According to the World Bank and IMF, China and India are both now growing much faster than the West. Their greater populations mean that their output will overwhelm the West’s well before 2100. The global economy history book indicated that their brutal realism about international economic relations, so similar to the attitudes of Britain in 1815 and the United States in 1915, will ensure their success.
Martin Hutchinson, a renowned British author and market analyst, asserted that just as the 19th Century belonged to Britain and the 20th Century to the United States, so the 21st Century will belong to China and India, with no other obvious claimant to the 22nd century. He noted that China and India’s assertiveness, in both economic and geopolitical spheres, is reminiscent not of the hesitant Britain and United States of today, but of their activities in the period when they were rising to global hegemony, around 1815 and 1915 respectively.
According to history, around 1815, Britain claimed the right to seize neutral merchant ships, prevent them from trading with France and collect any British citizens who might be serving on them. Its effective closure of United States trade through the 1807 Orders in Council was the main cause of the War of 1812. Around 1915, the United States maintained massive protective tariffs against the world’s trade, far higher than others’. It also built the Panama Canal and invaded Mexico and Haiti, asserting its rights in the Western Hemisphere much as Vladimir Putin does in neighboring countries today.
Martin Hutchinson stated that, India follows the relatively benign model of Britain 1815 and the United States 1915 fairly closely. Indeed, India is not yet quite as assertive in foreign policy as was either previous emerging hegemon. China on the other hand is in many respects more like the Kaiser’s Germany, claiming disputed areas of ocean by building artificial islands thereon. They are also building a navy that, like the Kaiser’s High Seas Fleet, can be aimed at only one other power, the existing hegemon.
Economically, the case for China and India’s emergence is rock solid. According to figures by Price Waterhouse Coopers earlier this year, even if there is considerable slowing in growth after 2020, by 2050 China will have a GDP of $61 trillion to the United States $41 trillion. Meanwhile, India with GDP of $42 trillion will also have surpassed the United States to become the world’s second largest economic power. In practice, Price Waterhouse Coopers’s estimates are likely to be too conservative. Certainly its estimate of growth for the United States between now and 2050 is higher than has been achieved in the “recovery” from the 2008-9 debacle. Its estimates of growth for India and China both look low.
That is not to say China and India will be as rich as the United States in per capita terms by 2050, even if they grow faster than Price Waterhouse Coopers estimates. Nevertheless they will be considerably richer than they are currently, especially in India’s case. With total GDPs larger than the United States they will be able to project force more effectively than will the United States, even with the help of its NATO allies. Russia, fading from sixth place in GDP (on a purchasing power parity basis) in 2014 to eighth place in 2050, less than one tenth the size of China, will also be a declining force internationally, even if it has managed to annex a few neighboring economic basket cases.
According to Martin Hutchinson, looking beyond 2050, it is difficult to see what might dislodge China and India from their hegemony. Price Waterhouse Coopers estimation revealed that, of individual countries in 2050, in economic terms, the fourth is Indonesia, with a GDP about 30% of the United States and double that of the largest European country, Germany. In terms of population, China and India are several times the size of the next largest country, and will remain so, increasing their geopolitical clout accordingly.
They will still be much poorer than the United States in 2050, and so they will presumably enjoy some further catch-up in terms of wealth and living standards and hence increase their lead in terms of raw GDP. India’s year 2100 population is projected as 1.6 billion by the United Nations and China’s at 1 billion. This compares with a mere 450 million projected for the United States.
Martin Hutchinson noted that it is possible of course that other countries may combine, in much the same way as the EU has attempted so painfully to do. Nigeria’s population is projected as 752 million in 2100. Africa’s population as a whole is projected to approach 4 billion, since fertility rates will remain much higher there than in other regions throughout the 21st century. The world’s population overall is now projected in 2100 to be a grossly overcrowded 11.2 billion. China and India together will represent only 23% of the total compared with today’s 31%, thus be theoretically vulnerable to a new competitor.
An African federation, if one could be formed, would have four times China’s population and 2½ times India’s in 2100. It might have approached those much richer countries in terms of total GDP, while remaining much poorer per capita. That would suggest that the 22nd Century might well belong to such a federation, if it came into existence. But consider the difficulties that have been faced by the European Union.
As it is obvious, most of those African states share a common history and culture, if not language. It seems very unlikely that Africa’s 54 countries will be able to form themselves into a federation tight enough to act as one superpower. It is of course possible that a subgroup of those countries may do so. However it would probably still lag China and India in terms of GDP, even if not in population.
Martin Hutchinson stated that, in any case, if there is to be another geopolitical transition taking place after 2100, it will be for China and India to worry about, not for us inhabitants of what will then be second-class powers. In general, we can anticipate a transition to Chinese/Indian hegemony philosophically, if not without regret. The main difficulty will be that of having two hegemons whose emergence will not be simultaneous.
China is emerging already, whereas India requires another 20-30 years before its economic clout is sufficient to bring top-level geopolitical power with it. This staggered emergence clearly has the potential for conflict. With today’s technology, that could greatly damage the rest of us, even if we stayed out of it directly.
Transition between hegemons does not have to result in war. Britain handed over peacefully to the United States, for example. But it brings risks higher than in periods of hegemonic stability. Politically, both China and India are at present reasonably benign, much more so than the 20th Century Soviet Union. We should also remember that China has a history of global hegemony and one which does not look much like European hegemons.
India, China and the Global Economy
UNIPOLARITY LEADING TO MULTIPOLARITY
What are the telling signs of demise that awaits uni-polarity? We are using the words polarity, uni-polarity, bipolarity and multi-polarity to describe the ongoing flux in structural geopolitics. The unsustainable extraction of non-renewable resources and the saturation of natural sinks on the blue planet might well hasten the collapse of the existing world system, which is nothing more than a frivolous social construct aggressively enforced by empire and headed by its reigning hegemon-the USA! Be that as it may, the scenario associated with the realignment of geopolitical positions due to many factors, the least of which is not the scarcity of resources, will be our preoccupation of the day. After the demise of the USSR, bipolarity was replaced by uni-polarity. We can look at the current status of uni-polarity from two different perspectives. Internally, from the point of view of empire, and externally, from the perspective of the outliers, if we can call them that!
The telltale signs from the outside include all sorts of challenges emanating from the continuous activities of emerging states. Increased dissatisfaction about the whole lopsided global arrangement in the non-core countries mostly affecting the downtrodden sheeple (human mass) is another of the major signs. In addition, the unsustainability as well as the crony-ness of the prevailing global economic order keeps fueling insecurity all over the world. Amidst all these, the clear failure of the current hegemon to inspire and forge a more sustainable mode of collective human existence is accelerating the pace of systemic collapse. Almost all empires disintegrate as a result of hubris. Overreach is one of the Achilles heel’s of empires; past and present. See Smith’s article next column. By and large, it is the built-in rigidities of empires that almost always underlie their demise. To adapt to changing circumstances is something empires were and still are, incapable of doing, despite wealth of accumulated knowledge to show the way out! By empire, it is usually meant the powerful triad: USA, EU and Japan.
The signs that are coming out from within are; political apathy with respect to establishment institutions (political parties, state institutions, etc.) A restless and increasingly inquisitive populace, demanding radical alternatives in all spheres of collective existence, is another sure sign of disintegration. The ‘Yellow Vests’ movement in France might well be a precursor of such bold initiatives. Various internal conflicts amongst the citizenry, mainly due to excessive economic polarization that keeps on marginalizing the large majority of the sheeple, are another of the telltale signs. Depending on the chosen strategy of conflict management (by the power that be), conditions can easily get ugly and society might degenerate to a point of no return. In this regard, identity politics comes to mind. Always finding easy scapegoats to debilitating and disfranchising socio-economic conditions has always been the forte of dominant interests (in any system through out the ages) and the modern world system is no exception! Recent scapegoats include; Jews, blacks, communists, refugees, Moslems, etc.! The emergence of a well-entrenched ‘deep state’ that operates outside of the law is usually a manifestation of desperation heralding decline. To recall, we have defined the deep state as: the military-intelligence-industrial-banking-media-complex of the powerful states.
Multipolarity is now pushing forward, despite the efforts of the ‘deep state’ of empire, particularly that of the hegemon. Trying to arrest efforts that are consciously propelling alternative globalizations might prove fatal to the existing unipolarity. In fact, the project of malicious manipulation undertaken by entrenched interests via their ‘deep states’ is undermining democracy and good governance in the core countries themselves. The bickering in Washington D. C., the refusal by all signatories (save the US) to abrogate the joint Iranian anti-nuclear weapon agreement, the reluctance on the part of the European countries to join the oil sanction imposed on Iran (unilaterally by the US), surprising threat to withhold intelligence from former allies if they endorse China’s 5G initiative, etc., etc., are all forerunners of impending collapse.
On the other hand, the BRI (Belt Road Initiative) is gradually solidifying support for a more equitable globalization. It is expected to win the hearts and minds of a good portion of humanity. So far over 70 countries have agreed to become part of the Chinese initiated BRI, including prominent European Union countries like Italy! The emergent Eurasia Economic Union (EEU) will be, without a doubt the largest economic unit on our planet, encompassing Europe and Asia, to say nothing about Africa. SCO (Shanghai Cooperative Organization) is another formidable ensemble of rising/populous nations who seem to be determined to keeping their relative independence, particularly from the heavy-handedness of empire and its increasingly wobbly hegemon. Eurasia might well become the core of the forthcoming globalization, which necessarily has to be peaceful, sustainable, egalitarian and democratic, to secure long-term support from the planet’s inhabitants!
It seems the ascending multipolarity will be led primarily by China and Russia. The old civilizations of China and Russia seem to be more suited for the task at hand. Based on historical analysis, geographical locations, aspirational outlooks and proven temperance that has been more accommodating than any witnessed by the empires of west (at least the recent ones), these two continent size nations might well be the right choice to collectively lead the coming (it is hoped) sapient globalization. We will not dwell on the reasons why the other BRICS or others, might not be fit for the position of leadership, since we have already elaborated this particular issue on our previous installments. Suffice is to say, the new world order is promising to be one that is essentially based on cooperation rather than confrontation. It is also hoped that it would be one where the rule of law, rather than the rule of power prevails!
This was first published in May 2019
Refugee-owned businesses to support in the U.S.
Zubaidah Boutique
Zubaidah arrived in the U.S. from Iraq as a refugee in 2014. She owns Zubaidah Boutique, where she creates handmade jewellery. Hand-made using the highest quality materials, her products blending the originality of the past with the modernity of the present.
“Since childhood, I have had a passion for disassembling and assembling things to see what they would look like in a new way or to learn how they are made,” Zubaidah says. “I always have new ideas to create beautiful things that make people happy.”
Blossom Pads
Sultana Amani is a 21-year-old Afghan entrepreneur, activist, and student. She arrived in the United States after fleeing her home in Kabul when the Taliban took control of the country.
Sultana runs a social enterprise that employs Afghan women in their homes to make reusable menstrual products–called Blossom Pads–for other Afghan women.
Enfance Radieuse Child Care
Fatima arrived in the United States with her two children from Togo, a country located in West Africa, soon after her husband sought asylum in 2016. Her family resettled as refugees, working hard to rebuild their lives in the Beehive State.
Fatima announced her new child care business, Enfance Radieuse meaning “Light of Children” earlier this year. The day care service provides a bi-lingual (French and English) environment, so kids can explore their linguistic abilities and learn a new language during their time at the center.
New Roots Tucson Farmers
Egide and Anezi are farmers and refugees from Burundi. Egide and his family arrived in 2016, and Anezi and her family arrived in 2015. They now grow hot peppers and a variety of other produce at the IRC’s New Roots program in Tucson, Arizona, and sell them at local farmer’s markets. They have also partnered with a local restaurant, LaCo, to provide their locally grown chillies for LaCo’s house-made hot sauces.
Egide and Anezi are ecstatic that the Tucson community can finally taste what they devoted so much time to carefully grow and create. Egide said, “I am so pleased because it makes me feel like what I am doing, the work I am doing, is being enjoyed by other people.”
Abyssinia Restaurant and Cafe
Azeb is a refugee from Ethiopia, came to Phoenix, AZ, 12 years ago with a dream of one day opening her very own restaurant. Through the Economic Empowerment program at the IRC, she was given a loan to open her restaurant, Abyssinia Restaurant and Cafe, in 2015.
At her restaurant, she serves a wide variety of Ethiopian dishes, including Missir, Shiro, and Doro. Azeb also performs a traditional Ethiopian Coffee Ceremony an important and spiritual cultural ritual.
Historically in Ethiopia, women perform this spiritual ceremony three times a day – morning, afternoon, and night, as a way to welcome and connect with neighbors, friends, and family.
In the eight years of owning her restaurant, she has seen some highs and lows and her business is slowly picking back up after the impact of COVID-19. Yet, Azeb’s faith in God, and her positive attitude never waiver.
Dija’s Touch
Born in Sierra Leone, Kadijatu struggled with depression as an asylum seeker building a new life in Arizona. She couldn’t find her story in the culture around her.
One night, she prayed. “Believe it or not,” Kadijatu recalls, “I dreamt of making shoes. And I woke up I only had $100 to my name and I went to Walmart.”
At home, she pulled a pair of sneakers apart to learn how to make them herself. That was the beginning of her journey with Dija’s Touch, a brand and platform for women’s empowerment.
Today, with support from an IRC microenterprise program, Kadijatu uses African prints to create custom-designed shoes and products. Inspired by words her mother shared when she left Sierra Leone “Wherever you find yourself, try to be part of the community” she seeks to give back.
Kadijatu recently hosted an event to introduce her brand to her new community in Pennsylvania; a quarter of the sales were donated to the construction of a vocational school for women and girls in Sierra Leone.
Mother of All Catering
Chef Kaltum Mohamed learned to love cooking as a child by helping her mother in the kitchen and quickly realized her passion for food.
Kaltum wants to share her East African culinary traditions with all of Utah. Her cuisine is reminiscent of Sudan with special spices and a beautiful presentation. Some of her specialties include gima, a crispy potato dish of peas, beef, and Sudanese spices; sambusa, a triangular pastry filled with vegetables and spices; falafel; and basbusa, a sweet, syrupy semolina cake.
Tapping Africa’s Exponential Finance
Over the last two decades Africa’s financial systems have grown by leaps and bounds. However, liberalization, privatization, and stabilization is yet to translate into more accessible financial services, especially credit, that reaches the majority of Africans. On average, banks in Africa are well capitalized and liquid. Still, the benefits of deeper, broader, and cheaper finance have not yet been reaped. As development continues to grow in the continent, frontiers have popped up to benchmark access to formal financial services and to discuss policies that help turn the un bankable into the bankable population, and the bankable into the banked population.
In light of this, on June 15–16, 2023, financial experts, policymakers, and industry leaders from across the East Africa region converged in Addis Ababa to discuss the state of the financial industry and its development, under the umbrella of the sixth edition of the East African Finance Summit. The two day event sought to promote financial inclusion and innovation as well as foster collaboration among stakeholders, under the theme; Emerging Frontiers in Africa’s Finance Sector: Regional Integration, Innovation, and Access to Finance. As sector experts strive to drive innovation and improve access to financial services across the continent, Capital’s Metasebia Teshome caught up with Gemechu Waktola, founder and CEO of I-Capital for in-depth insights on ways to promote regional integration and enhance financial inclusion in Africa. The following are excerpts from the candid interview;
Capital: How did the East African Finance Summit start, and what achievements have you seen through the last 5 editions?
Gemechu Waktola: The summit was started in 2016, but of course it was interrupted for two years due to the pandemic. From the beginning, the whole intention was to create dynamism in the Ethiopian financial sector and in the region as well through discussion networking, knowledge sharing, and experience sharing in the sector by creating a platform where different ideas from different perspectives come to the table. The summit tries to bring all the stakeholders—leaders, policymakers, and operators—together.
There was not enough conversation between policymakers and operators on policy aspects to make the sector dynamic. Thus, bridging the gaps together from both the policy makers and operators sides is one of the key issues that we want to have in order to better the financial ecosystem.
We have been raising several issues to be discussed at the summit, such as the financial sector and innovation. If we say our financial sector should be innovative, and if regulation is equally important, which one should come first? You can’t regulate what you don’t know, and innovation is bringing something new to the market. If you say I should regulate it before I give permission to operate, it is a problem. So we had a discussion on how they go together, and of course the regulator was a bit hesitant because if they let it go, it could go out of control. Other issues also of paramount importance looked into include; issues of inclusion, products that were available from financial institutions, the issue of the capital market, and opening up of the financial sector. So our path is to talk about the issues until they get solved and answered from both sides.
We believe that we have made a contribution to transform the sector as these issues have been picked up by many as soon as we bring them to the summit.
Capital: This week, Addis Ababa hosted the 6th edition of the summit. What are some of the progresses on that front?
Gemechu Waktola: In our previous editions, we have discussed certain issues, such as when to open the financial sector and what modalities and regulations should be prepared. Now that we know the modalities by which foreign banks will be allowed to invest in local banks, it is said that about five banks will be allowed to get into the country in the coming five years. In the insurance sector, we have discussed establishing an independent body to control the sector; now it is in formation. We change our agenda as soon as they are answered.
So this year we tried to see if the banks were ready to compete since the regulation is happening. In fact, a development that usually happens in ten years in the rest of the world, even in Africa, is happening in Ethiopia in two or three years. The Ethiopian capital market authority and Ethiopian stock exchange have been established, and directives are also under preparation. In all of this, we see where the banks and other organizations are, if they are ready to be listed, to invest in the platform, and to buy and sell. So to cater for that, we had experience sharing programmes, and progress and expectations of the capital market have also been shared.
Capital: Now that the government is working on opening up the market for foreign players, is it feasible? How do the financial experts view it? Do you think our financial sector is ready for the coming competition?
Gemechu Waktola: Ethiopia’s economy is more or less isolated from the rest of the world because it is highly regulated and protected. Our argument was that our financial sector didn’t grow due to two reasons. First, because new developing sectors, especially those related to the financial sector, were not that strong, and second, is that the financial sector couldn’t support the economy. With the current changing world, 15 to 20 years is too much to protect. In one way or another, we cannot stay isolated from the rest of the world.
One way of developing and making the sector strong is through access to technology, new leadership, and introducing new products. All this comes when the sector opens for competition. As we know it, the world has become a global village and is opening up, in more ways than one. The global changes such as COVID-19, the Russian-Ukraine war, sanctions, global supply chain disruption, and inflation, which have affected the financial sector in different ways, are instances that have shown that we should embrace change and conduct our business through adaptation. For instance, if we see correspondent banking, currently our banks are working with limited international banks, and some of them are not even getting it. Also an issue related to Swift is that it is being used as a weapon for sanctions, yet banking transactions globally depend on Swift. Also, we are dependent on the dollar, and now there is this de-dollarization thing. We can easily see what our future could be with the current shortage of dollars, so what should we do as a country? This is something we should consider. We should know our position as the world is moving to create a new world order. We should properly analyze what others have done and what we should do first.The other important thing here is regional integration; there is this African continental free trade agreement. This sort of integration makes Africa strong economically, creates a bigger market, and harmonizes and integrates the financial sector.
Most of the foreign banks that we are expecting are from the region; this is because others compliance requirements are huge and our market potential is not that much big for them. Still, banks from the region will also come up with new things in terms of technology, better leadership, and big international customers.
Of course they may create some challenge for the local banks; the first thing they will do is picking up talented workers from the market. Can our banks retain their talented workers in the competition is a question? There is also an opportunity as it knocks them up to change them and the challenge is that if they are not changing, the change will catch up to them. More or less, our banks corporate management is not that strong; it should be solid. By increasing their capital, introducing innovative products, increasing accessibility and inclusion, they have to start going down to the society in rural areas, and so on. Of course, it will take some time to potentially compete.
There are some banks that have the ability to sustain themselves in the competition, and there are also some banks that are trying to work on their organizations. There are also some that do business as usual.
The other perspective is that the Ethiopian banking industry is full of hefty dividends, and even if management wants to increase its capital, shareholders will not be happy as it minimizes their dividend. This mindset has to change.
Capital: What’s your evaluation of the current innovation and financial scheme of the country?
Gemechu Waktola: Innovation has to be the norm for the financial sector; we have to go to all levels where financial institutions introduce new things every day. The financial sector is the most innovative sector in the world. Innovation is the core of driving competitiveness with emerging digital means. Yes, it needs huge investment, and our regulations should be encouraging and supportive. Of course, there are certain impressive innovations, such as ride-hailing, Telebirr, and new ATM versions. Also, M-Pesa is an innovation that will surprise the developed world and is from east Africa. Ethiopia has enormous opportunities. The point is how the banks are supporting or partnering with fintech companies. The most successful innovation in the sector is through partnerships, so banks and insurance companies should have an open appetite for fintech.
Capital: How do you see access to finance and inclusion in the sector as most of the financial institutions operate in the capital city or in other big cities?
Gemechu: That’s where access and inclusion come into the picture. Ethiopia is not only Addis Ababa or other major cities. Most of the population is farmer and pastoralist, student, unemployed, and job seeker. Therefore, financial institutions should consider how to serve all of these populations, bringing them across the value chain. It needs investment and efforts unless it will be chasing easy money or banks will be like city boys. They need to go out into society and show that’s where we need innovation in a cost-efficient way.
Capital: There are emerging players in the financial sector throughout the world; how do you see regulations bringing these newcomers into the sector?
Gemechu Waktola: Traditionally, we talk about banks when we think of the financial sector because they are the biggest and most dominant players. However, we have to know that there are other institutions, such as microfinance, saving and credit intuitions, and fintech. As Ethiopia’s economy is a bank-led economy, fintechs and mobile money players have been recognised recently, which has led to the emergence of many players. With the emergence of the capital market, we will see their value. If you look at the insurance companies, they have two objectives: they underwrite policies when you buy insurance, and when something happens to you, they pay claims. We don’t know what they do with the money in between. Mostly, they save it in banks or build their headquarters. But using the capital market, they can expand their products by investing through the platform, either in the short term or in the long term.
From a regulatory perspective, one step forward is that our regulation has recognized fintechs and mobile money providers. So we can say that we have a lot from the regulator’s perspective, but there are some issues that still need to be addressed, such as establishing an independent body to monitor the insurance sector. However, we have to think about what we can do with what we have, for example, to alleviate shortages of foreign currency or treat all the operators equally with the Commercial Bank of Ethiopia or Telebirr.
Capital: As the global financial trend is changing, countries are choosing their side, and now Ethiopia’s economy seems to be left under the pressure of international organizations. How do you think our economy will sustain itself in this changing world with its current status?
Gemechu Waktola: I think, as we all know, these global institutions have their own agendas, so it’s obvious that we have to see who is influencing them. Those influencers want this organization to fulfil their interests, but that doesn’t mean that they don’t have good perspectives. It doesn’t mean that it is bad for Ethiopia or Africa to accept policy prescriptions when they do benefit their interests. At the same time, we have to consider intentions behind every policy prescription and particularly timing, like pressures that come when we are economically weak and economically strong; it is like strengthening negotiation capacity. So the point is choosing the better option that cannot affect its national interest. For instance, they are recommending to liberalize foreign currencies exchange to be determined by the market, which is technically devaluation. That may be the way forward in the future, but the question is: is now the right time? When we do that, what are the consequences? There are lots of LCs; there are international companies that have their dividends in Birr and are waiting in foreign currency. They believe that if we just let the market determine the exchange rate, it could boost exports, but the readiness of the export sector is a question, can it response at the scale level.
Sometimes regional integration is also necessary when Ethiopia feels like weak need to align with someone to push its agenda. Now that we know our agenda, we can choose who we can align with by expanding visible alternatives.There are many options we should assess; we have to see other countries experiences and use their expertise and knowledge.
Capital: The capital market authority is expected to start its operation next year, so how do you evaluate the progress? What are the expectations?
Gemechu Waktola: Ethiopia is a latecomer to the capital market, even by Africa’s standards; it is one way of making finance available and accessible for economic development and business growth. In fact, we used to have a capital market under the imperial regime.Now we have the authority and Ethiopian security exchange.
The government is planning to engage the private sector so that not more than 25 percent of ESX is owned by the government, while the remaining 75 percent is open to both domestic and private investors. So now there should be products available. The government is planning to list out some of the state-owned institutions, the question is financial institutions, banks, and other private organisations are they ready to participate in both buying and selling.
The capital market has so far published three directives, which is a way forward, yet there are institutions that are needed if we want to succeed in the capital market, such as investment banks, brokerage firms, and so on. Since we don’t have that much experience in the capital market, it may take some time to get a fast result.
Capital: Ethiopia is more dependent on the dollar for its transactions, and now that we are facing a severe shortage of foreign currency, how can this issue be managed?
Gemechu Waktola:In addition to the current global occurrences, our context in my assumption is that three years ago, before the war, Ethiopia had a very coming back in foreign currency reserves, investment flow and remittances were promising, it’s fortunate that the war happened. The war brought multiple consequences, first that we used our reserved foreign currency, and also that foreign currency flow has decreased in addition to the global phenomena of COVID and the Russia-Ukraine war. In our current state, when we have to assess that is exports are generating earnings, is remittances are flowing in a formal line, are we getting aid, grants, and loans from international organisations as promised, the price of imported goods is high, and global inflation shows us our status. So the question is, “How can we get out of this?” We can see what other countries are doing to manage this, and some countries are trying to use their local currency in their trade transactions. What could we learn? Do we have trusted capital given the circumstances that we happen to be in using our local currency?
And in the long run, are we going to continue with all the external pressure whenever something happens because we depend on the dollar, Swift, correspondent banking, and those international organisations that want to impose their interests? We have to understand what our alternatives are and what is happening in the world.
Capital: Is there anything you want to add?
Gemechu Waktola: The financial sector is one lucky sector; lots of eyes follow it up with several conversations, including I-capital; we need similar platforms in other sectors too. We need to see and listen to others best practices. On behalf of I-Capital, we are doing our part by collaborating with our partners. We believe that by creating more platforms for sharing best practices and learning from others, we can drive innovation and growth in every industry. Our goal is to see agendas come out of every room, as people from different backgrounds and perspectives come together to find new ways of working together. With this mindset, we are confident that we can help create a brighter future for all. At some point, it has to grow; we want agendas to come out of the room.
