Reflections on the July 2024 IMF/World Bank Support to Ethiopia
By Tsehay Hagere
Bloomberg announced the deal with the headline, “IMF Support Helps Ethiopia Unlock $16.6 Billion from World Bank”! The IMF support is in the amount of USD 3.4 billion. Most economists express a positive outcome from the deal, rescuing Ethiopia from its current macroeconomic mess reflected in: unsustainable external debt; low international currency reserves; high inflation and overall macroeconomic imbalances. Most economists also peg their hopes that this deal will enable Ethiopia undertake overdue restructuring of its economy, transitioning it to adopt the open market system.
I do not want to dwell on the merits and demerits of such economic arguments and expectations. I leave that to the economic gurus in our midst. In this piece I want to look at the deal from a different vantage, primarily as the West’s geo-political investment in the country. Thus framed, the attendant question, then would be this: what could have Abiy promised to deliver in exchange?
Needless to say, Ethiopia’s geo-strategic location makes it a prized real estate given the threat the West is currently facing in the Horn of Africa (HOA) and the Red Sea (RS). One can reasonably consider these two regions as extensions of the boiling Greater Middle East. I would not be surprised if recent developments in these two regions kept western policy makers sleepless.
Renegade Eritrea is defying the West, hosting Russian Fleets; political Islam aka international terrorism is making inroads in the HOA (e.g. Al Shabab); Turkey is establishing military bases in Somaliland; the Houthis in Yemen are firing missiles into Tel Aviv and threatening commercial maritime transport in the Red Sea; Israel’s vulnerability has been laid bare by the October 7, 2024 Hamas attacks, not to speak of Hezbollah attacks from Lebanon and the latest confrontation with Iran; a greater Mid East war could be in the making; Europe is constantly threatened by waves of migration from war-torn and failed states from across the Red Sea and the Mediterranean.
It is self-evident that in the face of such growing threats, the West would be looking for a regime in the Region to stabilize, strengthen and turn into an anchor from which it would preempt or repulse any threats. From this vantage, it would be logical for the West to encourage Abiy and his Prosperity Party to work with the West [forget the BRICS posturing!] incentivizing him with an IMF/WB package and rehabilitating his economy. I would not be surprised if Abiy is also “encouraged” to work with TPLF as a duo, promising not to make noise if the duo make a sinister deal with each other (for example on FANO and Wolkait/Raya).
In such a scenario the outcomes would be win-win for the West and Abiy. Ethiopia would be stabilized, and prevented from failing/collapsing. Abiy would be safe (and possibly co-rule with TPLF as junior partner). TPLF would get to rule Tigray, showing off Wolkait and Raya as its booty.
Fano would be neutralized, prevented from being a spoiler. The duo would also contain Al Shabab and political Islam in the Horn. The duo might also be assigned other tasks to handle in the HOA and Red Sea. Abiy might even be promised for Ethiopia to get permanent arrangement to access the Red Sea, now that the West might have in hindsight seen the folly of allowing Ethiopia to be completely land-locked!
The scenario I have painted might not be as far-fetched as it might seem at first. Of course, there could be many justifiable reasons to think of the whole thing as unworkable. For one, the whole thing assumes Abiy is competent and sophisticated enough to pull off such a scheme – perhaps a huge, unrealistic assumption! All the same, such nuances and considerations of plan risk do not necessarily mean the powers to be will not consider or even go ahead with such plans.
The more relevant question is what we Ethiopians should do or prepare to do for such eventualities. The way events are unfolding force such questions on us. These developments promise both opportunities and huge risks for our country. It is up to us to seize the moment and craft a smart response that would enable us to exploit the opportunities offered.
Editor’s note : Views in the article do not necessarily reflect the views of borkena.com
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Good points. And full of possibilities, too. Unfortunately, Ethiopian “scholars” can’t think longterm. Secondly, as you also hinted Abiy doesn’t have what it takes to wade through international waters. Yes, he would do anything so long as it ensured his hold on power. Yes, he will make deals with Tplf. Problem is that both are servile by their very nature and both want to be in the driver’s seat. Hence, arrangements could only be temporary, ending in a round of conflicts.
Unfortunately, in the majority of the diaspora communities mindset who call America ‘home’, Ethiopia is just another peg on the board America must influence. The notion of “fatherland’ and the history of it all is very much an after thought, it seems. But for some of us that is not so.
In my opinion, US-Proxy (banda) TPLF, shouldn’t have been resurrected, but that is a debate for another day.
If it was for the ‘opportunists’ (the author is suggesting we should be) Ethiopia would have fallen to colonization just like the rest of Africa, but our forefathers chose patriotism and freedom over slavery, and preserved the independence of Ethiopia with their blood and passed it on to us so that we preserve and pass it on to the next generations.
Our nation is at a similar junction today because of the neocolonialist forces push in the last several decades. And the ‘opportunists’ among us who were overcome by foreign-influence and the ‘disillusionment’ the old system then in the 1970’s and optimism to bring about a better Ethiopia, took the western-imperialist’s bait and we collectively have been languishing in the political chaos ever since then.
I argue, the patriots among us will rise up to the challenge yet again, to keep the independence of Ethiopia intact just like our forefathers had done.
We appear as a divided-society at least on the surface at the moment, and the road ahead may be a bit topsy-turvy requiring a lot of maneuvering but the picture is clear, we will get out on the other side as one people.
Be well.
Washington Post July 25th 2024,
HOW FOUR U.S. PRESIDENTS UNLEASHED ECONOMIC WARFARE ACROSS THE GLOBE
Link = washingtonpost.com/business/interactive/2024/us-sanction-countries-work/
Richard D. Wolff & Michael Hudson: The Shocking Truth Behind the End of Financial Colonialism!
Link = youtube.com/watch?v=FSA6l97_g8k&ab_channel=DialogueWorks
Investigative journalist Whitney Webb & Mark Goodwin:
“Abandon the corrupt & crumbling western financial system and build a new one…”
Part 1
Link = Link = youtube.com/watch?v=zcg7MiHpKgo&ab_channel=WhatBitcoinDid
Part 2
Link = youtube.com/watch?v=kHJoTKKrzao&t=23s&ab_channel=WhatBitcoinDid
BRICS is such a system Ethiopia has joined, and Argentina’s last government joined it and used its working relationship with China it was able to borrow Chinese Yuan (at a lower rate) and paid its IMF loan obligation in 2023.
Link = english.elpais.com/economy-and-business/2023-07-01/argentina-uses-yuan-for-the-first-time-to-settle-part-of-its-imf-debt.html
Abiy ( wannabe Lee Kuna yu) could have gone to the Chinese and borrow Yuan & pay its IMF & WB obligations instead he chose to drag the nation back to the IMF’s predatory jaw by taking this latest ‘deal’ & devaluation of the currency exposing the currency to financial terrorist’s like George Soros who among others broken the Bank of England in 1992
.
What we see here is the US’s attempt to kill BRICS using IMF and WB ( its financial warfare tools) it managed to pluck out Argentina out of BRICS, now they found Abiy the weakest-link in the BRICS (no pun intended) and sure enough the tunnel-versioned opportunist fall for it, and bought the nation to these difficult junction.
It is not too late Abiy can still talk to his BRICS members states China and Russia ( who have USD surplus) and can easily reverse this debacle and get the nations finances on the right path out of the jaws of the predator west if he muster his faculties and get to work and borrow some Yuan and pay IMF and WB obligation save the GERD from falling out of the Ethiopian hand who built it saving penny’s. But as the old saying goes, “became weak to the weak” that was meant to do good by Paul the gospel, but for the power hungry weak opportunist’s like Abiy, it is for the opposite, greed.
Be well.
It is obvious Abiy wants to imitate Lee Kuan Yu the late prime minister of Singapore. In fact his predecessor Meles Zenawi was also said to have such a notion and attempted to apply Singapore’s economic strategy in Ethiopia in the 90’s with some success.
What Abiy missed is this, if Lee Kuan Yu lived today he would align with today’s economic and manufacturing power China, not with the dying Western economies that are standing on one leg.
Here is LKY’s UN ambassador (1984 -1989, 1998 – 2004) Kishore Mahbubani , author of many books on the subject of geopolitics & economics…
Here giving speech 4 years ago
“How the West can adapt to the rising Asia”
Link = youtube.com/watch?v=dsJWs6Z6eNs&ab_channel=TED
LKY commented, he aligned with his colonizers the capital rich UK & the West out of necessity to bring about economic growth to poor Singapore, on the other hand his fellow ( newly independent ) African states chose to the other way to align with (the capital strapped) socialist bloc USSR & China in the last century and sacrificed their economies growth and still languish in poverty.
Belgian Professor Howard Nicholas:
“Wester educated African students are brainwashed to work in the interest of the West, instead of for working to better economic future to their own nations…”
“‘Underdevelopment’ in Africa – What’s the Real Story? (1/3) – Howard Nicholas”
Link = youtube.com/watch?v=SaqgQvLn5sQ&ab_channel=CriticalCollective
Be well.