growing economies in the world (including Ethiopia) are in Africa.
There is a large African diaspora community in the U.S. that can facilitate business, trade, investment and tourism with Africa.
African countries have a large consumer market for U.S. businesses to access.
American companies can bring significant capital, innovation, and proven solutions, and adhere to the highest standards of transparency, quality, and social responsibility.
American companies are increasingly recognizing that Africa’s growth presents immense opportunities. Many U.S. companies are beginning to expand their investments in Africa.
U.S. businesses can help build Africa’s infrastructure and other development projects and expand economic growth.
Africa can benefit from a diversified investor pool. The European Union and China have large investments, but American companies can bring quality, state-of-the-art products and services, and ethical business practices to Africa.
The US wants to grow Africa’s middle class, promote youth employment opportunities, improve the business climate, and fairly compete with China and other nations who have business interests in Africa.
U.S. tourist activity to Africa is on the rise and with better information and promotions, the continent can be a magnate in the American tourism industry.
Prosper Africa for Progress in Ethiopia
There are many different kinds of Ethiopians today:
those who do the heavy lifting and make sure Ethiopia prosper and those who prefer to see Ethiopia wallowing in a vortex of poverty;
those who take responsibility and make things happen and those who let things happen and squirm like a worm in silence;
those who make things happen and those who wonder what happened, scratch their heads and chase their tails;
those who say what they mean and mean what they say and those empty barrels who windbag about what they did not say and did not mean;
those who are filled with optimism and hope and those who languish in pessimism and despair;
those losers who sob and mope around moaning and groaning and those who joyously shriek out “Eureka! The sky is not the limit in Ethiopia!” and are sick and tired of the moaner and groaners;|
those who see Ethiopia as a rising state and those who see her as a failed state;
those who believe Ethiopia’s best days are yet to come and those who believe Ethiopia will never have a good day; and
those who see things as they are in Ethiopia and ask “Why?” and those who dream of things and ask “Why not?”
Abiy Ahmed is the kind of Ethiopian who makes things happen and does the heavy lifting to get it done.
He means what he says and says what he means.
He sees Ethiopia as a rising state on the African horizon. He believes Ethiopia’s best days are yet to come. He dreams of things that never were and asks, “Why not?”
That is why world leaders are pledging their support for Ethiopia.
That is why investors, businesspeople, traders and tourists will flock to Ethiopia.
I shall prophesy that in the next few years, the world will beat a path to Ethiopia’s door!
That is because Ethiopia will be open for business to anyone with the good will, good faith and good sense to invest and Prosper in Ethiopia.
Let’s make Ethiopia the African economic lion and not a shadow image of the Asian tiger!
Ask not what Abiy Ahmed is doing to improve the Ethiopian economy, ask if you are doing your fair share to help Ethiopia to become economically strong.