Custom Tariff Revision Hits Computer Market Hard

What he had expected to be a thrilling day was not turning out as planned for high school student Hailmikael Adugna. A computer technician in his spare time, Hailmikael had just purchased a used HP laptop at Green Teck Computer Shop for 8,000 Br.

Hailmikael, who started providing door-to-door computer maintenance services a year ago, had decided to buy a laptop to help him with his education and also his aim of developing a website to promote his business. But upon arriving at the the shop in Megenagna on September 19, 2019, he was shocked to learn that the price of laptops had risen immensely, so he visited three other shops to compare prices.

He found the price spike everywhere he looked. “The price wasn’t as I expected before,”  said Hailmikael.

But due to the requirements of his business, he reluctantly forked over his savings.

Many besides Hailmikael have witnessed the sudden price increase in the laptop market in the past six weeks, according to retailers.

Everyone agrees that it arrived after the revised customs tariff issued by the Ministry of Finance imposing a 15pc tax on used and new computers. The amended customs tariff was enacted starting from August 2019.

The tariff revision came about with the main aim of increasing revenues. In this fiscal year, the government targets to collect 253 billion Br from domestic tax revenues, which is expected to cover 65pc of the federal budget.

Under the tariff book of the country, there are six duty tax rates ranging from zero to 35pc, which are applicable based on the goods imported.

The range varies in order to encourage the importation of some goods by imposing the zero tax rate and at the same time to discourage the import of selected goods by imposing a higher tax rate.

The global laptop market was valued at 101.7 billion dollars in 2017. Growing internet usage, rising disposable incomes, swelling global population, and increased awareness among consumers about the emergence of new technologies are among the primary growth stimulants for the market.

The revision on the customs tariff came into effect in line with a harmonised, internationally standardised system of names and numbers to classify traded products and was revised in 2017, according to Fentaye Weldesenbet, tariff allocation senior officer at the Custom Commission.

The Commission was established in 2018 after it split from the then Ethiopian Revenues & Customs Authority. Under the new structure, the Commission is in charge of customs and duty matters and reports to the Ministry of Revenues.

“The implementation of the revision was delayed for two years due to filtering the importers who require a privilege and amending different types of taxes takes time,” she said.

The tariff was revised since Ethiopia is a signatory to the International Convention on the Harmonized Commodity Description and Coding System. It is expected to be reviewed every five years.

Ethiopia became a member of the World Customs Organization (WCO), which was established in 1952 as the Customs Co-operation Council. The WCO is an independent intergovernmental body. The Organization’s mission is to enhance the effectiveness and efficiency of customs administrations.

Before the revision two months ago, the customs tariff was 20pc, but now the full duty on a computer is 35pc. The new amendment added a 10pc surtax and a five percent customs tax on the product.

Surtaxes levied in addition to and based on the regular tax rate and excise tax is a legislated tax on specific goods or services. The surtax is levied mainly on luxury items.

Seife Tekeleweld, the owner of Green Teck Computer, strongly argues against the surtax on computers, since the product is not a luxury item but rather a necessity for students.

Following the adjustment of the tariff, the number of customers flowing to Green Teck Computer has significantly decreased, according to Seife, who has been in the business for the past four years.

He claims that he was selling five to ten laptops on average a day before the tariff amendment. But now there are days that he does not sell a single laptop, he said.

“Most of my customers only request the price of the product and leave without buying,” he says.

Recently, Seife sold brand new laptops for between 10,500 Br  and 23,000 Br, and most of the time his customers are university students and people who work on research papers.

“After the custom tariff amendment, the price of a single laptop showed a 5,000 Br increase,” Seife said.

The current season is known for the laptop market boom, since it is a time when high school graduates join universities.

In this season, the causal challenge of the retailers was getting supplied, and the price increase makes their business more challenging, according to Seife.

Another person who was affected by the price increase is Henok Seleshi, a father of four and a distributor of laptop computers for the past eight years.

Henok, who imports laptop accessories in addition to laptops, printers, photocopy machines and projectors from Dubai, says that he will lay off some of his employees.

”I’ll decrease my employees from eight to two,” he said.

Henok imports 1,200 laptops twice a month on average. If the goods transit into cargo, it takes him up to three days to receive the product, but if it is in the container, it could take him up to 10 days to receive the product from Modjo Dry Port.

His customers are universities and colleges, as well as wholesalers who distribute the products. On average he sells 150-200 laptops at a time through tenders. But now for him after the customs tariff amendment, he claims that his customers do not visit him frequently.

“I have a lot of expenses, and the increasing price of the laptops recently has stopped me from covering my expenses,” Henok, who has two warehouses in the Mexico neighbourhood, told Fortune.

At Henok’s shop, the price of used laptops increased by 4,000 Br, while the brand new laptop prices have risen by 3,100 Br. Two weeks ago, when he received his imported laptops, he paid 5,680 Br tax for each computer.

The latest tariff rise is aimed at encouraging local assembly of laptops by discouraging imports, according to Fentaye.

“If they didn’t support us, how could we assemble laptops in the country,” Henok claims.

Endal Yimer, tariff allocation unit leader at the Commission, also says that beyond promoting local assembly, the revision aims to increase domestic tax revenues by enforcing the tax mission.

The customs tariff has been revised eight times with the main aim of increasing revenue from taxes and duties and clarifying some ambiguities that have been seen in the previous tariff book. While the Council of Ministers is mandated to issue the customs tariffs, the Ministry of Finance has been delegated to revise the tariffs.

Yohannes Woldegebriel, a lawyer who specialises in tax law and the commercial code, believes that imposing a tax on computer products is meaningless.

“The government imposes a surtax on highly imported goods when financial situations constrain them,” he said, ”but the computer is not clustered with these goods.”

Computers are used for both education and office purposes, so most of the time, universities and government offices procure them, according to him.

”The result of tax pressure negatively affects the education sector,” Yohannes adds.

Aiming to motivate local importers to assemble them is overly ambitious, because the local technological institutions are not capable of this, he argues.

However, Hailmikael, who really needs the laptop, bought a used HP laptop for 8,000 Br, since he did not have a choice other than buying one.

 

Customers visit a laptop shop at the Kkare Building to compare products.

A customer looks for laptops at Green Teck Computer Shop in Megenagna, one of the shops that sells accessories and computers.

Food Fight: City Closes Shops, Claims Caused Inflation

Dagnachew Aschalew stands forlorn outside his butchery on the main thoroughfare in Adisu Gebeya, in Gulele District. Staring at his shuttered business last Thursday, September 26, 2019, Dagnachew recalls how two weeks prior, he received a warning from the Addis Abeba Trade & Industry Bureau. A day later the butchery was closed by city officials for failing to renew his trade license.

“Even though we tried to pay the tax and renew the license, the Bureau told us the tax audit was not complete,” said Dagnachew. “We can’t pay our tax unless we complete the audit, but the Bureau didn’t understand us.”

Dagnachew’s is not the only business the Bureau closed two weeks ago. To control the continuously increasing price of goods and claiming to stabilise the market, the Bureau took measures against some businesses accusing them of contributing to inflation, while it also took measures on businesses like Dagnachew because of license issues.

The Bureau, after investigating 5,783 commercial enterprises, closed 691 businesses and issued warnings to 2,402. The closed businesses include bakeries, butcheries, construction materials shops and mills.

“A lot of my customers are coming to the butchery and leaving after they see that it is closed, and I’m forced to pay my employees even though the butchery is not working,” says Dagnachew.

The Bureau also closed 88 shops, which were found selling vegetables and fruits without receipts or were using forged receipts.

“The Bureau conducted research to understand the root cause of the continuously rising inflation in August,” said Habtamu Tilaye, an official at the Trade Inspection Regulatory Directorate. “Research shows that there are long and unnecessary trade chains, and we decided to cut these chains.”

Besides this, to prevent the contraband trade, a task force was formed by the city’s Trade & Industry Bureau, Addis Ababa Police Commission, Revenue Authority and Attorney Bureau.

The task force arrested eight brokers and impounded 52 Isuzu trucks last week around Mercato for allegedly selling teffillegally.

In addition, the task force also seized 59 Isuzu trucks, which carried onions, avocados and oranges, in an operation that lasted for three hours on September 11, 2019.

“They’re selling vegetables and fruit on the street, while selected areas at Atikilt Tera are the only designated area for sales of these items,” he adds.

We distributed the products to Cooperative Unions and Et-Fruit, and they are selling them at a lower price, Habtamu added.

The City Administration also claims that after it made the move there was a decrease in prices on some agricultural products and attributed the price decrease to its regulatory measures.

The price of onions, which had gone up to 30-34Br a kilogram in August now has come down to 10-18 Br a kilogram in the retail market and 10-16 Br at cooperative unions.

“The closed businesses will get their licenses back if they fulfill the necessary criteria, but the brokers will be held legally liable,” said Habtamu.

In August inflation showed a 2.5 percentage point spike from the preceding month. The increase was mainly on food items, which rose by three percentage points, hitting 23pc on a year-over-year basis. Non-food inflation also rose by two percentage points to 12pc. The last highest inflation rate was registered in 2014, reaching as high as 22.2pc.

The Central Statistical Agency said the increase in the price of onions and garlic contributed to last month’s rise in inflation.

“Increases in prices of the major cereals, especially on teff, barley, sorghum, and maize, have continued unabated,” reads the report from the Agency.

Of the food items that have shown a drastic increase, onions were a clear outlier. They were sold for 30 to 35 Br a kilogram, doubling in price from the previous month.

Three and a half months ago, the macroeconomic committee chaired by Prime Minister Abiy formed a task force to explore the causes of rising inflation and came up with policy recommendations to keep the rate down.

Chaired by Getachew Adem, the deputy commissioner of the National Planning & Development Commission, the task force has six members and is composed of experts from the ministries of Trade & Industry, Finance and Agriculture, the National Planning & Development Commission, the National Bank of Ethiopia and the Central Statistical Agency.

The task force regularly follows up on the inflation rate and conducts research to trace the cause of rising inflation and forward recommendations to the macroeconomic committee.

Experts in the sector do not agree that the closing of the businesses will be a solution.

“Closing the shops will create a shortage of goods, and this situation will harden the inflation and increase the price of goods,” said Atilaw Alemu (PhD), assistant professor of economics at Addis Abeba University.

“Rather they have to give support by making products available to stabilise the market,” Atilaw said.

He argues that in order to minimise the inflation rate to a single-digit level, more needs to be done, and the government should amend the monetary policy and expand investment in addition to decreasing bank interest rates.

The butcher Dagnachew is doing his best, so that he will be able to get his trade license soon and reopen his shop.

“We are in the process of renewing the trade license, but it is a bureaucratic process, and I am afraid it could take a long time,” Dagnachew added.

Property Management Flourishes as Sector Gets Professional Makeover

A medical doctor serving at the VA Medical Centre in the United States, the 63-year-old Amanuel Tekle has been away from his native land for so long. Growing up in Addis Abeba’s Seba Dereja neighbourhood, the search for a better life and opportunities caused him to move in 1983. It was a time of political turmoil and profound uncertainty at home that compelled thousands of his generation to flee far away.

Close to 30 years passed before Amanuel returned to have a presence in the land of his origin. He leased a 1,000Sqm plot where he built a villa in Ayat Tafo, Yeka District. He also owns a house in the United States, the place of his permanent residence. Little was he prepared, however, for the extreme difficulty of managing his villa in Addis Abeba from afar.

Thus, he decided to outsource the management of his house to a property management company and chose Apollo Real Estate & Property Management for the service. He signed an agreement with the company back in 2016.

Established in 2012 with the aim of administering the diaspora community’s property in Ethiopia, Apollo is in charge of administering Amanuel’s house, such as renting the house and collecting rent payments.

The company also provides services like advertising rental properties, interviewing and selecting the right tenants, collecting rent and administering properties on behalf of the diaspora.

Companies like that of Apollo handles all the day-to-day activities of the property, including seeking out tenants to rent the space, collecting monthly rental payments, maintaining the properties and maintaining the grounds.

Such companies also oversee residential, commercial and industrial properties, which include apartments, detached houses, condominium units and shopping centres. The property manager acts on behalf of the owner to preserve the value of the property while generating income.

Apollo is based in Washington, DC, but has a branch office in Addis Abeba on the third floor of National Tower. At the beginning of this month, the office of Apollo was crowded with customers looking for its services.

Some of the visitors wanted to consult the property manager on how to keep their house safe when they are away, while the others were there to sign agreements for property administration services.

Amanuel was among the crowd paying a visit to the company in a bid to renew his agreement, which operates with 13 employees and has 60 customers.

”The company saves me time, which I could spend managing the house,” Amanuel told Fortune.

Though the trend seems quite new, the service has been emerging in the capital over the past couple of years.

Baladera Property Management & Investment Consultant is another company engaged in the property management business. For the past five years, Baladera has managed buildings and residential houses.

Residing on the ninth floor of Selam City Mall located on Cameron Street, the company also consults on the finishing processes of buildings under construction. Currently, the company is an agent to 1,500 tenants.

Renting buildings and shopping malls, Baladera collects rent from tenants on behalf of the property owners.

Nega Asfaha, managing director of Baladera Property Management, says that many people do not have experience in outsourcing the management and administration of properties to property managers.

”Investors must develop the habit of outsourcing the management of their property,” Nega said.

Investors who rent their office buildings sometimes find it hard to manage their property effectively. For this reason, they transfer the administration of their property, including the rent management, to professionals, which makes life easy for them, according to Nega.

The company currently works with 25 properties and buildings, while it has signed seven contracts for new projects. Century Mall, Zefmesh Grand Mall, Snap Plaza and Centrum Apartment are among Baladera’s clients.

It also supplies raw materials for cleaning and maintenance services and has a capital of half a million Birr.

The service also helps tenants who wish to rent spots at different buildings. Endanluel Trading Plc, an establishment that has been in business for the past decade, is one of them.

Endanluel retails ready-made menswear that is imported from Italy. The company started the business in a rented space inside Lafto Mall. Its store sits on the ground floor of the building and has been selling clothes under the name Real Fashion.

After three years, the company, which is owned by Endegena Abebe and sells luxury brand men’s shirts and suits to customers such as diplomats, opened a second branch in Mafi Mall, which operated for nine months.

Endanluel also opened a shop inside Zefemesh Mall two years ago selling a brand named Kabalino Men’s Wear after it was approached by Baladera.

Currently, Kabalino is found on Century Mall’s ground floor selling ready-made menswear such as shoes, socks, suits and jackets to their targeted clientele.

“We plan to expand and open our shops in luxury hotels, and Baladera is consulting us on how to approach this,” Daniel Yiheyis, general manager of Endanluel, told Fortune.

Endanluel pays nothing to Baladera for these services, according to Daniel.

Not only private companies but also Commercial Nominees Plc (CN), a company that is owned by Commercial Bank of Ethiopia, provides this service.

Established in 1958 with the joint force of the Commercial Bank of Ethiopia and the then Construction and Business Bank, Commercial Nominees is a pioneer in the service.

The service rendering company that was re-organized as an independent entity in 1993 operates with 33 branches, employing 385 permanent and 27,000 non-permanent employees.

It has been engaged in managing employees for private companies, the administration of 10 buildings, provident and employees benefit funds administration for 28 companies and real estate administration for eight investors.

The company also provides Western Union money transfer services, salary payment services for registered companies, CBE Birr banking services, facilitation of client businesses, buying and selling flats and buildings and collecting and delivering various confidential documents.

It also distributed over 90 million mobile cards a year, a deal which was cancelled when the service was given to Yimulu Mobile Service in the last fiscal year, according to Awegechew Abiye, operations manager for Commercial Nominees.

Currently, CN administrates the buildings of the Cooperative Bank of Oromia, Development Bank of Ethiopia, Helzer, all branches  of the CBE and Seid Yaisn Shopping Centre, which has two branches in Jemo and Qera.

Commercial Nominees saw 1.3 billion Br in revenue from its various business segments and made 123 million Br in net profit in the last fiscal year, an increase of 162pc above the profit made five years ago, which was 47 million Br.

From these services Commercial Nominees gets three to 20pc commission, depending on the services it provides.

The company gets 4.5pc commission, or 65,000 Br a month, from administrating the Helzer Building, where it employees 48 employees.

It receives clients who submit expressions of interest requesting the services, open an account and present the necessary documents of their property. Clients who fulfilled the prerequisites will sign a contract depending on the services they require.

The company will also represent its clients in matters concerning inheritance, including standing in court on behalf of its clients by presenting the original paperwork signed by the client.

Tsedeke Yihune, shareholder and former CEO of Flintstone Homes, says that the property management companies should consider giving the full services of property management.

The property management industry has five major categories: security, cleaning, utility [water, electric and ventilation], building maintenance and social security, according to Tsedeke.

“The property managers usually don’t provide all these services,” he said. “They probably give two out of the five.”

Tsedeke also says that the business needs sufficient skilled manpower to provide the services.

To the Stars

Space is eerie. Its darkness, quietness and coldness stand in stark contrast to the hustle and bustle of the green and blue planet we call home. That is perhaps why space makes an interesting subject matter for exploration in movies. Its vastness and darkness complemented by its uncanny stillness and silence produce an ideal backdrop for portraying the loneliness, diminutiveness and loss of a sense of meaning we humans have felt since time immemorial.

This is why 2001: A Space Odyssey feels so metaphysical, why Alien is so claustrophobic, and Solaris, the original one, is so profound and mysterious. Now comes Ad Astra – Latin for “to the stars” – one of the best movies about outer space to have come out in recent memory. Calmly, noiselessly and meticulously, the film explores our solar system, which also becomes a metaphor for the mental and emotional state of its protagonist.

Brad Pitt plays an astronaut. He is unlike most of the fictional spacemen and women we have been introduced to recently. He is not running from anything as Sandra Bullock’s character was in Gravity. He is not trying to find anything out in space like Matthew McConaughey in Interstellar.

Roy has long stopped feeling anything. Like outer space, he is indecipherable, even to himself. He does not know who he is and why he is like that, and whenever he is outside the Earth’s atmosphere, he finds a certain peace of mind, perhaps because he finds himself in his element, perhaps because there is rarely anyone else that stands counterweight to him.

The film takes place in the “near future”. Humankind has traveled well past Mars to Uranus and Neptune. There has even been an expedition to Pluto, which had unfortunately ended in disaster. This expedition was led by Roy’s father, Clifford (Tommy Lee Jones), and he and his crew have not been heard from ever since. They have long been declared dead.

But after power surges that take the lives of tens of thousands of people here on Earth and continue to threaten human survival as a whole, it is revealed to Roy that the incidents have been traced to a ship his father was commanding. After all of these years, Clifford may be alive. Roy is given a mission to contact his father and plead with him to stop the power surges emanating from his ship. With human survival hanging in the balance, Roy travels deep into our solar system in an adventure that reveals a great deal about his father, his own feelings of isolation and our place within the universe.

Roy is the second most interesting character Pitt has played this year after Cliff Booth in Once Upon a Time. Both characters are distant, rarely speak and show few facial expressions. But while Cliff is a great deal more playful and resigned to his fate, Roy is only holding back until he can get some answers about himself. The latter is much more conflicted and uncertain. Although he has been looking for something his entire life, when he finally gets the chance to take that journey, he goes through it with such emotional restraint, it is actually very touching.

But the brilliance of the movie is in James Gray’s ability to create an analogy between an excursion deeper into the solar system and Roy’s mental state. This is the closest Hollywood has gotten to remaking Andrei Tarkovsky’s Solaris, a great deal closer in emotional and intellectual complexity than the adaptation of the Russian masterpiece by Steven Soderbergh.

There is a dreamlike quality to the movie. The cinematography is coarse, with muted colours. The dialogue is few and far apart in the movie, but in its place lies a good deal of internal monologue. The camera is held steady even in moments where there would seem to be chaos and confusion, matching the sense of calm the protagonist continues to experience throughout the movie.

I admit that the film can be boring at times. There are long moments where nothing seems to happen. But the film is meant for introspection more than anything else. It is an exploration into the soul (whatever this means) of a man, which is not always full of thrills and action as the likes of Gravity make it look.

Balancing Self-Love and Self-Sacrifice

How does one know what one is willing to sacrifice? And how can one know for sure that it is worth it? What happens if it turns out that the sacrifice is worth nothing at all? Veronica Rott in her book Allegiant explains it this way: “There are so many ways to be brave in this world. Sometimes bravery involves laying down your life for something bigger than yourself, or for someone else. Sometimes it involves giving up everything you have ever known, or everyone you have ever loved, for the sake of something greater. But sometimes it doesn’t. Sometimes it is nothing more than gritting your teeth through pain, and the work of every day, the slow walk toward a better life. That is the sort of bravery I must have now.”

Anyone who has been in this world long enough knows that nothing comes easy, working hard and hardly working have two completely different outcomes and that time and patience are the building blocks for considerably better living.

The word sacrifice also has another side. The word sacrifice carries with it an individual concept called self-sacrifice. The giving up of one’s own interests or wishes in order to help others or advance a cause. According to various psychologists, why people sacrifice their own lives for others is an evolutionary puzzle. After all, survival and reproduction of an individual’s own genes is the first priority. One wants the best for one’s own self.

Yet we see within ourselves or others the need to swallow the need one has in order to fulfill the needs of others. In most cases it is apparent to see that a mother sacrifices her everything for her child, a daughter sacrifices her mental health to abide by the rules of her guardian, and some pay the ultimate sacrifice for a cause they believe in.

The question now changes to who are we willing to sacrifice for? Which is to say, whose happiness is more important than our own, or who is worth the pain and suffering that boils within.

We, humans, live in societies where we need to cooperate in order to gain favours from other people. In addition, we Ethiopians have been taught to give everything in favour of others and society at large.

But regardless of the many articles that have been written about this particular phenomenon, no one can truly and honestly say why self-sacrifice is as common as it is being seen throughout the globe.

Some people who try to dissect this seemingly selfless act, say that the reasoning behind self-sacrifice is a dire need to come out on top of the heroic pyramid; in simple words, they attribute it to wanting to be viewed as a hero. Others believe that it is because of their innate ability to become a super philanthropist. And still, others cannot seem to find enough explanation and resort to the fact that some people are just more humane.

Whatever the reason, I believe one has to look deep inside and decide the main question who they are willing to sacrifice for? What is one willing to sacrifice? And how does one know that it is worth it? What will one do when the sacrifice is worth nothing at all?

And once we have answered these questions we can so easily be the balanced, self-loving and self-sacrificing piece of art that we would like to be.

 

KILLING IT SOFTLY

Haile Gerima, a prominent Ethiopian filmmaker, famously pointed out that groundbreaking artists are only recognized after foreign validation. Even though there have been attempts to dispute this sentiment, it is the truth. Contemporary arts in Ethiopia is yet to have a home. At this time while we have a few spaces that work at the preservation of our art forms like dancing and some folklore, the next few years of the arts stands on shaky ground.

At this time, the progress is paved with foreign money and interest. Yet we may also debate the lack of local governments’ interest to do anything for the creative industry. As initiatives like Capture Addis take form to highlight the visual art of photography, we learn that photography has become the new art of the poor. Before the advances in technology and the spread of smartphones, the easiest accessible tools for art-making were pen and paper. Our country has many hidden writers in every home. The many emerging literary events and the large audiences they are attracting are proof of this developing art.

Other art forms are not accessible to the masses, making their development slow. As formal teaching and interest are not encouraged, traditional instruments like Masinko and other crafts, like jewelry making, are showing a vast decline. Encouragement is necessary to make progress. It is not in the simple sentimental need to keep tradition and culture but in the absolute belief that we benefit from our unique culture.

As most in the Ethiopian film industry in Ethiopia stick to commercialised scripts and forms of storytelling, those pushing the limits are often not given the space they require. This year Ethiopia has put into consideration Running Against the Wind for an Academy Award. All countries are entitled to enter films of their choice. While Ethiopia has in the past put forward four films, only two were by Ethiopian filmmakers. According to Hollywood Reporter, Running against the Wind, directed and written by a team of German nationals is the first film that has the backing of the Ethiopian Culture & Tourism Ministry. The other submissions to the Academy Awards have been through individual effort.

While the validation of the Academy Awards is not the epitome of success, the support of the Ethiopian community is. Artists are not making art because they require validation, yet a national indifference toward the emerging art forms is a cause for decline.

Emerging industries are left to fend for themselves in a highly bureaucratic system. While our innovations are paraded to the outside world, internally we are discouraging change makers. Among the innovators of my generation, Endeguena Mulu is a visionary music producer and one of the creators of Ethiopyawi Electronic. His sounds have awed few of his fellow countrymen but the masses abroad. As an appreciation for his deeply culturally-rooted music overflows from outsiders, which of our own spaces are available for creators like him who are pushing boundaries?

This week as I made my way to watch a performance of a prominent artist, I was met with one question at the event entrance, “Will you be paying for a bottle or simply buying off the bar?”

As the degree of my alcohol consumption was questioned as a means of passage, I wondered what will be next?

I was there to enjoy the musical stylings of a celebrated artist, not drink myself under the table on a Monday night. Our artistry must not become a lullaby to drunken slumbers. As alcohol companies, foreign forces and political agendas play tag on our art, who is there standing up for it?

While we could also argue artists themselves do not do enough, and that a united voice is necessary for moving the industry forward, we must recognize that few ever get that far. We are losing many visionaries along the way.

I remember the first time I heard someone sing in an azmari house. I remember the feeling of wonder and beauty I felt. I am still in awe of Endeguena Mulu’s “Ethiopian Records” recent set that puts a mirror to neocolonial practices, the history of racism and gentrification.

There is a lot of potential within Ethiopia, yet until that potential is given a home, it is wasted energy. And while we would like to think of Africa as only being robbed of its natural resources, we are also willingly giving up our artistic potential. We are giving in, standing idly without putting any resistance as our art dies softly.

Antidote for Rumours: A Questioning Culture

Now more than ever, it seems like most people run life on endless greed, false rumour and selfish ambitions. “Me against them” and “me better than them” is the norm. And this is profoundly pointless and hurtful even to the person practising it. The nature of humanity, that once united everyone, is quickly vanishing, and Ethiopia is no exception. It is a time where people are convinced that everything is about them, and serving others is being taken advantage of.

My younger brother who is studying medicine was assigned to go and serve a community in Oromia Regional State for one month, as part of his academic duty. In the past, the place was one of the areas that have experienced disturbances related to protests against the government. This was a cause for concern for friends of our family, as they felt my brother was taking a high risk by going there. My brother, who was very excited to serve at the regional state hospital, was a bit fearful after hearing all the threatening rumours. However, unlike what family, friends and colleagues said, we encouraged him to go and serve his community, affirming that he will enjoy his entire stay and interaction with the community. He went out with unclear expectations.

What he found on the ground was not just exciting but also educational to family friends and colleagues who were convinced of wrong beliefs. Complete strangers became loving and caring families to my brother. They helped him rent a house and filled his temporary home with vital household equipment. They comforted him by telling him they will be by his side helping him familiarise himself with the neighbourhood. Men and women, young and old, that he randomly stopped on the streets to ask directions also tipped him about where to eat and where to find a market with a smile and politeness. They took the time to ask him what he needs and thanked him for coming to serve the community.

His experience can change the narrative that was built on rumour. It is time that people believe based on evidence not on a petty rumour that demeans a community’s value. We have to intentionally decide to speak on evidence and choose to be as kind as we expect others to be. Our common cultural narratives should be about building one another up rather than tearing each other down. What we think of others does not say a thing about them, but it says a whole lot about us.

False rumours breed discord, along with unnecessary problems that spread quickly. We should not run life based on wrong ambitions and vain conceits. We should learn humility and value everyone. People are forgetting that we are more alike than different. We all know it is bad to judge others, but we find ourselves in the act.

When I was a teenager who grew up in a very conservative family, I used to be a very judgemental person. It was hard for me to understand why people do things that do not seem beneficial. I expected everyone to behave as I did. As I grew up, I understood people a lot more and accepted them for who they were instead of expecting them to fit into my world view. I used to judge people in front of them, hence when I realized my mistake, I called each one of those friends and apologized for judging them. When we listen to people and put ourselves in their shoes, there is nothing to judge.

These days it has become a habit to bad mouth individuals and even entire communities. I believe people spread false rumours as a way to bond with like-minded people. It is unfortunate that when people talk about someone else, most people will gladly join in. For most people, there is bonding that comes with talking about others. As for me, I trust everyone except those who bad mouth and talk negatively about others behind their back. I do not join such conversations.

Wisdom is the art of steering through the good and the bad this world brings and living skillfully in whatever condition we find ourselves. Toxicity starts in our thinking and imagination. That is why it is very important for us to watch out, not just for our actions, but also our attitudes, motives and thoughts.

To become truly great at something we have to dedicate so much time to it. What we do all day and every day defines who we are. Let us not be conditioned to believe everything we hear. A questioning culture can lead us to the truth.

 

Food for Sustainable Development

Feeding a planet of 7.7 billion people is no easy matter. Every person on the planet needs, expects and has the right to a healthy diet. Every farmer needs, expects and has the right to a decent livelihood. The roughly ten million other species on the planet need a habitat in which they can survive. And every business that produces, processes, and transports food needs and expects to earn a profit.

It is a tall order – and it’s not being fulfilled. Over 820 million people are chronically hungry. Another two billion or so suffer from micronutrient deficiencies, such as a lack of vitamins or proteins. Around 650 million adults are obese, an epidemic caused in part by ultra-processed foods that are stuffed with sugar, saturated fats, and other chemical additives.

But the problems go far beyond hunger and diet. Today’s agro-industrial practices are the main cause of deforestation, freshwater depletion and pollution, soil erosion, and the collapse of biodiversity. To top it off, human-induced climate change, partly caused by the food sector, is wreaking havoc on crop production. With more warming and population growth ahead, the crisis will worsen unless decisive changes are made.

The food industry is a powerhouse of the global economy and includes some of the best-known brand names, because we connect with them every day. Solving the many intersecting food crises will be impossible unless the food industry changes its ways.

Fortunately, there is an important glimmer of hope. A growing number of food companies understand the challenge and want to forge a new direction that is consistent with human health and planetary survival. We have been asked by some of these industry leaders, convened by the Barilla Foundation, to help identify the steps needed to align the food sector with sustainable development.

Our starting point is another source of hope. In 2015, all 193 members of the United Nations agreed unanimously to two vital agreements. The first, called Agenda 2030, adopts 17 Sustainable Development Goals (SDGs) as a roadmap to human wellbeing and planetary safety. The second, the Paris climate agreement, commits the world’s governments to taking decisive action to keep global warming to less than 1.5 degrees Celsius. Both the SDGs and the Paris agreement require decisive changes in practices by the food industry.

In our report, we call on all companies in the food sector, both producers and distributors, to adopt clear guidelines, metrics, and reporting standards to align with the global goals. Specifically, each company must address four critical questions.

First, do the companies’ products and strategies contribute to healthy and sustainable diets?

We know that the fast-food culture is literally killing us. The industry has to change, urgently, to promote healthy diets.

Second, are the company’s production practices sustainable?

Too many companies are engaged in chemical pollution, massive waste from packaging, deforestation, excessive and poorly targeted fertilizer use, and other environmental ills.

Third, are the company’s upstream suppliers sustainable?

No consumer food company should use products from farms that contribute to deforestation. The destruction of forests in the Amazon and Indonesia – literally a scorched-earth process – underscore the need to barcode all food products to ensure that they are sourced from sustainable farms.

Lastly, is the company a good corporate citizen?

For example, aggressive tax practices that seek to exploit legal loopholes or weak enforcement processes should be avoided, as they deprive governments of the revenues needed to promote public services and thereby achieve the SDGs.

As part of our work, we examined the food industry’s current reporting practices. While many companies purport to pursue sustainable development, too few report on the healthfulness of their product lines or how their products contribute to healthy and sustainable dietary patterns. Too few recognize that they are part of the environmental crisis, either directly in their own production, or as buyers of products produced in environmental hotspots such as the Amazon or Indonesia. And companies don’t report in detail on their tax practices. In short, the food industry’s commitment to sustainability is still too often more high-minded sentiment than actual reporting and monitoring to ensure alignment with the SDGs and the Paris accord.

But we are not pessimistic. Around the world, young people are demanding a sustainable and safe way of living and doing business. We believe that companies, too, will change. After all, companies need customers who are satisfied, workers who are motivated, and the respect of society as a tacit “license to do business.” Some of the cases we analyzed give us hope that change is possible. As our project continues in the coming year, with the aim of working with the industry to ensure that performance, reporting, and monitoring are aligned with sustainable development, we will keep the public informed of what we see and learn.

The food sector is a key part of a larger picture. World leaders gathered at the UN this week to review progress – or lack thereof – on the SDGs and the Paris agreement. They must keep in mind one crucial fact: the world’s people are demanding change. We have the know-how and wealth to achieve a prosperous, inclusive, and sustainable world. The business sector must urgently recognize, acknowledge, and act upon its global responsibilities.

Four Collision Courses for the Global Economy

In the classic game of “chicken,” two drivers race directly toward each other, and the first to swerve is the “loser.” If neither swerves, both will probably die. In the past, such scenarios have been studied to assess the risks posed by great power rivalries. In the case of the Cuban missile crisis, for example, Soviet and American leaders were confronted with the choice of losing face or risking a catastrophic collision. The question, always, is whether a compromise can be found that spares both parties their lives and their credibility.

There are now several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis. The first and most important contest is between the United States and China over trade and technology. The second is the brewing dispute between the US and Iran. In Europe, there is the escalating brinkmanship between British Prime Minister Boris Johnson and the European Union over Brexit. Finally, there is Argentina, which could end up on a collision course with the International Monetary Fund after the likely victory of the Peronist Alberto Fernández in next month’s presidential election.

In the first case, a full-scale trade, currency, tech and cold war between the US and China would push the current downturn in manufacturing, trade and capital spending into services and private consumption, tipping the US and global economies into a severe recession. Similarly, a military conflict between the US and Iran would drive oil prices above 100 dollars per barrel, triggering stagflation (a recession with rising inflation). That, after all, is what happened in 1973 during the Yom Kippur War, in 1979 following the Iranian Revolution, and in 1990 after Iraq’s invasion of Kuwait.

A blowup over Brexit might not by itself cause a global recession, but it would certainly trigger a European one, which would then spill over to other economies. The conventional wisdom is that a “hard” Brexit would lead to a severe recession in the United Kingdom but not in Europe, because the UK is more reliant on trade with the EU than vice versa. This is naive. The Eurozone is already suffering a sharp slowdown and is in the grip of a manufacturing recession; and the Netherlands, Belgium, Ireland, and Germany – which is nearing a recession – do in fact rely heavily on the UK export market.

With Eurozone business confidence already depressed as a result of Sino-American trade tensions, a chaotic Brexit would be the last straw. Just imagine thousands of trucks and cars lining up to fill out new customs paperwork in Dover and Calais. Moreover, a European recession would have knock-on effects, undercutting growth globally and possibly triggering a risk-off episode. It could even lead to new currency wars, if the value of the euro and pound were to fall too sharply against other currencies (not least the US dollar).

A crisis in Argentina could also have global consequences. If Fernández defeats President Mauricio Macri and then scuttles the country’s 57-billion-dollar IMF programme, Argentina could suffer a repeat of its 2001 currency crisis and default. That could lead to capital flight from emerging markets more generally, possibly triggering crises in highly indebted Turkey, Venezuela, Pakistan and Lebanon, and further complicating matters for India, South Africa, China, Brazil, Mexico and Ecuador.

In all four scenarios, both sides want to save face. US President Donald Trump wants a deal with China, in order to stabilise the economy and markets before his re-election bid in 2020; Chinese President Xi Jinping also wants a deal to halt China’s slowdown. But neither wants to be the “chicken,” because that would undermine their domestic political standing and empower the other side. Still, without a deal by year’s end, a collision will become likely. As the clock ticks down, a bad outcome becomes more likely.

Similarly, Trump thought he could bully Iran by abandoning the Joint Comprehensive Plan of Action and imposing severe sanctions. But the Iranians have responded by escalating their regional provocations, knowing full well that Trump cannot afford a full-scale war and the oil-price spike that would result from it. Moreover, Iran does not want to enter negotiations that would give Trump a photo opportunity until some sanctions are lifted. With both sides reluctant to blink first – and with both Saudi Arabia and Israel egging on the Trump administration – the risk of an accident is rising.

Having perhaps been inspired by Trump, Johnson naively thought that he could use the threat of a hard Brexit to bully the EU into offering a better exit deal than what his predecessor had secured. But now that Parliament has passed legislation to prevent a hard Brexit, Johnson is playing two games of chicken at once. A compromise with the EU on the Irish “backstop” is still possible before the October 31 deadline, but the probability of a de facto hard-Brexit scenario is also increasing.

In Argentina, both sides are posturing. Fernández wants a clear electoral mandate and is campaigning on the message that Macri and the IMF are to blame for all the country’s problems. The IMF’s leverage is obvious: if it permanently withholds the next 5.4-billion-dollar tranche of funding and ends the bailout, Argentina will suffer another financial collapse. But Fernández has leverage, too, because a 57-billion-dollar debt is a problem for any creditor; the IMF’s ability to help other distressed economies would be constrained by an Argentinean collapse. As in the other cases, a face-saving compromise is better for all, but a collision and financial meltdown cannot be ruled out.

The problem is that while compromise requires both parties to de-escalate, the tactical logic of chicken rewards crazy behavior. If I can make it look like I have removed my steering wheel, the other side will have no choice but to swerve. But if both sides throw out their steering wheels, a collision becomes unavoidable.

The good news is that in the four scenarios above, each side is still talking to the other, or may be open to dialogue under some face-saving conditions. The bad news is that all sides are still very far from any kind of agreement. Worse, there are big egos in the mix, some of whom might prefer to crash than be perceived as a chicken. The future of the global economy thus hinges on four games of daring that could go either way.

 

Multilateralism: Not en Vogue but Indispensable

The 74th session of the United Nations General Assembly took place this week in New York. Nearly two hundred leaders from around the world gathered to consult about the challenges facing humankind.

Saying there were some boring speeches is to make the understatement of the week.

It was not a lovefest by any stretch of the imagination. There were leaders who cannot stand each other. There were countries on the verge of going to war whose delegates were staring each other down. But for all that and more, even with notable absentees, most leaders showed up, including those that riled up and routinely bashed multilateralism in general and the UN in particular. The point is the leadership of the entire world were there.

It was not always so. In the pre-World War II world, for example, countries generally preferred to deal with different alliances and bilateral deals than an international organisation. The precursor to the UN, the League of Nations, was an unqualified disaster as Ethiopians know only too well.

The universal failure of the world in not having an international body for collective security resulted in the destructive worldwide carnage that became World War II.

If nothing else, that global war proved to the world that the scientific and technological advances that human beings have achieved, if not harnessed in the right way through some sort of collective arrangement, are no longer containable in some regional silos but will amount to a suicidal pact of the human race. Hiroshima and Nagasaki were the ultimate proof of that fact.

Toward the end of the second world war, when the leaders of nations that have just been devastated by conflict saw a glimpse of the future of warfare, they were quickly convinced of the need for an international organisation that will provide collective security.

By the time the UN charter was ratified by 29 nations, and it came into existence on October 24, 1945, it had become clear that it is not only the prevention of war that needs international cooperation. Many task-oriented organisations of the international body like FAO, UNESCO, ICAO, the IMF and the World Bank were already set up. It was an acknowledgement of the fact that the problems and challenges of the new world can no longer be met by individual countries alone. The issues have grown to be global, so the response also needed to be universal.

If the challenges were massive 74 years ago, imagine them now. Take a more in-depth look at the challenges of today, and it is bright as daylight that there is no option but global collaboration. Take the problem of environmental degradation and climate change. Even though the small island states like the Maldives are in the front row of the devastation from climate change and are already beginning to experience some of the adverse effects, there is not much they can do to protect themselves from it.

Although they contributed little to nothing to the human-made environmental damage, they still will pay more than the worst offenders. They just cannot go it alone.

Some big countries with the biggest economies may feel they have the wherewithal to survive by themselves. But in a world of today’s interconnectedness with the wonders of technology, the health challenge of a small African country will only take days to knock on their doors. A failed state in northern Africa becomes a European problem in a matter of weeks as boatloads of refugees disembark on their shores.

Populist rhetoric and selected memories of a glorified past coupled with the desire to avoid confronting the complex problems of the world today may have made multilateralism unfashionable. But a serious analysis of the challenges the world is facing today can only reach one conclusion: international cooperation and collective action is not even a choice, it is an indispensable condition for the very existence of the human race.

 

Bring Back the Monarchy

One of the weaknesses of modern democracies is their dependence on the immediate whims of voters. With much of the electorate focused on temporary zeitgeists or simplistic negative partisanship, the achievements or popularity of the current government is too often confused with that of the state as a whole.

If an elected leader performs poorly, the average voter often condemns the whole system itself and paints the entire state apparatus as necessarily rigged. The problem is that in any democracy, a large minority of voters tends to be disgruntled with the current leadership at any given time. With our current age of 24-hour news shows, minute-by-minute updates and political posturing on social media, the fallibility of political leaders, unfortunately, becomes apparent to even the casual observer.

With this as a backdrop, it is hard not to occasionally look back, with somewhat too nostalgic memories of course, at our pre-democratic age. In the past, very few of us controlled the nature of the states in which we lived. But it must have been at least somewhat reassuring to live in a society with a continuity attached to it – the knowledge that the state had existed before one’s birth and would likely carry on past one’s death.

Of course, many Ethiopians alive today remember living under a monarchy and may still retain this sense of awe. In this time of political uncertainty, even many of the youth hold up 19th-century monarchs as ideal leaders.

But many visitors find it curious in the present day United States that an electorate who has only known democratic governance for the last 230 years still reveres its “founding fathers” as the pinnacle of national leadership, a category that suffers clear comparisons to the semi-divine respect given to actual royalty. Of course, the fact that many of them were self-conscious slave traders and thought only white men who owned land should be given the vote is brushed aside. There is something primordial in our contemporary democratic psyches, in which the current stock of meritorious elites is never quite deemed worthy of polishing the shoes of those distant monarchs.

It is hard to feel that Ethiopia gained some level of sophistication by jettisoning its monarchy, following in the footsteps of many recently liberated African nations of the time and the “modern,” anti-historical Americans.

My question is this. What would it look like if the country reintroduced the Solomonic Dynasty as a symbolic, constitutional monarchy with zero political power?

Before shruging off this impossibility, consider the state of many advanced democracies around the world. Rather than splicing their history in half with a monarchical past and a democratic future, they have opted for hybrid designations. Denmark and the United Kingdom both have constitutional monarchies headed by queens. Thailand has a king. Japan has an emperor.

What these mostly symbolic leaders all have in common is that they serve as a focal point to uplift the hearts and minds of their countrymen. When King Bhumibol of Thailand passed away in 2016 after 70 years on the throne, thousands of Thais slept in the streets to reserve places to observe his funeral procession. The King had remained on the throne through more than 20 prime ministers and many coups, a disruptive democratic adolescence to say the least. But through all those crises, Thais had a sense of continuity, as their symbolic leader remained in place, stoically reassuring them that the state would carry on.

The other advantage that cannot be ignored about these constitutional monarchies is that they bring in significant amounts of tourism. As a nation that both requires all the foreign currency it can muster for economic development and loan repayment, the reinstating of a symbolic monarchy could be a significant game-changer.

Having a monarchy presents a nation with a certain cachet, a certain prestige that attracts a high-paying clientele, who often visit other sites and stay at hotels. When Prince Harry and Meghan Markle got married, the royal wedding brought in an estimated 1.4 billion dollars to the UK economy. When tourists flock to see the royals in an average year, the UK brings in more than 550 million British pounds. That’s a lot of foreign currency. In many ways, royal tourism is its own economic sector.

With Prime Minister Abiy Ahmed (PhD) already undertaking significant renovations at the National Palace, what could make the future “museum” better than having a live royal couple living in the royal abode?

Imagine the thrill of attending a bunaceremony with the King and Queen.

What royalty does for a people is demonstrate that they are not just the inheritors of a modern democracy, which while respecting the wishes of its electorate often must descend into the petty squabbling inherent in its structure. What royalty signifies is that a citizen is not just an atomised cog in the broader electorate but also a descendant of a rich history much bigger than oneself, of a people deserving of kings and queens.

Yekuno Amlak’s  leg of the Solomonic Dynasty, for all its issues and defects, ruled unbroken through prosperity and eras of decline for more than 700 years. King Bhumibol’s Chakri Dynasty is less than 240 years old. The current House of Windsor that presides in the UK is barely more than 100 years old. In light of 700 years, the last 45 seem like a mistake.

Time is of the Essence in Electoral Contestations

The right to freedom of expression, despite its variety in platfoms, is essentially the right to offend. On the receiving end could be those who hold state power or groups with entrenched influence over segments of society. As long as the views intended for expression are made in a non-violent manner, they should be tolerated, if not encouraged.

In the last few weeks alone, there have been several demonstrations around the country with diverse themes. The content of their messages could be to the disliking of those on the opposite side. That should be the least surprising.

The news is not just that there were demonstrations. They were calm. Despite the sensitivity of the issues raised and the fact that there are opposing views on the matters, they were able to protest without violence as its consequence. Crowds had had public rallies mixed with violence and responses from law enforcement were brutal. It was not uncommon to see disproportionate baton swinging and even trigger-happy policing deployed against demonstrators.

This time around, those demonstrating and members of the law enforcement community should be lauded. If the current trend holds, it may be a sign of a budding democratic culture that should be carefully tended and encouraged to take hold.

The right of assembly and expression of opinions peacefully is one of the fundamental human rights that are enshrined in the constitution. Every government vows to respect it. But few actually do. It is not only the government that fails in that compact though. Citizens too fail to recognise their side of the bargain, which is the peaceful expression of views, however pent-up the anger gets.

This is especially important in light of the coming national elections. Campaigns will significantly raise the number of public gatherings. There will inevitably be demonstrations and counter-demonstrations.

Public gatherings may turn out to be occasions of violent confrontations is one of the fears of those who feel the country may not yet be ready for electoral contestations. It is not an unfounded fear as such incidents have been plenty in the past. The events of the last few weeks could go some way to help change such narrative and address legitimate concerns.

Of course, there is no guarantee of future conduct, but it certainly is a good start that should be emulated.

Election campaigning should be starting in earnest soon. It is strange and concerning that political parties are not seen more actively campaigning at this point. Some opposition parties remain displeased with the amended electoral law and are hesitating to participate in this decisive democratic exercise. It is not good news at all.

Going from electoral hegemony (or electoral authoritarianism) to a relatively competitive pluralist electoral system will no doubt be uneasy. Plenty of push and pull, back and forth bargaining and horse-trading are to be expected. Political parties trying to negotiate the best deal they can get for themselves is not surprising.

However, they must keep in mind that this time around it is not in just another election cycle they are participating. The historical context today makes the elections a unique one. There is an element of state making in it.

The violent demonstrations and disturbances that had become daily occurrences for a few years dropped off significantly about 18 months ago with the change of leadership and promises of change by the EPRDF’s new leadership. It was a sort of unspoken compact to usher in a transition to a more democratic dispensation.

The ruling coalition has made some significant, tangible and painful concessions.

Its leaders have freed political opponents from jail. They have allowed exiled political parties to come back home. They have unbanned some opposition political parties that were designated as terrorist organisations in the past. All these parties, politicians and activists were invited to the table and are free to participate in the coming elections.

The National Electoral Board has been reformed. It is now chaired by Birtukan Mideksa, once a stalwart of the opposition camp and a former prisoner. Of course, the electoral law itself has been changed to allow for a more competitive electoral environment. Though it may not be perfect, and it is possible to argue it has not gone far enough.

There have been tangible changes both in the judiciary and the Human Rights Council.

There is no question that the ruling coalition has come a long way from its past entrenched authoritarian positions. It ought to be met at least halfway in this hoped-for transition to a genuinely democratic system.

Indeed, it is not out of place to ask what compromises the opposition parties have made.

It is hard to find any observable change of behaviour on the part of opposition parties. There is very little activity that shows them building or expanding their constituencies. Very little grassroots political movements are to be observed. There have only been few policy dialogues or alternative political platforms presented to the public. They seem to have their attention entirely focused on getting concessions from the powers that be and neglected the most significant source of power – the voting public.

Though there is nothing wrong in trying to get the best deal in negotiations, there are times in a nation’s history when politicians have to think in longer terms than one election cycle. This is such a time for Ethiopia.

Opposition leaders have to be more than politicians; they have to evolve to be statesmen and women, too. They have to be willing to make painful concessions now in the interest of laying down the foundations for competitive democratic elections in the future.

Leaders of political entities in the country must build a consensus on the rules of the game. The much hoped-for agreement that over a hundred parties signed to act as a playbook spelling out the rules of the game seems not to have been applied as much as it was hyped. This is unfortunate. All parties should reconsider, for there will never be a perfect agreement.

Neither is this time to start from scratch. If that document is respected and applied to the letter by all parties, it can serve to be the road map for the coming elections.

In light of the importance of the national elections next year, there must be tolerance for diverse views expressed peacefully.

The contrast in the last few weeks may demonstrate that the public may be ahead of the politicians when it comes to developing a democratic culture. While recent signs are encouraging in this respect, the fact that political parties have not yet agreed on the rules of the game and start campaigning should be a concern.

Political parties and their leaders need to get their act together. Time is running out.