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Turkish delight

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Born in Izmir/Turkey Berk Baran Ambassador of the Republic of Türkiye to Ethiopia and permanent representative to the African Union he served in Turkish Embassies in Nicosia, Zagreb, Moscow and Kiev. He also served in Permanent Mission of Turkey to UN Office at Geneva as Minister-Counsellor, Deputy Permanent Representative. As of 15 March 2023, he took office as the Ambassador of the Türkiye to Ethiopia and Permanent Representative to the African Union. Capital caught up with him to talk about the two countries bilateral relations and Türkiye-Africa Business and Economic Forum. Excerpts:

Capital: What are the key areas of cooperation and collaboration between Türkiye and Ethiopia, and how have they evolved over time?

Berk Baran: Türkiye has long-standing historical and cultural relations with the Ethiopia, dating back to 19th century. The first diplomatic contact between Türkiye and Ethiopia was in 1896 with the exchange of delegations during the rule of Sultan Abdülhamid II and Emperor Menelik II. Following the opening of the first Ottoman-Turkish Consulate General in Harar in 1912, the first Embassy of the Republic of Türkiye in Sub-Saharan Africa was opened in Addis Ababa in 1926. Ethiopia opened its Embassy in Ankara in 1933.

Mutual high-level visits, the inauguration of Turkish Airlines’ direct flights to Addis Ababa as of April 2006; the establishment of the first TIKA (Turkish Cooperation and Coordination Agency) Office in Addis Ababa in 2005, first in Africa and development aid programs towards Ethiopia have been significant steps which have contributed to the development of our bilateral relations.

Our relations are currently progressing in a positive direction in many ways not only with Ethiopia, but also with other African countries. Our long presence in Addis Ababa, being the political capital of Africa, helps us strengthen our ties with the continent as well.

The trade volume between Türkiye and Ethiopia was US$ 70.8 million with Ethiopia in 2003, while this figure reached to US$ 763.2 million in 2022.

Türkiye has been providing substantial number of undergraduate, graduate and doctorate scholarships to Ethiopian students for twenty years. This also helps not only the business and commercial relations, but also people-to-people relations to strengthen.

Capital: How do you view your country’s role in supporting Ethiopia’s economic development and infrastructure projects?

Berk Baran: Being at the crossroad of Europe, Asia and Africa, Türkiye’s policy of opening up to Ethiopia is not just the reflection of a transient economic expectation. On the contrary, it is the product of a process with strong historical and cultural aspects. It is, foremost, the expression and natural result of the firm feelings of friendship and partnership between Turkish and Ethiopian people.

Türkiye’s priority to engage with Ethiopia has helped facilitate the growth of business and trade relations. Turkish SMEs have particularly started to invest as Ethiopian markets have become more accessible.

The Turkish image and presence have been enhanced by the engagement of private companies, NGOs, and Turkish schools.

Turkish companies have been undertaking major infrastructure and superstructure projects. Our investors have also founded companies producing a wide range of products such as food items, clothes, cables, furniture to electronics in Ethiopia.

In addition, Türkiye has helped to create a significant number of jobs in Ethiopia, unlike some other foreign investors who bring their own workers to Ethiopia.

In order to develop our economic and trade relations Türkiye-Ethiopia 8th Session of the JEC was held in Ankara on 14 January 14, 2021.

Capital: Can you provide insights into the current state of Turkish investments in Ethiopia and the potential for future economic partnerships?

Berk Baran: Ethiopia is an important destination for Turkish investments. Turkish investments in Ethiopia are diversified; covering textiles, construction materials, hygienic products, beverages, leather, cables and furniture. Starting from 2006 to 2023, there are a total of above 200 Turkish owned foreign direct investment projects in Ethiopia.

The capital of those projects is above 10 Billion Ethiopian Birr.

On the other hand, Turkish companies have been investing in construction sector in many different projects including water well drilling.

We are aware of the future investment opportunities in the Ethiopian textile, leather products, fertilizer production, mining as well as the banking sectors.

In banking, for instance, Türkiye has significant know-how and prominent banks, which are strongly positioned in foreign markets. So, we believe that our banks will be able to play important roles in Ethiopian economy, which will contribute to the development of Ethiopia’s banking infrastructure.

Moreover, there is great potential waiting to be tapped in the agriculture and agro-processing sector and we are ready to support Ethiopia’s efforts to diversify its economy beyond coffee.

We do our best to encourage Turkish companies to do business within a win-win understanding in Ethiopia via establishing joint ventures with the Ethiopian private sector in these sectors.

Capital: Could you give detailed information about Türkiye-Africa Business and Economic Forum? And why is this forum important for future economic partnerships between Türkiye and Ethiopia?

Berk Baran: Economic cooperation and trade relations are one of Türkiye’s priorities in the continent. To promote trade relations between Türkiye and African countries, Türkiye organizes Türkiye-Africa economic and business forums periodically in partnership with the African Union in order to regulate and develop trade relations between Türkiye and the continent.

The Foreign Economic Relations Board (DEİK), is set to host the Türkiye-Africa IV. Business and Economic Forum (TABEF) in Istanbul on October 12-13, 2023. The event will be graced by the presence of the President of the Republic of Türkiye, H.E. Recep Tayyip Erdoğan, and the President of the Comoros Union State, who also serves as the Chairperson of the African Union, H.E. Azali Assoumani. With 152 Business Councils spread across the world, DEİK is committed to develop Türkiye’s intercontinental trade and investment through its commercial diplomacy initiatives, and it has now turned its attention to Africa.

The Türkiye-Africa IV. Business and Economic Forum, expected to be attended by high-ranking dignitaries such as Turkish Minister of Trade Prof. Dr. Ömer Bolat, Albert Muchanga, the Commissioner for Economic Development, Trade, Industry, and Mining at the African Union Commission (AUC), Nail Olpak, the President of DEİK, Fuat Tosyalı, the Coordinator President of DEİK/Türkiye-Africa Business Councils, Dr. Amany Asfour, the Acting President of the African Business Council (AfBC), and Ministers of Economy, Trade, and Finance from African countries, as well as H.E. Emine Erdoğan, our First Lady.

The main theme of Türkiye-Africa IV. Business and Economic Forum is “Addressing Challenges, Unlocking Opportunities: Building Stronger Türkiye-Africa Economic Partnerships.” Priority sectors include energy, infrastructure, agriculture, agribusiness, healthcare, tourism, and digital marketing.

Capital: Could you please inform us about the events that will be organized within the scope of the forum?

Berk Baran: During the first day of the forum, there will be panels on “Collaboration in Genetic Industry Production between Türkiye and Africa: Ensuring Sustainability in the Supply Chain,” “Digital Transformation in Africa: Enhancing the Ecosystem of Digital Technologies,” and “Assessing Health Technology: Ensuring Sustainability in the Healthcare Sector and Exploring New Innovative Prospects.”

Simultaneously, there will be Government-to-Business (G2B) sessions focusing on “Opportunities in Infrastructure Investment: Energy, Telecommunications, and Transportation Networks,” “Africa’s Food Security Strategy Policy: Implementing the African Agenda 2063 – Commitments of the Malabo Declaration,” and “Unveiling Tourism and Digital Marketing Technologies: Transforming the Tourism and Hospitality Sector.”

On the second day of the forum, there will be discussions on ” Türkiye -Africa Women Leadership Dialogue”, “Opportunities under the Türkiye and Africa Continental Free Trade Area (AfCFTA)”, and “Investment in Africa, Trade Financing, and Banking Relations with Türkiye.” Additionally, there will be a presentation on “Free Zones and Opportunities.” Throughout the forum, panels, G2B, and B2B meetings will occur simultaneously.

In the “Türkiye-Africa Women Leaders Dialogue” event, both Turkish and African businesswomen will share their experiences in reshaping the landscape of the business world. They will engage in discussions regarding potential areas of collaboration and strategies to promote increased participation of women in leadership positions.

As part of the forum, there will be a panel titled “Opportunities under the Türkiye and Africa Continental Free Trade Area (AfCFTA)” to evaluate the impact of the AfCFTA agreement on Türkiye’s exports. With the participation of the Secretary-General of the African Continental Free Trade Area (AfCFTA), the panel will discuss how AfCFTA is expected to increase intra-Africa trade by 50% and generate an additional US$ 76 billion in income for the world. It is expected that Africa, the world’s largest global free trade zone, will create a free trade market with a population of 1.3 billion and a trade value of US$ 3.4 trillion.

Regarding the panel titled “Investment and Trade Financing and Banking Relations with Türkiye”, Turkish companies have been achieving increasingly successful outcomes in Africa in recent years. Trade and investment financing remains a significant challenge when engaging in business with the African continent. This panel will address important solution proposals aimed at improving access to trade and investment financing by tackling these challenges. Decision-makers responsible for critical projects and investments in Africa will engage in discussions and consultations with financial institutions, alongside representatives from the Turkish and African private sectors, with the goal of exploring concrete business partnerships that will contribute to Africa’s development.

Under the Forum’s program, thematic panels, B2B Bilateral Business Meetings, B2G Meetings and a fair consisting of stands of Turkish and African firms will be organized.

Capital: Which countries and international organizations will participate in the forum and how many participants do you expect?

Berk Baran: The Türkiye-Africa IV. Business and Economic Forum is expected to host over 3,000 participants, including representatives from the African Development Bank (AfDB), the African Export-Import Bank (Afrieximbank), the Turkish Export Credit Bank (Türk Eximbank), international and regional financial institutions, non-governmental organizations (NGOs), chambers of commerce and industry, DEİK/Türkiye-Africa Business Councils Presidents and their counterparts, relevant associations, professional organizations, and entrepreneurs in both Türkiye and Africa, diplomatic mission representatives in Türkiye, as well as media organizations from Türkiye and across the African continent. In Africa, participants are anticipated to come from all countries including Türkiye.

Capital: What is required to participate in the The Türkiye-Africa IV. Business and Economic Forum, what is the registration process?

Berk Baran: All Ethiopian business people can participate in the forum. There is no need to pay any fee to register in the Forum, it is completely free.

IS MEAT HELATHY?

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Nourishment is essential for life. Unlike many species, humans are omnivorous (i.e., both carnivorous and herbivorous.) In the case of the human animal, the optimum balance between meat and non-meat diet has not been conclusively established. Yet, one thing is clear; consumption of excess animal fat causes constriction of blood vessels in the human body, increasing the likelihood of hypertension (high blood pressure). High cholesterol level means the amount of fat within the blood stream is high and not healthy. Strict vegetarians, the vegans, argue there is absolutely no need to consume neither meat nor any other animal bi-products to have a healthy and balanced diet!

To be sure, there are cultures that have avoided consumption of meat for eons (Hindus, etc.) Plenty of modern researches support the vegetarian life style, as healthier than a high fat diet that includes not only meat, but also rich seafood. It seems the enlightened human community has started to reduce or even completely avoid the consumption of animal fat in its various forms. If nutrition science recommends a low fat diet for humans, why do the majority of people in the West stick to a high level of meat/fat consumption? The answer lies not in the scientific domain but rather in the irrationality of the profit system. Don’t forget; so long as there is money to be made, the existing world system will have no qualm in selling poison to humans, so to speak. Remember the three white devils? Fat, sugar and flour (wheat.) Many products that have high level of refined sugar or artificial sweeteners are promoted and sold as if they were heaven on earth. Soft drinks and all sorts of sweets belong to this category. Just observe the amount of money that is being spent to prod the global youth into becoming sugar junkies!

In addition to the above health problems, the production of meat, particularly ‘red meat’, involves many unsavory processes that contribute, rather significantly, to the degradation of our environment, particularly the atmosphere! The green house gases that are released to the atmosphere due to global animal husbandry is very significant compared to many of the emissions from many industrial processes! In the so-called developing countries, feeding domestic animals is still done the traditional way, i.e., animals are allowed to graze the meadow and are not always confined to the barn, exasperating the problem of soil erosion. Ethiopia with one of the largest livestock population in the world (number one in Africa) has been a victim of such practices going back centuries. Grazing has caused continuous soil erosion and the depletion of biodiversity all over the world. What should be done?

From the perspective of both human health as well as the wellbeing of the planet, it is advisable if humans can cut down on their consumption of meat and its byproducts. In this regard, our excessive consumption of meat, particularly in the more affluent urban communities of Ethiopia, like Addis, must be significantly reduced. These days it is not unusual to see young people, even in their twenties afflicted by high level of cholesterol and blood pressure! Diabetes is becoming an epidemic in certain localities, according to health professionals.  To this end, we believe the government should levy an excise tax that is commensurate with that of other needless consumptions. We believe, sin taxes, like levies on alcohol or tobacco must be imposed on excessive meat consumption. These taxes should be levied, mostly on in situ consumption of ‘raw meat’ and ‘tibs’! The measure, besides helping to contribute to the overall health of the nation, will provide the state with an additional source of revenue, if collected effectively and honestly!

Despite incessant pressure from narrow interests, blinded by the money god, we never tire of telling the truth to the public at large, especially if we deem it useful.

This was first published in July 2017

The Chinese alternative: Beijing reveals its vision for the world

Although US talk about globalization was just a farce, it’s still possible to build the real thing – and China claims to have the blueprint

By Timur Fomenko

On Tuesday, China’s government released a new white paper titled “A Global Community of Shared Future: China’s Proposals and Actions.” The paper made an appeal to human unity, arguing that humanity faces common challenges to its survival and future, and therefore must unite and cooperate.

The paper drew a deliberate contrast to the actions of unnamed third parties which it condemned as “bloc politics,” “alliances,” and “Cold War mentality.” It was quite explicitly a Chinese roadmap to its own foreign policy vision for the world, and as such, an alternative manifesto to American unipolarity.

If the US is a contemporary opponent of globalization, China is its strongest advocate. While America wants to reserve its privileges and kick away the ladder developing countries can use to rise and become prosperous, China envisions openness as the only path to its own advancement and encourages other countries to join it. These two contrasting visions form a critical juncture in the world’s future path, and ultimately the rise of China will be pivotal in whether a multipolar world can succeed, or the US will hold on to its dominance forever.

The US-led Western order

For the past 400 years, the international system has been shaped by an exclusive group of countries who have built an order designed to uphold their respective economic, commercial, technological, and military privileges. This order was built from European colonial empires, and later handed over to the US by the middle of the 20th century. It derives its power from exacerbating inequality and dominance over the states of the Global South, keeping access to capital conditional on ideological, military, and political subjugation. In maintaining this system, only states that have endorsed the order, such as for example Japan or South Korea, have been allowed to rise to prosperity, while states that have opposed it have been deliberately isolated from key financial and technological markets. The US sits atop the hierarchy, with a network of vassals who maintain their privileges by being part of the system, in particular the former empires of Britain, France, Germany and, as mentioned, Japan.

New VAT amendments underway to ease mobile money services

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By Muluken Yewondwossen

The financial regulator, National Bank of Ethiopia (NBE), expresses hope for change following the tweaks being made to the value added tax (VAT) proclamation amendment which is set to remedy the challenges that face the mobile money service.

The regulatory body and service providers, particularly Ethio Telecom’s Telebirr, have been for quite a while raising concerns regarding the tax issue that were imposed on the mobile money partners.

As Capital learnt through those close to the issue, leaders at Telebirr and Ministry of Revenue (MoR) have held discussions to ease the challenge, but the much needed change is yet to materialize.

Whilst addressing the matter, Bruk Adhana, Head of Telebirr, a few weeks ago told Capital that he had a meeting with officials at MoR, however he was reluctant to reveal the outcome.

As Capital gathered, the mobile money service providers have shared the case with the financial industry regulatory body for a feasible way forward.

Solomon Damtew, Acting Director for the Payment and Settlement Systems Directorate at NBE, recalled that the issue is associated with financial inclusion and National Digital Payment Strategy (NDPS) that the government highly demanded to expand for the reach to the financial excluded society.

As Solomon explains, currently, the mobile money service agents are supposed to pay tax from their commissions that they earn from mobile money service providers.

“The primary concept of expanding mobile money service is addressing the public in remote areas, while agents that are mostly kiosks and small shops at the periphery and rural areas do not have business license or tax registration, thus do not have receipts. So when mobile service providers pay commissions to agents they are not issued receipts, which is one of the challenges that service providers face,” Solomon elaborated on the issue.

He further cited that agents are also expected to pay tax from their commission payment, “One of our duties is insuring the expansion of financial service and financial inclusion and the attainment of the enlargement of agent service. To meet the target we believe that the mobile money agent service shall be exempted from tax levy.”

He told Capital that he hoped that the relevant tax body would be interested to ease the situation, while he reminded that there were also interests to expand the government’s revenue stream, “The case shall be seen in a balanced manner under the financial inclusion and revenue expansion.”

As he highlighted, his office is closely following the case “We expected the issue to be solved on the new VAT proclamation that is expected to be amended in this budget year.”

Agent networks are one of the key pillars for the successful implementation of mobile money particularly addressing the society in very remote areas.

Telebirr, the biggest mobile money service provider which launched its business about two and half years ago has enabled to recruit over 110,000 agents.

With mobile banking and mobile money services expanding, the NBE estimates that as of September 2022, there were more than 185,000 agents in the country.

At the end of the budget year, Ethio Telecom’s Telebirr had 34.3 million subscribers with a total transaction value of 679.2 billion birr.

Much like Ethio Telecom, Safaricom Ethiopia has also launched its well know mobile money service, M-Pesa in August.

On GSMA’s mobile money report launching event and panel discussion held late July, Solomon said that NBE had taken prudent steps to revise its directive to best realize the targets set by NDPS, by boosting the role of agents whilst splitting certain weights to banks and other financial institutions.

He pointed out that digital payment schemes are registering tremendous growth despite being relatively new in the country.

The Use of Agents Directive, issued April 1, 2020, cited that it allowed broader access to agent network management as the key enabler to expand agent services.

As Solomon indicated, the directive was a comprehensive development to serve both agents for regular bank services and mobile money services, “We are planning to split it.”

“The current Use of Agent Directive is more of an enabler for further financial services. And of course, we need to make more awareness to provide more clarification on the intention of the directive.” he said.

As Solomon highlighted, in order to register the required growth, the central bank has harbored a conducive environment by backing the sector on issuing relevant laws and directives, “The directives in the digital payment and agent services has created an enabling environment for the system to flourish.”

He elaborated that regarding boosting the role of agents, there will be clarifications on the directive and some changes will follow suit to realize NDPS’ success.

According to the latest report of GSMA in Ethiopia, the number of agents has been growing steadily, albeit slightly lower than its peers.

The wait for IMF financial aid continues

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By our staff reporter

Ethiopia’s demand for access to financial support from the International Monetary Fund (IMF) still remains in the grey despite over half a year wait.

In the latest press briefing held on Thursday, September 28 the Director of Communication Department for the IMF, Julie Kozack, shared economic support progresses but did however not touch upon the prior request.

As Julie expressed, discussions are underway on economic policies and reforms that could potentially be supported by an IMF program, “An IMF program would support the Homegrown Economic Reform Agenda (HGER II) to help address macroeconomic vulnerabilities and help unlock Ethiopia’s considerable economic potential.”

The briefing that the Director mentioned about Ethiopia did however not have any progress compared with similar statements on the regular press conference that she cited the past months.

As reports reveal, Ethiopia has been looking for a fund worth about USD two billion from the international lender to support its HGER II. IMF on its end had announced that it expects support and assurance from Ethiopian partners and financers to make available the requested amount of money.

On her briefing, Kozack said that a new program would also require clear commitments from development partners and financing assurances from creditors under the G20 Commons Framework (CF) to ensure that it can meet its objectives.

Early 2021, Ethiopia was a pioneer when it came to demanding for a debt rework under CF when the G20 countries showed their keen interest to support poor countries for re-profiling poor countries that were on economic pressure in connection to the global pandemic debt.

However, the country is yet to get the results it hoped for from its global partners. This derailment is thought to stem from the northern Ethiopia conflict that was sparked in November 2020, where western countries pressured the central government because of the war. As part of pressuring the government, they did not show their interest to support Ethiopia’s request for debt rework that made other major financers like China to pause from any action.

The IMF Director on her briefing reminded that Ethiopia has been the subject of multiple shocks, including six consecutive years of drought, the pandemic, domestic conflict, and the impact of Russia Ukraine war, “Economic challenges are significant, including food insecurity, humanitarian needs, post conflict reconstruction, high inflation, and shortages of foreign exchange and some imported goods.” she said adding, “We have received a request for financial assistance to help Ethiopia address these challenges.”

However demands that IMF put were not fulfilled, which caused delays for the Ethiopian wants to access fund from the IMF.

To support the first HGER to maintain macroeconomic stability and improve living standards, IMF approved USD 2.9 billion through a three year arrangements under the Extended Credit Facility and the Extended Fund Facility (EFF) for Ethiopia.

But only about 10 percent of the approved amounts were dispersed while the remaining amount was paused because of the conflict between the central government and TPLF.

The IMF mission had visited Addis Ababa on late March in a ten day visit to hold discussions with the relevant authorities’ which had requests for IMF to support their reform program. Since then the international partner stated that discussions were underway to approve the requested fund. In different occasions, including the Spring IMF and the World Bank joint meeting and Prime Minister Abiy Ahmed’s US visit, Ethiopian officials have got a chance to meet with IMF leaders but any significant development is not seen.

IMF stated that the country debt sustainability is one of the issues mentioned regarding approving the new fund but there is also some policy changes that it looked into.

However some sources from the government’s side told Capital that following the peace agreement between the central government and TPLF in November 2022 some major partners like the US, which is the biggest shareholder of IMF, are looking for further implementation of the peace agreement on the ground in order to roll out financial support. Experts said that further discussions may be in the works for the upcoming World Bank-IMF annual meeting that will be held next week in Ma

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