the addis ababa commodity exchange ... If you build it prosperity will come ... yeah, right

In Field of Dreams an Iowa farmer builds a baseball diamond in the middle of his corn fields after hearing voices, particularly one saying “if you build it, he will come.” Eventually a team of ghostly players from the infamously corrupt 1919 World Series do show up and throw a baseball around while the farmer works out some issues with his father. If you bother to figure accept the premise and sit through it - it can make for part of a fairly nice cable TV movie on a lazy Sunday afternoon.

On a related matter ... we have caught flak from a few readers every time we mentioned the hype about a Commodities Exchange for Ethiopia. Google the words commodity exchange and Ethiopia and you will see that apparently the whole world thinks it is the greatest idea since the opposable thumb or at least the talkies. To ethiopundit and other rational observers, however, it is not about ‘doing good’ or ‘developing institutions’ but propaganda.

Aping the outward appearance of institutions possessed by successful societies without following the practices of successful societies will not work and it will materially harm the mass of Ethiopians. It will for a few short reporter news cycles and a few more long bureaucratic career cycles serve as a smoke screen for the rapacious revolutionary feudal aristocracy running Ethiopia.

Remember the ‘elections’ and the ’election board’ in Ethiopia? How about the ‘parliament’ and the ‘supreme court’? The parliamentary investigations into the government massacres of the Anuak people? More greatest hits in that familiar dishonest style include the 7% now 10% now 11.8% economic growth bubbling along in the scorching hot ‘free market’ economy.

Why would anyone expect a commodities exchange to be any different than all the other lies and fake institutions? Ethiopia is one of the most corrupt nations on earth. It has one of the very lowest rates of foreign investment ever imagined. Money generally flows into Ethiopia from aid and remittances then joins money squeezed from peasants on the way back out into the elite’s foreign bank accounts, real estate, and investments.

The country has no property rights in law or in practice. The government / party / crony businesses control all commodities from the peasant’s fields onto foreign ports. Ethiopia produces less and less food for more and more people every year on less and less land due to erosion and is one of the biggest if not the very biggest recipients of food aid in the world.

There is no freedom of the press and no free exchange of information - period. All economic statistics are made up by the government / party. It has no plans to develop the country’s ample food or other economic potential aside from forever being the rich wardens of a permanent beggar state. This despite a wealth of fertile land and natural resources - and above all the abilities of her people.

Ethiopians have a government with one of the worst human rights records in the world. A police state that uses starvation not only as a means of attracting aid from foreigners but also of exerting power - witness the current starvation in the Ogaden.

How has the rest of the sixteen year litany of lies about democracy and the promises of reaching middle income nation status soon been working for Ethiopians so far? ... and we are all to believe that a Commodities Exchange will somehow miraculously be different - right? The simple ugly truth is that the government / party has set up a structure predicated on its own permanence and enrichment. Ethiopian suffering is the collateral damage of the growth potential of the Meles Inc. portfolio.

Commodities Exchanges and Stock Markets work because they are in societies and economies that are already developing because the right rules are in place. That free market of ideas and goods acquires a natural sophistication based on the traditions of trading found everywhere.

When the framework of the right laws, property rights, and economic / information freedom meet confidence, potential, and a people as enterprising as Ethiopians - economies explode forward. Ethiopians have been denied all of the basics for development that almost all of the rest of humanity enjoys. There is nothing wrong with Ethiopians genetically or culturally or geographically or historically that makes suffering a tradition there.

The flow of money and capital and goods as the numbers grow and the economy grows more complex is marked by the need for institutions where efficiencies are increased by centralized places where trading can take place.

Commodity Markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated Commodities Exchanges. A commodities exchange is an exchange where various commodities and products are traded. Most commodity markets across the world trade in agricultural products and other raw materials … and contracts based on them.

Let us consider what above seems familiar to most world societies, an real bore to the rich ones, and the realm of absolute fantasy to Ethiopians. Essentially Ethiopia today has none of the predicates for a Commodities Exchange in law or in practice.

Basically the rational behind Ethiopia’s famous Commodities Exchange to be seems to us to be remarkably similar to that for building a baseball diamond in the middle of a cornfield in the hope that ghosts will show up to play on it. In the Ethiopia set up by Meles Inc. you are not talking about a Field of Dreams however but a veritable Field of Screams.

Perhaps a better comparison is to the Cargo Cults of the South Pacific. In the 19th century and particularly after World War II a series of religious movements appeared in areas of the South Pacific that had experienced often jarring contacts with the West. The word cargo refers to foreign goods possessed by Europeans and Americans that miraculously flowed from cargo ships and then cargo airplanes.

Cult believers figured that if they plowed fake airplane runways on their beaches and placed life size straw model airplanes on their mountain tops that they could get more cargo to come and usher in a future of paradise and plenty. To the cultists the desired objects, i.e. cargo - included everything from Spam and Coca Cola onto metal tools and textiles - were divorced from the societies and institutions that produced them and were instead seen as the result of rituals.

By that same faulty logic, building a Commodities Exchange in a fundamentally economically corrupt society at every level where the free exchange of information is considered to be criminal will somehow do good and serve as a model for the rest of the world. Ridiculous unless the issue is photo ops, headlines, and the confidence that no one will follow up the story seriously.

Another relevant term here may be Potemkin Village. Potemkin was the Prime Minister of some Czar or the other (perhaps Catherine the Great) who built a one layer of thin fake villages along her path to show her how prosperous her reign had been for her people. You had better believe that this Potemkin Commodities Exchange will work wonders on the intended targets - ferenjis.

After all the civil contract in Ethiopia is a covenant between ferenjis who write checks and the dictator who cashes them. Ferenji observers of Ethiopian affairs would be astounded to know that most of what the government says and all of what it pretends to be is an elaborate stage show put on for their benefit.

The Commodities Exchange will just open up a disgraceful new chapter in that ugly business of rule where a few foreigners writing reports and articles mean far more than the lives and futures of 70 million Ethiopians. Ethiopians who don't see the interests of Meles as their own aren't buying any of this and never have. They know exactly who rules them with no illusions.

‘Commodity exchange’ is nice concept but how about we take a look at some more relevant ones. The Ethiopian economy is based on agriculture but not really commodities for exchange in the economic model described above. Most have their lives based on subsistence agriculture where what they grow is what they eat - what little is left after taxes to the government / party apparatus and service of the debt owed to the government / party monopoly on fertilizer.

Which leads us to another definition:

A Company Store is where the workers of certain historical industries such as coal miners shop for vital goods. The prices are exorbitant and taken from already meager wages such that debt and peonage are constant. The overall result, especially where isolation and fear of the Company are factors, is one of modern day legalized slavery in all but name.

In Ethiopia the Company in question is of course Meles Inc. which is all at once the government and its monopolies, the ruling vanguard people’s party and its wealthy conglomerates, so called ‘private’ enterprises owned and controlled openly or silently by the government / party, and the tiny fractional private businesses that exist in submission and service to the political / economic juggernaut described here.

From local agents and spies in committees to defend the revolution all the way through tribal militias and grain purchasers all the way up to Ethiopian embassies and economists is a vast apparatus dedicated to keeping Ethiopian peasants in their place and to defending the status quo with either ready violence or the means to cover it up.

How about another definition, this time let us try :

Serfdom is the socio-economic status of peasants under Feudalsm. It was a condition of bondage or modified slavery. Serfdom was the enforced labour of serfs on the fields of landowners, in return for protection and the right to work on their leased fields.

All of the land in Ethiopia is owned by the government and therefore by Meles himself the CEO of Meles Inc. The whole economy is the private checking account of Ethiopia’s tiny and brutal feudal aristocracy in the incestuous party / government / business hydra. They make their investments abroad in countries where commodities exchanges can rationally exist.

As Trotsky said, “In a country where the sole employer [or landlord] is the state, opposition means death by slow starvation.” He should have known because that was his business as it is of the Dergue and Meles Inc. Opposition meant death by enforced starvation and bombing in Tigray during the 1980s and death by enforced starvation and bombing in Ogaden during the 2000s.

The Ethiopian government is fundamentally opposed to the free flow of any kind of information in the same way that a vampire fears the cross or that Meles fears HR 2003. Let us repeat Ethiopia has no freedom of the press. Unauthorized exchange of information is a matter of death sentences or quiet disappearances in Ethiopia.

Internet and phone penetration have been blocked purposefully compared to every neighbor in Africa as a matter of policy so that Ethiopians don’t know too much and no one knows too much about them. All economic data is carefully cooked to maximize aid while providing a pretense of growth sufficient to justify aid.

Somehow a commodities exchange is supposed to work in this setting? In whose fantasy or nightmare? For a moment imagine how a Commodities Exchange could actually function in Ethiopia. The economy as we have said is basically made up by the government, its monopolies, the party, its businesses, and some hangers on as the sole actors. Peasants, for example, do the work but don't matter otherwise.

No one invests in that economy who is not motivated by pity or emotion ... or without a confidence born of pockets full of politicians and regulators for rent. So who is going to get involved in this exchange without a ready assumption that they will never lose money? Certainly no one will ever take the risk if they don’t feel that results are already decided and that this is just a way to make or launder money and impress ferenjis.

Anyone with the means but without connections will stay away because they will know way upfront it is all a political game. Imagine though that some bright young fellow outsmarts some TPLF conglomerate by cornering part of the coffee market on his own or with a few daring foreign investors.

Everyone knows up front that said bright young fellow will thereafter be in fear for his life and will lose his freedom. He will be up on charges of corruption and ‘rent seeking’ no doubt, his assets will be confiscated and the foreigners will be mau-mau-ed into silence by cries of how they are exploiting the Ethiopian people the way that Nestles was and Starbucks almost was.

Who is going to regulate the Exchange? As we have said the government / party of Ethiopia is acknowledged to be among the most corrupt on earth. But - they supposedly regulate themselves and tax themselves in a manner that the reader should assume is also based on corruption and the appearance but not the reality of civilized government.

Try and imagine a dedicated young lady working as an exchange regulator who tells a prosecutor that a TPLF company has done something unethical or illegal in the exchange or perhaps conducted insider trading in a hypothetical stock market. If she dared to do so she would of course be killed or arrested for life on corruption charges. Imagine also the ensuing cheers of ferenjis who would be happy to hear her arrest marked a major step in the transparency of the Ethiopian economy.

Every commodity in Ethiopia from each coffee bean and handful of grain will have been in government / party hands from the moment the farmer labored over it in fields owned by the government / party through the local collection centers controlled by the government / party all the way to roads to foreign ports or domestic markets controlled by the government / party.

The whole economy and every commodity are subject to Meles Inc. control at every level and that control is based on lethal force. There is no way to access capital from anywhere without the government / party taking the choicest cuts along the way.

Building an Commodities Exchange in the Ethiopia of Meles Zenawi is like holding elections there - errant nonsense. Countries don’t develop because ferenjis pay for the computers and staff that go into pretty buildings that they call Commodities Exchanges.

Commodities Exchanges develop because the native people are allowed to develop and they eventually need a Commodities Exchange. There can be no confidence in any sort of economic truth or information about the current or future price of a commodity in Ethiopia that is sufficient to make the existence of a Commodity Exchange justified beyond propaganda value.

Like carving out a baseball diamond in a field of corn in the Midwest in the hopes of being spiritually fulfilled, making fake airports on the beaches of the South Pacific in the hopes of growing miraculously rich, or building fake villages top please one’s Queen and be promoted - building a Commodities Exchange in Revolutionary Democratic Ethiopia is just plain silly - if the purpose is prosperity and development and not creating a shell game to get approving nods from ferenji aid bureaucrats and reporters.

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The same goes for all the upcoming Meles Inc. propaganda planned about membership in the World Trade Organization. Consider this a post about that subject as well.