The U.S. Embassy in Addis Ababa partnered with U.S. Fulbright Scholar, Professor Tsegaye Nega, to host a demonstration event to showcase efficient cook stoves that can eliminate more than 95% of indoor air pollution and reduce fuel requirements by 90%. In addition to cooking, the stoves can also be used to light a room or charge a cell phone.
Every year over 60,000 people, mostly women and children die in Ethiopia because of indoor air pollution arising from the use of solid fuels (i.e., wood, cow dung, crop residue, and charcoal) for cooking and heating using open fires or traditional stoves. Another 5 million suffer respiratory diseases. The environmental impact of these activities is equally serious: to supply charcoal to urban areas of Ethiopia alone, the equivalent of approximately 29,000 hectares of forest is cleared every year. This is the same as the combined areas of Bole, Akaki, Addis Ketema, Arada, and Gulele sub cities of Addis Ababa.
On August 1st, 2018, Professor Nega and his colleagues launched a field test of what they call the “stove + pellets + charcoal buyback” business model in Addis Ababa. This three-prong approach seeks to demonstrate that more efficient cookstoves make economic.
U.S. Embassy partners with Fulbright Scholar to showcase how efficient cook stoves reduce pollution, save fuel
The imperative of peace-building on economic development
The private sector’s ability to prosper is imperative to job creation and investments necessary for human security. Armed conflict and post-conflict situations constitute severe constraints on economic life and present a hostile environment to business and investments. Economic analysts, however, seriously argued that the positive connections between the role and needs of the private sector and peaceful development are however still less explored.
Considering the multiple risks and associated high costs of violence, a peaceful development and improved socio-economic conditions typically converge with the self-interest of businesses with a long-term objective. The private sector, international and local, has the ability to contribute in at least two rather different ways: by conducting its core business and by actively promoting certain elements of peace-building.
Taking years of practical experience from private sector development in complex environments as point of departure, Sofia Svingby, a private sector development specialist at Stockholm University argue that through conscious engagement and active dialogue promotion business can and does take on an important role for both economic development and peace-building in fragile contexts.
While potentially highly profitable, fragile or complex environments present a multitude of challenges for an international company. According to Sofia Svingby, this risk-opportunity balance must be carefully managed to cater for long-term success. Weak formal institutions, opaque power structures, commercial and political interdependencies and ethnic tension are some examples of particular challenges of the fragile context any business company needs to navigate.
The private sector’s main contribution to developing economies and societies stems from its core activity of its ability to offer products and services meeting local demand, and the related effects on job creation and economic growth. Brian Ganson, Associate Professor at the Business School of Stellenbosch University stated that in their interaction with suppliers, consumers, employees and governments and institutions, companies may transfer know-how, promote peaceful tools of conflict management and good governance through their core business conduct. Herein lie both the inherent challenge and opportunity. According to him a company’s ability to steer towards sustainably successful business models rather than short-sighted and exploitative practices is pivotal.
Brian Ganson, however, argued that in order to be successful, companies can not go about doing ‘business as usual’. In complex or fragile environments, operations and products need to contribute to a virtuous rather than vicious circle of economic and societal development. If implementing conflict sensitive approaches in strategies and operations, companies can facilitate economic development while also contributing to establishing essential conditions for peace-building.
Brian Ganson further noted that a context-sensitive governance model, including means of ensuring local compliance with the corporate code of conduct, is required, but key to implementing such approaches is leadership. Leaders’ ability to navigate complex environments which is harvesting opportunity and managing risk determines if a business can successfully provide benefit to stakeholders, employees and society. In order to do this, leaders need to incorporate an attitude of attentiveness to any aspects in the local context that may influence the company’s operations. According to Sofia Svingby, the key attribute of such an attitude is inquisitiveness, continuously striving to understand the environment in which the company operates.
Joanna Buckley, development economists at Oxford Policy Management Consultancy on her part argued that this approach helps business leaders anticipate and manage the way the company influences the local context, positively or negatively. Moreover, and equally important, it supports the management’s grasp on how the local context, for instance its conflict dynamics, affects the company and its ability to meet the financial, reputational, legal, and other requirements placed on international firms.
Joanna Buckley explained that in addition to conducting business sustainably and responsibly, private sector actors such as individual companies, multinational or local, as well as organised business, may offer channels and methods for trust-building outside the traditional arenas. This potential can be manifested by a well-functioning labour market dialogue or improved interaction between private sector and policymakers. The ability of individual employers or that of business organisations to contribute to conflict resolution, either at the workplace level or in society at large, may be decisive in establishing a dialogue-centred rather than conflict-oriented interaction.
The fact that companies often have an acute awareness of the challenges facing citizens in local communities is sometimes overlooked. Organised business on local and national level, meanwhile, can have an important role to play in holding governments and public institutions accountable. The achievements of the 2015 Nobel Peace Prize laureates, the Tunisian Quartet, clearly demonstrate how business and labour market parties, when engaged in broad cooperation, were able to provide an alternative, peaceful political process at a time when the country was on the brink of civil war.
Jonas Borglin, a known Swedish private sector and industrial analyst argued that business should be viewed and view itself as a stakeholder in sustainable development, even though a company’s status as a commercial entity may render it difficult to engage in far-reaching development work as such. The interests, capacity and mandate of companies and business associations need to be acknowledged if business actors’ potential in building resilient, prosperous societies is to be efficiently utilised.
According to Jonas Borglin, sustainable, responsible business practices and values are not complementary features of long-term successful business, but a pre-requisite. As such, the core business and the way it is conducted is the major contribution of a company not only as a source of financing, innovation, job creation and growth, but through its impact on stability and governance issues, including anti-corruption, peace and security and the rule of law.
ETHIOPIA & THE HORN II
How can unity of purpose come to fruition in a world of uncompromising identity politics? This is the real challenge facing Africa. The Horn is probably more prone to this malaise than many of the other regions on the continent. Here is the dilemma. On one hand, there is the realization that Africa’s fate is doomed unless Africans forge broad and meaningful alliance against the reigning polarizing globalization (not excluding wars, etc.) On the other hand, this Pan African sentiment (easily said than done) is confronting the formidable primordial forces of identity politics that work against the unifying drive. How is one to reconcile this? So far and outside of the usual empty rhetoric, (the AU vision, etc.) Africans and their leaders have conspicuously failed to articulate and implement durable strategies that can pacify the elemental sentiment of kinship to allow diverse, yet cohesive, political entities to take deep root! See Wight’s article next column and others on page 41.
The so-called REC’s (Regional Economic Cooperation, like COMESA, ECOWAS, etc.), which were initiated by the formal states to serve as building blocks of continental unity, might not stand the first serious brawls, especially if these incursions are instigated by hyper-ethnicized sheeple (human mass.) This top down concoction is almost exclusively focused on the mercantilist logic of exchange and accumulation, which in turn is based on the ideology of greed, sanctified by the modern world system. Put together, such schemes, mostly pushed by the narrative of the metropolis, do not consider the real issue of identity politics that obtains on the African ground. Countries that looked relatively homogenous like Somalia, Libya, etc., have succumbed to identity politics of much lesser intensity than what we are currently facing in the broader Horn. Imagine if this ontological conviction takes over the imagination of the sheeplet (the youth) in a seriously diverse country like Ethiopia! With some luck, the Horn can potentially avoid such nightmares if its collective leadership genuinely focuses on issues that are common to all and sundry. Unfortunately, after the demise of the socialisms, USSR, et al, and the ascendance of neoliberalism, critical thinking was sacrificed on the altar of the accumulation god. Would be articulators, revolutionaries, humanists, etc., in general, those who used to be genuinely concerned about the welfare and liberation of collective humanity, were systemically marginalized/ignored/disregarded, both by the global power that be, as well as their minions in the peripheries. The result; countries in Africa are mostly run by zombies with hardly any knowledge about the workings of the modern world system. The modern world system is sustained by systemically leveraging racism, religion, ethnicity, sexism, etc. all across the globe!
Be that as it may, the Horn has to tackle its myriad problems intelligently/creatively, by hook or a crook; if anything, at least to avoid the worst possible outcomes that can easily lead to utter chaos and regional instability! To those well disposed, Ethiopia can still exert a ‘pulling effect’ on the other countries of the Horn. Ethiopia has a large area inhabited by several clans of the Somali ethnic groups that is adjoined by Somalia (Ogaden). In the North, Ethiopia has a large area inhabited by the Tigreans, adjoining Eritrea (Tigray). Ethiopia has a large area inhabited by the Afaris, adjoining Djibouti and Eritrea (Afar). Again, Ethiopia has a large area inhabited by the Nour, Dinka, etc. adjoining South Sudan (Gambella). Ditto Beneshangul and Borena. It is only Ethiopia that has, within its political jurisdiction, all the diverse nations and nationalities of the Horn, however defined! On the other hand, the other Horn countries lack such a full spectrum ethnic mix. For example, Eritrea doesn’t have Somalis or even Oromos in any significant number. By the same token, Somalia doesn’t have noticeable number of Tigryans in its territory, etc., etc. This wide encapsulation of (Ethiopia’s) diversity is an asset in its own right and can help build confidence amongst the peoples of the Horn. Obviously, this reality is a two-sided sword. Handled properly and wisely, Ethiopia’s composition can help bring the peoples of the Horn together and might also serve as a rudimentary template for potential consolidations elsewhere in Africa. Absent capable leadership to handle the growing unbridled primordial instincts, proliferating disturbances can destabilize the region as well as the far away lands of the Middle East, Europe, etc.!
We admit, quality leadership has proved difficult to come by, almost everywhere. Shallow demagogues with psychopathic streak always craving for power, continue to brainwash and goad the gullible African sheeple into heinous acts, which are only intended to serve the interests of the criminally inclined. The African Sheeple has to start interrogating some of its elite whose loyalty to the continent/people is suspect. A number of these characters are only interested in collecting crumbs from their foreign masters for massively undermining their poor sheeples and states, in all possible ways! In the absence of committed indigenous leadership with sufficient caliber or what Gramsci, (the radical philosopher early 20th century) labeled ‘organic intellectuals’, our future remains, at best, precarious! When ethnic affiliation overrides long honed collective values, there isn’t much one can do. For instance, when next to kin is engaged in atrocities/genocide against members of another ethnic group, the rational and decent thing to do is to bring the culprit to justice. But when his clan is out in force to protect him from justice, the time tested collective civilized existence is going to be undermined severely! Enlightened leadership, based on common human values must take the lead if we are to survive, let alone flourish!
To be fair, capitalist modernity to which all African nation states have pledged alliance to, is failing them left and right. Critical discourses that challenge the prevailing polarization are no more encouraged or even allowed by the status quo! The Horn will not get very far if it adheres to the existing unsustainable nature-destroying paradigm that passes for ‘development.’ We will try to interrogate the prevailing economic narrative that dominates social thoughts, particularly as it pertains to the Horn’s future, in our next installment. In the mean time, we should remind ourselves that we could always learn from history, with a view to employ the various lessons in our endeavor. Here is a statement from one of the unifiers/consolidators of 19th century Europe. “Only a fool learns from his own mistakes. The wise man learns from the mistakes of others.” Otto von Bismarck. Good Day!
New Regional Ports, New Opportunities
Since the coming to power of Abiy Ahmed (PhD) there have been many social and political changes, not only in Ethiopia but also in the region. Domestically, political prisoners have been released, opposition figures have returned from abroad, religious leaders have reconciled.
Ethiopia’s international relations have also changed as the PM visited regional countries, first stopping at Djibouti, the major logistical hub for Ethiopia for the past 20 years. He also traveled to Gulf States and other neighbors and restored peace with previous rival Eritrea.
His visit to Asmara, which was the first at this level in two decades, brought new and unexpected options for the country since the two leaders agreed to use ports in Eritrea to import and export cargo from Ethiopia.
Officials at the Ethiopian Maritime Affairs Authority (EMAA) recalled that when he visited Djibouti in April, the PM agreed to partner with the Djibouti government to develop a port dedicated to Ethiopia.
They both agreed to swap mega infrastructure projects which served both nations.
“It may indicate that Ethiopia will get a share of the already developed port or a port planned for development in Djibouti as opposed to establishing a new one,” an expert said.
During his visit to Kenya, Sudan and Somalia the PM also met with leaders of those states and one thing they reflected upon was potentially developing logistical and port facilities via partnerships. “We have been in the process of observing the best way to take advantage of using new logistics facilities in neighboring countries,” an expert at EMAA said, noting that Ethiopia is the most populated nation without sea outlets in the world.
“We are still in the process but now we have a lot of work to handle because the government is interested in working with regional countries on port development including Djibouti, which has been our port ally for the last 20 years,” he added.
Eritrea, the former province of Ethiopia, was the major port for Ethiopia until 1998 when the border conflict erupted. Ethiopia had been using Assab port, which is 887km north east of Addis Ababa, as a major logistics hub, while Massawa is also close to the northern part of the country but it is 1,187km north of Addis Ababa.
According to the information that Capital obtained from EMAA the Eritrean government says Massawa is ready to serve shipments to and from Ethiopia.
“Even though Eritrea has made this offer, it is far from the center so we are mainly interested in using the port at Assab, but we will look what possibilities there are for logistics in northern Ethiopia via Massawa, which is about 400 km from Mekele, the capital of Tigrai,” another expert said.
A source at EMAA said, the government has already formed a taskforce to speak with Eritrean officials about how best to utilize Assab.
Mekonnen Abera, Director General of EMAA, confirmed that a taskforce group would talk about the use of Assab when they travel to Eritrea. He told Capital that this would occur in the near future but declined to give a specific time.
“We don’t know the current condition of Assab in terms of being able to anchor vessels at the berth. It has to be confirmed and there are some other technical issues,” one source added.
In the last twenty years Ethiopia had been using ports at Djibouti which has undertaken massive logistics developments to accommodate Ethiopia’s growing demand.
In the past few years Djibouti has inaugurated new ports and expanded existing ones, making the country’s port capacity the most viable in the region, and it continues to construct new facilities worth billions of USD.
In July, Djibouti launched the Djibouti International Free Trade Zone (DIFTZ) which will be of huge importance for Ethiopian logistics companies. According to a statement Capital obtained from Djibouti’s Ports and Free Zones Authority (DPFZA) regarding the trade zone, this is only the pilot phase of the project and the DIFTZ will continue to be expanded, welcoming more and more Ethiopian businesses. “As the DIFTZ grows, it will foster trade opportunities for the whole region, not only Ethiopia,” it added.
Djibouti still has huge influence on port services, more than Eritrea, said Daniel Zemichael, Chief Executive of Freighters International Plc and veteran shipping and logistics expert with over 41 years of experience. Djibouti has built a huge and unparalleled efficiency handling containers in the horn. “It may take several years for others to reach the current capacity of Djibouti,” he pointed out.
Experts say that Assab is the closest port to Ethiopia at 887km in distance but they note that the road, which is about 60km from port to the border of Ethiopia, on the Eritrean side, may need significant re-construction.
“When you see the distance from Djibouti ports to Ethiopia via Galafi it is about 910km which is a bit further than Assab but the asphalt road to Djibouti via Dire Dawa will soon open so the distance will become closer than all other ports in the region,” an expert said. The distance from Addis Ababa to Djibouti via Dire Dawa would be about 800km only. Experts said that if road via Mieso to Dire Dawa is functional the distance could be reduced to 780 km.
In addition, because of the new railway network the distance is 750km from ports in Djibouti to Addis Ababa, which is also more feasible, according to experts.
Daniel argues that Assab could be a potential competitor to Djibouti for bulk cargos. “Cargos like fertilizer, wheat and steel can be imported via Assab at a competitive price,” Daniel explained. “But when you come to container cargos Djibouti will continue to be a dominant player for the coming ten years.”
Storage capacity at Assab may not be as competitive as the facility in Djibouti.
The depth of the water at Assab is not like Djibouti, which has a natural depth for the berthing of huge deadweight (DWT) vessels. According to Mekonnen, the vessels that Ethiopia has are medium size vessels that can berth at Assab. However, cargo that comes via other vessels with huge DWT should berth at Djibouti.
Experts say that the current move of the PM and his decision to develop a sea port jointly with the given countries will have a positive impact on Ethiopia’s logistical services.
According to Daniel, Abiy’s strategy is different. “His attitude is that Ethiopia must have a say on the partnership, investment and decisions of the regional logistics development, which is a proper move.” “Even though you may not have full rights and control, you have a say,” he added.
“Using ports of sovereign states always comes with challenges since it is not like the European trading community. Countries have their own local rules and regulations that may challenge the operation of Ethiopia, but expanding market options will contribute to competitive services and prices for Ethiopia,” Daniel said.
Capital asked DPFZA if the current move of Ethiopia is good for business.
Mohamed Aref Mohamed, Head of the Marketing Department of DPFZA, told Capital that Djibouti welcomes free and fair competition. He said that for the last three decades, Djibouti has been a trans- shipment hub for the Red Sea and East African ports, and continues to be more than ever. “We are linking countries to one of the busiest maritime trade routes in the world,” he said.
“Indeed, our infrastructure capacity is far larger than Djibouti and Ethiopia’s external trade. Our relationship with Ethiopia is of vital importance but Djibouti’s facilities are strategic for the whole region. Our ports are designed to be a transshipment hub and have sufficient capacity volume to service Mombasa, Dar es Salaam, Durban, Sudan, Aden, Berbera and Massawa, which have served for many decades (is not a new business),” he added in his emailed response.
He argued that as the economic potential of the region becomes unleashed, demand for additional ports would be expected to increase; therefore, Djibouti actually needs to continue with its program of world class logistics infrastructure building.
“It is worth noting that our relationship with other countries also continues to flourish; following recent developments, South Sudan will once again be using our ports,” he wrote.
EMAA asserts that Djibouti will continue coming up with better services and resolving challenges.
When asked about the possibility of Djibouti applying a tariff adjustment in order to be a dominant actor in the region’s logistics sector, Aref Mohamed stated that Djibouti’s port infrastructures are world class standard and very competitive. “Tariffs for general cargo have not increased in Djibouti since 1981, and container tariffs since 2008; and we have even decreased the tariffs applied by the logistics companies.”
“However, our focus is not on tariffs but delivering the most efficient service. It is well known that costs generated by inefficiency are higher than port service charges. It is for this reason that we have focused our competition strategy on efficiency, not on tariffs,” Mr. Mohamed added.
Recently at a presentation in Djibouti, the Djiboutian Minister of Economy and Finance Ilyas Moussa Dawaleh said that his country is working to take the major share of the regional logistics sector with better services and competitive prices.
In December 2017 Dawaleh reckoned that Ethiopia may start using Assab port in the near future. “It is not worrying to Djibouti, which is working to expand its logistics facilities aggressively, since the country is targeting not only Ethiopia but other land locked countries in the region and the western part of African states,” he said.
The DPFZA’s marketing head also stated that his authority is not worried about Ethiopia using Eritrean ports. “We are more than happy that Ethiopia has alternative seaports at its disposition. International port services charges are applied across the board and will become more competitive with the expansion of the number of ports in the region. This is beneficial to everyone – ports operators and customers alike,” he said.
Aref Mohamed said the recent dispute concerning DP World and the Doraleh Container Terminal (DCT) would not have any negative impact on the logistics sector or Ethiopia and Djibouti. He said that Djibouti has six world class ports and DCT is one of them. “DP World was a minority shareholder of DCT, with 33% of the shares and on February 22nd 2018, the management of the port changed, and DP World is not in charge anymore. Since then, the operations have significantly improved – berth productivity has increased from 70 moves/berth per hour to 110 moves/berth per hour and the traffic volume has increased by 32 percent,” he added.
“This is good news for Ethiopia and for Djibouti; the foreign trade of both countries will benefit from the new high levels of productivity that will cut down costs. Our bilateral trade relationship will also be strengthened by Ethiopia’s ability to use the deep-sea port to accommodate large vessels, carrying cargo for the fast growing economy,” he explained.
“In truth, our main focus is developing world class infrastructure to serve some of the most dynamic economies of the world. We continue to focus on this and will not allow this dispute to impede progress in this respect,” he concluded.
