About five months ago, a fellow who was into car assembly, (more like import tariff avoiding enterprise) absconded to his adopted country, bankrupting the company (he was a member of the diaspora.) About a couple of hundreds who had advanced money towards the purchase of the assembled vehicles were left stranded on the streets, of course without cars. The total amount that disappeared was not much, at least on the scale of Ethiopia’s recent well-endowed oligarchs, [probably in the low hundreds of mils (millions of birr)]! It is presumed the assembly plant’s most sophisticated tools were the sturdy screwdriver and that old friend of the handyman, the ever-reliable all-purpose wrench. The local content of this enterprise was nothing more than human labor, to be sure, quite skilled in handling the above tools. In the auto industries abroad, well-coordinated dexterous robots have replaced such type of labor, so in effect, if it weren’t for government largess (in the form of duty waiver, credit, land, etc) the business wouldn’t have seen the light of day, day one! Ironically, the very chrome piece on the body of the vehicles proclaiming local make/names were themselves imported from China; so much for our unthinking industrialization!
Months later, a fellow desirous of becoming a steel magnet quit his venture and promptly left the country, most likely to the USA. Again, we presume the new venture didn’t realize the conversion margin in steel making is rather thin, razor thin to be more visual. From the look of things, the business started big, in the tradition of our oligarchs (more than financed with credit and depending on the strength of one’s connection, an un-payable loan.) As soon as financing was approved the company went on a buying binge; fancy cars for executives, sales force, probably for a mistress of the godfather behind the project, etc, etc. Before the roughing mill was installed, executives were pouring, not liquid steel, but Champaign all over the place.
This reminds us of steel mill operations in places like India/China. A mill that does (melts and rolls) over 3 million tons of rebar (reinforcement bars) annually, can hardly afford fancy cars/luxury travel/entertainments for its top executives, let alone other things. The typical office on site would probably be built from steel scraps that lie around. Of course there are differences between them and us. There, they are knowledgeable entrepreneurs who have to sweat it out (on a daily basis) to keep going. Here, our so-called industrialists are, by and large, well-connected individuals who are likely to be challenged by the elementary multiplication tables. As a result, they are unable to keep abreast (even in their own narrow field) with the changing technology/price structures evolving around the world. The bankers that are financing such businesses usually know next to nothing about complex projects. What they are good at is fiddling with phony numbers to have projects financed, so that they can get their cuts. Our consultants/analysts are paid to convince all and sundry that miracles do happen every day! Unfortunately, most of Ethiopia’s large-scale industrial projects (relatively speaking) leverage the oligarchs-banksters-politicos nexus and seem to go nowhere. In this particular case for example, the leading financier (government bank) is in hock roughly for a billion birr, to say nothing about the fate of other creditors. To date, (last ten years) more than four mills (mini steel mills) have gone under, big time!
Only weeks ago one of the more visible businessmen whose diverse interests range from the likes of investment banking and real estate/hotels, to plastic processing/water bottling also departed to the good old USA. You guessed it; he was also a member of the diaspora! The company he ran/started was hoping to build thousands of condos on multiple sites in Addis. Apparently his project was planned without much consultation/coordination with the city council. As EPRDF began to review/interrogate its creeping oligarchic tendency (within the party leadership) along with the attendant shortsighted policies, particularly in the most crucial area of land use, the fellow’s project promptly ran aground.
To be sure, the business of real estate is nothing more than a business of speculation and it usually appeals to the beast (human mass), unsophisticated as it is. Remember our oft repeated dictum; ‘the beast’s forte is not inquiry/knowledge, etc, rather, it is collective and ultimate conscience.’ That is why the world is stuck with housing units numbering around 3 million in Spain, 20 million in the USA, about 70 million in China, etc, all sitting pretty and vacant. It is always easy to swindle the beast in the speculative business of real estate. All one needs is pretty pictures/posters of houses/condos and soon checks will start flooding the swindler’s account! This latest gimmick in Addis has already cost the gullible well over 2 billions. Remember the old adage: ‘In due course fools will always be liberated from their money.’
It is not only in Ethiopia oligarchs are facing problems. This past week the Cyprus government seriously considered levying a 10% tax on deposits of over 100,000 Euro. The Russian oligarchs would be the ones that will suffer the most. Nonetheless, the tightly knit family of global oligarchy is getting scared by the day as the global beast gradually increases its demand of dismantling the revered edifice of the oligarchs’ institutions, such as the global banking cartel, etc. Moreover, oligarchs’ indecent/imbecile activities that fly off the beast’s hungry face clearly are deemed as outright provocations. See the articles on page 2, 50 and 51. Unfortunately Ethiopia’s ascending oligarchs also share the same degenerate culture of their spiritual leaders abroad. No wonder the late president argued: “We must confront the privileged elite who have destroyed a large part of the world.” Hugo Chavez. Good Day!