The 1997 Asian Financial Crisis vs. Ethiopia’s Foreign Exchange Problem

The 1997 financial crisis in Asia occurred after several decades of outstanding economic performance. Annual gross domestic product (GDP) growth in the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) averaged close to eight percent over the decade before 1997. This is similar to the official growth rate registered by Ethiopia in the past decade.

There are written and unwritten social contracts between businesses and societies that leadership and strategy should deal with. Society is becoming more and more pluralistic making business and societal relationships more dynamic. A pluralistic society often has a multitude of stakeholders and special interests which is characterized by tens of thousands of special-interest groups. Diversified stakeholders and interests can be dealt with better when they are approached by strategic leadership.

In the past, technological progress in the banking industry was steady and slow. But beginning from the 21th century that trend has changed and we are looking at progress every now and then. Beginning from the core banking system which enables branches to be interconnected in their activity and exchange of information, to mobile and internet banking, technology is enabling clients to conduct financial transactions from anywhere. Technology also becomes the main means of gaining a comparative advantage and a source of efficiency for the banks. It also helped banks to increase the penetration of mobile and internet banking service, which is a plus for them to reach customer in a simplistic way.

Although Africa has recorded strong economic growth in recent years and will continue to do so this year, its gains will remain fleeting until it undergoes a long-awaited transition away from commodity exports and toward manufacturing. That in turn will require leaders who are willing to put the economy before narrow political considerations.

Between 2000 and 2014, Africa grew at a strong clip, fueling belief in the narrative of an “Africa rising.” But, since 2015, growth across Sub-Saharan Africa has weakened, and the poor outlook for commodity prices has cast doubt on Africa’s economic promise, leading many to question the “Africa rising” narrative – and some to pronounce it dead.

The recent decision of the government to privatize state-owned enterprises (SOEs) which are operating in various industries has caused unease. What worries many is the inclusion of massive enterprises such as Ethiopian Airlines and Ethio-Telecom for partial privatization.