Mereja.Forum

[Thomas H]

Brhane's Perspective

እተን Veto power ዘለወን ከ ሱቕ ድየን ዝብላ : እስቲ ፍረዱ ነዚኣ ከመይ ገይርካ ሃገር እያ ኢልካ ብ ዉዱብ ሑቡራት ሃገራት ዓለም ኣፍልጦ ትህባ :: Come on guys. እስቲ እቲ ቤተ-ንዋየኦም (Thier bank) ረኣይዎ:: እቲ " P" ዝብል ከ ን ናይ ናይ መኪና ግዝያዊ መዕረፊ, ወይስ?
I issue you a direct challenge to provide any country's bank like this You won't find..

[Fiyameta]

• "... if the African continent creates a Bank of its own sometime soon....
  The Eritrean model may well be worth mimicking."

International
Banco del Sur
An alternative to the World Bank and IMF

MICHAEL SHANK and AMI CARPENTER


The World Bank's launch in late November of a five-year action plan for fighting the HIV/AIDS pandemic in Africa is emblematic of the Bank's new direction. The structural adjustment programs are of yesteryear.

Less controversial campaigns are becoming more common and economic strong-arming less frequent. Why the shift? The economies of some former Bank recipient countries have improved, loans repaid, and Bank presence ushered out. Venezuela, Bolivia and Ecuador have done as much, even creating a Bank of the South, launched in early December with four other South American countries.

The split from foreign aid is a significant one, even though western economists doubt that the southern three will survive on their own. Yet, the numbers already look promising and there is precedence for economic stability in foreign aid-free, developing countries.

Take Eritrea. Long an isolationist nation determined to be self-reliant, the country's GDP and income both rose nearly 9 percent in the last ten years, with adult illiteracy dropping by 8.4 percent. Life expectancy, school enrollment and primary school completion rate all increased, while mortality rate dropped substantially. During the same period, Eritrea's ratings on the UN Human Development Index which measures achievement in three dimensions (long healthy life, knowledge and a decent standard of living) rose 9.3 percent.

While Eritrea is no shining star ranking at an unenviable 130th in the HDI, it does challenge the paradigm of dependency, faced by many developing countries, on foreign aid. Its social indicators are improving, slowly but surely, and without the backing of the banks in the west.

Mimicking Eritrea's headstart on self-reliance, Venezuela, Bolivia, Ecuador and most likely others are eager to shrug off what they perceive as the political yoke of foreign aid. They think western aid is frequently aligned with the geopolitical priorities and interests of developed nations.

Not long after the Bank appointed Robert Zoellick and the IMF appointed France's Dominique Strauss-Kahn, South American nations announced their intentions to form the Bank of the South. Now, with December's launch, Argentina, Bolivia, Brazil, Ecuador, Uruguay, Paraguay and Venezuela have staked their self-reliant claim to be free of foreign philanthropy.

How the south will fare is yet to be seen. Venezuela's 2008 budget allocates 46 percent to the social sector with special attention to health, education, food aid, land reform, affordable housing, micro credit and job training. These are sectors in which the Bank and the IMF traditionally focused on.

Some economists see this as serious socialism. How dare Venezuela's President Hugo Chavez funnel oil and natural gas revenues into the social sector and rebuild the deteriorating infrastructure? How dare Bolivia's President Evo Morales consider an equitable nation-wide distribution of revenues stemming from natural resources? How dare Ecuador's President Rafael Correa decree that 99 percent of extra oil income will be distributed among the people, leaving only one percent for foreign firms?

They dare because they can. With fuel prices crossing $100 a barrel, oil-rich and gas-rich nations are exerting the same power on developed nations that they once did so determinedly on developing nations. The tables have turned and the formerly dependent are less so. And who's to blame them?

HIV/AIDS programs in Africa then for the Bank? With the pandemic on the rise throughout the continent, countries are in weak position to refuse assistance. Self-reliance in Sub-Saharan Africa may be slower to pick up steam than in South America. But don't be surprised if the African continent creates a Bank of its own sometime soon. The Eritrean model may well be worth mimicking.

Michael Shank is an analyst with George Mason University's Institute for Conflict Analysis and Resolution. Ami Carpenter is a fulltime instructor at California State University's Program on Negotiation, Conflict Resolution and Peacebuilding.

http://www.nepalitimes.com.np/issue/200 ... onal/14341

[Fiyameta]

".. for every $1 that African countries receive in grants, they pay back $13 in interest on debt...

An Economic Lesson We Can Learn from Eritrea

• In the midst of the banking crisis and credit collapse, one country's development policies stand out as a lesson to the rest of us

By: Professor Mark D. Juszczak, an economist

Eritrea, a war-ravaged land of extremes in the horn of Africa where the per capita GDP hovers around $2 a day, is an unlikely place to find lessons in economic development for wealthy western nations. And yet, in the midst of a global credit meltdown and a crush of pollution related ecological phenomena that are wrecking a higher and higher economic toll, it appears that our persistent paradigm of growth for growth's sake is reaching its limit.



Eritrea stands out, despite a strong grip on power by the country's sole party, People's Front for Democracy and Justice, for one distinct principle that has managed to persist above the pressure of both internal and global politics. This principle is a strong commitment to self-reliance and virtually zero debt.



Given the unsustainable cheap price of credit over the last several years, this is of specific interest. But, if one examines the context of credit in Africa, a clearer picture emerges. Africa currently spends about $15 billion a year on debt repayments, mostly from loans given by international agencies. In addition, for every $1 that African countries receive in grants, they pay back $13 in interest on debt. Without going into the history of this debt crisis, it is sufficient to say that prudence and a long-term perspective on sustainable growth were not at the forefront of policy makers and government leaders.



Eritrea, on the other hand, has taken a different path since its independence in 1993: one that can stand out both within Africa and to the rest of the developed western world as an example. Since its independence Eritrea has been ruled by the guerilla hero of their struggle with Ethiopia, President Isaias Afewerki. The President has rejected most foreign aid and promoted an agenda of internal development: by and for Eritreans. Although there have been sporadic periods of long bread and milk lines and the economy remains largely subsistence, with over 80% of the population working in farming and herding, a number of distinctly visible results have produced a unique national profile – one that is a time capsule on the surface and a design for a sustainable future at its roots.



The New York Times ran a series of travel articles on Eritrea over the past two years. While the articles highlighted distinct tourist attractions, one paragraph stood out: "In 1994, the Eritrean government decided to rebuild the railway. It had hardly any money, and it asked for none. Retired railway workers, some in their 80's and 90's, came forward, and eight steam engines were painfully rebuilt, the parts made from smelted brass and iron. Eritreans were asked to return any parts they found. The lines, tunnels and bridges were repaired and rebuilt by hand. [The reporter visited] the workshops where the old men show me the ancient lathes and cutting machines that they have used to restore two more steam engines. They recycle and melt scrap metal to make parts."



There are several economic and ecological principles that the Eritrean approach to the restoration of the railroad demonstrates:

-a preference for skills building of the native workforce instead of opting for turn-key solutions by foreigners that may be more modern but do not provide opportunities for self-development

-a respect for the intelligence and competence of Eritrean nationals by the Eritrean government

-a zero-debt approach to ground-up development

-a model of development that produces a smaller carbon footprint than focusing on building highways and importing foreign automobiles through credit

-a tremendous pride in the craftsmanship and durability of Eritrean made goods and services

-a closed loop approach to industrial projects: zero-debt and zero-waste.



These principles might appear insignificant to the technological race that liquid capital is producing in powerful western economies, but they are the cornerstone of sustainable growth. Eritrea barely sips on the hydrocarbon economy. Although this might appear to be its weakness it is really a strength. It's nearly five million people consume approximately 5000 barrels of oil a day or 1/3 of a barrel per person per year. To put this in perspective the US consumes approximately 68 barrels of oil per person per year, over 200 times as much per person.



Precisely because it does not yet have a cumbersome hydrocarbon based infrastructure or development model, there is a great opportunity for Eritrea to develop a 'natural capital' economy from the ground up – focusing on conservation, solar energy, converting its steam powered rail network to electricity and developing an extensive inter-modal transport network focused on the human dimension of scale.



At the same time, Eritrea stands out as an unusual example of wisdom and prudence in government. We could all learn lot from its example.

http://markdarius.com/news/an-economic- ... om-eritrea