
Ethiopia is now Africa's fastest growing economy - thomas
http://www.phillytrib.com/news/ethiopia-is-now-africa-s-fastest-growing-economy/article_7c72f20d-3d2b-5901-9d02-9aba91e68e04.html
======
typpo
I spend a lot of time in Ethiopia for my company. In many parts of Addis
Ababa, the entire skyline is under construction - you can't look up anywhere
without seeing a new building in progress. The sound of hammers is ubiquitous.
You can tell the place is booming.

Most of the large construction projects are run by Chinese companies,
especially the Chinese State Construction Corp. New airport terminal,
ministries, hotels, convention center, light rail, and so on. This has caused
some discussion around Chinese taking construction jobs etc. You'll see these
state-funded Chinese construction projects in pretty much every African
country.

Although Addis is booming, the population still primarily lives in the
countryside, and their quality of life is a lot lower. It's misleading to look
at average income across the entire population because the city's economy is
so far ahead of the rest of the country. This has probably contributed to some
of the unrest.

~~~
AdamM12
This reminds me of the DW documentary I watched on their (Chinese) "aid" work
in Africa. The Chinese gov lends money to they country and makes them use
Chinese companies to do all the work and thus effectively brings much of the
money back while dropping the legal obligation on the citizens of that nation.

~~~
duxup
There was an interesting article about other such deals with the Chinese. The
Chinese would make a deal with an African nation and dump products on the
market that they couldn't sell in nations who had an actual choice or quality
standards that were enforced. The market would be flooded by cheap garbage
tools, electronics, and etc. Quality products would disappear quickly as they
were many times more expensive.... and then everyone realizes everything is
garbage.

Interesting enough the construction sites contain none of these tools (the
Chinese workers don't use them), and the locals now can't afford to bring them
on a special order because they're either locked out of the market or many
more times expensive than before due to the trade deal. Crappy state run
industries just keep on trucking at the expense of the locals in Africa.

~~~
vkou
>The Chinese would make a deal with an African nation and dump products on the
market that they couldn't sell in nations who had an actual choice or quality
standards that were enforced. The market would be flooded by cheap garbage
tools, electronics, and etc. Quality products would disappear quickly as they
were many times more expensive.... and then everyone realizes everything is
garbage.

You've described free trade in a nutshell. More industrialized nations love
these kinds of trade policies.

~~~
mistermann
> You've described free trade in a nutshell.

Canada and the US have very healthy activity in cross border free trade, but
I'm unable to tell which of those two countries is the aggressor and which the
victim.

~~~
adventured
There's an $800 billion trade deficit with Canada since 2000. They typically
import about $250b-$280b per year in US goods.

If Canada is the victim, then woe is poor China and Germany. Must suck to have
the world's largest economy devouring your exports.

~~~
verelo
What’s the source of these numbers?

------
Maarten88
There was an interesting Danish documentary on foreign investments in Ethiopia
titled "Dead donkeys fear no hyena's" [1]. It came down that economic
investments (including from the World Bank) are used to drive indigenous
people from their lands, that land is sold (outside of the public eye) to
anonymous foreign agricultural corporations to start industrialized
agriculture. However, those corporations will just export everything abroad,
leaving the local people with little return, and, most importantly, without
food. Promises of compensation, relocation and education are, of course,
neglected, and people who dare to protest are met with arms.

1\.
[http://www.deaddonkeysfearnohyenas.com/](http://www.deaddonkeysfearnohyenas.com/)

~~~
pjc50
> "Dead Donkeys Fear No Hyenas was triggered by a seemingly trivial scene at
> the airport in Addis Ababa, six years back. Waiting for my flight late at
> night, I happened to see some tired workers at the tarmac who were loading
> food products on an airplane destined for Europe. At the same time, another
> team was busy unloading sacks with food aid from a second plane. It took
> some time to realize the real meaning of it – that this famine struck
> country, where millions are dependent on food aid, is actually exporting
> food to us."

This is straight out of the Potato Famine. :(

~~~
Barrin92
>food products on an airplane destined for Europe. At the same time, another
team was busy unloading sacks with food aid from a second plane.

while everyone should acknowledge the degree of poverty that is still rampant
in countries like Ethiopia, that image is not particularly well suited to make
a point.

It can be true that at the same time that Ethiopian farmers sell produce to
Europe, while people from somewhere else try to alleviate poverty in the
country.

It would not make sense for farmers in Ethiopia to stop trading food with the
world at large just because people in the country are hungry. In fact,
depending on whatever economic transaction is going on, the food coming in
might be significantly cheaper than the food going out. Trade and reducing
poverty or hunger are not at odds.

The goal should be to generate better incomes and social services for poor
Ethiopians, not stopping businesses from trading with Ethiopia globally.

~~~
ballenarosada
On the contrary, the image itself is uncomfortably well suited to make a
point. This comment is a classic example of defending an obvious absurdity of
capitalism by appealing to the overall system.

It's true that individuals are all acting rationally, and that imposing limits
on exports would not be a panacea. However, at the most basic level, it is
monstrous that food exports are happening in the context of local starvation.
The rationality of the outcome within capitalism shouldn't blind us to the
absurdity of the outcome itself.

~~~
Barrin92
There's really nothing absurd about this. A country like Ethiopia consists of
independent actors. Someone might sell food abroad to Europe, someone in
Europe might decide to send food to Ethiopia.

There's really no way to stop this other than to outlaw all exports of food
while starting to centrally distribute food in Ethiopia. This is neither
productive nor would it reduce the amount of starving people in Ethiopia. In
fact, it would increase the amount of poverty.

There are certainly poor people who have trouble affording basic goods in
California. Still the solution is not to stop all exports of goods from
California to Washington and vice versa. This would just make everybody worse
off.

~~~
RobertoG
Any country that pretend to develop and keep some independence need to
prioritize a minimum of food production. That's a strategic need. Europe is a
good example of that, where food production is strongly protected. I bet is
the same in the States.

The point of the original post is that those "independent actors" are not
"independents", not from Ethiopia.

~~~
teddyh
> _Any country that pretend to develop and keep some independence need to
> prioritize a minimum of food production. That 's a strategic need._

To turn this back to software, I am strongly reminded of Joel Spolsky’s
discussion of when and what to outsource:

[https://www.joelonsoftware.com/2001/10/14/in-defense-of-
not-...](https://www.joelonsoftware.com/2001/10/14/in-defense-of-not-invented-
here-syndrome/)

“ _If it’s a core business function — do it yourself, no matter what._ ”

------
jeffreyrogers
This is good, but there are some potential problems.

1\. Ethiopia's GDP per capita is ~$700 USD, so this growth is from a very low
base.

2\. Total fertility rate is 4.28. Compare this to China at 1.57 and USA at
1.84. This means that some of the growth just goes to supporting a larger
population.

3\. I have read elsewhere that you need government connections and a lot of
money to do business in Ethiopia. So the benefits of this growth might not be
as broad as they otherwise could be.

~~~
AlanSE
Interesting points you raise, I thought about calculating this by-hand, but
then I realized that actual numbers are published by actual economists.

Here are some old figures:

[https://tradingeconomics.com/ethiopia/gdp-per-capita-
growth-...](https://tradingeconomics.com/ethiopia/gdp-per-capita-growth-
annual-percent-wb-data.html)

In that year, GDP growth was 7.5%, but per-capita GDP growth was 4.9%. I could
have some gaps in my knowledge of the meanings in these figures, but I think
the difference roughly equates to what you speculate - that population growth
eats some of the economic growth when viewed from the perspective of the
individual.

Also important to note, I think that these are nominal, not real figures. So
right now, I think we would reasonably expect sub-5% real per-capita growth.
Even correcting for that I'm sure it's an astounding pace of improvement. It's
hard to wrap your head around multi-year improvements in quality of life of
that scale.

But there's a depressing side, that maybe some nations are actually
contracting in per-capita real GDP.

~~~
ido

        But there's a depressing side, that maybe 
        some nations are actually contracting in 
        per-capita real GDP.
    

I'm sure some countries are contracting, but not due to Ethiopia growing - the
world economy is not zero-sum.

------
jk2323
Ethiopia is an interesting place. You can smell the money in the air.

"Ethiopia hailed as 'African lion' with fastest creation of millionaires"
[https://www.theguardian.com/world/2013/dec/04/ethiopia-
faste...](https://www.theguardian.com/world/2013/dec/04/ethiopia-faster-rate-
millionaires-michael-buerk)

Ethiopia is not an easy place to travel. People are friendly but reserved.
English it not very common there. They are not the African "buddy" type of
people (ey man, lets have a beer!). If you are into adventure, go to the Bale
mountains and take a three day horse ride expedition and try to see the
Ethiopian fox.
[https://en.wikipedia.org/wiki/Ethiopian_wolf](https://en.wikipedia.org/wiki/Ethiopian_wolf)
Or take a two week expedition on horsed to see the Ethiopian lions
(unfortunately longer that my ass can sustain on a horse). AFAIK the only
lions that live in the jungle. It is a rough place. I like it. Possibly love
it, but Ethiopia is not for everyone.

Addis has two major museums. If you want to see Lucy
[https://en.wikipedia.org/wiki/Lucy_(Australopithecus)](https://en.wikipedia.org/wiki/Lucy_\(Australopithecus\))
make sure you go to the right one.

If anyone is interested in importing ore, please ask me. My Ethiopian friends
are always nagging me for business contacts.

~~~
ikeyany
> They are not the African "buddy" type of people (ey man, lets have a beer!).

I think you're confusing Africans with Jamaicans or some other black
stereotype.

~~~
jk2323
I don't care about what you think about "black stereotypes".

But try to see the difference between welcoming Uganda (based on a statistic
they are the most welcoming nation to foreigners) and Ethiopians. Yet, they
are nearly neighbors.

I don't dislike that the Ethiopians are reserved. What did one of the rangers
tell me? We are dirty. We don't have showers. We don't have washing machines.
We are dirty. But we know that we are dirty. We are dirty but not stupid!

~~~
jk2323
A 20 year expat (speak, before the Ethiopia hype( told me this joke:

How to shoot an Ethiopian? Aim 1 meter above his hear. You have to hit his
ego!

Yes, they are a special kind of people and they take proud in it. If they ever
throw me out of my current home, Ethiopia may be, besides Colombia, my second
destination. It is happening there!

~~~
samsonradu
As a regular traveler, you really got my attention. Mind sharing some of your
thoughts about Columbia too?

~~~
jk2323
Colombia caught my attention when I lived in the states. But before I come to
Colombia, lets talk about Brazil.

I fell in love with Brazil many years ago. Many people did, some may still do.
It was an amazing place. People were super friendly, the women were curious
about foreigners... Today Brazil is much less welcoming for foreigners, even
slightly xenophobic. They still have an economic crisis and I wonder what will
happen if the world economy cools down. It also has become dangerous again.
People change, countries change, I may have changed.

So this brings us to Colombia. It is very cheap to fly there from the states.
I had many adventures there, got certified in scuba diving, slept on a tiny
house on an island when scuba diving, learned horse riding in Saint Augustin,
got lost in the mountains when hiking near Armenia (visit Salento!). Partied
super hard at night in Medellin, Cali and Bogota. People were super friendly,
approaching me and other travelers and telling us how happy they are the
things have changed in Colombia and foreigners are now visiting. The climate
is super interesting since you are near the equator but also have the Andean
mountains. You basically can get every temperature you want. From hot
Caribbean (and overrated) Cartagena, to the city of eternal spring, Medellin,
to cold Bogota. I love the Candelaria district in Bogota (as I once loved
Santa Teresa in Rio). It is a magic place and brings me happiness.

People change, countries change, and I may change again. What worries me about
Colombia is that more and more foreigners are coming (voted as number ?.
tourist destination last year). This is seldom a good thing. Sooner or later
the place will change and people will get fed up with tourists. SO if you want
to visit, better visit now and not in 10 years.

Literature, there is not only 100 years of solitude, try to appreciate Nicolás
Gómez Dávila.

------
mirajshah
Ethiopia seemingly has an incredibly good relationship with China. The lion's
share of FDI in Ethiopia is from China, and much of it goes towards large
infrastructure projects. Flying through the airport in Addis recently I was
surprised to see multiple Chinese restaurants, a special lounge for Chinese
travelers, and signs everywhere in Chinese.

It's great to see economic cooperation working out so well on so many levels!

~~~
dalore
This might not be as good as you think:
[https://news.ycombinator.com/item?id=15272413](https://news.ycombinator.com/item?id=15272413)

China will cause the country to become indebted to it and when they can't make
the repayments offer to helpfully take full control of it.

~~~
beat
_coughcough_ IMF _cough_

More broadly, taking on debt to build the infrastructure needed to level up
industrial capabilities isn't exploitation. Building better energy grids,
transportation, and communication infrastructure is expensive. It's
fundamentally no different than software startups taking on fundraising rounds
to enable growth. As long as the leadership isn't irresponsible about it,
there's nothing wrong with it and it should easily pay for itself.

The important thing for debt-for-infrastructure planning is to keep corruption
manageable, so you don't wind up borrowing to build boondoggles that are for
the personal enrichment of the the well-connected rather than the good of the
country.

At any rate, China is no more predatory in this regard than the IMF, the World
Bank, or other western financial institutions. They have a surplus of capital
and need to invest it somewhere. The goal is not imperialist, but rather
capitalist.

~~~
dalore
China is more imperial. They have a really long 100 year view. They don't mind
losing money to gain a long term advantage.

Yes it's exactly/similar behaviour to the IMF. Doesn't make a difference
though to the people.

------
gandreani
So after reading Factfulness by Hans Rosling and family I'm really interested
in investing in African companies. Ideally it would be through index funds. I
got as far as finding ABSA as my go to online broker, but couldn't find any
indexes to research (just a bunch of broken links)

Would anybody have any resources or direction to point me to?

~~~
anubisresources
There are virtually no publicly traded African companies. There are companies
like glencore that have operations here, but they’re still European or Asian
companies. If you’re looking to invest in African companies you have to put
time in on the ground to find private companies suitable for investment.

~~~
MusaTheRedGuard
That's just not true. A more accurate statement would be there are very few
African companies listed on American stock exchanges. They are still listed in
their home country's exchanges

~~~
anubisresources
The daily trade volume on the Ugandan exchange is ~$18,000. Companies may be
“listed”, but good luck actually buying any stock

~~~
MusaTheRedGuard
Look at the Nigerian stock exchange or the South African stock exchange or the
Morrocan Stock exchange.

Obviously financial infrastructure varies a lot from country to country

------
esaym
Get you an air popcorn popper and some green Ethiopian coffee beans [0] and
enjoy some of their great economy right in your own home!

[0] [https://www.sweetmarias.com/green-coffee/africa-
arabia/ethio...](https://www.sweetmarias.com/green-coffee/africa-
arabia/ethiopia.html)

~~~
slfnflctd
I have tried a lot of different coffees, and I personally think Ethiopian is
just about the most pleasantly flavorful in the world, at least for my taste.
The fresher the better.

------
StanislavPetrov
Just a few years ago, Libya was the jewel of Africa and led in almost every
social and economic metric. I wonder what happened there to throw them so
horribly off course?

~~~
dotancohen
Kadafi gave up his nukes. We saw the same thing happen in Ukraine after they
gave up their nukes.

Do you know what is happening in Iran these past few weeks? And I say this as
an Israeli, whom Iran has already threatened to destroy. I understand their
position. Moreso if you consider which two countries border Iran to the east
and to the west, and what has happened in those two countries not long after
the turn of the millennium.

Don't get me wrong, I realize that Europe, Israel, and the US are better off
with a non-nuclear Iran. But having seen Libya and Ukraine, I completely
understand the Iranian position.

~~~
IkmoIkmo
Yeah I recall Mehdi Hasan's article about this some 7 years ago:

"Wouldn't it be rational for Iran – geographically encircled, politically
isolated, feeling threatened – to want its own arsenal of nukes, for defensive
and deterrent purposes?" Pointing out the difference between America, and its
allies, going to "war with non-nuclear Iraq" and their "diplomacy with
nuclear-armed North Korea", Hasan concluded: "The simple fact is there is no
alternative to diplomacy, no matter how truculent or paranoid the leaders of
Iran might seem to western eyes." [0]

As for the OP's question... it was a dictatorship for 40 years driven not by
good governance but by oil money. You either have a dictatorship that builds
very strong institutions for a post-dictator rule, or you don't. And
particularly the oil-dependent states forgo building the right institutions,
because an oil-rich country doesn't need them. Without institutions and civil
society a dictatorship erupts into chaos after the dictator dies, particularly
if it happens abruptly.

In terms of institutions and governance Libya was far from the jewel of
Africa. It was never designed to last. It's more akin to someone living on
creditcard debt for a few years before it all comes crashing down.

[0]
[https://www.theguardian.com/commentisfree/2011/nov/17/iran-w...](https://www.theguardian.com/commentisfree/2011/nov/17/iran-
want-nuclear-bomb)

~~~
tormeh
North Korea has survived until now not because they recently got nukes, but
because they are holding South Korea hostage. The moment foreign troops near
Pyongyang, conventional NK artillery would have leveled Seoul completely.
Millions of rich-country people in a nation allied to the US would die. Also
China would have been pissed.

------
csours
Sing it along with me:

If you are told the percentage increase, check the absolute increase;

Aaaaand if you are told the absolute increase, check the percentage increase!

~~~
everdev
Yes, our newborn was our fastest growing child for a long time! In fact, his
growth outpaced all other children we knew going all the way back until the
previous child was born. Adjusted for "inflation" though, I'm told it was only
average growth.

~~~
TremendousJudge
relevant, as always: [https://xkcd.com/1102/](https://xkcd.com/1102/)

