Hard Currency: Bonds and Oppositions Economics!
Zeru Hagos Jan 08 2009
California, one of the richest state in the United States of America, is said to be the eight richest country in the world. Yet, the current economic slowdown has caught up with the state and is in dire need of cash infusion. The State government is trying hard to solve the cash short fall by raising taxes and issuing bonds as well as federal bailout. If California home to Silicon Valley and rich productive agricultural land can feel the squeeze of the current economic slowdown, why our Diaspora talking heads found Ethiopia’s current woe with hard currency short fall is bemusing.
Ethiopia’s growing economy and consumers are demanding record high hard currency to import consumer as well as building materials. The growing middle income earner class is demanding goods that are not manufactured in the country. Steel, Oil and other high tech instruments need to be imported to continue the infrastructure development. This coupled with Ethiopia’s economy growth mainly tied to the agriculture; the country’s need for hard cash is showing a growing imbalance. The country’s growth in industries that generates hard cash, though growing, did not grow enough to match import demands. Is this really a weakness to be blotted about?
If you ask the juvenile Diaspora talking heads they will tell you yes but if you ask the average folks absolutely no. Even California the 8th richest country in the world is having difficulty! California is the top hi-tech and agriculture produce exporter in the world.
The issue with hard currency shortage in Ethiopia is a problem everyone should try to solve. We should not leave this issue for politicians and government officials. We all know Ethiopians have been living for quite some time, earning 400 million a year in hard cash. The EPRDF govt can easily do that and lead the country happily!
But EPRDF is not doing that, it has chosen to take Ethiopia out of the doldrums!
The EPRDF govt has created a policy where new hard currency earning industries can flourish. Oil seeds and the flower industries are few examples. Ethiopia is set to earn close to 2 billion in hard cash this year yet the demand for hard cash is growing. The economic engine has started to roam full speed. It will be sad if this engine is choked for lack of hard currency.
Now is the time to buy bonds and to invest in our mother country. Hard cash is needed by merchants and traders. Do not believe it is the government that needs hard cash! That is a lie; government does not have a need to pay its employees in hard cash. It is the average private investor in the country that needs the cash to import goods and materials. It is the infrastructure construction that needs the hard cash to import steel and machineries. These are investment that will be there for centuries long after EPRDF is gone. It is to our country’s benefit we do our share however small it may be.
The opposition in Diaspora may think they have EPRDF in sight with this issue. They are wrong. Ethiopia’s economy is growing and a growing economy will face setbacks in the form of correction no matter who is the governing party. The issue arises because Ethiopia’s economy is not at a standstill. An economy at a standstill would not have any economy to speak off. The economist would not have tried to rank a dead Ethiopian economy but we all know it did, so much so, it put Ethiopia’s economy as the fourth fastest economy in the world for the coming year. It is such growth that is causing the hard currency squeeze coupled with the dollar weakness. Ethiopia trade with the outside world, as most other countries do, is with dollar. The Diaspora oppositions do not have EPRDF insight to speak of!
The EPRDF government is a savvy government and will likely resolve the shortfall in due time before it chokes the engine. However, we the silent Diaspora can do our best to help by investing and buying bonds. It is our duty. We owe our people this much. After all the Ethiopia people and its government paid for our schooling!
Speaking of bonds, I have heard Ethiopia’s Electric Power Authority has issued bonds in order to raise funds to complete the ambitious and much needed power expansion project in the country. This is a very good investment as Ethiopia is geared to export power to neighboring countries. I am not sure how and where these bonds can be bought but I hope our embassies in the western hemisphere will facilitate and do a campaign to educate the Diaspora public. Our foreign ministry ought to instruct foreign missions to actively promote these bonds. So far I have not heard or seen any info coming from embassies anywhere except the news posted on the web.