Nobel Devotee of Melez Zenawi
Indian Ocean Newsletter
In a book to be published in the United States by W W Norton & Company entitled "Globalization and Its
Discontents" - which The Indian Ocean Newsletter has managed to obtain a copy of - a Nobel Prize laureate in
economics presents a determined attack on International Monetary Fund (IMF) policies in Ethiopia, from 1997
onwards, when he himself served as senior vice president at the World Bank. In the book, Joseph E Stiglitz rips
apart top IMF officials in charge of funds. "The programs are typically dictated from Washington, and shaped by
the short missions during which its staff members pore over numbers in the finance ministries and central banks
and make themselves comfortable in five star hotels in the capitals", states the author as he paints a portrait that,
although vicious, can hardly be described as far from the truth. Stiglitz raises several points on which Prime Minister
Meles Zenawi was right, in his opinion, to stand up to the IMF.
The first concerns the position that, in order to grant its aid, the Fund demands a balanced budget in order that
Ethiopia's expenses no longer exceed its earnings. Since budgetary earnings vary from year to year, the absurd logic
of this given was not to use donor's bids in order not to upset the budget and maintain it in reserve. It amounted
to an aid granted as long as it wasn't used. Intimate with Meles Zenawi, Stiglitz was an active participant in the
negotiations between the World Bank and Ethiopia, even though they were not the prerogative of his duties. That is
how he found himself entangled in the debate of the early refund of a loan made by Ethiopia from an U.S. bank.
Despite the quality of the security - an aircraft - Addis Ababa paid on the loan interests superior to those that its
reserve in currency was bringing into its coffers. Nonetheless, the "United States and the IMF objected to the early
repayment", because Addis Ababa put the IMF before a fait accompli, shattering the clause which required it to
present anything that resembled a loan beforehand to the Fund.
To "the IMF, it was just standard operating procedure" but to "Ethiopia, such intrusiveness smacked of a new
form of colonialism". Finally, Stiglitz castigates the pressure of the Fund to bring Ethiopia to liberalize its financial
markets by opening them to Western competition and subdividing state banks. "The Ethiopian banking system was
at least seemingly quite efficient", he says, and Meles Zenawi resisted the IMF "for good reason" on that point,
which, incidentally, is still currently on the agenda in a slightly modified form between the IMF and Ethiopia.
However, the Nobel laureate seems to ignore one essential aspect of the problem: the use by certain Ethiopian
leaders of the aforementioned state banks to enrich themselves or their friends. This was the problem that broke
out when officials of the CBE were dismissed.
Beyond the criticism of the IMF, Stiglitz has trouble hiding his political sympathy for Meles Zenawi, whom he
showers with a plethora of qualities, from "honesty" to "personal integrity" through "intellectual attributes", and
even rebukes the PM's democratic critics by saying pointedly that the hard-working man "was not an old-fashioned
A member of the inner circle of President Bill Clinton, the Nobel Prize winner seems to have been contaminated
by the thesis on new African leaders then in fashion, which imploded when the war between Ethiopia and Eritrea
broke out. Thus he seems blinded to the political struggles in Addis Ababa and uses for his defense of the regime
the very vague approximations that he reproaches the IMF for. Such as "there were few accusations of corruption
within his government" at a time when former minister Tamrat Layne went to jail for just that. His blind trust
reaches new heights when he presents Meles Zenawi as a "doctor by training" - the TPLF leader finished but two
years of studies - who "studied economics at the Open University in England" - what Meles Zenawi earned was
the same diploma by correspondence that has been obtained by no fewer than two dozen of the Tigray region's
THE INDIAN OCEAN NEWSLETTER N° 991