It is a shocking surprise but the US dollar has actually gone down on the black market over the past week, Capital learned.
People who closely follow the parallel market, have noticed the trend and some experts think it may be a precursor of significant change.
According to Capital’s observation the market has been saturating with dollars every day this week. For instance a week ago the rate stood at 37 birr per USD, while the legal market or bank exchange rate is 27.27 birr to one USD.
The difference between the parallel market and the legal one had been over 36 percent, a record high on the exchange market.
People who trade on the black market that Capital interviewed said that they could not understand the reason for the sharp drop in the exchange rate over the past seven days. Right now they are not interested in buying the dollar or other main hard currencies because they can’t currently speculate about the market’s trend.
According to the information that Capital obtained from parallel market traders, who refused to be named, they are afraid that hard currency they bought will devalue.
Now there is actually a larger supply of dollars on the black market than demand, they added.
According to the traders the rate of a USD went down to 32 birr on Friday July 6, from 34.50 birr a day before and to 28 birr on Saturday. “We have observed significant decrease every day,” one of the illegal hard currency buyers told Capital. “We don’t know the reason this happened,” he added.
According to the market actors on Friday June 29 the rate was 37 birr for a USD. That rate began to drop last Saturday.
The hard currency shortage, the stagnation of export earnings and illegal market or contraband had been the main reason for the rising black market rate besides for those who use it for illicit means or collect hard currency in relation to past political instability in the country.
Observers stated that some the FDIs’ were also involved in collecting foreign currency from the parallel market, which caused the black market rate to skyrocket.
Before the government devaluated the birr by 15 percent in October 11, 2017 the black market was stood around 27 birr for a USD, while immediately after the devaluation it escalated to 33 birr. For a long time it was about 25 percent higher than the legal market. However in the past few months the parallel market frequently increased and the gap with the bank rate widened up to 36 percent.
Experts who closely followed the sector commented that the black market reduction in the past week is a result of relative stability in the country and more hard currency has come into the country since the new PM took office.
“Even though there are several reasons for the reduction of the rate of the parallel market, the government has been working to control illegal business or contraband and illegal hard currency flow via border areas at the eastern, southern and western parts of the country,” experts explained.
“The government’s empowerment to control contraband has forced illegal actors to reduce trading foreign currency from the black market,” experts explained.
Regions like Oromia are also working strongly to control the contraband goods entering the county illegally.
This trade has been one of the sources of conflict along the Somali and Oromia regions. The former PM Hailemariam Desalegn stated that the conflict and the displacement of Ethiopians from the Somali region by the regional special force (Leyu Hayl) are directly related with the contraband business that the Oromia tried to control.
Dollar price goes down on black market
IS ABYE AHMED A LIBERAL OR A PROGRESSIVE?
Let’s change a bit the ethnic discourse and ask who from Dr. Abye Ahmed or the late Meles Zenawi is considered a liberal or a progressive?
For now, let’s define a ‘Liberal’ (in common speech) as a capitalist, who recognizes the flaws of capitalism and is dedicated to remedying them though taxation; and a ‘Progressive’ would be one who supports change and expect the state to enforce it; a progressive will gladly strip the individual of liberty in the name of progress.
There may not be consensus on these definitions, but that’s okay. These days it’s better to argue over such concepts than ethnic politicking. At least you can change your stance from being a liberal to being a progressive, or vice versa, or even if you are on the losing side today, you can be a member of winning electoral coalition at some time in the future.
I know I’m painting a very complex issue with one brush, but I believe this ‘fact-ish’ comparison may enlighten us a bit on where we came from and where we are heading as a nation.
On Nationalism
Dr. Abye – is just like President Trump, he favors Ethiopia First. We have seen him travelling from one corner of the country to the other, pleading for unity of the country.
Ato Meles – was all about Tigray. He used fear of the Oromos and Amharas coming together to fire up his vision of Tigray nationalism.
On political prisoners
Ato Meles – hardly had any problem throwing his opponents to jail.
Dr. Abye – is all for releasing ‘political prisoners’ wherever they are, including those accused of committing bigger crimes.
On the economy
Dr. Abye – loves free enterprise and free markets, plans to sell prized public assets, like Ethiopian Airlines, Ethio Telecom, Railway etc.
Ato Meles – Maintained government as a powerful agent for improving the life of citizens’, at times used coercion to accomplish big things, i.e. investing in infrastructure, expanding housing, favoring price regulations etc.
On corruption
Dr. Abye – says zero tolerance, but sees no problem in releasing jailed corrupt officials.
Ato Meles – said zero tolerance, but picked and chose which corrupt official go to jail.
On political parties
Ato Meles – Favored a close-knit group of individuals pulled from the Tigray insurgent movement to safeguard the revolutionary ideology of TPLF. For Meles, electoral defeat was never on the cards.
Dr. Abye – seems to adopt a radical vision which opens doors to all parties to play their part in the political process, with no threshold.
On foreign affairs
Ato Meles – was astute, disciplined and, overall, reasonably successful in addressing the nation’s immediate security challenges.
Dr. Abye – He seems unpredictable. He will vote for the US in the UN.
On personalities
Dr. Abye -The more people see him, the more they like him.
Ato Meles – has certain iciness, he is more private and conceited.
As Dr. Abye goes into full swing in defining the ideology which defines the term of his political philosophical foundation, conversations about political ideology presents an opportunity for citizens to widen their political sphere. It’s critical to have civil discussions. Clearly, the Meles vision has lost the consent of the governed. Despite some positive goodies, the “prosperity” EPRDF repeatedly boasted to have realized has flowed solely to the ruling elite and its apparatchiks and apologists thru theft, fraud, embezzlement, political fixing, price-fixing, and so on.
There might still be time to turn things around. We must begin to speak with each other, and solve our problems together.
POPULISM VS ELITISM
The current ascending populism is a reaction to the heavy handedness of global dominant interests. These interests impose and enforce their desires (on all and sundry), amongst many ways, through the overt/covert operations of their powerful states. The ‘deep state’ plays noticeable role in this regard. To recall; by the deep state we mean, the military-intelligence-industrial-banking-media-complex of the (mostly) powerful states of the world system. To be sure, the current global status quo is the reign of the elites, or ‘elitism’ for short. Its nemesis is the rising ‘populism.’ The confrontation between these two camps might well end up shaping the disintegrating phase of our modern world system, which has been around for over half a millennium!
The current divisive ‘elitism’ is the manifestation of late modernity, which is grounded on the ambitions of monopoly capital/crony capitalism and its attendant lopsided governance. Reductionist neoliberalism anchors its economic ideology. By and large, elitism is a socio-political diktat privileging those who believe they are in the know. All institutions of our world system effectively operate under this well-established regime. From institutions of learning to that of global governance (economic, political, cultural, etc.), all conduct their affairs by abiding to the logic of the elites. NATO, WB, IMF, EU, WTO, etc., are some of the institutional tools of global elitism. Inequality, instead of equality, undemocratic, instead of democratic, disempowerment instead of empowerment, etc. are some of the visible features of the reigning elitist global order, however camouflaged these obvious dispensations are (by TPTB=the power that be)! Current elitism is based on the greed system. If truth be told, it has little appeal to the global sheeple. If humanity is honestly allowed to express its wishes, hopes, fears, etc., it will definitely opt for a more holistic life than what is currently delivered by the reigning hyper elitism. By contrast, the misguided elitism of our day doesn’t really have a clear picture of what life is and should be, outside of the universe of accumulation. Existing elitism is possessed by the now and now! For instance, what the cumulative effects of our incessant manipulation of nature will bring to life and the planet itself is not a burning issue to existing elitism!
The destructive nature of the current elitism has yet to be (fully) exposed by the ascending ‘populism.’ As we said earlier, elitism’s irrational behavior, particularly in regards to natural resources, ecosystems, life and the general well being of our blue planet is abysmal! It is like a kind of mission to nowhere. At the end of the day, this dead end objective cannot appeal to any human, let alone the global levelheaded sheeple. Critical thinking is systemically shunned (by the global elitism) so that sugar coated anti-life discourse can go on unabated. Nonetheless, the old trick of numbing/indoctrinating the sheeple seems to run out of steam. See the articles next column, on page 23,41 & 44. Even the power that be (TPTB) of the industrially advanced states of the OECD (rich countries) are facing this backlash from their increasingly agitated sheeple. Many pretexts are being used to challenge the heavy handedness of institutions like EU, NATO, etc. Brexit itself is a populist reaction to EU’s preponderance. Greece, Spain, Germany and many of the east/central European countries are having vibrantly ascending populism eager to challenge the elitist status quo. Only last week another of the OECD country went populist, so to speak. Mexico elected, by a wide margin, an avowed socialist to its highest office. Over ten politicians are killed on a monthly basis, in Mexico! One wonders why?
To go forward, populism has to rethink many of the things the world has been taking for granted, under the current reign of destructive elitism. Populism should be everything that the current elitism is not! For example, stupid economic doctrines, like infinite growth on a finite planet, must be discarded. We believe, the ideology of the new populism must be derived from the following two foundational principles. Respect for all life and life support systems! Peace and equity for all! To some extent, justice and other democratic notions are espoused (mostly) to secure the above lofty objectives. We also believe, the dynamic dichotomy of left and right populism can be managed as long as we adhere to the above basic principles. For example, we now have a coalition of left and right populists running one of the G7 countries-Italy! Be that as it may, some serious debates need to be conducted (on a continuous basis) before conclusive assessment can be made about the rising populism of our time.
Maybe the era of the unthinking sheeple is coming to pass, rendering the following comment somewhat irrelevant: “We’re developing a new citizenry. One that will be very selective about cereals and automobiles, but won’t be able to think.” Rod Serling (creator of the Twilight Zone). Good Day!
Djibouti inaugurates Africa’s largest Free Trade Zone
Djibouti has launched the Djibouti International Free Trade Zones (DIFTZ), Africa’s biggest trade zone that will comprise a total investment of USD 3.5 billion and span an area of 4,800 hectares.
This Free Trade Zone, which already hosts 21 companies, is expected to enhance trade in the Horn of Africa and strengthen Djibouti’s position as a trade and logistic hub. It is connected to the main ports of Djibouti, and provides benefits such as zero corporate, income and value added taxes.
At a ceremony held at the Free Zone, President Ismael Omar Guelleh hailed the scheme as the culmination of infrastructure projects “boosting Djibouti’s place in international trade and commerce”.
The Horn of Africa nation, located at the mouth of the Red Sea and Suez Canal, in 2017 unveiled three new ports and a railway linking it to landlocked Ethiopia, as part of its bid to become a global trade and logistics hub.
Somalia’s president, Mohamed Abdullahi Mohamed, hailed the free-trade zone as a “victory for East Africa”, in comments echoed at the ceremony by Prime Minister Abiy Ahmed and presidents Paul Kagame of Rwanda and Omar al-Bashir of Sudan.
The zone, which is connected to Djibouti’s main ports, aims at diversifying the economy, creating new jobs and luring foreign investment through tax-free incentives and full logistical support.
The pilot phase launched on Thursday comprises a 240-hectare site.
The project hopes to see foreign companies setting up manufacturing plants within the zone, adding value to products instead of merely importing and exporting raw materials.
“The volume of goods travelling to East Africa keeps increasing. Every time a product arrives in the continent without being transformed it is a missed opportunity for Africa,” said Aboubaker Omar Hadi, chairperson of the Ports and Free Zones Authority.
A row of Djiboutian and Chinese flags fluttered side by side above the freshly painted bright yellow walls surrounding the expansive project – a symbol of the tiny country’s close ties to the Asian giant whose loans have funded its lightning-fast infrastructure growth.
Djibouti – which is also the site of China’s only overseas military base – is a critical part of China’s “Belt and Road” global infrastructure initiative and in a prime position along what has been dubbed the “Maritime Silk Road”.
The free trade zone is being run by Djibouti, the majority shareholder, along with three Chinese companies: the China Merchants Group, Dalian Port Authority and Chinese big data company IZP.
