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Month: November 2022

World Cup Dimensions to Inspire the Economy

Posted on by Tizita S.

For most of my professional career, I explored the links between the beautiful game and the global economy. At Goldman Sachs and, before that, at the Swiss Bank Corporation, I indulged my dual obsessions by presiding over special one-off publications for each World Cup from 1994 until 2010. After one, I received personal messages from senior central bankers worldwide telling me it was the best publication we had produced.

Given how frequently we published on economic events and markets, it was amusing and something to ponder. We persuaded national leaders and major football figures to guest write for us. On one occasion, the legendary Manchester United Manager, Alex Ferguson, selected his all-time top-world team.

From these experiences, I can attest to those who describe the event as one of the most beautifully inclusive meetings of different nationalities and cultures. The advent of the fan zones, which took off following the 2006 World Cup in Germany, embodied this spirit, though I experienced it most intensely in Seoul in 2002.

The link between football and the state of the world economy is apparent in the choice of tournament hosts. I think it is an inescapable fact that FIFA’s selection of South Africa in 2010, Brazil in 2014, Russia in 2018, and now Qatar was based on the steady rise of emerging economies during the first two decades of this century. I have long thought that the other two BRICS countries (a group comprising Brazil, Russia, India, China, and South Africa) might join the small group of hosts in the future.

Who at the beginning of this century would have thought that tiny Qatar might host the 22nd World Cup underway? Yet here we are, and the only surprise is that it does not feel surprising.

But given major countries’ inward turns in recent years, are the days of wanting to host the event numbered? Will aspiring emerging-market countries find it difficult to succeed in staging the world’s most-watched tournament? Or could the world soon shift back to a more contented, globalised, and inclusive international order? One might even ask a deeper question: is FIFA a leading or a lagging indicator of the world economy and the degree of globalisation?

I suspect that how the competition progresses over the next weeks and how many of us watch the matches might be the clearest early sign of the broader significance of this year’s World Cup. The competition has been the backbone of FIFA’s revenues. There is a talk, probably motivated by professional clubs’ desire for stronger revenues, of turning the tournament into a biennial event or supplementing the current quadrennial format with a quadrennial club-based competition.

If the global economy’s future differs from the past two to three decades, this will be reflected in FIFA’s decision-making. It is hard to imagine FIFA being enthusiastic about future competitions in emerging-market countries if these countries contribute less to world economic growth than the tournament hosts since 2010.

In the 1980s, 1990s, 2000s, and the last decade, global real GDP growth averaged, respectively, 3.3pc, 3.3pc, 3.9pc, and 3.7pc. The acceleration in the most recent two decades was clearly due to stronger growth in the emerging world, coinciding with the period FIFA began selecting hosts from outside the traditional football strongholds. It looks as though this trend could be reversed this decade, even with eight years to go.

What about the winners this time?

Through the popularity of the publications I produced in the past, I learned to go no further than predicting the four semi-finalists. The same realism with which one must approach economic forecasting applies to the World Cup. The leaders of countries we did not tip to win often did not take it well.

I start with history. Only eight countries have won the World Cup. Having won five times, Brazil is always one of the favourites, and this year’s squad seems to be one of the tournament’s strongest. Argentina, Uruguay, France, Germany, Italy, Spain, and England are the other previous winners. Even though Italy failed to qualify this time, the winner is likely to be among the others.

One of these years, England will win again, but it could easily be any previous winners. Denmark, the Netherlands, and Portugal usually exceed their economic and population weight. Whoever wins, I will be watching for all sorts of signals about the future – as I have always done.

Amid Talent Dearth, Investment Promotion Falters

Posted on by Tizita S.

I received a call from my foreign national friend who wanted me to accompany him to the office of the Investment Commission on Africa Avenue (Bole Road). He wanted me to be the intermediary while interacting with the staff members. Such calls were no stranger to me; I have done the same several times.

The Commission’s staff had no issues with his conduct, but something else was missing.

I saw the staff struggling with his command of the language needed to communicate with the prospective investor. He failed to convey the investment laws and regulations with clarity. He kept confusing the prospective investor with impressive claims the country could offer. My friend is well-read and researched the sector he desires to invest in, making it difficult for the staff to cover up his limitations.

I hear him asking, “does the law say that?”

I have come across several staff members who have not read the country’s investment rules and regulations, getting embarrassed before me. The lack of basic information and the inability to communicate professionally and adequately should not be a problem in such federal agencies. Some in the civil service prefer to speak in a local language foreign nationals cannot comprehend. Others ask me to interpret for them. Sometimes, I get puzzled to see them holding crucial positions, utterly lacking the competence to deliver the rudimentary.

The problem is dumbfounding at regional offices, but not all. In some places, staffs openly ask for payoffs to pass a piece of information or hand a single letter to their directors. It is an almost-there experience to hear staff members complain about foreign nationals not speaking the local language. I find it outlandish when they refer to that as if they were taught to speak various local languages in schools. It is staggering how such unprofessional people find themselves assigned tasks critical to the country’s progress.

Despite the disappointment, I find myself embarrassed by the apologetic recognition of the Commission’s high-ranking officials.

These individuals are the faces of investment in Ethiopia, selling the country’s endowments. They deal with prospective investors to persuade them to bring their capital or be pushed away. How they treat each one walking to their office has a more considerable detrimental effect.

I have had opportunities to meet Ethiopian individuals in Europe representing the country in investment or, particularly, the tourism sector. However, seeing them deliver below expectations is dispiriting.

I attended the same conference with a successful hotel owner from Ethiopia in France. He wasted an opportunity to promote the country’s virtues to high-profile individuals. My husband and I stayed at his incredible hotel. But it was heartbreaking to see the person failing to explain the value his property offers. Instead of addressing far better issues, I saw him explaining the quality of his liquors and searching for a way to get them. I understood he was running a business there, but promoting his country’s products for export would have been noble.

Those who promote their country at local or international offices should be staffed with professional and competent individuals. They should explain business and leisure opportunities adequately, address questions, and assure hesitant prospective investors. They should elucidate the country’s potential in the local and international markets, demonstrating how others benefited from their investments.

Foreign investors tend to be cynical when taking on new investments. Competition is high, with almost 200 countries contending to attract international capital for investments and tourism. A well-prepared person who preemptively answers investors’ questions can showcase the country’s suitability, helping investors to trust their decisions.

First impressions are vital. Either we get it right or lose it for good. Fellow countries in East Africa, such as Kenya and Rwanda, captivate listeners by portraying their investment opportunities, understanding investors’ psychology, and convincing them to go ahead. They make investors fall in love with their countries and become advocates, attracting new ones. They research and prepare data and analytics for investors, imploring them that they have come to the right place. Such countries understood what foreign investors pursue.

African countries have started hiring international agencies to induce tourism and foreign investment to enhance the export and competitiveness of the domestic business sector.

Promoting a country requires more than listing down opportunities. It requires superb communications skills, passion, and an understanding of the value propositions that can attract tourists, trading partners, and investors.

Hosting Internet Governance Forum without Internet Access

Posted on by Tizita S.

As Ethiopia hosts a forum on Internet governance next week, three fourth of its more than 119 million citizens may not follow the proceedings as they are not connected to the Internet.

Very few may even know this event is happening. The Horn of Africa country grapples with a 25pc Internet penetration rate, according to the latest figures by the World Bank. That is a drop of water in the ocean for a country almost twice the size of the United Kingdom (UK) in population. This year’s forum should challenge the country’s leadership to pace up efforts in fast-tracking Internet penetration.

Comparing its figures with those of its neighbours, Ethiopia’s Internet penetration does not seem to measure up to its level of economic growth. Despite being a consistent global leader in economic growth over the last 15 years, the country’s Internet connectivity significantly lags behind its peers, Kenya and Sudan.

Kenya, a neighbour to the south of Ethiopia, has 29.5pc of its 54 million population connected to the Internet. Meanwhile, Sudan’s Internet penetration stands at 28.4pc against a population of 44 million. This leaves Ethiopia with nearly 90 million people unconnected to the Internet, against about 33 million and 27 million people in Kenya and Sudan, respectively.

The forum presents a golden opportunity for Ethiopia to dialogue with its leaders to resolve the status quo. As President Sahlework Zewde welcomes dignitaries this week to the capital for this global Internet discourse, it is time to reflect on her country’s progress in connecting the unconnected, most of whom live in rural areas.

Over the last 10 years, Ethiopian numbers have risen by about 23pc. However, the government’s monopoly of the telecom industry has significantly slowed down penetration. While the country’s liberalisation of the market and establishment of the Ethiopian Communications Authority (ECA) to regulate telecommunication in 2019 is commendable, full opening up is necessary to speed up accessibility increase. There is much to be done to balance the economic growth rate with Internet penetration.

The forum is a challenge in privilege to increase efforts in extending Internet infrastructure to the country’s forgotten corners.

This year’s forum underscores Ethiopia’s importance in global Internet issues and should increase the urgency to scale up the country’s role in connecting the world. As a developing country, there is a temptation to disregard the Internet for a secondary need. Most such countries grapple with issues like hunger, health crises and housing and view the Internet as an afterthought. Yet the role of the Internet in enhancing economic well-being is undoubted and should be the basis for Ethiopia’s prioritisation for improving access.

In hindsight, if Ethiopia had aggressively pursued scaling up Internet penetration as it did economic growth over the last 15 years, its spot in the global economic growth list would be even more solid. This year’s forum allows the nation to reflect and redefine its priorities. It is an opportunity to make new commitments to leapfrog Internet penetration in the country. It is, by all means, an underscoring of Ethiopia’s immense untapped potential whose exploitation should top its to-do list after the forum concludes.

Ethiopia needs to widen its efforts in improving Internet access to make good use of this once-in-a-lifetime opportunity. As the seat of the African Union (AU) and now an upcoming economic powerhouse in the continent, the country should be a meeting point for more than multilateral conventions. With one of the fastest-growing economies in the world, it should, at the very least, be a continental leader in technology.

Hosting the forum on Internet governance is a timely wake-up call that the country cannot afford to ignore.

Global Knowledge Leads to Competitive Capacity

Posted on by Tizita S.

The future is not ahead of us; it has already ensued. We stand on a cliff, stepping into a new era of enormous change and uncertainty characterised by a borderless interconnected global economy. It is hard to be indifferent to a change at the world’s edge. The walls have crumbled, and we are highly networked and interconnected beyond expectation as the world becomes a bigger village fueled by the demand for democracy driven by free markets.

The adage “think global and act locally” no longer serves the current business world. The tightly woven fabric of distance and instant connection weave our diverse world together. We can question whether the same methodology works for the financial and service sectors.

The beautiful but challenging dynamism significantly sheds the focus of business leaders, urging them to apprehend the mobility of resources they are commanding. People, information and capital move with little restraint, making it challenging to control them with limited local knowledge. Global media, international travel and advanced communications have eroded distance and borders, instantly linking us with others anywhere in the world.

Should we not think globally and change our mindset before the force of change conquers our thinking as it does to borders?

Ours is a unique era in history and the most challenging century, constantly pushing us to the wave of change where we learn the most diversified wisdom of the electronic revolution and economic interdependence. This is not a change in degree, size or colour. It is fundamental in everything.

As a nation or an industry, we end up with loss and bankruptcy sooner than later if we keep thinking the way we believe yesteryears. Globalisation is a system of millennia that shapes domestic and international politics and changes the rule of trade.

The blessing of dynamics became a curse when we tried to interact locally without exposure to learning skills functional on a global stage. A company or an industry could no longer thrive without an adequate understanding of how to trade in a networked world with technological devices used as a hose. The internet and e-commerce dramatically change how we do business, forever altering our relationships with customers and suppliers. Employees have access to information never dreamed of a decade ago.

Ethiopia could have a growing economy, but it could not create a strong brand in business after launching a free market economic policy. Our corridor does not have a strong bank, branch, or subsidiary insurance business. The need to have global literacy is not a stand-alone element in globalisation; policy changes and regulatory amendments should be in place. A nation will benefit if it trades globally at a larger operational spectrum than remaining complacent with bumpy past success.

Treading globally is today’s demand and not a question of later.

How much time and space should we give to change our domestic policies, regulations, and institutional directives, to fit into a free market and reorient all national resources to globalisation?

Globally connected capital markets produce open and transparent exchanges where investment flows seemingly among trading floors worldwide. Ethiopia deserves optimal benefit from globalisation as it plays a significant role in the continent. Avoiding our lack of forethought and entertaining the global marketing strategy is better. The blessing of dynamism is like its very nature, a permanent process and a stream without a final destination.

Global literacy would help us develop networks with multinational companies. It assists us in creating a team working to acquire entrepreneurship. In this competitive marketplace, there is a race for talent, creating a whole new knowledge-generating industry. This could be achieved through global literacy. Managing knowledge, developing networks and building partnerships are essential skills we can tap into.

Business leaders should strategically foster a knowledge-based service industry, create a climate of trust and teamwork, and proactively equip employees with global trends. The world will not wait for us. It will react differently if we wait for the future. We cannot optimise the nation’s assets if a company waits for the change but cannot simultaneously maximise the blessing of the change.

Capital market knowledge starts from the free market theory, which was constitutionalised in the country 25 years ago. But we do not have a secondary market, and thus insurers and bankers are obliged to invest in a wasteful circle. Our knowledge of plying international trade is inadequate.

Once the government works its policy frameworks towards global literacy, its appetites and attitude drive businesses and economic sectors towards global competitiveness. New threats and emerging risks are rising everywhere. But we cannot escape the risk of global illiteracy.

 

Uncalled Judgment Exposes a Materialist Society

Posted on by Tizita S.

It is difficult to find a society void of stereotypes. The level and how much those people subjected to it have tolerated it vary. But nothing beats the stereotype against women.

Women are judged by the things they do. The worst one is the judgement that lies under the source of their income. It is believed that most women’s income source is out of men’s pockets. It belittles the women striving to change their lives to build something for themselves and their families.

I was in the car with a friend in slow-moving traffic. This woman drove past us with one of the expensive cars that roam around the city lately. I said, “that is a nice car,” and my friend nodded.

The driver in the car next to us had additional comments. He associated seeing a woman driving that type of car with a ‘sugar daddy.’ As we stopped at the traffic light, the man in the passenger seat tilted his head out of the window and said, “there is no way this woman could buy a car like that by herself.”

He maligned her as if he saw the moment she was receiving money from a man. Surprisingly, the guy in the driver’s seat nodded, acknowledging the comment. I could not help myself. I felt as if I was insulted, too, as a woman. Words escaped my mouth unconsciously.

“You don’t know that.”

“Why would you label someone you don’t know as a gold digger?”

“She might be a businesswoman.”

The man was shocked by the flowing responses as he was not expecting me to engage. With a smirking smile, he explained his past experience of witnessing many women like that out loud. His answer made me furious; I told him that he would be surprised to see how many men are known as gold diggers. Without a blink of an eye, he said he knew about it and drove passed us.

Why the man needed to generalise women like that was a question. Without any glimpse of hesitation, he told me that such conducts are widespread in the city. It is something that cannot be denied. I admitted that some women use their looks to get money and materials, but generalising hard-working women into that category is uncalled for. I did not think it was fair for those women to be labelled simply because they chose to drive an expensive car.

I started to mumble to myself but said out loud that there could be different reasons why a man could buy a car for a woman. Maybe he wants to spoil her, and a few million might not be a big deal. Even if she chose to be with such a guy for the benefit of financial gains, she made the decision. It is right from her point of view and what outsiders may state is irrelevant. The man is getting something out of the relationship; she did not steal from him.

At a young age, girls are taught to marry someone well-off who could look after them financially as if their sole purpose is looking pretty and waiting for a millionaire. I have to admit times are changing. Children are being raised to be self-efficient and dependable.

I notice how men like to tease women drivers on the road. They try to mess with them and test their limits.

But it warms my heart to see women taking advantage of those situations and outsmarting their teasers. I sometimes see men get offended. What drives me mad is seeing a society that bashes women for being with older and wealthy men without knowing the reason.

BRIDG-EATERIA

Posted on by Tizita S.

They say, “Where there is traffic, there is business.” It reflects the colour of Addis Abeba roads and roundabouts. Around Bole, commonly known as the Ring Road, vendors serve tea and snacks underneath a bridge. Owing to these selling methods allow pedestrians and drivers to get the service they need while walking and driving. Despite that, such practice has become a frequent encounter in the heart of the city streets. The most common purpose of a ring road is to reduce traffic volumes in the urban centre, hardly to be used as a cafeteria, or “Bridegeateria”?

WALKWAY DISPLAY

Posted on by Tizita S.

Pedestrian walkways around Addis Abeba are growing smaller by the day, competing to gain a foothold in the public spaces. The city, which prides itself as Africa’s political and diplomatic capital, becomes a showcase of contrast. Beauty and affluence wrestle destitution and poverty to claim space. Vendors have displayed their second-hand outfits, shoes and luggage for sale on a roundabout in front of the Ministry of Education, up at the Arat Kilo area

TRAILER HOMES

Posted on by Tizita S.

Retired city buses were once converted to bakery outlets retailing bread supplied by ‘Sheger Bakery’ during their twilight zone. The city administration had used Anbessa City buses as its retail shops before formal outlets replaced them. Sheger Bakery, touted as the largest bakery and flour factory with the potential of baking two million loaves of bread daily, was to cater for millions of people in Addis Abeba with a subsidized bread supply but failed to live up to expectations. The old city buses are now dumped in different parts of the city, serving as trailer homes, far from the sights of city dwellers.

Road Accidents Claim Young Lives in the Capital

Posted on by Tizita S.

Young men in their teens and twenties are dying of accidents on the road.

The national death toll averages around 5,000 people annually, 80pc account for pedestrians in traffic accidents. Men between the ages of 15 and 29 took over three-fourths of this number. This year, the death of 30 people has been recorded on the road from Ayat to Tafo, on the north-east outskirts of Addis Abeba.

A panel discussion focused on reducing traffic accidents was held at the Traffic Management Bureau located on Haile Gebresilassie Street in the capital. Officials at the Bureau attributed the increased traffic accidents and death rates to the mismanagement of breathalysers and speedometer radars.

Ethiopia ranked 19th in countries encountering the most car accidents, reports World Health Organisation (WHO). The number of death rates due to traffic accidents accounted for 11pc by the end of last year, according to the report by Bloomberg Initiative for Global Road Safety (BIGRS), an international organisation working to improve road safety and save lives. An international initiative, BIGRS, aims to reduce road crash fatalities and injuries in low and middle-income countries and cities, strengthening national legislation and enhancing data collection and surveillance.

Lethal traffic accidents are frequent during late night hours, with increased numbers on Saturdays, according to a report presented by Meron Getachew, a country representative of BIGRS.

Trio Lays Schemes to Insure Farmers by Next Harvest Season

Posted on by Tizita S.

Farmers are on the way to acquiring agricultural insurance, a scheme designed to prepare them for production loss from natural calamities. A discussion has been held between the Ministry of Agriculture and African Risk Capacity (ARC), a specialised agency of the African Union (AU), to sign an agreement with an insurance and technology company, PULA.

ARC has provided insurance to over 30 million farmers in Africa since 2012.

Says the CEO, Lesley Ndovu: “Insurance is an ideal instrument to protect farmers and the GDP of Ethiopia and other African countries.”

Representatives of the trio met last week at the Skylight Hotel on African Avenue (Bole Road). The discussion focused on improving national coordination for disaster response with early warning and preparedness against disasters that affect the sector, such as droughts, floods and locusts.

Over 18 million Ethiopian farmers cultivated cereals on 10.5 million hectares of land two years ago, harvesting 30.2 million tonnes, according to data from the UN Food & Agricultural Organisation (FAO).

The Agricultural Transformation Institute (ATI) initiated an engagement between officials of the Ministry and representatives of ARC six months ago to examine ways of covering local farmers from losses. The agricultural insurance scheme will be provided through the input voucher, a distribution system developed by the ATI, cooperating with the Ministry and financial institutions. The system has been effective for the past nine years and provided inputs to seven million farmers last year.

Oumer Hussein, minister of Agriculture, said that the signing would set out the terms and conditions to facilitate cooperation between the parties. The minister said they would be working with financial institutions and farmers to develop and deliver the scheme to be ready in the coming harvesting season.

“It’s time for the government to be involved in providing a relevant insurance solution to build our farmers’ resilience,” said Oumer