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Ethiopia - Open letter to Dr Eleni Gabre-Madhin

Written by Jawar Siraj Mohammed ([email protected])
Tuesday, 18 August 2009

Note from the Editor

Dr Eleni Gabre-Madhin is Chief Executive Officer of the Ethiopian Commodity Exchange. Over 15 years
of experience on agricultural markets in Africa, prior senior positions in the World Bank, the
International Food Policy Research Institute (Washington), and United Nations (Geneva). Doctorate in
Applied Economics from Stanford University, Bachelors and Masters in Economics from Cornell
University and Michigan State University, respectively. Received the American Outstanding Dissertation
Award in Agricultural Economics in 1999.
She recently wrote an article entitled 'My Ethiopian Story' in response to the polemics around her ethnic identity, article to
which Mr Mohammed reacts with the open letter hereunder.

Let's be like the market. Sure but what if the market is monopolized?
An open letter to Dr Eleni Gabre-Madhin
Jawar Siraj Mohammed / Stanford University
Dear Dr Eleni,
I just finished reading an article you recently wrote titled Lets be like the Market in which you made a passionate call to
your critics not to engage in destructive ethnic bigotry but rather focus on rebuilding a country in need of grass root
economic development. You have stressed the importance of being like the market a market that does not care about
who is selling and who is buying but what is sold and for how much, hence we should not judge people based on their
identity but by their characters and deeds. In an ideal world, I agree with you. But what if the market is imperfect,
distorted, manipulated and has been for the most part monopolized by a single company or group? Can you still advocate
embracing such an imperfect market?
To me the problem in Ethiopia is not only the fragmentation of ethnic diversity per se, its rather the manner in which those
several ethnic groups have been unjustly brought under one state and are ruled. When people with different cultures and
views live side by side, in the absence of effective interaction, its natural for them to make assumptions about the other.
When such neighboring groups compete over resources, or when there is conflict of interest, those assumptions develop
into prejudices and bigotry. Therefore, assumption, prejudices and bigotry are present in any diverse society and they often
die out as interaction and interdependence among communities increase. But if and when one group dominates its
neighbors and imposes its cultural, political and economic will, those preexisting assumptions and prejudices become
fertile ground for dehumanization, discrimination and exploitation. In other words, what we call racism today is a situation
in which the powerful suppresses the powerless based on those preexisting social differences.
Everyone knows that Ethiopia was built by one group subjugating the rest, and ignoring that history will not help everyone
to get along Therefore, from the very beginning, the market was imperfect. This imperfection continued to worsen as the
subjugating group further monopolized the market, by strengthening its own cultural, linguistic and economic domination.
I hope your wonderful grandmother has told you about Minelik's soldier in Hararghe when they used to own at least 10
families including their land, property and lives. All members of that family worked on their land and gave the product to
their owner. That monopoly lasted almost a century, and put the then powerful group ahead of the subjugated, and much

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of the problems and disparities we are facing today are the product of such imperfect beginnings. Can you imagine what a
market monopolized by a single company for such a long time would look like? The Ethiopian market today remains as
imperfect as before if not worse. The only difference is that it is monopolized by a new company. Therefore, in a country
where the system has been monopolized by one group or another for over a century, and the majority has been severely
repressed, marginalized, exploited and dehumanized, we cannot simply wish away bigotry and ethnic hatred We must
face it head on and deal with it.
Let me go straight to my point. It is because of this monopolistic market that people automatically assume you are a
Tigrean. By they way you are not the first to be a victim of such erroneous assumptions and deliberate mislabel. Dr Nagaso
Gidada was called Neagsi Giday and once it was widely rumored that Dr Brehanu Nega was a brother of Sebehat Nega.
Some of the reasons why people either assume or label individuals working with the current government as Tigrean is as
follows:
First, it is an undeniable fact that the current system, be it political or economic, is fully dominated by the Tigrean elites
loyal to the regime. From the oligarchy enterprise known as EFFORT that has taken a big chunk of the market to all real
political power posts within bureaucracy, military and security apparatus, the regime has deliberately and openly excluded
individuals of other ethnic groups from the system and filled it with Tigreans. Therefore, when a new and potentially
powerful entity like ECX surfaced, it was unthinkable for people to imagine a non Tigrean would be allowed to run it. People
automatically assumed that its just another entity established to run a new kind of scam.
The second reason is that as a product of the 70's radical left, the elites of all ethnic backgrounds and political grouping are
accustomed to using labels and conspiracy theories as the primary weapon of discrediting whomever they disagree with.
As you probably know, the ruling oligarchy is mercilessly notorious for using people, especially outsiders,as
use-and-throw
Learning from Not So Distant Past: Would ECX Perfect the Market or Would it Strengthen the Monopoly?
When I first heard about ECX I was excited on its potential to transform the grain market but I was also worried about
problems you would face from two sides. One, from the larger public who have been excessively exploited by the regime
over the last two decades that they have lost trust in any institution run by the government. Two, from the very regime
that is known for taking advantage of genuine individuals like yourself to advance its narrow economic and political
agenda.
I hope my fear will not be realized and you succeed in fulfilling your dream of making ECX a great market place. But
growing up under this government, I am too familiar with its scams and injustices that I cannot help but remain
suspicious. I share the fear that ECX will become just another facet through which the regime will systematically impose
its market monopoly and force independent businesses out of the market as it has done since it came to power.
Here is a recent historical reflection: There was a farmers cooperative in Hararghe known as East Oromia which was
engaged in trading jimaa (khat). The regime, eying the luxurious jimaa business, falsely labeled the cooperative as an OLF
property, and decided to nationalize it. However, it was not really nationalized in a real sense but the finance and
operation of the cooperation was simply transferred to Dinsho, a company owned by the ruling party. Former board
members and officers of the cooperative have been killed or are languishing in jail. Today Dinsho has been bankrupted and
the jimaa business is believed to be owned by none other than the Prime Ministers wife and is estimated to earn hundreds
of millions of dollars per year. To make sure that the business would not be scrutinized and disturbed, the prime minster
directly intervened and federalized the entire Awaday district so that the company would not have to pay tax to the
Oromian regional government. This is as free as the current market is in Ethiopia.

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Because I have heard and witnessed so many stories about such scams and injustices, I was not surprised when all of a
sudden you were ordered to trade the coffee that was nationalized from the six renowned business people. I cannot
believe for a minute that coffee was nationalized because of hoarding" as it was claimed by the government. It was said
that those businesses hoarded coffee to wait for better pricing, but since the world coffee market has been fluctuating for
quite a long time how come a corrective measure hasnt been taken before. And, most importantly why now and why
through ECX that was supposedly established to trade grains?
I believe that the ruling oligarchy robbed those business people for one simple reason; the coffee business was the only
major sector that was not monopolized by companies owned by the ruling clique or EFFORT. This has been done to several
other major businesses in the past. For instance, there was a business man in Finfinne who was one of the most respected
business people since the emperor's era. He was believed to be one of the first people to import fertilizer. His business was
so important for the country that even the communist junta did not nationalize it. When the current regime came and
began expanding its business monopoly, they wanted to take the fertilizer market as well, due to its profitability and more
importantly to make farmers directly dependent on the ruling party. But there was one problem, the old business man and
his company had been so established that he had strong loyal suppliers and consumers. First, the regime tried to push the
man out of business through competition. A tax exempt company got established to bid and import fertilizer. But the old
man kept winning. You won't believe what they did next. They told him that he can import the fertilizer but had to share
the profit with them. The man, being a conservative businessman of the old days, rejected their demand. At last they
simply moved on him, seized his entire property and forced him into exile. At the age when he should be sharing his
experience and wisdom with aspiring young business minds, he lives in a foreign land, while those who robbed him have
been relaxing and enriching themselves on the very land where his umbilical cord was buried. Then who should we be
surprised when owners of EFFORT publicly claim that it is the biggest company in Ethiopia if not all of Africa, after all the
oligarchy was built by properties gained through such daylight robbery.
Beyond The Horizon: We Must Face and Deal with the Imperfection Before We Embrace the Market
Ethnic diversity, prejudice and bigotry are not the real issues why people question your identity, therefore while your call to
be like the market is correct it is not realistic in a condition in which the market is so imperfect and highly monopolized by
a few cliques. Can this market be perfected? Yes and it better be. How?
The first thing to do is to recognize and acknowledge that Ethiopia was built and has been sustained on discriminatory
system where the majority has been marginalized from the economic and political affairs. . And also it's essential to admit
that the current government is run by powerful business oligarchy that has been using ethno-racist policies to monopolize
and exploit Ethiopia's economy for the exclusive benefit of a few individuals. Let me be clear here. I do not believe the
current system is serving ordinary Tigreans, but the small clique that runs the country has been using Tigrean nationalism
to hide their sinister personal motives. The Tigrean people themselves are the victim of this system. The ever increasing
anti-Tigrean sentiment within some segment of the society is the product of deliberate and calculated move by the ruling
oligarchy that have been promoting racist policies to anger and agitate other ethnic groups. The oligarchy believes that
facing hostility, the

Tigrean people would be isolated and insecure that

they

remain loyal to the system. Thus, the

current anti-Tigrean sentiment can only be contained from spreading to the wider society if this regime is stopped from
implementing racist policies. As long as these individuals and their policies remain, bigotry and ethnic tension will persist
or even increase making it difficult for people like you to serve their people without distraction.
Solving this problem requires two approaches, I) Political solution by democratizing the country which will free the market
by breaking the monopoly of a single group over the economic and political system and making it accessible to all. II)
Promoting integration through grass root social activism. These two approaches will gradually create an environment free of
ethnic and class prejudices and bigotry through self-actualization and innovative indigenous social engineering.

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Let me explain. Much has been debated about the correlation between economic development and democracy. Some have
persuasively argued, using the Asian Tigers as example, saying that regimes strength and stability, not democracy, is
more important for economic growth. That might be true in few countries where their society is more or less
homogeneous. In my view, in such an ethnically fragmented country like Ethiopia, an authoritarian system can never be
strong and sustainable because it always creates presumably advantaged and disadvantaged ethnic groups leading to
permanent tension and instability. This is because the primordial ethnic differences and grievances make it easy for elites
to create and mobilize an ethnic support base. As a matter of fact the current regime is a clear example of this
phenomenon and even the communist Derg did not escape the perception of being an Amhara government. As long as a
regime uses an ethnic support base or perceived to prefer a particular group, those who feel disadvantaged will move into
an opposition camp. More dangerously in the absence of democracy and rule of law hey often use violent methods. This
eventually widens ethnic fragmentation and polarization.
For a positive, transnational and courageous people like you to succeed in using your wealth of knowledge, experience and
wisdom to help the people of Ethiopia without distraction, the current polarization and exclusiveness needs to be replaced
by an environment that is based on mutual business trust which is the anchor of any enterprise and free market. This can
only be done by democratizing the state and establishing an all inclusive government. Successive authoritarianism has
allowed small but well organized vocal and vicious groups to monopolize politics both in the ruling groups and their
opponents. Seasoned and rational individuals have abandoned the field of political dialogue due to the kind of smear
tactics that was thrown at you. The silent majority has either abandoned the country or has chosen a non-political way of
helping the country like you are doing now. But for genuine people to make practical, stable and sustainable difference in
the country, it is essential for the political system itself to be stable and progressive. Any authoritarian regime is doomed
to fail no matter how long it lasts. The longer it remains in power, the more likely that it would face a violent demise With
the fall of such a regime, the succeeding group often destroys whatever positive institutions that were left by the previous
one and starts from ground zero. We have seen this during the past two successions. The current rulers do not seem to
have learned any valuable lesson from their predecessors. So I fear that, the few great institution such as ECX that have
been built through such hard work might become the victim of a new cycle of showdown.
Finally, in no way I am trying to discourage you from doing the great work. In fact I see you as a role model for all Africans
including myself. I disagree with those who advocate for completely boycotting the country because of the nature of this
regime. I strongly believe that the problems of the country can only be solved from within. Let me share with you a story a
friend told me. A man came across an old lady searching outside her house for a needle she lost inside. The man asked her
why she was looking outside if she lost it inside. Her response was that there is no light inside. The man asked " what is
easier, finding light for your house or searching outside where you know the needle is not there?" The situation in our
country is similar, there are too many problems, but the solution must come from inside not outside. You are trying to do
exactly that.
However it's also very crucial that, while lighting up her house, the woman I mentioned above works on properly covering
her roof so that the next rain will not take out the light. She also needs to clean her house so that next time she drops a
needle it does not get lost in the midst of the trash. Similarly while returning home to solve gigantic economic problems is
important, we need to make sure that we tackle the root cause of poverty and ethnic tension, which is the monopoly of the
politics and economy by self-anointed dictators and the disenfranchisement of the majority. Any activity should be directly
or indirectly aimed at solving this root cause, and we need to be careful that our actions do not prolong the rein of tyrants.
In light of this, the direction EXC is heading is not clear. It has a huge potential to solve the market stagnation and
catalyze innovative entrepreneurship. On the contrary, it can also become an important mechanism in which the ruling
oligarchy can expand its monopoly over the market and increase the already rampant dependency of the farmers on the
state. So far the later seems the case, but I urge you to not let that happen.
Respectfully,

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Jawar
The author can be reached at [email protected]

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