www.eastafricaforum.net http://africa.reuters.com/country/ET/news/usnLQ230145.html
Maids in Lebanon dying every week - rights group
Tue 26 Aug 2008BEIRUT, Aug 26 (Reuters) - Lebanon must improve working conditions for migrant domestic workers, who often commit suicide or die while trying to escape from their employers, a U.S.-based rights group said on Tuesday.
Human Rights Watch said there were an estimated 200,000 such workers in Lebanon, including those with illegal status, mostly from Sri Lanka, the Philippines and Ethiopia.
Out of about 95 foreign housemaids who died in Lebanon since Jan. 2007, 40 deaths were classified by their embassies as suicides and 24 as workers falling from high buildings, often trying to escape their employers, it said in a statement.
"Domestic workers are dying in Lebanon at a rate of more than one per week," said Nadim Houry, senior researcher at Human Rights Watch.
"All those involved -- from the Lebanese authorities to the workers' embassies, to the employment agencies, to the employers -- need to ask themselves what is driving these women to kill themselves or risk their lives trying to escape from high buildings."
The rights group called on a committee created in 2006 to improve workers' conditions, to investigate the causes of these deaths and develop a concrete national strategy to reduce them.
The Labour Ministry, which leads the committee, was not immediately available for comment.
The rights group said interviews with embassy officials and friends of domestic workers who committed suicide suggested that "forced confinement, excessive work demands, employer abuse and financial pressures are key factors pushing these women to kill themselves or risk their lives".
According to Human Rights Watch, Lebanese labour laws specifically exclude domestic workers from rights guaranteed to other workers, such as a weekly day of rest, work hour limits, paid holidays and compensation.
"While the Lebanese authorities cannot guarantee these women happiness, they should guarantee them the right to move freely, to work in decent conditions, to communicate with their friends and family, and to earn a living wage," it said.
http://www.app.com.pk/en_/index.php?option=com_content&task=view&id=50518&Itemid=2
Associated Press of Pakistan
August 27, 2008
British Muslim delegation visits Ethiopia and Somaliland
LONDON, Aug 27 (APP)- Four prominent British Muslims have visited Ethiopia and Hargeisa in Somaliland as part of a Projecting British Islam visit. The main aim of the visit was to build stronger partnerships between British Muslims and the Ethiopian and Somali Muslim leadership.
According to a Foreign and Commonwealth Office release, the delegation helped showcase the integral role of British Muslims in the UK and highlighted the work being undertaken in both countries by British organisations.
An important outcome of the visit was to add the voice of British Muslims to those in Ethiopia and Somalia who are opposed to extremist ideology. The four delegates were: journalist Fuad Nahdi ,educationalist Sheikh Babikir Ahmed Babikir, Sabin Malik a Community Cohesion specialist and Habib Malik of Islamic Relief charity.
The delegates met students, civil society and religious leaders in both Ethiopia and Hargeisa. A highlight of the visit was when Sheikh Babikir Ahmed Babikir, one of the delegates, addressed 10,000 people during Friday prayers at the main Mosque in Ethiopia.
Other highlights included meeting the President of Somaliland and taking part in two lively Q&A sessions about Islam with young Somali and Ethiopian Muslims.
Speaking about their visit, the delegates said:
“We went to Ethiopia and Hargeisa for discussions about issues of mutual concern, in particular to build partnerships between British Muslims and communities in both countries.
We enjoyed an open and frank discussion with leading figures in Ethiopia and Hargeisa including Muslim scholars, community representatives, educational and women’s leaders. “We shared our experiences as British Muslims in Britain today and helped counter the misperceptions that existed about the role of Muslims in UK society.
We also learned a lot from the experiences of our Ethiopian and Somali hosts. We were proud to represent the diverse range of British Muslim communities on this visit.”
Projecting British Muslims is a programme of visits by British Muslim delegations facilitated by the Foreign and Commonwealth Office to a range of Muslim majority countries, and countries with Muslim communities.
The aim is to share their experiences as Muslims in Britain today and engage in constructive dialogue and debate with a range of political, religious and social groups and figures.
http://news.newamericamedia.org/news/view_article.html?article_id=8999b6d3c59ee1ad69baaea141567cf2 New America Media, US August 26, 2008
Adopting Ethiopian Orphans May Not be the Best Solution
Americans are adopting fewer orphans overseas except in one country: Ethiopia. But social workers are saying adoption is not the best solution to Ethiopia's problems. Bauer is a freelance journalist and photographer based in the Middle East and Africa.
Addis Ababa, Ethiopia - On the outskirts of Addis Ababa a newly built orphanage called Rohobet is hidden among tin-roofed shacks on top of a eucalyptus and pine-covered hill. All around it, dirt roads are turned into muddy rivulets in the midday drizzle.
The inside of the largely empty house has features that are distinctly un-Ethiopian. A large kitchen table and chairs -- the eight children are to eat at a table rather than on the floor.
Babies are fed by bottles and sleep in cribs, rather than the large pieces of cloths shaped into tiny hammocks that are the norm in most Ethiopian homes. When they travel, the smallest children sit in car seats. After leaving their home state of Oromo and coming to the orphanage, the children are being prepared for life in the United States.
In the four months that the Rohobet orphanage has existed, it has had five children adopted through the Minnesota-based agency, Better Future Adoption. The director of Rohobet is a man I'll call Tewodros since he asked not to be named for fear of reprisal from the government or the American adoption agency that funds his orphanage.
He had the personality of a non-profit entrepreneur, with a big heart and a mind for expanding his business. His mission was clear: raise more money and have more children adopted. "We have enough orphans, just not enough money," he said.
He also has enough of a demand. For his line of work, business is virtually booming. In recent years, Americans have become increasingly interested in adopting children from Ethiopia, a dynamic that a New York Times article last year attributed to the fact that orphanages in Ethiopia are run by foreign agencies and that the country has a relatively efficient and hassle free adoption process.
According to Tewodros every week, American families land in Addis Ababa to pick up their new children, usually leaving in less than seven days.
While American adoption of Ethiopians is climbing, international adoption by Americans is declining overall. In 2004, Americans adopted 22,884 children from other countries. In 2007 the number was 19,400.
The number of children sent out of Ethiopia to the United States in that same period has more than quadrupled, rising from 289 in 2004 —the year before Angelina Jolie's famed adoption of an Ethiopian girl— to 1,255 in 2007. This makes Ethiopia the fourth most popular country for Americans to adopt from after China, Guatemala, and Russia, respectively.
But is adoption actually the best strategy for improving the lives of the orphaned children?
Most of Ethiopia's estimated one million orphans have extended family members who, if they only had the money, Tewodros said, would care for the child. Here's where the idea of adoption as a last resort gets tricky: It costs $20 per month to support a child with a foster family in Ethiopia.
More often than not, the foster family is one of the child's relatives. An American parent adopting a child through Better Future Adoption will spend between $14,170 - $18,170 in fees and travel costs, according to the Web site.
"To solve the problem of orphaned children, we need solve the problem of HIV," said Teshager Shiferan, director of the Dawn of Hope Ethiopia Association. His organization is an association of people living with HIV/AIDS, the main cause of orphaned children in Ethiopia. Of the country's one million orphans, 700,000 have
Photo credit: Shane Bauerlost their parents to the disease.
"We can't solve the problem of orphaned children in Ethiopia by sending them abroad," Shiferan said. "We need to focus on the prevention of HIV/AIDS." Ethiopia, he said, is headed in the right direction.
Three years ago, the government began offering free anti-retroviral treatment (ART) to 150,000 HIV/AIDS victims. That is still a small fraction of the estimated 1.2 million people living with HIV/AIDS, but it is already showing results: according to him, the number of people dying from HIV/AIDS in Ethiopia has been declining.
"The implication is clear," he said. "An orphan is someone whose parents died. If you increase the number of people who get ART, you decrease the number of orphans."
Dealing with HIV/AIDS might be a long-term solution to curbing the problem of orphaned children, but people like Tewodros are invested in dealing with the immediate problem of kids without parents.
As of late, he's been coming up against the government, which has recently been increasing restrictions and implementing policies that would keep children in the country. For a child to be approved for adoptions, new stipulations require documented confirmation of the death of both parents or the serious illness of the single living parent.
Tewodros said the reason for the policy change is to crack down on child trafficking, but for him, it just creates headaches. Three of the children at his orphanage are waiting to be adopted, but the government has been refusing to approve it, because the children's father is still alive. "We go to the ministry again and again and the government won't give us permission. Their father is a poor man and he can't take care of them," he said.
Tewodros admits that adoption isn't always the best strategy, but like non-profits the world over, he is restricted by funding. The money is in adoption, not in keeping children in their country with their families.
Doing the math, it would cost roughly $5000 to fund the care of 20 orphans by their extended family. While that amount is 26 times the average yearly income of an Ethiopian, it's about a quarter to a third of the amount an American would pay to adopt a single child from the Rohobet orphanage.
Wednesday, August 27, 2008
Saturday, August 23, 2008
Sports, security and economy: Challenges of the Horn in the new millennium
www.eastafricaforum.net http://www.iaaf.org/OLY08/news/kind=108/newsid=47300.html IAAF, US Saturday, 23 August 2008 Men's 5000m - FINAL
Kenenisa Bekele adds the 5000m gold to the 10,000m title he won earlier in the week (Getty Images)
Alongside Hannes Kolehmainen, Emil Zatopek, Vladimir Kuts, Lasse Viren and Miruts Yifter we can now add the name Kenenisa Bekele as the only men to win the 5000m and 10,000m double at the Olympic Games.
The Ethiopian maestro produced a masterful tactical performance as he dictated the pace from the front for much of the race before unleashing that killer kick finish to destroy the opposition and set an Olympic record of 12:57:82.
So often in the recent past global 5000m finals have been characterised by turgidly slow races followed by a last lap burn up but Bekele, who was beaten by just 0.20 to the gold medal in Athens four years ago, was never going to allow that to happen a second time.
Supported ably by his Ethiopian lieutenants - including his brother Tariku and Abreham Cherkos - the trio laid the foundations for Bekele's memorable victory. Kenya's Eliud Kipchoge, the eternal bridesmaid, went one better than four years ago in Athens to take silver in 13:02.80 with countryman Edwin Soi (13:06.22) taking the bronze.
Surprisingly for Bekele, who is the World record holder, this was his first global 5000m title and he also matched the feats of his compatriot Tirunesh Dibaba who had completed the 5000m and 10,000m double the previous day.
Eritrea's Kidane Tadesse took the field through the first lap in a modest 68 seconds but Bekele mindful of being outsprinted by Hicham El Guerrouj at the Athens Games, was not prepared to suffer the same fate again. He hit the front and slowly cranked up the pace ahead of Ireland's Alistair Cragg.
Bekele's younger sibling, Tariku, took his turn at the front and he hit the 1km mark in 2:45.49 followed by Kenenisa with the third Ethiopian, Cherkos, the World Junior champion, controlling affairs at the front.
Just after the 2km point - passed in 5:22.29 - Cherkos took his turn at the front, although the Kenyan trio took closer order behind the Ethiopians.
At 3km Bekele, that's Kenenisa and not Tariku, led them through in 8:00.85 but five laps out he decided to make what would prove the decisive move of the race putting in a 60-second lap to blow the field wide open.
Four laps out only five athletes remained in touch with the leader - Kipchoge, Soi, World champion Bernard Lagat, Moses Kipsiro of Uganda and Qatar's James Kwalia of Qatar. Kwalia was the next to crack followed quickly by Lagat, who could not gain 5000m redemption after bombing out of the semi-finals of the 1500m.
Bekele now consistently running 60-61 seconds was hurting the opposition and on the penultimate lap Kipsiro, the World bronze medallist was the next to drop off the relentless pace at the front.
At the bell Bekele was followed by Kipchoge and Soi but any hope of a Kenyan champion in this event since John Ngugi in Seoul 20 years ago had evaporated 150m into the final lap. Bekele shifted into fifth gear and like a top grade sports car just left the Kenyans for dead.
Soi quickly dropped out of the picture and Bekele had opened up a winning lead on Kipchoge halfway down the back straight.
The rest of the lap was primarily a case of whether Bekele would dip below Said Aouita's 24-year-old Olympic record of 13:05.59. We should never have worried. Bekele produced a 53.8 final lap to stop the clock in 12:57.82.
Kipchoge and Soi took the two minor medals to ensure Kenyan picked up five medals inside the Bird's Nest Stadium tonight - the final day of the track and field programme.
Kipsiro placed fourth in 13:10.56 with Cherkos fifth (13:16.46). Tariku Bekele settled for sixth in 13:19.06 but Lagat's miserable Games was complete as he wound up ninth in 13:26.89.
_________________________ http://www.irinnews.org/Report.aspx?ReportId=79945 IRIN August 22, 2008 ETHIOPIA: Thousands displaced by flash flood in Gambella
Photo: /IRIN
Thousands of people have been displaced by flash floods after two rivers in the Gambella region burst their banks
ADDIS ABABA, 22 August 2008 (IRIN) - Three rivers in the Gambella region of western Ethiopia have burst their banks following torrential rains that fell in the area for three consecutive days, government officials in the area said.
"We have not yet finalised our assessment, however, an estimated 10,000 to 11,000 people have been displaced," Akway Abala, team leader for the Disaster Prevention and Food Security Department of Gambella region, told IRIN on 22 August.
A flash flood, he added, had occurred in Lare woreda (district) after the heavy downpour that lasted from 16 to 19 August. Villages in another woreda, Itang, which is located 53km west of Gambella town, were also swept away by a flood on 12 August after the Pukong river burst its banks.
"Residents of the villages [have fled] to the highlands," Akway said. "Some of them have sheltered with their relatives and others have made temporary huts. After we finalize our assessment, we will appeal for aid from the federal government or other non-governmental organizations.”
Gambella has been repeatedly affected by flash floods whenever rivers draining down to the region from the western highlands of Ethiopia fill up and burst their banks.
Other regions of Ethiopia have also been affected. In April 2007, several houses were damaged by flood waters in the eastern town of Dire Dawa, 515km from Addis Ababa, after heavy rains pounded the area.
The floods swept over the Addis Ketema and Decahtu suburbs, but there were no reports of casualties. In August 2006, Dire Dawa, Ethiopia's second-largest town with a population of 400,000, was again hit by flash flooding in which at least 250 people died and nearly 10,000 were forced to leave their homes. That flood prompted the town’s administration to build sand banks in the Decahtu, Ashwa, and Hafcat.
The latest reports of a flash flood have come as Ethiopia grapples with a food crisis affecting several million people, as a result of drought, rising global food and fuel prices and poor rains.
____________
Sustaining Growth: A Way Forward
By Ken Ohashi
World Bank’s Country Director for Ethiopia and Sudan
Setting aside the food crisis for a moment, Ethiopia’s two main economic challenges today are rampant inflation and rising trade deficits. They are interrelated. They reflect an economy that is trying to grow faster than the supply side could keep up.
When domestic demand grows faster than domestic supply, an underlying inflationary tendency is created, and imports rise sharply to alleviate domestic shortages. Of course, the external shocks of high oil and other commodity prices and the failure of Belg rains earlier this year have exacerbated the problem.
Behind all this is the growth strategy of the Government of Ethiopia (GoE). It aims to create quickly a strong infrastructure base and certain key production capacity (e.g., in hydropower, cement, and export industries in general) so that in time, growth of imports will moderate and exports will begin to narrow the trade deficit.
This is a risky approach, for it is an attempt to "over invest" in certain things in anticipation of a strong supply response. But, Ethiopian policymakers argue that a gradualist approach will not do in a country that has been mired in severe poverty for decades.
The current food crisis, which was caused by a failure of rains that generally contribute no more than 10% of the annual food supply, is a stark reminder that Ethiopia needs fast and sustained growth to overcome such vulnerability. Having managed to get the unprecedented growth started—an impressive feat in itself—GoE leaders are keen to sustain this at all cost. Until a tipping point in external imbalance arrives, they hope that more aid and remittances may bridge the financing gap.
Is this a credible scenario? Should the donors step up aid efforts to help fill the temporary financing gap? I believe this strategy has certain coherence. But, the recent experience has also revealed an important weakness.
Private investment, while very strong in select sectors, has not responded to the increasing opportunities on the scale needed to keep the supply side of the economy growing fast enough. Various analyses indicate that investors still find the ‘business climate’ in Ethiopia not good enough for a major investment rush that could have avoided this supply problem. One should also not forget that after a 17-year Derg regime, Ethiopia’s private sector started from a very weak base in the early 1990s.
This does not mean the basic strategy is wrong. I think it can still be viable, and I hope it will prove successful. I believe, however, some mid-course corrections may be necessary. To give a more considered answer, we will have to examine carefully the possible export and import trajectories, underlying investment projections, etc. But, I have some tentative suggestions.
First, I do not think Ethiopia can count on increased aid and remittances alone to offset the rising trade deficits for the next several years. The gap is simply too large.
An important part of the solution is likely to be found in increasing foreign direct investment (FDI), while moderating investment by the public sector. Both types of investments require imports, but FDI brings its own foreign financing.
This switch will allow Ethiopia to maintain high levels of investment without causing foreign exchange problems. Of course, this assumes some public investment projects can be delayed without harming growth, or can even be replaced by private investment.
Ethiopia may find such substitution opportunities in electricity generation, transportation, etc. If state-owned enterprises are involved in conventional manufacturing activities, they would offer obvious opportunities for FDI substitution.
Second, there is still much Ethiopia can do to encourage private sector investment broadly and increase the supply response to the growth in demand. Studies have identified several areas of action, including access to finance, access to land, etc.
Measures that encourage FDI are usually also good for domestic investors (unless they are preferential measures). Since Ethiopia faces a shortage of foreign exchange, focusing on areas that can attract FDI may be timely.
One idea I found interesting is the possibility of opening the domestic civil aviation sector to foreign/domestic joint ventures, and lifting the limit on the size of aircraft private companies can operate.
This can bring not only foreign investment but also increase Ethiopia’s attractiveness to foreign tourists. Furthermore, it would increase the passenger traffic for Ethiopian Airlines from its international routes, a major foreign exchange earner for the country.
Although I do not know all the complexities of this industry, this seems like an attractive proposition. I imagine there are many other such ideas. If foreign investors are required to enter Ethiopia through joint ventures, then it would also help promote domestic businesses.
Third, agricultural productivity remains too low. This is true despite the significant growth in output and some impressive success stories (e.g., roses). I had indicated in part one that an important foundation has been laid to accelerate productivity growth. There is now a need for a comprehensive program to make it happen on a large scale.
Although there is an important role for public investments, e.g., in rural infrastructure and research and development, this needs to be complemented by a policy environment that leads to significantly higher levels of investments by entrepreneurial farmers and the agribusiness sector alike.
One way to achieve this is through active promotion of public-private partnerships. For example, a strong cooperation between public agricultural research on the one side and private seed companies and farmers on the other can facilitate market access and availability of high-yielding varieties to farmers.
Fourth, it is essential to tackle inflation. High inflation tends to stifle savings and investment in productive assets, favoring holding of inflation-resistant assets (such as buildings, undeveloped land, or even teff). This does not help growth. Inflation in Ethiopia already points to some of these problems. East Asian countries that sustained rapid growth for many years all kept inflation in check and encouraged domestic savings and investment. I cannot think of any easy solution for Ethiopia’s inflation, for it seems to be now driven significantly by expectations. GoE has already done much to contain growth of money supply. Whether this, combined with good harvest this fall, will be enough to revere the inflationary expectations is yet to be seen. All I can suggest is GoE needs to remain vigilant and perhaps be prepared to take tougher actions as needed (possibly including further slowing of public investments).
These challenges are daunting. It is important, however, to remember that these policy problems arose from too much growth, not lack thereof. Many governments would gladly exchange their headaches of slow growth for GoE’s headaches.
Although increased donor assistance is unlikely to be big enough to solve the problem of foreign exchange, I do believe that when combined with policy measures to increase supply responsiveness of the economy, additional aid could be very helpful in facilitating a smoother transition to a more sustainable growth path. Without such help, the acute foreign exchange shortage could force Ethiopian economy to slow down abruptly. That would be a huge setback for poverty reduction and a costly way to adjust to macro imbalances.
In part one of this piece, I had indicated that the potential growth rate of Ethiopia may have risen to around 7.5-8% in recent years. Ethiopia should not be satisfied with maintaining that trend line. With strong policy measures to increase supply responsiveness and manage inflation, I believe that rate has the potential to head toward 10%.
Poverty reduction in Ethiopia needs that kind of growth. That would make Ethiopia’s growth strategy truly bold, and well worthy of strong donor support.
Kenenisa Bekele adds the 5000m gold to the 10,000m title he won earlier in the week (Getty Images)
Alongside Hannes Kolehmainen, Emil Zatopek, Vladimir Kuts, Lasse Viren and Miruts Yifter we can now add the name Kenenisa Bekele as the only men to win the 5000m and 10,000m double at the Olympic Games.
The Ethiopian maestro produced a masterful tactical performance as he dictated the pace from the front for much of the race before unleashing that killer kick finish to destroy the opposition and set an Olympic record of 12:57:82.
So often in the recent past global 5000m finals have been characterised by turgidly slow races followed by a last lap burn up but Bekele, who was beaten by just 0.20 to the gold medal in Athens four years ago, was never going to allow that to happen a second time.
Supported ably by his Ethiopian lieutenants - including his brother Tariku and Abreham Cherkos - the trio laid the foundations for Bekele's memorable victory. Kenya's Eliud Kipchoge, the eternal bridesmaid, went one better than four years ago in Athens to take silver in 13:02.80 with countryman Edwin Soi (13:06.22) taking the bronze.
Surprisingly for Bekele, who is the World record holder, this was his first global 5000m title and he also matched the feats of his compatriot Tirunesh Dibaba who had completed the 5000m and 10,000m double the previous day.
Eritrea's Kidane Tadesse took the field through the first lap in a modest 68 seconds but Bekele mindful of being outsprinted by Hicham El Guerrouj at the Athens Games, was not prepared to suffer the same fate again. He hit the front and slowly cranked up the pace ahead of Ireland's Alistair Cragg.
Bekele's younger sibling, Tariku, took his turn at the front and he hit the 1km mark in 2:45.49 followed by Kenenisa with the third Ethiopian, Cherkos, the World Junior champion, controlling affairs at the front.
Just after the 2km point - passed in 5:22.29 - Cherkos took his turn at the front, although the Kenyan trio took closer order behind the Ethiopians.
At 3km Bekele, that's Kenenisa and not Tariku, led them through in 8:00.85 but five laps out he decided to make what would prove the decisive move of the race putting in a 60-second lap to blow the field wide open.
Four laps out only five athletes remained in touch with the leader - Kipchoge, Soi, World champion Bernard Lagat, Moses Kipsiro of Uganda and Qatar's James Kwalia of Qatar. Kwalia was the next to crack followed quickly by Lagat, who could not gain 5000m redemption after bombing out of the semi-finals of the 1500m.
Bekele now consistently running 60-61 seconds was hurting the opposition and on the penultimate lap Kipsiro, the World bronze medallist was the next to drop off the relentless pace at the front.
At the bell Bekele was followed by Kipchoge and Soi but any hope of a Kenyan champion in this event since John Ngugi in Seoul 20 years ago had evaporated 150m into the final lap. Bekele shifted into fifth gear and like a top grade sports car just left the Kenyans for dead.
Soi quickly dropped out of the picture and Bekele had opened up a winning lead on Kipchoge halfway down the back straight.
The rest of the lap was primarily a case of whether Bekele would dip below Said Aouita's 24-year-old Olympic record of 13:05.59. We should never have worried. Bekele produced a 53.8 final lap to stop the clock in 12:57.82.
Kipchoge and Soi took the two minor medals to ensure Kenyan picked up five medals inside the Bird's Nest Stadium tonight - the final day of the track and field programme.
Kipsiro placed fourth in 13:10.56 with Cherkos fifth (13:16.46). Tariku Bekele settled for sixth in 13:19.06 but Lagat's miserable Games was complete as he wound up ninth in 13:26.89.
_________________________ http://www.irinnews.org/Report.aspx?ReportId=79945 IRIN August 22, 2008 ETHIOPIA: Thousands displaced by flash flood in Gambella
Photo: /IRIN
Thousands of people have been displaced by flash floods after two rivers in the Gambella region burst their banks
ADDIS ABABA, 22 August 2008 (IRIN) - Three rivers in the Gambella region of western Ethiopia have burst their banks following torrential rains that fell in the area for three consecutive days, government officials in the area said.
"We have not yet finalised our assessment, however, an estimated 10,000 to 11,000 people have been displaced," Akway Abala, team leader for the Disaster Prevention and Food Security Department of Gambella region, told IRIN on 22 August.
A flash flood, he added, had occurred in Lare woreda (district) after the heavy downpour that lasted from 16 to 19 August. Villages in another woreda, Itang, which is located 53km west of Gambella town, were also swept away by a flood on 12 August after the Pukong river burst its banks.
"Residents of the villages [have fled] to the highlands," Akway said. "Some of them have sheltered with their relatives and others have made temporary huts. After we finalize our assessment, we will appeal for aid from the federal government or other non-governmental organizations.”
Gambella has been repeatedly affected by flash floods whenever rivers draining down to the region from the western highlands of Ethiopia fill up and burst their banks.
Other regions of Ethiopia have also been affected. In April 2007, several houses were damaged by flood waters in the eastern town of Dire Dawa, 515km from Addis Ababa, after heavy rains pounded the area.
The floods swept over the Addis Ketema and Decahtu suburbs, but there were no reports of casualties. In August 2006, Dire Dawa, Ethiopia's second-largest town with a population of 400,000, was again hit by flash flooding in which at least 250 people died and nearly 10,000 were forced to leave their homes. That flood prompted the town’s administration to build sand banks in the Decahtu, Ashwa, and Hafcat.
The latest reports of a flash flood have come as Ethiopia grapples with a food crisis affecting several million people, as a result of drought, rising global food and fuel prices and poor rains.
____________
Sustaining Growth: A Way Forward
By Ken Ohashi
World Bank’s Country Director for Ethiopia and Sudan
Setting aside the food crisis for a moment, Ethiopia’s two main economic challenges today are rampant inflation and rising trade deficits. They are interrelated. They reflect an economy that is trying to grow faster than the supply side could keep up.
When domestic demand grows faster than domestic supply, an underlying inflationary tendency is created, and imports rise sharply to alleviate domestic shortages. Of course, the external shocks of high oil and other commodity prices and the failure of Belg rains earlier this year have exacerbated the problem.
Behind all this is the growth strategy of the Government of Ethiopia (GoE). It aims to create quickly a strong infrastructure base and certain key production capacity (e.g., in hydropower, cement, and export industries in general) so that in time, growth of imports will moderate and exports will begin to narrow the trade deficit.
This is a risky approach, for it is an attempt to "over invest" in certain things in anticipation of a strong supply response. But, Ethiopian policymakers argue that a gradualist approach will not do in a country that has been mired in severe poverty for decades.
The current food crisis, which was caused by a failure of rains that generally contribute no more than 10% of the annual food supply, is a stark reminder that Ethiopia needs fast and sustained growth to overcome such vulnerability. Having managed to get the unprecedented growth started—an impressive feat in itself—GoE leaders are keen to sustain this at all cost. Until a tipping point in external imbalance arrives, they hope that more aid and remittances may bridge the financing gap.
Is this a credible scenario? Should the donors step up aid efforts to help fill the temporary financing gap? I believe this strategy has certain coherence. But, the recent experience has also revealed an important weakness.
Private investment, while very strong in select sectors, has not responded to the increasing opportunities on the scale needed to keep the supply side of the economy growing fast enough. Various analyses indicate that investors still find the ‘business climate’ in Ethiopia not good enough for a major investment rush that could have avoided this supply problem. One should also not forget that after a 17-year Derg regime, Ethiopia’s private sector started from a very weak base in the early 1990s.
This does not mean the basic strategy is wrong. I think it can still be viable, and I hope it will prove successful. I believe, however, some mid-course corrections may be necessary. To give a more considered answer, we will have to examine carefully the possible export and import trajectories, underlying investment projections, etc. But, I have some tentative suggestions.
First, I do not think Ethiopia can count on increased aid and remittances alone to offset the rising trade deficits for the next several years. The gap is simply too large.
An important part of the solution is likely to be found in increasing foreign direct investment (FDI), while moderating investment by the public sector. Both types of investments require imports, but FDI brings its own foreign financing.
This switch will allow Ethiopia to maintain high levels of investment without causing foreign exchange problems. Of course, this assumes some public investment projects can be delayed without harming growth, or can even be replaced by private investment.
Ethiopia may find such substitution opportunities in electricity generation, transportation, etc. If state-owned enterprises are involved in conventional manufacturing activities, they would offer obvious opportunities for FDI substitution.
Second, there is still much Ethiopia can do to encourage private sector investment broadly and increase the supply response to the growth in demand. Studies have identified several areas of action, including access to finance, access to land, etc.
Measures that encourage FDI are usually also good for domestic investors (unless they are preferential measures). Since Ethiopia faces a shortage of foreign exchange, focusing on areas that can attract FDI may be timely.
One idea I found interesting is the possibility of opening the domestic civil aviation sector to foreign/domestic joint ventures, and lifting the limit on the size of aircraft private companies can operate.
This can bring not only foreign investment but also increase Ethiopia’s attractiveness to foreign tourists. Furthermore, it would increase the passenger traffic for Ethiopian Airlines from its international routes, a major foreign exchange earner for the country.
Although I do not know all the complexities of this industry, this seems like an attractive proposition. I imagine there are many other such ideas. If foreign investors are required to enter Ethiopia through joint ventures, then it would also help promote domestic businesses.
Third, agricultural productivity remains too low. This is true despite the significant growth in output and some impressive success stories (e.g., roses). I had indicated in part one that an important foundation has been laid to accelerate productivity growth. There is now a need for a comprehensive program to make it happen on a large scale.
Although there is an important role for public investments, e.g., in rural infrastructure and research and development, this needs to be complemented by a policy environment that leads to significantly higher levels of investments by entrepreneurial farmers and the agribusiness sector alike.
One way to achieve this is through active promotion of public-private partnerships. For example, a strong cooperation between public agricultural research on the one side and private seed companies and farmers on the other can facilitate market access and availability of high-yielding varieties to farmers.
Fourth, it is essential to tackle inflation. High inflation tends to stifle savings and investment in productive assets, favoring holding of inflation-resistant assets (such as buildings, undeveloped land, or even teff). This does not help growth. Inflation in Ethiopia already points to some of these problems. East Asian countries that sustained rapid growth for many years all kept inflation in check and encouraged domestic savings and investment. I cannot think of any easy solution for Ethiopia’s inflation, for it seems to be now driven significantly by expectations. GoE has already done much to contain growth of money supply. Whether this, combined with good harvest this fall, will be enough to revere the inflationary expectations is yet to be seen. All I can suggest is GoE needs to remain vigilant and perhaps be prepared to take tougher actions as needed (possibly including further slowing of public investments).
These challenges are daunting. It is important, however, to remember that these policy problems arose from too much growth, not lack thereof. Many governments would gladly exchange their headaches of slow growth for GoE’s headaches.
Although increased donor assistance is unlikely to be big enough to solve the problem of foreign exchange, I do believe that when combined with policy measures to increase supply responsiveness of the economy, additional aid could be very helpful in facilitating a smoother transition to a more sustainable growth path. Without such help, the acute foreign exchange shortage could force Ethiopian economy to slow down abruptly. That would be a huge setback for poverty reduction and a costly way to adjust to macro imbalances.
In part one of this piece, I had indicated that the potential growth rate of Ethiopia may have risen to around 7.5-8% in recent years. Ethiopia should not be satisfied with maintaining that trend line. With strong policy measures to increase supply responsiveness and manage inflation, I believe that rate has the potential to head toward 10%.
Poverty reduction in Ethiopia needs that kind of growth. That would make Ethiopia’s growth strategy truly bold, and well worthy of strong donor support.
challenges of Civil Society: Freedom of Association for any cause or purpose!
Press Release
Draft law threatens to criminalise Ethiopian civil society
Civicus | August 21, 2008
--------------------------------------------------------------------------------
Under a draft law, Ethiopia could see severe restrictions on civil society and even closures of organisations working on contentious issues, such as human rights and governance, cautions CIVICUS: World Alliance for Citizen Participation in a recent analysis.
“We appeal to the government to stop the introduction of the bill in its current form. If enacted, many organisations will be forced to choose between stopping their work on vital issues or facing closure and possible imprisonment,” said Ingrid Srinath, CIVICUS Secretary General.
The government has released three consecutive drafts of the Charities and Societies Proclamation over the last few months. While the recent draft, due to be introduced to Parliament in October, makes some improvement on the last two, it retains many draconian provisions.
The government has stated that the intention of the bill is to increase civil society organisations’ (CSOs) transparency and accountability to stakeholders, but local and international groups have expressed concern that it will instead serve to silence dissent.
CIVICUS’ report lists a number of concerns regarding the law, including:
The Proclamation prevents CSOs that receive more than 10% of their income from foreign sources from working on issues of public importance, including human rights, gender and religious equality, children’s rights, the rights of the disabled, conflict resolution and judicial reform. Given the lack of domestic fundraising opportunities, most organisations rely on funds from abroad.
The Proclamation permits excessive government interference in the functioning of CSOs, through the power to carry out random investigations at will. Among other requirements, CSOs must provide the government with seven days notice of any general meeting.
By creating a web of exhaustive reporting procedures, the Proclamation gives the government a convenient way to intimidate CSOs. Mandatory annual reporting, requirements to keep meticulous financial records as well as re-registration every three years, leaves ample room for possible procedural delays and intimidation by the authorities.
Once a CSO is denied registration, or fails to apply, the organisation is then declared unlawful. If members and supporters continue their involvement with the CSO, they risk severe punishments, including three to fifteen years in prison. According to international standards, the decision to officially register should be voluntary not imposed by the government. Such harsh repercussions for breaching the provisions of the law could deter the free participation of individuals in civil society activities.
CSOs have limited rights to appeal against decisions taken under the Proclamation. For example, if a CSO is denied registration, it will not be able to ask for a judicial review of the facts on which the government has based its assessment. Aside from amounting to a denial of justice, it could also allow authorities to arbitrarily silence independent groups and individuals.
If the current draft of the Proclamation is passed, the already narrow space for civil society in Ethiopia could be even further restricted. In recent years, political opposition, media and civil society activists have been systematically harassed and even imprisoned because of their criticism of the government.
“The government must listen to the concerns of the country’s civil society. Their activities contribute immensely to the people of Ethiopia. But, sadly, rather than promote this vital work, this bill threatens to criminalise it,” says Srinath.
The Proclamation, if permitted to pass, would violate Ethiopia’s commitments to international and regional human rights agreements, as well as its own constitution. Article 31 of the Constitution specifically guarantees, “Every person has the right to freedom of association for any cause or purpose”.
An analysis of the proclamation is available here.
---
Draft law threatens to criminalise Ethiopian civil society
Civicus | August 21, 2008
--------------------------------------------------------------------------------
Under a draft law, Ethiopia could see severe restrictions on civil society and even closures of organisations working on contentious issues, such as human rights and governance, cautions CIVICUS: World Alliance for Citizen Participation in a recent analysis.
“We appeal to the government to stop the introduction of the bill in its current form. If enacted, many organisations will be forced to choose between stopping their work on vital issues or facing closure and possible imprisonment,” said Ingrid Srinath, CIVICUS Secretary General.
The government has released three consecutive drafts of the Charities and Societies Proclamation over the last few months. While the recent draft, due to be introduced to Parliament in October, makes some improvement on the last two, it retains many draconian provisions.
The government has stated that the intention of the bill is to increase civil society organisations’ (CSOs) transparency and accountability to stakeholders, but local and international groups have expressed concern that it will instead serve to silence dissent.
CIVICUS’ report lists a number of concerns regarding the law, including:
The Proclamation prevents CSOs that receive more than 10% of their income from foreign sources from working on issues of public importance, including human rights, gender and religious equality, children’s rights, the rights of the disabled, conflict resolution and judicial reform. Given the lack of domestic fundraising opportunities, most organisations rely on funds from abroad.
The Proclamation permits excessive government interference in the functioning of CSOs, through the power to carry out random investigations at will. Among other requirements, CSOs must provide the government with seven days notice of any general meeting.
By creating a web of exhaustive reporting procedures, the Proclamation gives the government a convenient way to intimidate CSOs. Mandatory annual reporting, requirements to keep meticulous financial records as well as re-registration every three years, leaves ample room for possible procedural delays and intimidation by the authorities.
Once a CSO is denied registration, or fails to apply, the organisation is then declared unlawful. If members and supporters continue their involvement with the CSO, they risk severe punishments, including three to fifteen years in prison. According to international standards, the decision to officially register should be voluntary not imposed by the government. Such harsh repercussions for breaching the provisions of the law could deter the free participation of individuals in civil society activities.
CSOs have limited rights to appeal against decisions taken under the Proclamation. For example, if a CSO is denied registration, it will not be able to ask for a judicial review of the facts on which the government has based its assessment. Aside from amounting to a denial of justice, it could also allow authorities to arbitrarily silence independent groups and individuals.
If the current draft of the Proclamation is passed, the already narrow space for civil society in Ethiopia could be even further restricted. In recent years, political opposition, media and civil society activists have been systematically harassed and even imprisoned because of their criticism of the government.
“The government must listen to the concerns of the country’s civil society. Their activities contribute immensely to the people of Ethiopia. But, sadly, rather than promote this vital work, this bill threatens to criminalise it,” says Srinath.
The Proclamation, if permitted to pass, would violate Ethiopia’s commitments to international and regional human rights agreements, as well as its own constitution. Article 31 of the Constitution specifically guarantees, “Every person has the right to freedom of association for any cause or purpose”.
An analysis of the proclamation is available here.
---
Friday, August 22, 2008
The Energy Debate; Are we competent in managing the impending Energy Security Crisis?
The Debate over Energy Security
Are we secure enough to continue burning the carbon fuels at the current rate? Is there a viable alternative or are we just kidding ourselves just to avoid the judgement call of our next generation for being a selfish wasteful generation.
Follow the debate below and contribute to the conversation.
Now is the time to milk those creative juices waiting to gush out!
with regards
Dr B
Globalbelai4u.blogspot.com
Globalbelai@yahoo.com
Dear reader,
Now we are cooking with gas, at least as far as our energy technology debate is concerned. Not only have our two speakers put forward sharp opening remarks, but we have also received many dozens of thoughtful comments from readers.
The proposition
"This house believes that we can solve our energy problems with existing technologies today, without the need for breakthrough innovations."
Moderator’s comments
Thus far, the debate has been a closely fought contest, with commentators fired up on both sides. Solarenergy4all, for instance, advocates the use of economic incentives as a way to boost renewable energy. Meanwhile, Loucus points out the dangers of lavishing subsidies on trendy energy technologies and alternative fuels, observing that biofuels can be a “double-edged sword”.
Interestingly, Joseph Romm, speaking in favour of the motion, parts company with those in the climate crisis camp, including Al Gore, who advocate a “Manhattan Project” or “moonshot” approach. He argues it would be better to get existing clean technologies into the hands of more consumers quickly: “If you want deployment of the technology by 2040, we are mostly stuck with what we have today or very soon will have.”
Peter Meisen, however, argues that the climate challenge is so daunting it requires innovation breakthroughs in addition to the expansion of energy efficiency and other ready measures. This would create “entirely new business opportunities” by emerging “clean tech” sectors such as IGCC gas turbines, hybrid plug-in cars, LED lighting and solar photovoltaics, he says.
The Pro side currently holds a slim advantage. But much can happen between now and the closing arguments, so be sure to get in your comments now—and vote.
Speaker comments
Pro: Joseph J. Romm
“Clean energy technologies have a steadily declining cost curve, whereby greater volume leads to lower cost. So speeding up the deployment of new technologies is more important than generating new ones. Plus, the more electricity a utility sells, the more money it makes—which is why the last thing most utilities want to do is push strategies that save energy. We need to do what California did decades ago—adopt regulations that untie utility company profits from how much electricity they sell.”
Con: Peter Meisen
“A new priority order is needed. Conservation first. Energy efficiency next. Then new power generation. Last in line are the fossil fuels and nuclear. And we need a globally interconnected electric grid. Unique to electricity are the peaks and valleys of daily and seasonal demand. A unified grid allows utilities to level the load curve, maximising the resources of the entire power pool. These high-voltage grids currently link half the world. With co-operative resolve, we can complete the job in two decades.”
Debate schedule
August 22nd – Rebuttals. Share your comments on the issues so far, and vote
August 25th – Guest speaker, Makito Takami, Chief Representative of Washington, DC Office, NEDO, posts
August 26th – Guest speaker Mujid S. Kazimi, Director, MIT’s Centre for Advanced Nuclear Energy Systems, posts
August 27th – Closing arguments by the speakers. Post your final comments and vote for your winner
August 29th – Debate winner announced
Weigh up the rebuttals, have your say and vote now on Economist.com—and discuss the issues with friends via our Facebook page.
Let battle commence. Join the debate now.
Vijay V. Vaitheeswaran
Debate Moderator
Correspondent
The Economist
Are we secure enough to continue burning the carbon fuels at the current rate? Is there a viable alternative or are we just kidding ourselves just to avoid the judgement call of our next generation for being a selfish wasteful generation.
Follow the debate below and contribute to the conversation.
Now is the time to milk those creative juices waiting to gush out!
with regards
Dr B
Globalbelai4u.blogspot.com
Globalbelai@yahoo.com
Dear reader,
Now we are cooking with gas, at least as far as our energy technology debate is concerned. Not only have our two speakers put forward sharp opening remarks, but we have also received many dozens of thoughtful comments from readers.
The proposition
"This house believes that we can solve our energy problems with existing technologies today, without the need for breakthrough innovations."
Moderator’s comments
Thus far, the debate has been a closely fought contest, with commentators fired up on both sides. Solarenergy4all, for instance, advocates the use of economic incentives as a way to boost renewable energy. Meanwhile, Loucus points out the dangers of lavishing subsidies on trendy energy technologies and alternative fuels, observing that biofuels can be a “double-edged sword”.
Interestingly, Joseph Romm, speaking in favour of the motion, parts company with those in the climate crisis camp, including Al Gore, who advocate a “Manhattan Project” or “moonshot” approach. He argues it would be better to get existing clean technologies into the hands of more consumers quickly: “If you want deployment of the technology by 2040, we are mostly stuck with what we have today or very soon will have.”
Peter Meisen, however, argues that the climate challenge is so daunting it requires innovation breakthroughs in addition to the expansion of energy efficiency and other ready measures. This would create “entirely new business opportunities” by emerging “clean tech” sectors such as IGCC gas turbines, hybrid plug-in cars, LED lighting and solar photovoltaics, he says.
The Pro side currently holds a slim advantage. But much can happen between now and the closing arguments, so be sure to get in your comments now—and vote.
Speaker comments
Pro: Joseph J. Romm
“Clean energy technologies have a steadily declining cost curve, whereby greater volume leads to lower cost. So speeding up the deployment of new technologies is more important than generating new ones. Plus, the more electricity a utility sells, the more money it makes—which is why the last thing most utilities want to do is push strategies that save energy. We need to do what California did decades ago—adopt regulations that untie utility company profits from how much electricity they sell.”
Con: Peter Meisen
“A new priority order is needed. Conservation first. Energy efficiency next. Then new power generation. Last in line are the fossil fuels and nuclear. And we need a globally interconnected electric grid. Unique to electricity are the peaks and valleys of daily and seasonal demand. A unified grid allows utilities to level the load curve, maximising the resources of the entire power pool. These high-voltage grids currently link half the world. With co-operative resolve, we can complete the job in two decades.”
Debate schedule
August 22nd – Rebuttals. Share your comments on the issues so far, and vote
August 25th – Guest speaker, Makito Takami, Chief Representative of Washington, DC Office, NEDO, posts
August 26th – Guest speaker Mujid S. Kazimi, Director, MIT’s Centre for Advanced Nuclear Energy Systems, posts
August 27th – Closing arguments by the speakers. Post your final comments and vote for your winner
August 29th – Debate winner announced
Weigh up the rebuttals, have your say and vote now on Economist.com—and discuss the issues with friends via our Facebook page.
Let battle commence. Join the debate now.
Vijay V. Vaitheeswaran
Debate Moderator
Correspondent
The Economist
The World Bank tries to pre-empt economic crisis in Georgia
Inline Attachment Follows-----
NEWS RELEASE
Contacts:
In Washington: Michael Jones (+1-202) 473 2588
Mjones2@worldbank.org
In Tbilisi: Inga Paichadze, (99532) 91 30 96 / 91 26 59
ipaichadze@worldbank.org
World Bank Statement on Georgia
WASHINGTON, August 21, 2008 -- The following is a statement made by Theodore Ahlers, World Bank acting vice president for Europe and Central Asia today in Washington:
"At the invitation of the Georgian government, a World Bank economic assessment team will leave for Tbilisi tomorrow. The World Bank remains committed to improving people’s lives in Georgia, and will continue with its ongoing support to economic reform and development in the country.
In the coming days we will work with the Georgian government to assess the economic impact of recent events and to recommend policy measures directed at fostering growth and protecting against poverty.
Georgia has strong economic fundamentals, the result of a committed reform program and prudent fiscal management by the government. These factors will help the economy to weather the impact of the conflict. The economy is, however, dependant on external investment, and growth is likely to be temporarily dampened as investors adopt a wait and see attitude.
The World Bank is in close discussions with the government on measures to minimize the impact of disruptions on peoples’ lives. At the government's request the Bank will assist the authorities in assessing the toll of the damage and reconstruction needs with international partners and other stakeholders through a follow up mission.
In this task, the Bank will focus on the infrastructure, environment, and agriculture sectors and on the needs of the internally displaced population. It will also assist the authorities in setting up a multi-donor trust fund for reconstruction investment to ensure a speedy recovery from the conflict and to ease the suffering of all of its victims.
The World Bank notes with grave concern the reports of forest fires in the Borjomi area of Georgia.
As a long-standing international partner which has been supporting improved environmental and forestry management throughout the South Caucasus region, the World Bank sincerely hopes that arrangements can be made urgently to facilitate access to the area of the necessary equipment and other resources to bring these fires under control as soon as possible.
The Bank will remain in close consultation with the authorities as needs evolve and will respond flexibly and speedily with policy advice and financing in the present difficult circumstances facing the Georgian people."
- ### -
NEWS RELEASE
Contacts:
In Washington: Michael Jones (+1-202) 473 2588
Mjones2@worldbank.org
In Tbilisi: Inga Paichadze, (99532) 91 30 96 / 91 26 59
ipaichadze@worldbank.org
World Bank Statement on Georgia
WASHINGTON, August 21, 2008 -- The following is a statement made by Theodore Ahlers, World Bank acting vice president for Europe and Central Asia today in Washington:
"At the invitation of the Georgian government, a World Bank economic assessment team will leave for Tbilisi tomorrow. The World Bank remains committed to improving people’s lives in Georgia, and will continue with its ongoing support to economic reform and development in the country.
In the coming days we will work with the Georgian government to assess the economic impact of recent events and to recommend policy measures directed at fostering growth and protecting against poverty.
Georgia has strong economic fundamentals, the result of a committed reform program and prudent fiscal management by the government. These factors will help the economy to weather the impact of the conflict. The economy is, however, dependant on external investment, and growth is likely to be temporarily dampened as investors adopt a wait and see attitude.
The World Bank is in close discussions with the government on measures to minimize the impact of disruptions on peoples’ lives. At the government's request the Bank will assist the authorities in assessing the toll of the damage and reconstruction needs with international partners and other stakeholders through a follow up mission.
In this task, the Bank will focus on the infrastructure, environment, and agriculture sectors and on the needs of the internally displaced population. It will also assist the authorities in setting up a multi-donor trust fund for reconstruction investment to ensure a speedy recovery from the conflict and to ease the suffering of all of its victims.
The World Bank notes with grave concern the reports of forest fires in the Borjomi area of Georgia.
As a long-standing international partner which has been supporting improved environmental and forestry management throughout the South Caucasus region, the World Bank sincerely hopes that arrangements can be made urgently to facilitate access to the area of the necessary equipment and other resources to bring these fires under control as soon as possible.
The Bank will remain in close consultation with the authorities as needs evolve and will respond flexibly and speedily with policy advice and financing in the present difficult circumstances facing the Georgian people."
- ### -
Lessons from the tale of Two Bubble Economies: USA and Japan
Economics focus
Lessons from a “lost decade”
Aug 21st 2008
From The Economist print edition
Will America follow Japan into a decade of stagnation?
AS FALLING house prices and tightening credit squeeze America’s economy, some worry that the country may suffer a decade of stagnation, as Japan did after its bubble burst in the early 1990s.
Japan’s property bubble was also fuelled by cheap money and financial liberalisation and—just as in America—most people assumed that property prices could not fall nationally. When they did, borrowers defaulted and banks cut their lending. The result was a decade with average growth of less than 1%.
Most dismiss the idea that America could suffer the same fate as Japan, but some of the differences are overstated. For example, some claim that Japan’s bubble was much bigger than America’s. Yet average house prices nationwide rose by 90% in America between 2000 and 2006, compared with a gain of 51% in Japan between 1985 and early 1991, when Japanese home prices peaked (see left-hand chart). Prices in Japan’s biggest cities rose faster, but nationwide figures matter more when gauging the impact on the economy.
Japanese home prices have since fallen by just over 40%. American prices are already down by 20%, and many economists reckon they could fall by another 10% or more.
What about commercial property? Again, average prices rose by less in Japan (80%) than in America (90%) over those same periods. Thus Japan’s property boom was, if anything, smaller than America’s.
Japan also had a stockmarket bubble, which burst a year earlier than that in property. This hurt banks, because they counted part of their equity holdings in other firms as capital. But its impact on households was modest, because only 30% of the population held shares, compared with over half of Americans.
Nor were Japanese policymakers any slower than American ones to cut interest rates and loosen fiscal policy after the bubble burst, contrary to popular misconceptions. The Bank of Japan (BoJ) began to lower interest rates in July 1991, soon after property prices began to decline.
The discount rate was cut from 6% to 1.75% by the end of 1993. Two years after American house prices started to slide, the Fed funds rate has fallen from 5.25% to 2% (see right-hand chart). A study by America’s Federal Reserve concluded that Japanese interest rates fell more sharply in the early 1990s than required by the “Taylor rule”, which establishes the appropriate rate using the amount of spare capacity and inflation.
Japan also gave its economy a big fiscal boost. The cyclically adjusted budget deficit (which excludes the automatic impact of slower growth on tax revenues) increased by an annual average of 1.8% of GDP in 1992 and 1993—similar to America’s budget boost this year. Japan’s monetary and fiscal stimulus did help to lift the economy.
After a recession in 1993-94, GDP was growing at an annual rate of around 2.5% by 1995. But deflation also emerged that year, pushing up real interest rates and increasing the real burden of debt. It was from here on that Japan made its biggest policy mistakes. In 1997 the government raised its consumption tax to try to slim its budget deficit. And with interest rates close to zero, the BoJ insisted that there was nothing more it could do. Only much later did it start to print lots of money.
America’s inflation rate of above 5% is an advantage. Not only are real interest rates negative, but inflation is also helping to bring the housing market back to fair value with a smaller fall in prices than otherwise. But in another way America is more exposed than Japan was. When its bubble burst in 1991, Japan’s households saved 15% of their income. By 2001 saving had fallen to 5%, which helped to prop up consumer spending. America’s saving rate of close to zero leaves no such cushion.
The perils of procrastination
John Makin, at the American Enterprise Institute, a think-tank, argues that monetary and fiscal relief were necessary but not sufficient to revive Japan’s economy. The missing ingredient was a clean-up of the banking system, on which Japanese firms were more dependent than their American counterparts. Japanese banks hid their bad loans beneath opaque corporate structures, and curtailed new lending to profitable businesses. A vicious circle developed, whereby banks’ bad loans depressed growth which then created more bad loans.
In another new report Richard Jerram, at Macquarie Securities, concludes that America “will not come close to repeating the experience of Japan”, because its regulatory system, financial markets and political structure will not let it procrastinate for so long.
America has a more transparent regulatory structure which presses banks into recognising losses and repairing their balance-sheets—even if regulators were slow to recognise that the banks were shifting risky securitised assets off their balance-sheets in the first place. But Japan’s regulators for a long while were in cahoots with banks over hiding their bad loans.
Over the past year, American banks have been quicker than those in Japan in the 1990s to disclose and write off losses and raise new capital. In Japan it took a long while before the political will was there to use taxpayers’ money to plug the banking system. A big test for America’s Treasury will be how quickly it recognises the need to nationalise Fannie Mae and Freddie Mac, the teetering mortgage giants.
One advantage over Japan, says Mr Jerram, is that America is spreading the costs of its housing bust across other countries. Foreigners hold a large slice of American mortgage-backed securities. Sovereign-wealth funds have provided new capital for American banks. And America’s booming exports have helped to support its economy, thanks to the cheap dollar. In contrast, the yen’s sharp appreciation after Japan’s bubble burst hurt exports at the same time as domestic demand was being squeezed.
By learning from Japan’s mistakes, America can avoid a dismal decade. However, it would be arrogant for those in Washington, DC, to assume that Japan’s troubles simply reflected its macroeconomic incompetence. Experience in other countries shows that serious asset-price busts often lead to economic downturns lasting several years. Only a wild optimist would believe that the worst is over in America.
Lessons from a “lost decade”
Aug 21st 2008
From The Economist print edition
Will America follow Japan into a decade of stagnation?
AS FALLING house prices and tightening credit squeeze America’s economy, some worry that the country may suffer a decade of stagnation, as Japan did after its bubble burst in the early 1990s.
Japan’s property bubble was also fuelled by cheap money and financial liberalisation and—just as in America—most people assumed that property prices could not fall nationally. When they did, borrowers defaulted and banks cut their lending. The result was a decade with average growth of less than 1%.
Most dismiss the idea that America could suffer the same fate as Japan, but some of the differences are overstated. For example, some claim that Japan’s bubble was much bigger than America’s. Yet average house prices nationwide rose by 90% in America between 2000 and 2006, compared with a gain of 51% in Japan between 1985 and early 1991, when Japanese home prices peaked (see left-hand chart). Prices in Japan’s biggest cities rose faster, but nationwide figures matter more when gauging the impact on the economy.
Japanese home prices have since fallen by just over 40%. American prices are already down by 20%, and many economists reckon they could fall by another 10% or more.
What about commercial property? Again, average prices rose by less in Japan (80%) than in America (90%) over those same periods. Thus Japan’s property boom was, if anything, smaller than America’s.
Japan also had a stockmarket bubble, which burst a year earlier than that in property. This hurt banks, because they counted part of their equity holdings in other firms as capital. But its impact on households was modest, because only 30% of the population held shares, compared with over half of Americans.
Nor were Japanese policymakers any slower than American ones to cut interest rates and loosen fiscal policy after the bubble burst, contrary to popular misconceptions. The Bank of Japan (BoJ) began to lower interest rates in July 1991, soon after property prices began to decline.
The discount rate was cut from 6% to 1.75% by the end of 1993. Two years after American house prices started to slide, the Fed funds rate has fallen from 5.25% to 2% (see right-hand chart). A study by America’s Federal Reserve concluded that Japanese interest rates fell more sharply in the early 1990s than required by the “Taylor rule”, which establishes the appropriate rate using the amount of spare capacity and inflation.
Japan also gave its economy a big fiscal boost. The cyclically adjusted budget deficit (which excludes the automatic impact of slower growth on tax revenues) increased by an annual average of 1.8% of GDP in 1992 and 1993—similar to America’s budget boost this year. Japan’s monetary and fiscal stimulus did help to lift the economy.
After a recession in 1993-94, GDP was growing at an annual rate of around 2.5% by 1995. But deflation also emerged that year, pushing up real interest rates and increasing the real burden of debt. It was from here on that Japan made its biggest policy mistakes. In 1997 the government raised its consumption tax to try to slim its budget deficit. And with interest rates close to zero, the BoJ insisted that there was nothing more it could do. Only much later did it start to print lots of money.
America’s inflation rate of above 5% is an advantage. Not only are real interest rates negative, but inflation is also helping to bring the housing market back to fair value with a smaller fall in prices than otherwise. But in another way America is more exposed than Japan was. When its bubble burst in 1991, Japan’s households saved 15% of their income. By 2001 saving had fallen to 5%, which helped to prop up consumer spending. America’s saving rate of close to zero leaves no such cushion.
The perils of procrastination
John Makin, at the American Enterprise Institute, a think-tank, argues that monetary and fiscal relief were necessary but not sufficient to revive Japan’s economy. The missing ingredient was a clean-up of the banking system, on which Japanese firms were more dependent than their American counterparts. Japanese banks hid their bad loans beneath opaque corporate structures, and curtailed new lending to profitable businesses. A vicious circle developed, whereby banks’ bad loans depressed growth which then created more bad loans.
In another new report Richard Jerram, at Macquarie Securities, concludes that America “will not come close to repeating the experience of Japan”, because its regulatory system, financial markets and political structure will not let it procrastinate for so long.
America has a more transparent regulatory structure which presses banks into recognising losses and repairing their balance-sheets—even if regulators were slow to recognise that the banks were shifting risky securitised assets off their balance-sheets in the first place. But Japan’s regulators for a long while were in cahoots with banks over hiding their bad loans.
Over the past year, American banks have been quicker than those in Japan in the 1990s to disclose and write off losses and raise new capital. In Japan it took a long while before the political will was there to use taxpayers’ money to plug the banking system. A big test for America’s Treasury will be how quickly it recognises the need to nationalise Fannie Mae and Freddie Mac, the teetering mortgage giants.
One advantage over Japan, says Mr Jerram, is that America is spreading the costs of its housing bust across other countries. Foreigners hold a large slice of American mortgage-backed securities. Sovereign-wealth funds have provided new capital for American banks. And America’s booming exports have helped to support its economy, thanks to the cheap dollar. In contrast, the yen’s sharp appreciation after Japan’s bubble burst hurt exports at the same time as domestic demand was being squeezed.
By learning from Japan’s mistakes, America can avoid a dismal decade. However, it would be arrogant for those in Washington, DC, to assume that Japan’s troubles simply reflected its macroeconomic incompetence. Experience in other countries shows that serious asset-price busts often lead to economic downturns lasting several years. Only a wild optimist would believe that the worst is over in America.
Imainge the role of Good Governance in terrorist infested regions?
www.eastafricaforum.net http://www.ft.com/cms/s/0/f14285cc-6f85-11dd-986f-0000779fd18c.html?nclick_check=1 Financial Times, UKEthiopian FM blasts Somalia’s leaders
Barney Jopson
August 21 2008
Ethiopia has blasted Somalia’s political leaders for getting bogged down in ”internal squabbles” while millions of Somalis live on the brink of a humanitarian disaster in a country that remains violent and ungoverned.
Thousands of Ethiopian troops invaded Somalia at the end of 2006 to reinstall an interim government headed by president Abdullahi Yusuf. But it has a tenuous grip on power and its time in office has been marked by growing insurgency, clan warfare, and the mass displacement of civilians.
Seyoum Mesfin, Ethiopia’s foreign minister, told the Financial Times that a rift between the president and prime minister Nur Hassan Hussein, appointed eight months ago after his predecessor fell out with Mr Yusuf, was the biggest obstacle to peace.
Ethiopia’s own security and credibility are at stake in Somalia, which it invaded to oust a coalition of Islamist groups that had taken control. As the interim government’s main international backer, it has closeted the president and prime minister in Addis Ababa for the past week as it seeks to bridge the divide between them.
In Mogadishu, the Somali capital, Ethiopian soldiers and troops from the transitional federal government remain the target of almost daily attacks by Islamist insurgents and clan gunmen opposed to Mr Yusuf’s regime.
“The main challenge now is not what they call the enemy. It’s an intra-government crisis that is preventing them from focusing on the tasks they need to get done,” said Mr Mesfin. “There has been a lack of vigour and, if I may say so, a lack of commitment.”
Since the beginning of last year more than 8,000 Somalis have been killed and 1m forced from their homes by fighting, which has centred on the capital Mogadishu. Humanitarian relief efforts have been undermined by the assassination of aid workers and the United Nations says that, due also to the additional impact of a drought, up to 3.5m Somalis – or nearly half the population – could need food aid later this year.
But Mr Seyoum gave a less bleak account of the security situation today than many independent observers, saying the country was experiencing less daily violence than Iraq and Afghanistan. To create a durable peace, he said the president and the prime minster needed to implement plans to create regional administrations that would give people a greater stake in government and, potentially, help to reconcile Somalia’s warring clans and sub-clans.
The rift between the leaders overshadowed the signing of a peace agreement in Djibouti on Monday between the interim government and one of two factions of the Somali political opposition. The agreement was welcomed on Thursday by the African Union, but it did little to lighten a mood of gloom among western diplomats who follow Somalia, because it had already been rejected by the other faction as well as by the al-Shabaab Islamist extremists leading the insurgency.
Mr Seyoum said that al-Shabaab, which the US says is linked to al-Qaeda, had been critically weakened: “They cannot sustain their own activities, let alone disband the government.” But other analysts say their strength and boldness appears to be increasing.
http://www.bloomberg.com/apps/news?pid=20601116&sid=aSA8eJ8UcQmQ&refer=africa Bloomberg, US Somalia's Opposition Vows to Unite, Fight Ethiopians
Hamsa Omar
Aug. 19, 2008
Somali Islamic insurgents fighting a United Nations-backed transitional government have pledged to unite rival factions to drive Ethiopian troops from the east African nation, a spokesman for the rebel group said.
The Alliance for the Reliberation of Somalia split in June when a moderate faction led by Sheikh Sharif Ahmed signed a deal with the interim government in Djibouti, agreeing that attacks would stop in 30 days and UN peacekeepers would replace Ethiopian troops within four months. The accord was rejected by Sheikh Hassan Dahir Aweys, an Islamist leader regarded by the U.S. as a terrorist linked to al-Qaeda.
Differences between the leaders of the Islamic Courts Union ``will end soon,'' Abdilkadir Ali Omar, the deputy chairman of the group, said yesterday in a teleconference with journalists in the capital, Mogadishu. ``We will continue fighting against the Ethiopian forces who invaded our homeland aggressively until they withdraw from our country.''
Ethiopia invaded Somalia in December 2006 to help the transitional government oust Islamic militias from southern and central parts of the country. Violence between rebels and government troops has intensified since then.
Somalia hasn't had a functioning central administration since the 1991 removal of former dictator Mohammed Siad Barre.
The transitional government and ARS representatives agreed at a meeting yesterday in neighboring Djibouti to halt all fighting and pledged to implement the June peace agreement, the government said in a communiqué.
`Inflammatory Statements'
``The parties agreed to continue the political dialogue between themselves and refrain from making inflammatory statements,'' it said. ``They reaffirmed their commitment to cease all armed confrontation and to establish sub committees to implement the arrangements to that end.''
Meanwhile, Ethiopia denied its soldiers were responsible for attacks on minibuses last week that killed at least 40 civilians. The authorities in Addis Ababa blamed the Islamic al- Shabaab militia for planting a remote-controlled bomb under one of the vehicles, killing 11 passengers.
A local doctor and eyewitnesses said on Aug. 16 the minibus passengers died after Ethiopian soldiers opened fire on the vehicles. The attack occurred in Arbiska, about 30 kilometers (18 miles) south of the capital, Mogadishu.
``It was the Al-Shabaab bombing of the bus that caused the deaths of passengers, not fire from Ethiopian soldiers,'' the government said in a statement posted on its Web site today.
Five civilians died in a shootout between the Islamic militants and Ethiopian and Somali government soldiers, it said.
__________________________________
http://in.reuters.com/article/lifestyleMolt/idINLD39903620080822 Travel Postcard: 48 hours in Asmara
Fri Aug 22, 2008
ASMARA (Reuters) - Not many travelers end up in Asmara, one of Africa's least-known and most beautiful cities. But if you ever have 48 hours to spend in the Eritrean capital, here are some tips on how to make the best of a short stay.
Given Eritrea's turbulent history, including a 30-year independence war until 1991 followed by a 1998-2000 border conflict with Ethiopia, tourism remains underdeveloped.
Those who make it -- among them, plenty of Italians exploring their former African colony -- are stunned by Asmara, especially its architecture.
FRIDAY
6 p.m. Join the locals in a "passeggiata", or stroll, down Harnet (Liberation) Avenue, the wide main street where residents gather in the early evening to meet and greet. With its pavement cafes and extraordinary buildings from the Italian colonial era -- art deco to neo-classical -- you feel you are in the Mediterranean, rather than Africa.
Older Eritreans will greet you in Italian, the young in English. You can have no fear of being robbed.
8 p.m. Choose from an array of restaurants round the small city to enjoy a traditional meal of "injera", a spongy pancake served on a tray with stew on top. If you are less adventurous, the menu will have plenty of pasta dishes, too. As you go home, observe soldiers on street corners checking the papers of the residents in a sign of Asmara's stricter undertones.
12 p.m. Before you go to sleep, listen to the midnight church bells in the distance, breaking the silence in this tranquil city of half a million people on a plateau 2,500 feet
up from the Red Sea coast. Remember half of the Eritrean population is Muslim, so get ready to be awakened by the call to prayer!
SATURDAY
6 a.m. Feeling energetic? Before the heat comes, take a jog or a walk up one of the hills around Asmara. The views of the city are stunning -- only a couple of post-independence high-rises spoil an otherwise early 20th-century panorama, dotted with mosques and a couple of cathedrals. Looking the other way across the countryside, women in white shrouds begin daily chores while boys with sticks take sheep and goats out in almost biblical landscapes. Mountains disappear into a misty distance. Wave at the soldiers on guard on the hilltops in case they think you're up to no good.
10 a.m. If invited by local hosts, join them in a coffee ceremony. The bean was discovered centuries ago by a monk not far away in north Ethiopia, and it is in this part of the world that they really know how to enjoy coffee. Watch the beans being washed and roasted as incense is burned before boiling. It might take an hour and the coffee will be strong.
1 p.m. Take some time at lunch to talk to Eritreans about their history. The oldest will remember the Italian occupation, the British defeat of Benito Mussolini's troops in 1941, then the ever-controversial federation with Ethiopia.
All Eritreans will talk about the 30-year "struggle" for independence that ended in 1991 -- some still carry the physical scars: a missing limb, a bullet lodged in the ribs -- and has defined their modern history. Present-day politics are a sensitive subject -- President Isaias Afwerki was a successful guerrilla leader and initially praised by the West. He is now heavily criticised by human rights groups.
3 p.m. Spend a couple of hours walking around the city to enjoy its Italian-era architecture. Don't miss the plane-shaped futurist "Fiat Tagliero" service station on the roundabout of Sematat Avenue. Its concrete wings are so long nobody believed they would stay up when wooden struts were pulled away at its inauguration in 1938, but it's still standing. At the Education Ministry on Harnet Avenue, which used to be the Fascist Party headquarters, turn your head to the left and see how the building's jagged roof spells an "F".
5 p.m. English Premier League football is an obsession throughout Africa. Head to the Mocambo bar to join several hundred young Eritreans whistling and shouting as they watch their favorite teams live -- different matches on different screens.
8 p.m. Go for pre-dinner drinks to the trendy Zara bar, full of young Eritreans. It's next to Sandal Square, so-called because of a monument to the independence war shaped like the fighters' simple footwear. The sandal structure has gone for repair at the moment -- as has beer, because of a shortage of ingredients.
SUNDAY
8 a.m. Have breakfast on the courtyard terrace of the elegant Albergo Italia, Asmara's first hotel, built in 1899.
9 a.m. Take the two-hour drive down the mountains to Massawa port on the Red Sea. Don't forget to get a travel permit first from the tourist office. The hairpin bends afford dramatic views -- and churn the stomach.
1 p.m. Enjoy freshly caught fish in the rundown but atmospheric old town of Massawa, whose crumbling architecture reflects more of an Arab influence.
2 p.m. Take a boat to nearby Green Island for snorkeling.
7 p.m. Back safely in Asmara, freshen up at Asmara Sweet cafe with a juice or tea. Given that the city has become a refuge for exiled rebels from the region -- notably Darfur guerrillas and Somali Islamists -- you may find the men on the next table are interesting to chat to.
(Reporting by Andrew Cawthorne and Jack Kimball, editing by Paul Casciato
Barney Jopson
August 21 2008
Ethiopia has blasted Somalia’s political leaders for getting bogged down in ”internal squabbles” while millions of Somalis live on the brink of a humanitarian disaster in a country that remains violent and ungoverned.
Thousands of Ethiopian troops invaded Somalia at the end of 2006 to reinstall an interim government headed by president Abdullahi Yusuf. But it has a tenuous grip on power and its time in office has been marked by growing insurgency, clan warfare, and the mass displacement of civilians.
Seyoum Mesfin, Ethiopia’s foreign minister, told the Financial Times that a rift between the president and prime minister Nur Hassan Hussein, appointed eight months ago after his predecessor fell out with Mr Yusuf, was the biggest obstacle to peace.
Ethiopia’s own security and credibility are at stake in Somalia, which it invaded to oust a coalition of Islamist groups that had taken control. As the interim government’s main international backer, it has closeted the president and prime minister in Addis Ababa for the past week as it seeks to bridge the divide between them.
In Mogadishu, the Somali capital, Ethiopian soldiers and troops from the transitional federal government remain the target of almost daily attacks by Islamist insurgents and clan gunmen opposed to Mr Yusuf’s regime.
“The main challenge now is not what they call the enemy. It’s an intra-government crisis that is preventing them from focusing on the tasks they need to get done,” said Mr Mesfin. “There has been a lack of vigour and, if I may say so, a lack of commitment.”
Since the beginning of last year more than 8,000 Somalis have been killed and 1m forced from their homes by fighting, which has centred on the capital Mogadishu. Humanitarian relief efforts have been undermined by the assassination of aid workers and the United Nations says that, due also to the additional impact of a drought, up to 3.5m Somalis – or nearly half the population – could need food aid later this year.
But Mr Seyoum gave a less bleak account of the security situation today than many independent observers, saying the country was experiencing less daily violence than Iraq and Afghanistan. To create a durable peace, he said the president and the prime minster needed to implement plans to create regional administrations that would give people a greater stake in government and, potentially, help to reconcile Somalia’s warring clans and sub-clans.
The rift between the leaders overshadowed the signing of a peace agreement in Djibouti on Monday between the interim government and one of two factions of the Somali political opposition. The agreement was welcomed on Thursday by the African Union, but it did little to lighten a mood of gloom among western diplomats who follow Somalia, because it had already been rejected by the other faction as well as by the al-Shabaab Islamist extremists leading the insurgency.
Mr Seyoum said that al-Shabaab, which the US says is linked to al-Qaeda, had been critically weakened: “They cannot sustain their own activities, let alone disband the government.” But other analysts say their strength and boldness appears to be increasing.
http://www.bloomberg.com/apps/news?pid=20601116&sid=aSA8eJ8UcQmQ&refer=africa Bloomberg, US Somalia's Opposition Vows to Unite, Fight Ethiopians
Hamsa Omar
Aug. 19, 2008
Somali Islamic insurgents fighting a United Nations-backed transitional government have pledged to unite rival factions to drive Ethiopian troops from the east African nation, a spokesman for the rebel group said.
The Alliance for the Reliberation of Somalia split in June when a moderate faction led by Sheikh Sharif Ahmed signed a deal with the interim government in Djibouti, agreeing that attacks would stop in 30 days and UN peacekeepers would replace Ethiopian troops within four months. The accord was rejected by Sheikh Hassan Dahir Aweys, an Islamist leader regarded by the U.S. as a terrorist linked to al-Qaeda.
Differences between the leaders of the Islamic Courts Union ``will end soon,'' Abdilkadir Ali Omar, the deputy chairman of the group, said yesterday in a teleconference with journalists in the capital, Mogadishu. ``We will continue fighting against the Ethiopian forces who invaded our homeland aggressively until they withdraw from our country.''
Ethiopia invaded Somalia in December 2006 to help the transitional government oust Islamic militias from southern and central parts of the country. Violence between rebels and government troops has intensified since then.
Somalia hasn't had a functioning central administration since the 1991 removal of former dictator Mohammed Siad Barre.
The transitional government and ARS representatives agreed at a meeting yesterday in neighboring Djibouti to halt all fighting and pledged to implement the June peace agreement, the government said in a communiqué.
`Inflammatory Statements'
``The parties agreed to continue the political dialogue between themselves and refrain from making inflammatory statements,'' it said. ``They reaffirmed their commitment to cease all armed confrontation and to establish sub committees to implement the arrangements to that end.''
Meanwhile, Ethiopia denied its soldiers were responsible for attacks on minibuses last week that killed at least 40 civilians. The authorities in Addis Ababa blamed the Islamic al- Shabaab militia for planting a remote-controlled bomb under one of the vehicles, killing 11 passengers.
A local doctor and eyewitnesses said on Aug. 16 the minibus passengers died after Ethiopian soldiers opened fire on the vehicles. The attack occurred in Arbiska, about 30 kilometers (18 miles) south of the capital, Mogadishu.
``It was the Al-Shabaab bombing of the bus that caused the deaths of passengers, not fire from Ethiopian soldiers,'' the government said in a statement posted on its Web site today.
Five civilians died in a shootout between the Islamic militants and Ethiopian and Somali government soldiers, it said.
__________________________________
http://in.reuters.com/article/lifestyleMolt/idINLD39903620080822 Travel Postcard: 48 hours in Asmara
Fri Aug 22, 2008
ASMARA (Reuters) - Not many travelers end up in Asmara, one of Africa's least-known and most beautiful cities. But if you ever have 48 hours to spend in the Eritrean capital, here are some tips on how to make the best of a short stay.
Given Eritrea's turbulent history, including a 30-year independence war until 1991 followed by a 1998-2000 border conflict with Ethiopia, tourism remains underdeveloped.
Those who make it -- among them, plenty of Italians exploring their former African colony -- are stunned by Asmara, especially its architecture.
FRIDAY
6 p.m. Join the locals in a "passeggiata", or stroll, down Harnet (Liberation) Avenue, the wide main street where residents gather in the early evening to meet and greet. With its pavement cafes and extraordinary buildings from the Italian colonial era -- art deco to neo-classical -- you feel you are in the Mediterranean, rather than Africa.
Older Eritreans will greet you in Italian, the young in English. You can have no fear of being robbed.
8 p.m. Choose from an array of restaurants round the small city to enjoy a traditional meal of "injera", a spongy pancake served on a tray with stew on top. If you are less adventurous, the menu will have plenty of pasta dishes, too. As you go home, observe soldiers on street corners checking the papers of the residents in a sign of Asmara's stricter undertones.
12 p.m. Before you go to sleep, listen to the midnight church bells in the distance, breaking the silence in this tranquil city of half a million people on a plateau 2,500 feet
up from the Red Sea coast. Remember half of the Eritrean population is Muslim, so get ready to be awakened by the call to prayer!
SATURDAY
6 a.m. Feeling energetic? Before the heat comes, take a jog or a walk up one of the hills around Asmara. The views of the city are stunning -- only a couple of post-independence high-rises spoil an otherwise early 20th-century panorama, dotted with mosques and a couple of cathedrals. Looking the other way across the countryside, women in white shrouds begin daily chores while boys with sticks take sheep and goats out in almost biblical landscapes. Mountains disappear into a misty distance. Wave at the soldiers on guard on the hilltops in case they think you're up to no good.
10 a.m. If invited by local hosts, join them in a coffee ceremony. The bean was discovered centuries ago by a monk not far away in north Ethiopia, and it is in this part of the world that they really know how to enjoy coffee. Watch the beans being washed and roasted as incense is burned before boiling. It might take an hour and the coffee will be strong.
1 p.m. Take some time at lunch to talk to Eritreans about their history. The oldest will remember the Italian occupation, the British defeat of Benito Mussolini's troops in 1941, then the ever-controversial federation with Ethiopia.
All Eritreans will talk about the 30-year "struggle" for independence that ended in 1991 -- some still carry the physical scars: a missing limb, a bullet lodged in the ribs -- and has defined their modern history. Present-day politics are a sensitive subject -- President Isaias Afwerki was a successful guerrilla leader and initially praised by the West. He is now heavily criticised by human rights groups.
3 p.m. Spend a couple of hours walking around the city to enjoy its Italian-era architecture. Don't miss the plane-shaped futurist "Fiat Tagliero" service station on the roundabout of Sematat Avenue. Its concrete wings are so long nobody believed they would stay up when wooden struts were pulled away at its inauguration in 1938, but it's still standing. At the Education Ministry on Harnet Avenue, which used to be the Fascist Party headquarters, turn your head to the left and see how the building's jagged roof spells an "F".
5 p.m. English Premier League football is an obsession throughout Africa. Head to the Mocambo bar to join several hundred young Eritreans whistling and shouting as they watch their favorite teams live -- different matches on different screens.
8 p.m. Go for pre-dinner drinks to the trendy Zara bar, full of young Eritreans. It's next to Sandal Square, so-called because of a monument to the independence war shaped like the fighters' simple footwear. The sandal structure has gone for repair at the moment -- as has beer, because of a shortage of ingredients.
SUNDAY
8 a.m. Have breakfast on the courtyard terrace of the elegant Albergo Italia, Asmara's first hotel, built in 1899.
9 a.m. Take the two-hour drive down the mountains to Massawa port on the Red Sea. Don't forget to get a travel permit first from the tourist office. The hairpin bends afford dramatic views -- and churn the stomach.
1 p.m. Enjoy freshly caught fish in the rundown but atmospheric old town of Massawa, whose crumbling architecture reflects more of an Arab influence.
2 p.m. Take a boat to nearby Green Island for snorkeling.
7 p.m. Back safely in Asmara, freshen up at Asmara Sweet cafe with a juice or tea. Given that the city has become a refuge for exiled rebels from the region -- notably Darfur guerrillas and Somali Islamists -- you may find the men on the next table are interesting to chat to.
(Reporting by Andrew Cawthorne and Jack Kimball, editing by Paul Casciato
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