May 20, 2005
Electric trains and expat Ethiopians
I had an "exclusive" interview with Hailu Shawel, chairman of the opposition Coalition for Unity and Democracy (CUD) yesterday. The CUD has claimed total victory in Addis Ababa - both in the city administration and its 23 seats in the House of People's Representatives. It also says that it is heading for overall victory in the national elections - with a little help from its coalition partners like the EUDF.
Engineer Hailu talked about his master plan for Addis and the country as a whole. You can see the full interview below the fold.
But, in a nutshell, his top priorities for Addis are:
- Infrastructure development - including a city train network and a revamped water supply - "I think this could start immediately. The design is there."
- Training schemes for unemployed young people - "Problem number one is the young people who have no work."
- Accommodation and employment schemes for the city's destitute - "Instead of taking them away we provide them with decent accommodation where we can have handiwork and so on introduced on a large scale."
- A reformed city administration - "It is not only that it is overstaffed...We have to put key people in these leadership positions."
His top priorities for Ethiopia are:
- Land reform - "The government should take its hands off land"
- Liberalisation of the banking sector - "The banking has to be freed up, first of all. Second, we also have to allow foreign banks to come here."
- A new tax system - "The system at the moment is scaring every local investor into the ground."
- And a new office to attract foreign investors - "[We need to support] them from the beginning so they can function here."
And where will he get all the talented, motivated people to lead all these new initiatives? Largely from diaspora Ethiopians who, Engineer Hailu says, are now keen to come home.
"We will get really competent people in. They don't have to be here. There are many Ethiopians who are in the World Bank, the UN system, in other African countries – I've worked abroad, I know them. Whatever you pay them they will come. And I think these people need to be put to work. They are all lining up, literally, to come. Those with money and even those without money but with brains and capabilities."
Q: Your one definite claim to date is that you have won Addis Ababa. What is your take on the city and its main problems?
The first problem of Addis is unemployment – serious unemployment, especially of young school leavers, because of very, very retarded development...Number two, the same people are not allowed to use their initiative. There are some very intelligent young people but there is no support system to get them to work. There a serious misuse of the micro finance system which is externally assisted. But inside the administration there is serious partiality, so that independent young people can not access that network. It has been a ruling party fund to get the youth to them. Those who become party members get these special privileges. But the large majority who want to do some work are never given this facility. We believe a change in this system could start the young people on the right road.
Number two even if they want to do something themselves, exercise their initiative, there is no guidance given. Even the NGOs are not allowed to help these people. What we believe is NGOs can contribute very significantly to starting these people on the right road until we can get private investment to move again. So this is a gap which can be easily filled by NGOs. Eventually though we have to have a very efficient administrative system to encourage the investors to move into the city. So far they have been moving out of the city because of soaring land value which is tantamount to purposeful discouragement. Also, the banks are very conservative. They are not developing country banks. In a depression like this they make it look as if there is a problem of inflation so they completely suppress the financial investment in this town and in the country as a whole. We believe we have to free up the system. We have to come up with taxation systems that will allow investors to be more aggressively participating in the development of the country. And the banks should be a part of this – a very important part. And the financial system should enable the banks to be more flexible. The private banks are so highly controlled that there is so much money sitting around. And the government bank, which is the Commercial Bank of Ethiopia, doesn't give loans because of administrative problems...So we need to free that system immediately. How we can do it is only if we win the federal seats. Otherwise we will be constrained in our efforts to move forward. But Addis by itself, if there is control by the Federal government as there is now. I don't think there is freedom to move. The only thing we can do is to encourage the private sector and the NGOs to help out. Otherwise we can not free up the economic system at the moment.
So I see this, immediately, we will continue for short term employment – we will expand the construction sector. But that is a short term respite as you know. For the longer term investors should be attracted into the city by a good administration, good support, good accessibility to land and NGO help.
Q: How would you describe the city administration at the moment. How could you make it better?
The Addis Ababa administration does not deal in essence with the economy. It just deals with building roads and infrastructure and so on. But what do you build roads for? And moreover there is partiality for giving permits for anything in this country. We want clear, transparent systems...If you are a foreign investor, for the first few days you get everything quickly. But when it comes to the crunch, when you are really serious to do something, the whole thing stops. You get papers but never results.
Q: I was interested in your comment about NGOs. Do you think you will have a different approach to NGOs than the current administration?
There will be a very serious difference. We will give them problem areas to focus on. But they can take a choice over what they consider they can do within their capacity. And we will allow them to work freely – we won't say ‘Don't do this', ‘Don't do that.' – that stops immediately, immediately. If they want to involve themselves in helping the elderly – that is their choice. If they want to help the youth, we will accommodate it – whatever they want. Now at the moment it is all ‘You're not supposed to do this', ‘You're supposed to do that', ‘Go to the rural areas', ‘Don't come to the city'. But the city is becoming such a problem...They don't seem to see the totality of the problem. We see there are many NGOs who can help out in a serious way. We will even allow them to go into the micro-finance system, which the government refuses to do at the moment. Because it wants to control everything. We believe they should do it, not a government institution.
Q: If you win Addis Ababa without winning the Federal Government, what will be your top three priorities?
We believe that an economic situation is brought about by the private sector not by the government. What we will do is enable these private sector people to come in and start their job. The only thing a city government can do is to try to participate in short-term training of the youth – in technical issues. For example, if an investor wants a repairman or an electrician, there will be a specific training centre for this on a short term basis for a fast return to work. NGOs can help to establish these training centres and bring experts to train them. Because we do not have experts at the moment. The capability has gone down. I remember when I was a young engineer even the builders were so expert and the lines were just right. Now you get one line going that way, another the other way. Because the quality has gone down so dramatically. So that sort of thing needs re-training, complete re-training. So this is an area where we will try to ask everyone to participate in training the youth. And I think that is number one. Because problem number one is the young people who have no work.
Problem number two is the poor people who have no place to go. They are all in the same batch. Elderly people sleeping on the street. Poor people with nothing to eat. Instead of taking them away we provide them with decent accommodation where we can have handiwork and so on introduced on a large scale. Not these show pieces that we spread around in the country. Real, serious productivity – these are items for tourism, Ethiopian artefacts. A lot can be done by women in this area.
So Addis by itself: administrative system improvement; water supply - immediate enhancement of the capacity; the infrastructure which takes a long time to put in. We have to review all the plans. We believe, as I said, if you start getting the people to work, then foreign investors can come in because they see a healthy environment. They see that the rowdy youth are not there. And so on.
Q: Jut to look at you Addis Ababa plans in detail. You intend to set up a series of training programs for young people, started by the city administration and involving NGOs. Is that right?
The plan will be by the City administration. But the doing – we believe the NGOs and the private sector are best placed to contribute to this.
Q: How will it all be funded?
There will be some borrowing and institutions like the World Bank will like these kinds of projects. They will be involved. But most of it, I am sure, can be funded through small NGO grants. Because these are small capacity building establishments which are not profit making. It is just getting people out of the doldrums to start having a trust in themselves. So they can do something.
Q: How about your plans for destitute people? How will that be funded? And the accommodation – will there be new blocks of flats in the city or …
I think the city government has to do that. I think this should be a place where they can work, in the suburbs where you can set up in open areas. There are already some like that but there are too few. Some NGOs have institutions making carpets, making Ethiopian shamas, handicraft, carving. But there is a quality problem. So we have to bring in experts to really improve the quality so that tourists can buy them – or you can even export them.
Q: And the improved administration?
The administration will be down to ourselves. We really have to streamline that. That's our first job. Otherwise everything will just be talk. It is not only that it is overstaffed, there is a quality problem. A very serious quality shortage. We have to put key people in these leadership positions so that the response could be much quicker.
Q: How about the water supply and the infrastructure? How would that be funded?
We can't do it by ourselves, with our own funds. There are existing plans. I know about them. I participated in some of these water supply plans. It is already ready. It has been ready for quite some time. And number two, a transport infrastructure plan has also been ready a long time ago. Like electric trains and so on in this city. These plans have already been drawn out. I am sure the World Bank was interested at one time in funding these major rail links within the city. So that it reduces taxi fumes and standing and waiting in line. You can't serve all these people with buses. I think this could start immediately. The design is there.
Q: Why has it not happened up to now?
It was done about 18 years ago. At that time the Derg was in power and nobody would give a loan to the Derg obviously. So it stopped. When this government came – if it had really cared about this city it would have done it and the World Bank would have jumped at the chance of financing this infrastructure.
Q: So, if you win the country as well as Addis, what will you top three priorities be then? You mentioned reforming the banking system earlier. Is that a key priority?
Banking is a system which moves an investment or a retrenchment. The banking has to be freed up, first of all. Second, we also have to allow foreign banks to come here. And then, I am sure, on the back of these banks will come investors. Because they will trust. They will work with their own bank and things will be easier. If you do that, you also make the local banks more competitive and more cohesive. Most probably the local private banks, which are mini-banks in a way, they will come together and form bigger banks. Which means there will also be competition for the foreign banks and the commercial banks. It will all become more active. So that is number one, I believe. Without that, you can talk about development, you can talk about anything, but you won't go anywhere.
Number two, I do believe there needs to be a special office for investors who come here, supporting them from the beginning so they can function here. We need a special office – not what they have at the moment. There is an investment office but when you go there it is “Oh, where is the boss”. I would even arrange to collect people at the airport – it would not be highly costly. Then we could talk to these investors, let them talk freely to the local investors. They don't want to talk to government. They want to talk to their own kind – the investors here. So, if we free up the local investors, the foreign investors will come. It will be a cohesive action which will move things forward.
We also have, at the moment, a real momentum from the people. When there is a change people are really raring to go. And people will work much harder if they have their own elected government. We believe we have to use that momentum to really get things going. And we can do it. We will get really competent people in. They don't have to be here. There are many Ethiopians who are in the World Bank, the UN system, in other African countries – I've worked abroad, I know them. Whatever you pay them they will come. And I think these people need to be put to work. They are all lining up, literally, to come. Those with money and even those without money but with brains and capabilities.
Q: We have looked at banking and attracting investors. What else would be at the top of your list of priorities?
I believe this taxation system needs to be streamlined really. The system at the moment is scaring every local investor into the ground. People have to pay taxes, obviously, there is no problem about that. But, what is the basis of your taxation? There has to be a serious basis. You go into a little shop and they say ‘You pay this, unless you pay a little baksheeh and then you pay only this'. That has to stop. Immediately, it has to stop. There will be no group here who are favoured. At the moment, people are going up to investors and saying – ‘If you work with me you will get that and if you don't you will get this.' There are these things that are not at all tangible…but they are very serious. When an investor comes these days, everyone tries to grab something. And what happens then is that he moves out – he doesn't come back because the future doesn't look right. But here, if you have a clean government – and we can have a clean government with a policy of ‘first mistake and you are out'. If you are willing to be tough, I think you can have a clean government.
Q: From the perspective of Western Europe and America, this year is the 20th anniversary of Live Aid and the 1984/5 famine. What would you do about the whole development and land rights issue?
It depends on how much our majority will be. If we get two thirds, together with our coalition partners, the first issue to tackle is the land issue. The government should take its hands off land – except reforestation and rehabilitation areas. We support either communal ownership or individual ownership. And we consider land as capital. It is completely not in line with the socialist approach of the present government. The farmers will jump at the chance. And the investors can come in like everybody else and say this is my land. So land is a very serious matter. A very, very serious matter. And the people want it. That is why, when the EPRDF claims the rural areas, it is lying, it is cheating. Because our first discussions with people were in the rural areas. And what we told them was – land to the tiller. That's yours. You can sell it. You can keep it. You can transfer it. You can do anything with it. And that is the way we want it to be. Feeing up the economy starts with that.
Posted by aheavens at May 20, 2005 7:32 AM