Bonds of fraud

March4Freedom activist / April 23, 2011

There may be one thing that otherwise disparate-seeming people can agree on: government supporters, regular folks who are looking for investment opportunities, the gullible who trust any information as long as it comes from an "official" government source, and the Ethiopians with a conscience and love for country who are trying to give back: They all have no interest in losing their hard-earned savings where financial gain was promised them.

Inherently unstable, unaccountable dictatorships have a way of expressing gratitude for the inflow of funds coming through the purchase of government bonds, but then, when the bonds mature and the funds are due the investors, of finding a million reasons why they can't just yet cash out. And time passes, and reasons accumulate why it's still not quite the time to pay the investors back. Until eventually the matter will be swept under the rug by the government that never held its side of a financial bargain.

We need not look far for hard evidence that this is what tends to happen in dictatorships, which are characterised by an absence of any genuine recourse to justice. Years ago, many Eritreans who thought they were doing the right thing for their country put their faith--and family savings- into Eritrean government bonds. The outcome was disastrous, resulting in heartwrenching financial loss for masses of Eritreans both abroad and in the country. An article written nearly ten years ago recounts this tragedy. Ethiopians at home and in the diaspora should consider history before repeating its mistakes. Ethiopians in Ethiopia, in fact, often have little choice but to pay up, in light of suffocating pressure imposed on them in overt and implicit ways. But Ethiopians in the diaspora certainly have a choice to steer clear from an investment that is likely to hurt them deeply.


Bonds Shame: GoE Not Honoring Its Promise By Haile Tesfay -Nov 23, 2002

When the Eritrean Government screamed, “we need financial backing from our people in the Diaspora” during the most recent conflict with Ethiopia, Eritreans dug deep into their pockets, bank accounts, credit cards and even took out second and third mortgages on their homes in order to respond to this call. When the government came out with the ‘dollar a day’ initiative, we dug into our savings. When the government came out with the “first, second and third offensive” initiatives, we emptied out our children’s education funds. When the government screamed we need more money, we went as far as borrowing from our credit cards. Finally, the government came up with bond certificates and we, in good faith, bought them, with the understanding that they would be honored upon their maturity.

This year, the first batch of bond certificates matured and many Eritreans are finding out that the Eritrean Government is playing the ‘procrastination’ game; that it is not honoring its legal contract with the Eritrean people. This contract is more than a legal agreement between the Eritrean Government and Eritreans in the Diaspora, it’s a demonstration of the faith Eritreans had on the Government. Isn’t it this faith that was heralded all over the world? Isn’t it Eritreans’ steadfastness and unselfishness in responding to the Government’s call that amazed everyone? Sadly enough, this faith is repeatedly shaken and destroyed by the actions of those at the helm of power in Eritrea. Following a distressing pattern of taking its people for granted, the Government of Eritrea once again disregards a promise made to its people, one more example of how the Eritrean Government continues to fail its constituency.

As was posted a few weeks ago on a couple of websites, a group of us have started a legal process in order to encourage the Eritrean Government to honor the bond certificates it issued. It is unfortunate that we have been forced to take this legal route due to the Eritrean Government’s complete disregard for any promises made. In the message, we asked those who bought bond certificates and who have not gotten their money upon maturity to contact us. Due to the overwhelming response, we decided to write this follow-up message in order to share some salient points from e-mails we received. People DO NOT have to give a reason as to why they would like their money back, as it’s a legal and ethical imperative. Nevertheless, we would like to share the sad realities that push Eritreans to ask for their money now.

Not surprisingly, many people in the Diaspora find themselves in a position where their families in Eritrea find it very difficult to survive without their help. Situations such as the following compel Eritreans to send money directly to their families:

  • Bread-winners languish in the military, as their families sink deeper and deeper into poverty;
  • The intolerable rate of inflation and the ultra-high cost of living as compared to income levels; and
  • A dilapidated and backed-up public health-care system where the wait to have even the simplest of medical procedure is too long, forcing people to go to private clinics.

These and similar examples were given by desperate voices that shoulder many of the responsibilities of their families in Eritrea. Therefore, we would like to say to you, please do not feel any shame in asking the Eritrean government for the reimbursement of your bond money. Even though your reasons are noble, you do not have to apologize for asking that a legal and ethical agreement be honored.