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USAID launches resilience programs worth 11 billion birr

Staff Reporter
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USAID Ethiopia Mission Director Sean Jones concluded highly impactful visits to Bahir Dar in Amhara Region and Semera in Afar Region.
In Semera on February 3, a delegation led by Jones met with Awol Arba, president of the Afar Regional State, to discuss the needs of conflict-affected communities and internally displaced peoples (IDP) in Afar. The director visited an IDP camp in Semera and met with IDP representatives to discuss their needs and concerns. He then hosted lunch for local community leaders, including elders from the heavily war-damaged areas of Chifra as well as elders from Semera working with the government on IDP issues.
In Bahir Dar on February 4, a delegation led by Mr. Jones met with the president of the Amhara Regional State, Yilikal Kefale. Yilikal and the USAID director discussed the needs of those in the regional state, particularly residents of conflict-affected communities and IDPs. In addition to the ongoing development programs in health, education, and other areas, Mr. Jones highlighted USAID’s early efforts to support over 2.9 million people in the Amhara Region with emergency food supplies during the last few months and the commitment to supporting the region’s recovery in the coming years. The discussion underscored the United States’ continued efforts to help communities in the Amhara Region recover from the impacts of conflict, climate change, and other challenges during the past year.

 

Revisiting Putinomics

Alazar Kebede
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Revisiting Putinomics

In late 2014, a headline “Putin Watches Russian Economy Collapse Along with His Stature,” blared in Time magazine. Yet three years have passed since the price of oil crashed in 2014, halving the value of the commodity that once funded half of Russia’s government budget. That same year, the Western countries imposed harsh economic sanctions on Russia’s banks, energy firms, and defense sector, cutting off Russia’s largest firms from international capital markets and high-tech oil drilling gear. Many analysts, both in Russia as well as abroad, thought that economic crisis might threaten President Vladimir Putin’s hold on power.
Today, IMF and World Bank report revealed that Russia’s economy has stabilised, inflation is at historic lows, the budget is nearly balanced. Russian media highlighted that fact that President Putin has recently overtaken Soviet leader Leonid Brezhnev as the longest-serving Russian leader since Joseph Stalin. They also reported that economic stability has underwritten an approval rating of President Putin that hovers around 80 percent. Chris Miller, noted Russian expert, stated that “Putinomics” made it possible for Russia’s president to survive repeated financial and political shocks. Here, the most important question is, how did he do it?
Chris Miller noted that Russia survived the twin challenges of the oil price crash and Western sanctions thanks to a three-pronged economic strategy. First, it focused on macroeconomic stability, keeping debt levels and inflation low above all else. Second, it prevented popular discontent by guaranteeing low unemployment and steady pensions, even at the expense of higher wages or economic growth. Third, it let the private sector improve efficiency, but only where it did not conflict with political goals. This strategy will not make Russia rich, but it has kept the country stable and kept the ruling elite in power.
That said, the other question worth mentioning is that, does President Putin really have an economic strategy? According to Chris Miller, a common explanation of President Putin’s longevity is that he survives because Russia’s oil revenues keeps the country afloat. A number of economic analysts adamantly argued that Russia’s economy is known more for corruption than for capable economic management. But the Russian government could have adopted different economic policies and some of the alternatives would have made it harder for President Putin to sustain his hold on power. They might also have left Russians worse off. Consider what Russia looked like in 1999 when Vladimir Putin first became President: a middle-income country in which oil rents constituted a sizeable share of GDP. A country led by a young lieutenant colonel KGB officer committed to using the security services to bolster his power. A president who claimed the mantle of democratic legitimacy in part based on his ability to force big business and oligarchs to follow his rules, whether by fair or foul means.
A Russian economist, Anatoly Gregor explained that this could well describe Chavista Venezuela, still governed by an autocratic regime, still dependent on declining oil revenues, and still failing to build an economy based on rules rather than political whim. The difference is that Venezuela’s Chavistas spent recklessly during the oil boom while presiding over a mismanagement-induced collapse in oil production and, now, painful shortages of consumer goods created by poorly conceived price controls. According to World Bank estimates, Venezuela was wealthier on a per person basis than Russia in 1999. No longer now.
Willie Buster of Leeds University stated that the Russian government’s skill in mustering and distributing resources explains why the Russian elite has maintained power for nearly two decades and how it has deployed power abroad with some success. According to Willie Buster, many oil-fueled dictatorships squander their oil revenues on luxury goods like Ferraris and Fendi handbags. Russia’s ostentatious oligarchs have certainly accumulated their share of British football teams and hundred-million-dollar yachts armed with missile defense systems. But unlike its own spendthrift 1990s, Russia during the 2000s saved hundreds of billions of dollars during the good years, stowing resources in reserve funds for use when oil prices fell.
President Putin’s aim in economic policy has not been to maximize GDP or household incomes. Such a goal would have required a very different set of policies. But for President Putin’s objectives of retaining power at home and retaining the flexibility to deploy it abroad, the three-pronged strategy of Putinomics, macroeconomic stability, labor market stability, and limiting state control to strategically important sectors, has worked.
To understand Putinomics much better, let’s start with macroeconomic stability. Alexander Potonin of Warsaw University stated that Russia is a relatively rare kleptocracy that gets high marks from the IMF for its economic management. Why? Since the beginning of Vladimir Putin’s time in office, he and the Russian elite more generally have prioritized paying down debt, keeping deficits low, and limiting inflation. According to Alexander Potonin, having lived through devastating economic crashes in 1991 and 1998, Russia’s leaders know that budget crises and debt defaults can destroy a president’s popularity and even topple a regime, as Boris Yeltsin and Mikhail Gorbachev both discovered.
Willie Buster explained that when Vladimir Putin first took power, he devoted much of Russia’s oil earnings to paying back the country’s foreign debt ahead of schedule. In the current crisis, Russia has slashed spending on social services to ensure that the budget remains close to balance. In 2014, oil and gas earnings constituted around half of Russia’s government budget. Today, it is widely reported that oil trades at half the 2014 level, but thanks to harsh budget cuts, Russia’s deficit is around one percent of GDP which is far lower than in most Western countries. To ensure macroeconomic stability, President Putin has implemented a harsh austerity program since 2014, but there have been few complaints.
The second prong of President Putin’s economic strategy has been to guarantee jobs and pensions, even at the expense of wages and efficiency. During the economic shock of the 1990s, Russian wages and government pensions often went unpaid, causing protests and a collapse in President Boris Yeltsin’s popularity. When the recent crisis hit, therefore, the Kremlin opted for a strategy of wage cuts rather than allowing unemployment to rise.
The third prong of Putinomics is to let private firms operate freely only where they do not compromise the President Putin’s political strategy. The large role that oligarch-dominated state-owned firms play in certain key sectors is justified in part by their willingness to support President Putin in managing the populace by keeping unemployment low, media outlets docile, and political opposition marginalized. Alexander Potonin noted that the energy industry, for example, is crucial to the government’s finances, so private firms have either been expropriated or wholly subordinated to the state.

Dedication for Ethiopia

Staff Reporter
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Dedication for Ethiopia

Ton Haverkort has 40 years’ work experience in the development sector and has extensive experience in leadership positions. Ton has spent a large part of his career working in different roles for SNV – a non-profit international development organisation established in the Netherlands – mostly in Ethiopia and Kenya.
He then joined Global Alliance for Improved Nutrition (GAIN) from the Catholic Organization for Relief and Development Aid (Cordaid), where he was Head of Mission and Regional Programme Coordinator for Ethiopia, Kenya and Uganda. Ton used to write a weekly article for Capital Ethiopia on “Doing Business in Ethiopia” for 20 years. Ton as he recently retired talked to Capital about his life in Ethiopia. Excerpts;

Capital: When did you come to Ethiopia and why?
Ton Haverkort: I began my career in development cooperation in 1979 and I was assigned to Ethiopia in 1988. My assignment was to set up a school of physiotherapy at the Prosthetics & Orthotics Centre behind Paulos Hospital. While I enjoyed my work in this sector, I really wanted to move into management of development support programs. I was employed by SNV, Netherlands Development Organization and I was fortunate to work with several Country Directors, who encouraged me to continue studies in that direction. SNV’s policy at the time also included a trajectory to develop technical experts into Program Managers and Country Directors. I then got the opportunity to become Program Officer in Ethiopia for a few years, before I was assigned SNV Country Director in Kenya. A little less than four years later, I was transferred back to Ethiopia as SNV was looking for somebody who knew the country already well to replace the departing Country Director. So, I returned to Ethiopia with my family in 2001 and I was Country Director for SNV until 2004. SNV then went through a major reorganization and it was time for me to leave the organization. But as a family we did not want to leave Ethiopia. My wife Tigist had set up a growing business, Ethiopian Reflection, which required her full attention and I decided to take on consultancy assignments, which I really enjoyed. One year later I picked up a consultancy assignment with CORDAID to develop a Drought Cycle Management Program, which over the years grew into a Community Managed Disaster Risk Reduction Program. I was hired as regional Program Coordinator to manage projects in Ethiopia, Kenya and Uganda, duty station Addis Abeba. This allowed us to continue to stay in the country. Meanwhile our children continued their secondary education at Sandford International School to IB level and Ethiopian Reflection became a front running company, in designing and producing a new generation of Ethiopian souvenirs and gift items, focusing mainly on engraved glasses, tableware and mugs, but also added wallets and T-shirts to its products.
I remained Regional Program Coordinator with CORDAID until 2017, when another reorganization happened, and I also felt it was time for me to look for a new focus in my work. I found that focus with GAIN, the Global Alliance for Improved Nutrition, and I became their Country Director for Ethiopia in 2018. I found this to be the icing on the cake of my career, with a great mission and the focus I was looking for. After fours years however I found that the time had come for me to retire.
Over the years, our business expanded and Tigist had set up the “KitesNest Luxury Apartments” as well “The Canteen” restaurant.
And so, here we still are in Ethiopia and Addis Abeba, minding our business, while I will try and kickstart some consultancy activities again. This time though, I want to bring young professionals on board of my team and give them the opportunity to make their first steps in their career.

Capital: Tell us about your experience in Ethiopia and your various ventures.
Ton Haverkort: The work I was able to do in Ethiopia and the East Africa region, allowed me to travel to many remote areas and communities. I count myself blessed to have been able to see so much of the beautiful, vast and diverse country sides and meet with so many people of different cultures and livelihoods. Perhaps I have learned more from them than they did from me. Their resilience, hospitality and generosity have always impressed and inspired me. In spite of all the challenges that come their way, in terms of droughts, floods, environmental degradation, etc. I have found communities to be resilient, and supportive to each other. Projects to support their resilience will only be successful though, if the communities are fully engaged in the design and implementation of activities. Ownership is key.

Capital: Tell us a little about your work with International NGOs like SNV, CORDAID and GAIN.
Ton Haverkort: International organizations like SNV, CORDAID and GAIN are genuine development partners, which hold ownership by beneficiaries and sustainability as primary conditions for success in development. Likewise, we see ourselves as development partners and try and make a contribution to the development agenda of the country. This is another essential point of departure for successful partnership. Ethiopia has good policies in terms of development and growth. The struggle lies in the effective implementation and that is where we can come in. The Integrated Rural Development Programs with SNV and the Community Managed Disaster Risk Reduction projects with CORDAID are good examples of partnership with communities and the Governments that serve them. GAIN on the other hand also works a lot with Private Sector Partners and from a comprehensive Food Systems perspective, realizing that business is key in all food value chain steps. And from a Food System perspective, we are able to identify challenges to make nutritious food more available and affordable, including infrastructure, financial services, extension services, inputs, food safety, packaging, transportation, etc. GAIN and other development partners were able to work with Government last year to prepare for the Food System Summit, make commitments and lay out a road map to end malnutrition. This process was co-convened by the Minister of Health and the Minister of Agriculture and coordinated by the Agriculture Transformation Agency. The foundation was laid indeed to tackle malnutrition from multiple perspectives and the role of International NGOs and development partners is to find their way to effectively provide their support.

Capital: How did you start writing for Capital Newspaper? What was the focus of your writing?
Ton Haverkort: As I mentioned earlier, after I left SNV in 2004, I began consultancy services. I noticed there was a need also to provide management support to the private sector and business owners. I knew Capital Newspaper to be a newspaper for the private sector and proposed to write a weekly column “Doing Business in Ethiopia”. Teguest Yilma, editor in chief, who had interviewed me earlier in my capacity as SNV Country Director, welcomed the idea and invited me to send in a few sample articles, which I did. She approved the articles which resulted in a weekly column for 15 years. The focus was to provide management support to business owners in the context of Ethiopia. Observing challenges that business owners face, I began to describe real life examples, analyze the particular issue, and suggest options for improvement. From a principal point of view, I did not write blue-print management articles, but I tried to look at issues and solutions in the Ethiopian context. I also described situations from my own experiences in the country and as member of the Ethiopian business community, looking for ways to do business in this country in a more effective way. I considered myself part of the problem and wanted to be part of the solution.

Capital: What challenges did you have to overcome at the beginning of your journey?
Ton Haverkort: There have always been challenges and there will always be challenges. They are numerous and diverse. There are cultural differences in management and leadership for example. It is not anybody’s place to say which is a better way. It is important to realize there are differences and to know what these differences are and why they exist. Next is to find out how to deal with these differences and decide what to give and take to meet somewhere in the middle. Learning how to deal with cultural differences makes our lives richer indeed. Not being able to deal with them will make us miserable, irritable and bitter, wasting a lot of negative energy.
There are multiple other challenges of course, like consistent or rather inconsistent supply of services, including water, electricity, and telecommunications, infrastructure, the road conditions, etc. The growth in terms of population and urbanization is too fast for services to keep up. Frequent interruptions in water and electricity cause damages to business and add to production costs. I have the feeling that the service providers and authorities do not fully understand or appreciate the negative impact for business and the challenges faced by business owners. Meanwhile they are expected to fulfill their obligations without fail.

Capital: What is next?
Ton Haverkort: As I mentioned, I will kickstart my consultancy services again in the development and business sectors. And I want to give the opportunity for fresh graduates to make a first step in their career by including them in my teams and coach them on the way. I have seen how difficult it is for young professional to find employment and I hope to be able to help some on their way. I also intend to organize a monthly “Mingle” evening in our restaurant “The Canteen” for professionals to meet informally and network. Building relationships is one of the most effective ways to further develop as a person or business.
I may also pick up writing articles again and share my views about doing business in Ethiopia and make a contribution to doing business in Ethiopia more effectively.

The Alliance Éthio-Française hosted an art exhibition

Staff Reporter
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The Alliance Éthio-Française hosted an art exhibition

The Alliance Éthio-Française hosted an art exhibition entitled IT’S ONE WORLD, an artwork by Seifu Abebe on Tuesday, February 8, 2022 at the Piassa campus.
Here is a recap of Seifu Abebe’s art opening.

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