Ethiopia and Zenawi's gangaster capitalism

By Abebe Gelaw / June 23, 2009
A couple of weeks ago, Sebhat Nega, the man who is credited to be the father of the Tigray People’s Liberation Front, flew to Washington DC to inspect whether the VOA Amharic service can join the self-congratulatory band of the tyrannical regime. In the course of his mission, he told VOA Amharic listeners that he was disappointed with the performance of VOA Amharic section which he referred to as a stable for dissidents.

In his interview with Addisu Abebe, he told us that the Endowment Fund for the Rehabilitation of Tigray [EFFORT], which is the multi-billion dollars business conglomerate that pays neither taxes nor services bank loans, was accumulating wealth for Ethiopia. “EFFORT is owned by the Ethiopian economy, but legally the wealth is owned by the people of Tigray,” he said with no sense of shame.

Corruption or endowment?

Despite the fact that Sebhat was in command of the fraudulent enterprise until he was recently replaced by the dictator’s wife, Queen of Mega Azeb Mesfin, he could not recollect the amount of wealth EFFORT has been accumulating since it started monopolizing the Ethiopian economy in 1995. But it is easy to guess when an illegal entity operates under legal cover without paying income taxes or serving bank loans. One can do a simple arithmetic to work out how much they have accumulated with the help of over eighty companies and underhand affiliate businesses for decades. Funnily enough, Sebhat told us that EFFORT, whom he admitted to be unrivalled for wealth in the wretched land, submits audit reports not to the Inland Revenue but to the Ministry of Justice as a non-profit organisation.

The old man, who is said to have become one of the richest public figures in the country, also claimed that EFFORT was investing throughout Ethiopia. Asked if he could list its investment portfolio outside of Tigray, he mentioned Jimma, where they have set up a coffee processing and exporting company, Akaki and no more. “It has construction projects throughout the country,” Sebhat claimed. He also did a disservice to the people of Tigray by smearing them that they collectively own EFFORT at a time when many decent Tigrians have been condemning the corruption enterprise.

As a flagrant Ponzi scheme, a systematic investment scam based on deception and grand promises, EFFORT is set up to make maximum profit at a minimum cost. But what makes the scheme so unique is the fact that it is illegally run like a nongovernmental organisation by hypocritical senior government officials, who punish small corner shop owners for tax evasion and poor coffee merchants for ‘hoarding’ a few quintals of beans while they are using their power and influence to extort the entire people of Ethiopia.

EFFORT imports and exports tax free, it takes out billions of birr from banks but hardly pays back flouting basic laws, it does not pay income tax, it has unlimited access to hard currency, it takes major federal and regional government contracts including construction at inflated cost and it dominates almost all sectors of the economy stifling the prospect of private entrepreneurship. It is simply a take-it-all and never-give-back scheme, the worst form of gangster capitalism designed to benefit a certain ethnic junta that is hurting the economy and poor taxpayers who are unwillingly funding one of this corrupt politically connected business enterprises swindling billions of birr annually. If the richest criminals do business and never pay taxes and bank loans, why do ordinary citizens have to pay to fund the criminality and luxurious life styles of a highly racist greedy political gang?

Albanian Marxists found a milk cow nation

During the height of political radicalisation in the 1970s, the handful of TPLF founders who fled to the jungle to start insurgency against the military junta in what turned out to be a protracted bloody and destructive armed insurrection, were diehard communists that declared that private property was the root of all evil. According to their 1976 manifesto, the aim of the TPLF was to liberate and establish greater Tigray as a communist pariah annexing territories from Amhara and Eritrean provinces.

Aregawi Berhe, one of the founders of the Tigray People’s Liberation Front, who was later purged and forced into exile by Meles and his inner circle halfway in the course of the insurrection, wrote an interesting paper that appeared in the Journal of African Affairs [2004, Vol. 103/413]. According to Aregawi’s paper, The origins of the Tigray People’s Liberation Front, the diehard Marxists even felt too comfortable with their blind extremism to form “an ultra-left ideological brand of Marxism-Leninism (Stalinism specifically) which culminated in the formation of a group called the Marxist-Leninist League of Tigray (MLLT) in 1986.”

As a matter of fact, the now defunct MLLT, whose chief architect and leader was the current guerrilla leader turned despot, Meles Zenawi, based its ideology on the teachings of the fiery Albanian communist ruler Enver Hoxha [1908-1985], who was actually a fierce critic of Stalin. What made Albanian communism more attractive than Maoism or Stalinism to Meles and his followers has been a subject of debate. But whatever the case was, it is still indicative of the fact that the clique in power is composed of extremists that have jumped from Albanian Marxism to crony capitalism designed to benefit the selected few.

In 1989 Meles gave a lengthy and revealing interview to TPLF’s pirate radio in which he toiled hard blabbering about the front’s ideology as well as Ethiopia’s “one-hundred year” history and how Emperor Minelik committed internal colonialism. In that interview, Meles asserted, among other things, that the purest brand of communism was preached and practiced only in Albania, which was then the only officially atheist pariah, strictly pursuing a closed-door policy. In Hoxha’s Albania, owning a private car was seen as a bourgeoisie luxury and listening to the BBC was an act of imperialistic sedition. As a follower of Hoxha, Meles believed that most Eastern European countries and the former Soviet Union were corrupt states ruled by revisionists who cannot be trusted during the final showdown between “moribund capitalism” and the pure communists like him. No wonder he still seems ideologically deluded as he has had a gruelling steeplechase in his tumultuous political life, jumping from Maoism to Albanian communism, from ‘revolutionary democracy’ all the way to embracing gangster capitalism.

As soon as Meles Zenawi and his remaining cronies, who are spared from his constant purges that appear to have turned the TPLF into a kind of private limited company, consolidated their grip on state power, they have completely abandoned Hoxha’s ideology. As in the era of feudalism, land has been a means of exploitation and control for the TPLF. As there is no government mandated to rule by the people, the TPLF, backed by opportunist political puppets it created in every province, owns, secedes, annexes, allots, sells and grants land to its cronies, Arab merchants and neighbouring countries.

Zenawi’s TPLF has made it no secret that military victory alone is not enough to sustain tyranny in Ethiopia. As a result of this paradigm shift, TPLF has now become a formidable racketeering force engaged in profiteering that controls all kinds of businesses in every sector of the Ethiopian economy. TPLF’s top guns, who have been appointed to run the party’s companies formed under EFFORT, which enjoys unfair preferential status putting private entrepreneurs out of business have allegedly amassed wealth beyond their wildest imaginations. As a result of TPLF’s cronyism, we have now genetically engineered millionaires that are politically connected to Meles and his inner circle.

To make matters worse, Meles grabbed another news headline a few weeks ago by appointing his wife, Queen of Mega” Azeb Mesfin, aka Lemlem Gola, to head TPLF’s business empire, putting EFFORT back into the spotlight once again. Azeb, who infamously bankrupted Mega, is also the head of the Social Affairs sub-committee in Meles Zenawi’s rubber stamp parliament that she controls on behalf of her husband. A couple of years ago, she appeared on a community TV show in America and told us that the Swedes called her and her husband the “poorest of the poor.” She added that her tyrannical husband, whom she claimed to hve a brain that can be sold in any market in the world, does not even know the colour of the nation’s currency that he minted let alone stealing money from the poor people of Ethiopia. The comical drama wasn’t actually nothing more than the Queen of Mega being poorly creative.

The origin of the legendary symbol of Zenawi’s corruption and ethnic cronyism, EFFORT, is as chequered as TPLF’s history. Long before TPLF came to power, the front had amassed a huge amount of asset collected for the war effort through various ways. Money and assets of captured or dead Derg soldiers, funds from external powers including, Arab countries, Libya, Sudan, Egypt and Somalia, TPLF businesses mainly based in Sudan, relief aid, banks and public offices raided in “liberated” territories… were among the many sources of revenue for the ethnic front. But the greater chunk to start EFFORT’s multiple companies came from bank loans that remain unlikely to get repaid as nobody has the audacity or the authority to send bills to Zenawi’s TPLF.

In his book Peasant Revolution in Ethiopia: The Tigray People’s Liberation Front [1975-1991], John Young noted that EFFORT began operations in mid-1995 “by taking non-military equipment captured from the Derg; it furthered acquired companies established during and after liberation by the TPLF, and also received limited financial contributions from supportive NGOs.” It is also worth mentioning that EFFORT took over public enterprises under the guise of privatisation. John Young further pointed out that “with its capital, bank borrowing, and a team of seven TPLF Central Committee members,” with correspondent MBAs from Open University, EFFORT was destined to be a fraudulent economic “powerhouse.” EFFORT was launched under the leadership and guidance of Meles Zenawi [Legese Zenawi] and his trusted cronies Sebhat Nega [Wolde Selassie Nega] Seye Abreha [purged], Arkebe Ekubay, Abadi Zemu, Yohannes Ekubay, Yohannes Kidane, Alemseged Gebreamlak [purged], Abay Tsehaye, Tewodros Hago, Shimelis Kinde, Atkilit Kiros et al.

EFFORT: a symbol of grand corruption

EFFORT now boasts to own a brazen list of numerous strategic companies that are being accused of using their political connections to skew the economy, bankrupting banks and engaging in tax evasion under complex “legal” covers to protect their privileged status. According to informed sources, EFFORT’s business portfolio, enterprises like Addis Pharmaceutical Factory, Guna Trading House, Meganet, Almeda Texitile Factory, Hiwot Agricultural Mechanization Plc, Ezana Mining Development Plc, Africa Insurance, Wegagen Bank, Trans Ethiopia, Sur Construction Plc, Mesfin Engineering, just to mention a few among over eighty companies, owe the Commercial Bank of Ethiopia, the Construction and Business Bank as well as the Development Bank of Ethiopia over six billion birr. As a result of TPLF’s insatiable greed, the banks financial health has been seriously affected causing inflation. To make matters worse, the companies do not pay tax that need to be emphasized despite the fact that they are engaged in profiteering businesses having the lion’s share of government contracts at federal and state levels.

Meles Zenawi’s decision to appoint his wife to lead the corruption giant EFFORT bankrupting and plundering Ethiopia, has been well-calculated and shows the intention of the dictator to closely monitor the money flow. The first head of EFFORT, ex-Defence Minister Seye Abraha, suffered in jail after openly challenging Meles’ absolute rule during the war with Isaias Afewerki. The main reason for Seye’s predicament was not corruption as it is an open secret that all the company running “directors” and their close associates have enriched themselves at the expense of the hungry stricken people of Ethiopia. Seye, along with his family members, was accused of corruption and pilloried in courts. In his defence, Seye read a 29-page statement in court in which he alleged that Meles was actually the one who had committed “high treason and grand corruption.” In fact, as an insider Seye knows better than any ordinary folks. So it is very hard to dispute what he alleged.

For now, the Queen of Mega is on the throne of her husband’s gangster capitalism that benefits the selected few at the expense of the suffering masses who sustain their lives with food aid and compassion from afar. That is the sad reality of Ethiopia which never goes away year after year. Meles Zenawi’s gangster capitalism is based on nothing but the economics of looting that defies every economic principle, equity, fair play and common sense. That obviously calls for challenge and scrutiny.

In his VOA interview Sebhat mentioned a very weird plan of the TPLF. He said the ethnic party would dissolve itself after it establishes “capitalism.” In other words, it will ultimately commit suicide after plundering and totally bankrupting the unfortunate nation. It may be a funny premonition but corruption is an act of suicide that ultimately brings down any government.

Whatever they claim, there is enough evidence to boldly claim that EFFORT, backed up by Tigray Development Association [TDA] and the Relief Society of Tigray [REST] which are also involved in businesses though not as large scale as EFFORT, is nothing but the ugly face of gangster capitalism whose foundations are thievery, cronyism, nepotism, discrimination, grand corruption, tax evasion and unbridled greed. And yet EFFORT is being promoted as the property of Tigray with a view to further alienating and smearing Ethiopians of Tigrian origin, the majority of whom are obviously as outraged as the rest of the nation.

Gangster capitalism, whose hallmark is excessive greed and primitive accumulation, enriches no one except a few repressive members of a club of gangsters who are destined to fall into the graves they been digging for the hunger-stricken nation. As the educationalist, Amos Bronson Alcott [1977-1888], said: "A government for protecting business only, is but a carcass, and soon falls by its own corruption and decay."

The myopic leaders of the TPLF, the discriminatory ethnic party trying to impose slavish national obedience, may believe that EFFORT is accumulating wealth but in reality it is a disastrous economic and political liability that will remain an indelible blot which will inevitably go down in the history books to be passed down to generations to come.

That said, it leads us to a simple question. When will we have a decent government that works in the best interests of the whole nation? After all the idea of setting up a government at the expense of poor taxpayers is not to enthrone those who commit atrocities, division, discrimination and daylight robberies against a nation but to protect and promote the public good. It is the duty of a decent government to crack down on criminals, but if the government is run by a gang of criminals then it becomes the duty of ordinary citizens to expose and make concerted efforts to crack down on the repressive regime that has made our lives too unbearable.

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The writer, Abebe Gelaw, is a Knight and Yahoo International Fellow. He can be reached at