July 2013 – Page 2 – Ethiopian Business Review

Almost 100 years before Columbus discovered America, a Chinese explorer named Zheng He (also known as Cheng Ho) led seven expeditions from China all the way to the Cape of Good Hope in South Africa. His ships are said to dwarf anything sailed by later European explorers and continue to amaze today. In all, it is estimated that he had between 48 to 317 ships with a crew of over 28,000 men. During each of Zheng’s voyages, he brought back diplomats from other countries or encouraged ambassadors to go to the capital Nanjing on their own, according to historical records.

In Ethiopia, prosecution for corruption has been rare, which is why establishing the Federal Ethics and Anti Corruption Commission (FEACC), in 2001, was seen as a ‘game-changing’ move by the government. Although there have been notable arrests in the past such as Tamirat Layne, prime minister of the transitional government, Siye Abraha, former minister of defence and Abate Kisho, former president of the Southern Nations Nationalities and Peoples Region, some argue that arrests were politically motivated and that corruption from big players on Ethiopia’s political and economic stage went un-checked by an enforcement body seen as weak and a public seen as apathetic.

As corruption takes centre stage in public discourse, with the detainment of senior government officials and private sector tycoons, the Federal Ethics and Anti Corruption Commission (FEACC) seems to have gotten its groove back. In this exclusive interview, Addisu Deresse, associate editor of Ethiopian Business Review, sat down with Aklilu Mulugeta, the Commission’s Corruption Prevention Director, to discuss the root causes of corruption and the challenges of fighting this social evil in Ethiopia. Aklilu graduated in Economics from Addis Ababa University and has had several professional public sector positions before he became Prevention Director five years ago.

Zewde Zeleke (PhD), general manger and owner of Biyo Agricultural Development, has received 6,749 hectares of land to develop a commercial farm in Benishangul Gumuz regional state, almost a decade ago. The farm was profitable and earned him an award for the export crops he grew. He created more than a thousand jobs for the local community and provided supports including building roads and helped train residents in new farming technologies. This is what the government had in mind when it encouraged local investment in commercial farming.

For many, the untimely death of Meles Zenawi, Ethiopia’s long-serving and able prime minister, on August 20, 2012 was considered as a serious threat to the country’s unity. This was because; the premier had been too powerful as he had drawn overwhelming political and military control particularly after 2001. His sudden death after 21 years of firm control was anticipated to create vacuum and power struggle within the ruling Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) and the four parties that constitute it.

Nevertheless 10 months later, his successor Hailemariam Desalegn has managed a peaceful transition and maintains the same economic growth like his antecedent.

Even in good financial times, development aid budgets are hardly overflowing. Government leaders and donors must make hard decisions about where to focus their limited resources. How do you decide which countries should get low-cost loans or cheaper vaccines, and which can afford to fund their own development programs?

The answer depends, in part, on how we measure growth and improvements in people’s lives. Traditionally, one of the guiding factors has been per capita GDP – the value of goods and services produced by a country in a year divided by the country’s population. Yet GDP may be an inaccurate indicator in the poorest countries, which is a concern not only for policymakers or people like me who read lots of World Bank reports, but also for anyone who wants to use statistics to make the case for helping the world’s poorest people.

Investment is a vital engine for economic growth and socio economic transformation. It is one of the main considerations for policy makers, whenever economic development is formulated. Investment incentives to be accorded and the details of the laws and regulations governing the application of the investment policy may vary, depending on the time and circumstance or prevailing socio economic dynamics. The same is true for our investment laws including the latest one: investment proclamation number 769 /2012 and regulation number 270/2012.

Africa’s share of the global Foreign Direct Investment (FDI) flow is extremely low. Despite the fact that it evolved from an annual inflow of USD two billion in 1983-1987 to USD 55 billion in 2011, it represented a mere four pct of the global FDI and about 10 pct of FDI flow to the developing countries in 2010-2011. There is also a significant variation across regions and countries in Africa. Nigeria, Egypt, Morocco, Tunisia, South Africa, Algeria, Angola, Ghana and Cote d’Ivoire, accounting for a hefty two thirds of the FDI flow to Africa.

Ethiopian Airlines launched its first flight to South America on July 1, 2013. The flight from Addis Ababa to Sao Paulo and Rio de Janeiro, Brazil, the 74th and 75th destinations of the airline, via Lome’, Togo, will increase its flight route network to five continents.

Tewolde Gebremariam CEO of Ethiopian, during the launch, said, “the route will be the only direct [flight] service between West Africa and Brazil and with ASKY, our partner, the airline will connect 22 West African cities with South America.”

The International Labor Organization (ILO) commemorated “World Day Against Child Labor” on June 12, 2013, releasing a new report about the alarming situation many vulnerable children face. The organization urged concerted and joint action at national and international levels to eliminate child domestic labour.

Locally, the day was also observed in Wolayita Sodo in the Southern Nations Nationalities and Peoples Regional State (SNNPR), where many conditions are ripe for children to be exploited through forced labor and trafficking.

A Special Friend: How Africa’s Partnership with the Middle Kingdom Will Define its Future

Realizing a Corruption Free Civil Service: Mission Impossible?

Construction Sector, Next?

Disappointment on the Ground: The Failure of the Local Commercial Farming

Caught: Between the Legacy of Meles, His Own

The Problem with Poor Countries’ GDP

Overview of the New Investment Law

Africa: Engaging with the Emerging South

Ethiopian in the South American Sky

To End Child Labor