Thomas Dichter:- Letter from Ethiopia
(intpolicydigest)—-Ethiopia, despite its recent troubles, has been a rising African star for some time. World Bank and other statistics cite the country as an African standout, experiencing in some years 10% growth, with millions leaving poverty. Even Joseph Stiglitz, the Nobel Prize winning economist who is not known for a sanguine view of the world, has been optimistic about Ethiopia. Often cited is the government’s new strategy for growth based on the expectation that Ethiopia can replace South East and South Asia as a new low- labor-cost hub for light manufacturing.
The role of China is critical in these new hopes, having supplied well over $10 billion in loans in the last 8 years. Addis Ababa, the capital, in some of the hopeful articles about Ethiopia’s rise has been lauded for its “gleaming” downtown and booming growth. Among these accomplishments is the opening of the $475 million urban light rail line in September 2015 (the first in Sub Saharan Africa), built with a Chinese loan and by Chinese engineers. The 20 miles of the first stage of the line were finished remarkably in 3 years.
Last month I rode that line from Menelik Square to Kiliti, a distance of 10.5 miles, stopping for a couple of hours midway to roam the enormous Mercato, the largest market in East Africa. That experience made me wonder if the World Bank economists or those who so cavalierly used words like “gleaming” and “booming” had even been in the country.
When I first came to Ethiopia 36 years ago in 1982, it had one-third the number of people (36 million.) Addis’ population was 1.25 to 1.3 million people. Today, Ethiopia’s population is about 105 million, with Addis at about 5 million and growing fast. Indeed, Ethiopia has one of the fastest population growth rates in the world, hovering around 3% per year (this would mean a population of 200 million by mid-century). But not only is there little or no “gleam” (the $350 per night Addis Sheraton and a few office buildings on Bole Road are among the few exceptions) – virtually every building is streaked with brownish water stains, reddish dirt, and even the newest show signs of deterioration.
This vast city of hills has hardly a sidewalk that isn’t showing rubble. And surprisingly the light rail, less than 3 years old, with rolling stock from China and run jointly by the Chinese Shenzhen Metro and the Ethiopian Rail Commission, shows clear signs of poor maintenance and management. The digital read-outs in the cars do not work, the escalators in the few stations that have them do not function (nor were there signs of any work being undertaken to correct the problem, and the platforms show cracked and popped up pavers. As for the system’s revenue or safety, they are both inconsistently attended to, to put it generously. It’s quite easy to get on at an intermediate station without a ticket. And the many Addis city police in their blue uniforms whose presence at the stations and on the trains is supposed to deter terrorism are kids in their 20s, who occasionally perform a perfunctory search of an entering passenger’s bag but who spend most of their time staring at their phones. Given everything else in this “gleaming” city, it’s easy to imagine what the light rail system will look like when it is five years old in 2020.
Moving along the line’s route, you see a patchwork of new construction (much of it halted), interspersed with slums. Here’s an eight, ten or twelve story high rise, then a space about three or football fields square filled with shacks and shanties with corrugated roofs, many with satellite dishes; muddy lanes running everywhere, and then again another high rise. And every bit of street along the 10.5 mile light rail route is occupied with street hawkers, largely young men but many older women as well.
On a given day a 22 year old on the street side presides over a meter square piece of cloth on the ground. Today he is selling a pile of scotch tape, next to him is another young man with 10 pairs of cheap scissors on his one meter square space, and next to him another guy with some undershirts. Tomorrow or the next day he will sell cheap screwdrivers, or pencils. Whatever he can find that gives him a tiny margin is what he will hawk on that day. Women are hawking tomatoes, samosas, fried dough, plastic knick-knacks, or a tiny pyramid of oranges. And everything is in small quantities, Costco or Sam’s Club in reverse. The more established sellers have more or less permanent kiosks and are selling plastic toys, or running a makeshift café. The chairs and tables are slapped together out of crate wood or other scraps. But all the sellers believe they have something of value for someone out there, the prize for the most hopeful going to a man I saw selling faded half-torn, water-stained copies of Energy Physics.
The most ubiquitous of the hawkers and sellers are the shoe-shine boys. There are hundreds of them in the center of the city and on some corners, as many as twenty in a row. Their equipment consists of a crude box with a slanted piece of wood on top, a small plastic bucket filled with dirty water, and in it a piece of sponge, not a whole sponge, just a piece. The most professional of these young men might have a selection of 4 or 5 actual shoe polishes and a brush or two. A shine costs between 6 and 10 birr ($0.22 cents to $0.36 cents). But this is “good” money, as is the money that most of the thousands of other hawkers make. When you ask how business is going, virtually all will tell you that they make a living but that it is “small money.” And of course they are right. But suppose you have 20 customers in a day, and you make a total of 180 to 200 birr. You have no real overhead so it’s pretty close to pure profit, and it surpasses the World Bank poverty threshold ($1.90) by a factor of 3.75. In short, you’re making between $6.60 and $7.30 per day; it sure beats government work, and this small money, all of it made in the “informal sector,” as the economists call it, is what keeps everyday Addis alive. It is the largest provider of employment by far in urban Ethiopia. And it is also at one and the same time a sign of the people taking their own welfare into their own hands, as it is a formal economy that has no room for them.
What’s good about this? Survival. Human beings are finding ways to live in the most awful circumstances. What’s bad about it? Everything else. These people, many of them young have no real future. They are the least educated, least connected, but they have entrepreneurial energy and spend their day bargaining for a piece of the action. They have their small money and the fact that the small denomination notes they deal in (a 5, 10, or 20 birr bill) circulate so often and touch so many hands that the print is barely discernible, attests to the immense size of the informal economy.
As the train rolls along I begin to count the number of unfinished, half finished, or almost finished buildings. In the 1930s, British writer Evelyn Waugh described the city, then still a relatively new place having been founded in 1886, as being “in a rudimentary state of construction” with “half-finished buildings at every corner.” Almost a century later Waugh’s description still holds. On my first round trip I counted over fifty, and those were just the buildings adjacent to the rail line. Most are 8 to 12 stories high with wooden pole scaffolding and huge torn shards of protective blue or green plastic sheeting that are supposed to prevent dust and debris from falling on the street below. These buildings are a testament to bad planning, bad lending practices, a corrupt permitting system and in general, greed. As the money runs out, the construction stops dead, the thousands of poorly paid workers who were bustling about when the construction began may well be the ones on the street today shining shoes.
In the Mercato, I am the only foreigner as far as I can tell, and since there is no habit of selling to tourists, I am not bothered, nor even looked at. I roam aimlessly, from street to street. Everything imaginable is being hawked and sold, from the small to the big, from tomatoes and onions to refrigerators to auto parts, hardware, drums of oil, animals. The word “bustling” doesn’t do this area justice; it hums with frenetic activity, noise and movement. I stop to look up and get a reference point for pretty soon I won’t be able to find my way back out. A large man approaches me and in American accented English asks where you from? I tell him. I knew it by your accent when I heard you talking. Well, you have an American accent yourself. The story comes out. He is or was (it’s a bit vague) a taxi driver in Los Angeles. And he was just there. Why did you come back? To see family. We continue walking. What are you looking for? he asks. Nothing, just to look around. Well let me show you the spice market. OK. He leads and asks me questions. No reason to lie, I tell him I am on my way to France, where I’ll spend some time. He breaks into French, broken but still pretty good. Then it turns out he speaks a bit of Arabic as we pass a spot where Qat (Chat) is being sold. I used to live in Yemen I say, where Qat is a central part of daily life. Oh, “Sana’a” he says. And we exchange a few words in Arabic. We walk through the spice market and he makes remarks to various shopkeepers who all seem to know him. Pretty soon, he’s guiding me to the basket sellers, again as we walk people greet him and shake his hands. “You seem to know many people here.” “Yes” he says. “When are you going back to LA?” “Oh soon, next week, or maybe in a month or two.” I tell him politely that I hope he is not interested in getting me to buy anything because I am not going to, nor am I going to give him anything for his “guide” services. After all he approached me. He says OK, and in a split second he’s gone.
Getting off the train in Menelik square at 5:00 or so in the evening, there are other signs of urban misery; a few crazies, mumbling or shouting, quite a few men and one or two women who are clearly drunk, and hundreds of people lined up trying to catch one of the inadequately spaced collective vans (3 birr per person) to get home.
Later, walking through the campus of the University, near Haile Selassie’s old palace, there are students sitting around a broken down fountain, they look like college students everywhere, chatting with each other, texting on their phones, smoking, but in this country what is their future? Where are the jobs to come from? As an article in The Guardian recently asked “how will Africa match jobs to its population boom?
There are plenty of outsiders in Ethiopia wanting to help the country overcome these dilemmas. There are scores of first world NGOs and aid agencies. The most heartfelt among them give out food or cooking oil, or train sex workers to be street sellers of samosas, or they go to a village and drill bore holes and install pumps or latrines. Never mind that the sex workers will soon give up selling samosas and go back to sex work, or that many of these wells will not function in a few years, and many villagers will have left for the city. Then there are the more business-minded of the aid givers, those who see market opportunities in high end specialty coffee and go out to Ethiopia’s coffee highlands to reform the marketing operation of a local cooperative. They make an intense effort and do studies and link up with Starbucks or Peets, and for a while things look up for a local community and a few hundred coffee farmers.
But then, lo and behold, in far away Yunnan province in China entrepreneurs begin to get serious about coffee production and soon they’ve scaled up and their product threatens to severely limit the market potential for highland Ethiopian coffee on the world scene. And then there is the Chinese version of development assistance, untied to the concerns that drive the traditional aid agencies and NGOs, such as human rights or sustainability. Among other efforts, China is investing in huge factory complexes in rural areas, like the Havassa complex 170 miles from Addis. To these they bringing in managers from South Asia who have expertise is garment manufacturing.
But already, these “fast fashion factories” are showing signs of failure – logistical challenges in both the supply and export chain, difficulties with quality control and the training of former peasant agriculturalists in even the rudiments of machine work, and an unstable workforce, as people seek inevitably to get to the big city. In short, as in a number of very poor countries, even as governance and other aspects of the all-important political economy improve, even as new growth and anti-poverty strategies come on line, the challenges and the population seem to grow even faster – it is quite possible, and sad, that one step forward, two steps back could be the state of things for the foreseeable future.