Moral Hazards of the Aid Industry in Ethiopia: justice is overdue November 4, 2014

November 4, 2014

Commentary by Aklog Birara (Dr.)
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“Africa is treated as the dustbin of the world…To donate untested food and seed to Africa is not an act of kindness but an attempt to lure Africa into further dependency on foreign aid.”

Michel Chossudovsky “The Globalization of Poverty and the New World Order”

Aklog Birara, PhD

In October each year the Bretton Woods Institutions, the World Bank and the International Monetary Fund created in 1944 to reconstruct worn-torn Europe and the rest hold their meetings alternating between Washington and other countries. These meetings discuss and define global monetary and development policies that affect and often bind the global community regardless of economic and political status. I had the privilege of attending these meetings representing Ethiopia and as a Senior Member of the World Bank Group. My observation is that wealthy and powerful countries decide policies that help their own societies first. As the only independent country in Africa, Ethiopia served as a founding member of numerous multilateral and UN and regional agencies and is recognized as a founding member of the Bretton Woods Institutions. Committed to multilateralism, Ethiopia served the world community (Korea, the Congo, for example) much longer than the vast majority of countries that were colonized at the time. It played a leading role in the formation of the Organization of African Unity and its successor the African Union that it continues to host. Nevertheless, largely because of its poverty and technological backwardness, its influence in the Bretton Woods institutions is minimal; as is the influence of the rest of Sub-Saharan Africa. Poor and underdeveloped nations are by definition at a disadvantage in globalization. They are receivers rather than policy makers. So, why is Ethiopia preferred as the largest aid recipient in Africa today?

When did aid to Ethiopia begin?

Today, Ethiopia is the largest aid recipient in Sub-Saharan Africa and among the top in the world for a strategic reason. It is important to note though that aid to Ethiopia did not start under the current governing party, the Tigray People’s Liberation Front (TPLF) and the ethnic coalition, the Ethiopian Peoples’ Revolutionary Party (EPRDF) that this minority ethnic elite dominates. Ethiopia received its first loan from the World Bank in 1950 in the amount of $5 million for a road rehabilitation project following the devastating Fascist invasion that had destroyed the country’s modest social and physical infrastructure. The World Bank’s participation in alleviating Ethiopia’s poverty continued for more than 64 years. Prominent in the Bank’s development effort and contributions is significant investment in the social sectors—education, health, nutrition, sanitation, safe drinking water, HIV/AIDs, agriculture and food security and rural roads; and in institution capacity building. The Bank’s economic and sector analytical work and policy directions in Ethiopia are equally notable. These contributions have been especially pronounced over the past 24 years. Total Official Development Assistance (ODA) to the TPLF-led government has exceeded $30 billion. Why?

My thesis is Ethiopian Western allies and the donor community especially multilaterals such as the World Bank, the European Commission and the African Development Bank and bilateral agencies such as USAID and DFID (UK) transferred enormous financial resources since the current government took political power in 1991 for strategic reasons. The Governments of the United States and United Kingdom identified Meles and his party as indispensable friends not only in the Horn but also in the rest of Africa. On October 22 214, David Smith of the Guardian wrote an outstanding piece, “Ethiopia, 30 Years after the Famine,” in which he underpins direct correlations between the American War against Terrorism and massive aid to the Ethiopian government under Meles and beyond. “Ethiopia is seen as a reliable police officer (client state) in the region, hosting a U.S. Military base and sending troops to fight the Islamist militant group al-Shaabab in neighboring Somalia.” The War on Terrorism is now a pretext used by the TPLF to terrorize Ethiopians. Being a powerful country’s “police officer” pays for those in power; but has practically wiped out the semblance of civil liberty or human rights or a sense of human worth in Ethiopia today.

The aid narrative articulated by the donor and diplomatic community differs from my thesis. Instead, the narrative is that Ethiopia deserves more aid because of its intractable poverty and the destitution of the vast majority of the population; and especially the intractable dilemma of feeding its growing population that has reached 96 million. Even if we accept this definition, the aid industry has not made a headway to make the vast majority of Ethiopians self-sufficient and secure and the middle class prosperous. Ironically, one of the fastest growing economies in the world has impoverished the tiny middle class instead of enriching it. Most members of this class rely heavily on relatives in the Diaspora to make ends meet. Forget the poorest of the poor who barely survive. Ethiopia is a country of extremes: a tiny minority, mostly Tigrean that is filthy rich; and the vast majority who are unable to eat three meals a day. The filthy rich does not alleviate poverty in its home base, Tigray either.

Ethiopia is one of the hungriest and unhealthiest nations on the planet. It is also one of the most repressed and oppressed. Per capita income is still a miniscule $470 per annum. It is not just the poor and the unemployed or underemployed who leave the county in droves. It also the most educated. Between 1991 and 2006, 3,000 of 3,700 Ethiopia- educated and trained medical doctors left the country. Hundreds of thousands of Ethiopian youth take enormous risks seeking employment alternatives in North Africa, the Middle East, the rest of Africa and the West. Many of the 160,000 day laborers expelled by Saudi Arabia and shipped to Ethiopia last year trekked back to the country that expelled them. They are being re-expelled. Young Ethiopians immigrate to the Ukraine, an economic basket case with at least 10 percent unemployment. They are being expelled. This does not suggest the growing Ethiopian economy that is enriching the few and creating new millionaires, including TPLF generals each year has the absorptive capacity to create the required 2.5 million jobs each year. The Ethiopian government does not care for citizens. It only cares for the preservation of the Orwellian state that is backed by Western Governments, especially the U.S. and the U.K and financed by multilaterals such as the World Bank and the E.U. Ethiopia’s security, intelligence and defense forces have links to their backers in the West. No one knows what percentage of Ethiopia’s GDP subsidizes spies, security, defense, wealthy defense, federal police and other officers. I reckon it is high.