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Open letter to Samantha Spooner

Open letter to Samantha Spooner



Dear Samantha Spooner:


Several things you pointed out about the cityís history and current transformation is actually accurate. But you are seriously wrong on few areas including your main point: The urban development in Addis Ababa is leaving the poor and weak behind. Thatís completely wrong!  To the contrary it is lifting 100s of thousands of Ethiopian poor households from abject poverty. The steep poverty rate decline from 40% to low mid-twenties in both rural -- and urban  -- Ethiopia proves to the contrary. Has Ethiopia eliminated poverty or driven it down to an acceptable low, low level? No. But she is strongly moving in that direction.

First, regarding the subsidized housing, the program has transformed the lives of 100s of thousands of Ethiopian poor householdsí lives by rescuing them from urban slum shack existence to a life in modern housings.  Literally 100s of thousands of households have been rescued from horrible slum living conditions, not fit for any human being, to a modern one with all the modern amenities that makes daily life a lot brighter.  Moreover, the housing program has allowed poor households to significantly increase their wealth through property ownership.  Even those who are renting out their condos are much better off due to a newly found significant rental income. Hopefully, they will benefit themselves even  more -- and society as a whole  -- by engaging  in additional income generating activities.  

As far as the affordability of the condos, there are 4 different types in order to meet the income level of households ranging from the very low-income to low-middle income. Coupled with the long-term credit extension to these households, there is an affordable option for the vast majority. The very low -- low single digit -- mortgage default rate of the program attests to its overall affordability. Overall, the program has given regular citizens the incentive and capacity to invest in a valuable asset that transforms their lives  for the better tremendously.  

One additional key point in regards to the subsidized housing program is that itís true the government should ensure affordable housing options for the very low-income as well as the low-middle income, which currently is doing.  But itís also absolutely critical that citizens adequately contribute their fair share for the value of condo they personally choose in order to ensure:  1) the quality of the condos;  2) the subsidies are able to cover all deserving citizens. 

Second, the claim in you report that citizens are forcefully evicted from their zone or city is completely unfounded. The reality is Ethiopia as a policy has correctly decided to re-develop slum areas in order to dramatically improve the living conditions of citizens. The policy,  the reality on the ground, is private property owners are fully compensated for their property, with a land grant option -- in the same city -- to build a new up-to-standard property. Home owners are given two options. The first option is to receive cash for their fixed asset and a land grant -- in the same city --   to build a new up-to-standard house. The second option is to get full cash value for their entire property, for both their  fixed asset and land, as well as a long-term mortgage loan for a purchase of government subsidized condo -- in the same city -- if they choose so. Commercial property owners are given an option to either receive full cash value for their entire property, or a land grant -- in the same neighborhood or different part of the city,  based on their own choice --  and cash for their fixed asset. 

Third, I donít know where you got the information that the Oromia Zone and  surrounding Oromia localities will lose 36 towns under the Addis Ababa and surrounding Oromia integrated plan. Thatís completely wrong. I am afraid you were misinformed. The Oromia Zone as well as all other surrounding Oromia localities are administered by officials elected by the residents of the zone or localities. There is NO proposal to change that under the plan.  None at all.

Lastly, I just want to say you are absolutely correct in pointing out the importance of job creation and lifting all citizens -- reducing unhealthy inequality. But that can only be achieved through investments(developments) in all economic sectors to create jobs for the local citizens, as well as by enabling big item ownership -- purchases -- such as a house through extension of a long-term credit as Ethiopia is doing. If no one is to be left behind truly,  it requires job-creating investments,  and long-term credit extension for big item purchases,  in every part of the country -- including the Oromia Zone.




July 24, 2015


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