The viability of retail as a business depends on massive consumption by the multitude, the large numeric multitude, not the few of monetary genre! In turn, widespread consumption very much depends on the availability of broadly dispersed discretionary income. If the sheeple (human mass) is without sufficient income, then consumption will be severely curtailed. In other words, retail is predicated on the multitude having plenty of money to consume whatever is available, products or services. For example, in places like the United States, over 70% of the economy is mere consumption. In short, the retail sector looms large in the western societies. To be sure, even emerging economies are heading towards useless and wasteful consumption. In fact, in late modernity, consumption is not propelled by pressing need, but rather by narcissistic greed, to accentuate Gandhi’s phrasing!
Real income growth (minus inflation) is a function of productivity. If productivity is stifled, then the supposed increase in income is, by and large, the result of understated inflation. In essence, productivity is the making of things or the delivery of services with meaningfully less-resources than before, including the major one-labor. Since increasing productivity is a real challenge, particularly in the absence of major breakthroughs, nation-states use alternative/fictitious figures/numbers to impress upon a sense of wellbeing on the sheeple, even though the whole thing is actually a charade, a mirage! Such gimmicks help states subjugate their peoples into frightening political submission! Without being able to hide the bitter truth from their subjects, states would in turn lose their hides, so to speak. After all, states are mostly in the business of hoodwinking their sheeple so that economic, political, cultural, etc., benefits accrue mostly to their real handlers-the oligarchy or the crony capitalists, not genuine entrepreneurs! If truth be told, this is the actual mission of 21st century capitalism!
Debt propelled growth is always a highly precarious undertaking. When massively incurred debt results in no productivity gain, or no additional increment in GDP, etc., a country will end up in hock and that is when the global oligarchy aggressively demands flesh and blood. The so-called institutions of global economic governance, (IMF, WB, WTO, ECB etc.) always at the service of dominant interests, are largely used just like the infamous ‘debt collectors’ of the loan sharks. Various tactics are employed to get states to cough up what globally entrenched dominant interests really desire, despite nationalistic state’s protestations. Frankly speaking, it is not the prompt payment of debt that lenders actually want, but rather the privatization of lucrative enterprises with massive assets. This is the real prize behind the mask of ‘structural adjustment programs’. All the noise about private sector ‘efficiency’, blah, blah, is just that, empty talk, just review and analyze the various privatization programs across the world!
When a country is afflicted with mediocre leadership on a continuous basis, the result is either debt slavery or a hyperinflationary reality! It seems the simple and obvious choice is between a rock and a hard place. As they say, it takes two to tango. Lenders are always eager to lend and the politicos are always eager to acquiring debt, (private or otherwise), so that they can satisfy their limitless cravings for the temporal gratification of wining elections, to say nothing about their greedy objective of criminal accumulation! After all, the painful task of repaying debt can always be postponed, just kick the can down or putting it more politely, endow it to the next administration. In the final analysis, the time of reckoning will be upon us and thereafter the sharks will only demand the family jewels or else! Once the jackals are let loose on the so-called intransigents, things will be quite difficult to reverse, just ask Zimbabwe or Venezuela! Like it or not, this is the case of many African countries, not excluding ours truly! See the articles next column.
‘The government, which was designed for the people, has got into the hands of the bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy.” Woodrow Wilson, President of the United States. “So we make this big loan, most of it comes back to the United States, the country is left with the debt plus lots of interest, and they basically become our servants, our slaves. It’s an empire. There’s no two ways about it. It’s a huge empire. It’s been extremely successful.” John Perkins of ‘The Economic Hit Man’ fame. Good Day!
RETAIL, CONSUMPTION & DEBT
Mekele sees spike in housing prices
People have been flocking to Mekele from other parts of the country and landlords have responded by increasing rental prices as much as 70 percent.
People living in Mekele told Capital that a 175 square meter plot of land which would have cost 1.5 million birr three years ago now goes for over 3 million birr.
In some locations such as Hawleti, 18 kebele, and Adi Shenhun landlords have increased their rental prices by at least 100 percent. One room that is five by four meters could cost 2,700 birr per month.
Residents who were paying 2,000- 3,000 birr for two room for residential housing are now finding landlords demanding 5,000 birr. Villa houses are going for 10,000 compared with 7,000 birr previously.
The city which had less than 400,000 people two years ago has seen its population skyrocket to 600,000 thus increasing housing demand.
Solomn Tadesse a public relations officer at the Tigray Urban Development and Trade and Industry Bureau told Capital that the increase is happening as people come to Mekele because of instability elsewhere.
“Due to the instability in some parts of the country many people who born in Tigray are coming to Mekele to secure a safe place for them and their family, this has led to an increase in housing prices as a government we have a plan, we are trying to register people for land and housing.”
Residents fear housing prices will continue their sharp rise if something isn’t done soon.
A young man who requested anonymity said:
“With the growing population and lack of a proper housing strategy to meet the demand, Mekele’s rental market is not a level playing field. The majority of renters struggle to keep up with the pace and spend thousands birr in rent to secure a roof over their heads.”
“As far as we know it is the basic law of economics wherever demand outstrips supply, the price of the commodity including houses rises and this is what happening. We always advise them to settle for what people can afford to pay,” he said.
In the past three years the Mekele City Administration gave land to over 18,000 people who wanted to build a G+1 house on 74 square meters of land.
City to use public banks for service payments
The Addis Ababa City Administration is going to include private banks as optional financial service providers in its public service operation.
About two weeks ago the management of private banks and city administration talked at the mayor’s office of Addis Ababa City Administration on various issues, according to sources.
Sources told Capital that one of the area’s at the meeting held on July 22 that the private bank leaders raised was desiring the city administration to see possibilities of working with the private banks and the public financial firms, particularly the state giant Commercial Bank of Ethiopia (CBE).
In the evaluation meeting of the reforming process to improve the ease of doing business held July 23 at the Office of the Prime Minister Takele Uma (Eng), Mayor of Addis Ababa, who is member of the ease of doing business committee that was chaired by PM Abiy Ahmed and now transferred to Fetlework Gebreegziabher, Minister of Trade and Industry, stated that in the meeting with private bank leaders the issue of working as partnership was raised.
He said that the city administration wants to work with private banks on services like tax collection and other service payments under the city. However he claimed that the Federal Finance Administration Proclamation is a barrier that should be considered for the city or to be revised or give a mandate for the city administration to work with private banks.
Collection tax via financial firms is considered one of the ways to improve doing business in a given country and Ethiopia is expected to expand it and use a direct system in the settlement of the tax at the bank account instead of coming with a receipt or CPO.
Mid this week Takele told Capital that the city administration is working to include private banks in the payment system of services of the city administration.
“Our people are working to include them we understand that the federal proclamation would not be applicable to the city administration due to that we have started to include private banks,” he added.
Recently the city administration has transferred its municipality fees like water service and fines including traffic fines under CBE from the former operator Lehulu.
In the committee meeting Abiy has been advised National Bank of Ethiopia, whose governor is also member of the committee and on the committee meeting appreciated on its so far achievements to improve the easy of doing business, to see the way to use private banks on tax collections.
Ethiopia has new plan to stop contraband
Even though work has been done over the past year to stop the illegal flow of foreign currency and contraband trade the problem is causing major distress, including instability. Now the government has announced an organized campaign to tackle the problem with to regional administration at a ceremony held on Wednesday August 6 in the presence of Deputy Prime Minister Demeke Mekonnen.
Contraband is becoming an issue of sovereignty, besides its adverse effects on the economy. The joint efforts and commitment of stakeholders at all levels are crucial for the success of the plan to curb the problem, Demeke said.
