Dr. Zelalem Teklu
ESAT News (December 8, 2016)
Investment, export and trade have shown a serious decline in the country while cost of living has risen dramatically posing a serious challenge to the country’s overall economy, a U.S. based Ethiopian economist said on Thursday.
The year long protest in the country has paralysed economic activities and prices of food has skyrocketed resulting in diminishing consumption by the people, Dr. Zelalem Teklu told ESAT in an exclusive interview.
He said the regime is spending all its resources on stifling the popular uprising as this is a matter of life and death to the oligarchs.
“The only thing increasing is the budget and expenses of the government,” Dr. Teklu said adding that shortage of foreign currency is crippling the economy.
Despite regime’s claim that the Ethiopian economy is growing at the rate of 8%, the World Bank insists the rate is 6 percent. But Dr. Zelalem Teklu believes the rate could be much less than World Bank’s estimates. “Economists and any layman know the Ethiopian regime puts out inflated and cooked figures. But the regime, unable to hide the cruel reality of the economy, has for the first time gave single digit estimates.”
The economist said remittances from Ethiopians abroad are the main source of the country’s foreign currency and any reduction on that would further cripple the economy. “I am not here to advice Ethiopians not to send money back home but it is a weapon in their hand if they want to punish the regime. A little reduction in what we send back home could have a serious impact on the economy. But that would hurt people on the receiving end too,” Dr. Teklu said.
Data shows that Ethiopians abroad sent 3.7 billion dollars in 2015 in the form of remittances.
The World bank in its latest economic report on Ethiopia strongly advised for the devaluation of the birr against the dollar, a proposal the Ethiopian regime outrightly rejected. “Doing so will hasten the demise of the regime cause devaluation would mean that it would be difficult to import raw materials resulting in high prices of goods and services. This economic pressure coupled with the political pressure ignited by the popular uprising would speed up the demise of the regime.”
He said based on economic theories, the proposal for devaluation by the World Bank would be the right way to go for a long term solution to the economic crises. “But the regime is interested in resolving the immediate problems that is a threat to its survival – the popular uprising. It is putting all its resources to reverse the wave of resistance that is coming from all directions.”
The economist said the regime is always focused on short term solutions, which worsens the economic crises in the long run.
New foreign investments to the country have ceased to come while the existing ones are contemplating leaving the country due to a year long uprising against a corrupt and brutal regime in Ethiopia.
Meanwhile, the central statistics Agency of Ethiopia said inflation has risen to 7 percent in November from 5.6 percent in October. The agency attributed the increase in inflation to the rise in food prices. Inflation in food items also rose to 6.1 percent in November from 3.4 the previous month.