Ethiopia — Uncoupled from the world

Someone just came from London and gave me a copy of ‘The Economist’. SO depressing. Every single article seemed to about how bad things are. Don’t people in Britain these days think about anything else?

Here in Ethiopia you can forget about the recession for days at a time. True, the IMF has just slashed its growth forecast for Ethiopia — but from 11.2% down to 6.5%. European and American countries should be so lucky.

The first phase of the recession — the banking crisis — has so far passed Ethiopia by. The government might officially have declared Capitalism, but a strong whiff of communism still remains. Large chunks of the banking sector are state owned, and even the private banks don’t feel the need to oblige their customers.

There’s no problem of credit card debt, because there are no credit cards. There’s no toxic mortgage problem because hardly anyone gets a mortgage. For foreign residents like me, an overdraft is out of the question — I am not even allowed a cheque book. Exchange controls discourage Ethiopians from investing outside the country.

Most Ethiopians don’t have to worry about whether their savings are safe in the bank — if they have any savings, they are probably stuffed inside the mattress. Or people belong to savings clubs — what West Africans call ‘Tontines’. A young colleague of mine is part of a group of around twenty friends who were all at school together. Each month they meet and contribute part of their wages; they take in turns to go home with the ‘pot’. The money goes in and out on the same day — it doesn’t hang around to get stolen by rogue traders.

I get the impression people here actually feel better off than they did a year ago. This time last year we were in the throes of a drought — hard times both for farmers and city dwellers trying to afford rocketing food prices. Now the rains have been better, prices of maize and wheat have dropped, and markets are full of produce.

Meanwhile, for a country which doesn’t produce industrial raw materials, the crash in commodity prices is good news, not bad. Cheaper steel, cheaper cement, and above all, cheaper oil. Since the government has sportingly passed on at least some of the drop in fuel prices to the customers, we are all now feeling a little better.

I don’t suppose Ethiopia is going to get off scot-free. In fact Ethiopian Airlines — another state monopoly, but a profitable one — has just announced that it is reducing the frequency of some of its flights to China and the United States, although interestingly, not to the rest of Africa.

But the Ethiopian economy is still just about as isolated as it is possible to be in the modern world. Not perhaps a good idea in the long term, but distinctly comforting for the time being.

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