. . . . Volume 1, Number 67 August 12 - 19, 2001 Commercial Bank of Ethiopia to be Managed by Indian Bankers According to reliable sources the two sides have signed what they call a draft agreement to hand over the management of the Commercial Bank of Ethiopia (CBE) to a foreign company for the first time in its history of more than half-a-century. State Bank of India Dean of Ethiopian Bankers Wins Back Board Seat, But Rivals Retain Control Bulcha Demekssa, who was crying foul alleging the first election was deliberately shammed to push him aside from board membership, has managed to clench sixth rank winning 34,924 votes in the reelection managing to be aboard the newly elected 12 board of directors. Road Authority and Road Builder in Squabble Parliament Terminates IT Contract News from Fortune, Ethiopia's Business Weekly Vol. 1, No. 67 August 12 - 19, 2001 Exclusive to Ethioguide About Fortune Archive Surprise Awaits Police in Star Bank Accounts Council Approves Punitive Bill on Illicit AGOA Trade Sugar Auctions Regain Momentum City Denies Land to 61 Investors EPA Blamed for Failure to Hand Over Factory to Former Owners ESL Vessel Comes Through Tempest Loses a Crusher Fin'l Inst's, Customs Highly Prone for Corruption, Study Reveals Inventor Automates Injera Making Computer Firm Takes City IT Networking Project Fed Retreats on Withholding Tax Addis Gets Australian Consultant to Examine Roads Editorials EFFORT,Disappointing, If Not Disturbing! Does It Mean the Fed is Starting to Listen? Restaurant Review HILTON,JACARANDA RESTAURANT Economic Commentary The Exigency of Dealing with Unemployment My perspective Marriage and Population Explosion in Addis VIEW POINT What It Takes to Become Capitalist In my Opinion A bitter Economic Lesson from the last Conflict View from Arada The Last Lap NEWS IN BRIEF LETTERS TO THE EDITOR TREND BUSINESS OPPORTUNITY TENDER MART .Commercial Bank of Ethiopia to be Managed by Indian Bankers CBE, SBI Sign $3m a Year Draft Agreement Ethiopia's National Bank and India's Reserve Bank Awaited for Approval BY TAMRAT G. GIORGIS FORTUNE STAFF WRITER It has now became clear that Ethiopian financial authorities are satisfied with the State Bank of India (SBI). According to reliable sources, at least they have signed what they call a draft agreement to hand over the management of the Commercial Bank of Ethiopia (CBE) to a foreign company for the first time in its history of more than half-a-century. Both banks are now awaiting their respective regulatory bodies, the National Bank of Ethiopia (NBE) and the Reserve Bank of India (RBI) to endorse the draft agreement signed on June 29, in Addis Abeba by Phlipos W. Mariam, board chairman of the CBE, and Mr. P. K. Sarkar, deputy managing director & group executive, International Banking Group. The SBI has been selected by Ethiopian authorities to manage the CBE for the coming three years on a contract basis, deploying six of its staff members in Addis Abeba. According to reliable sources, SBI will start managing CBE as of next September 2001, earning an annual fee of close to three million Dollars. SBI committed itself to implement the blue prints laid by the global consulting firm, Ernest & Young, that has studied and audited the CBE last year. The firm has conducted a study of restructuring the bank, while setting priorities of improvements in the coming few years, including eight recommendations. Although SBI's main mission is said to be to make CBE internationally competitive, train the local workforce to ultimately take over the management of the bank and maintain the set standard. It has also been given the task of introducing radical changes in areas of information technology (such as ATM, credit cards and debt cards), human resource development, enhancement of CBE's credit portfolio, branch network management, reducing non-performing loans, and increasing credit facility. Our sources say SBI has been selected on the basis of its business plan, profit target, operation performance and its three million Birr annual fee. "We cannot take the agreement at this stage as a breakthrough," said a source in the Bank. "Anything could happen between now and the approval of the regulatory banks." Reliable sources said CBE's board and management will stay intact while there will not be any layoffs from the 5000 employees of the bank. The board has now replaced three of its previous board members: Aschalew Haile, vice president of the Ethiopia Chamber of Commerce, and two other private consultants. G. Kiros Habtu and Girma Seyoum, former director of Ethiopian Insurance and Banking Institute, are now members of the CBE board chaired by Philipos. The chairperson, not only works in the Prime Minister's Office, but is also known by some people as a professional board chairman, as he has been attested to serve to various posts in at least four different state enterprises.Top. State Bank of India The origins of State Bank of India (SBI) date back to 1806 when the Bank of Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955, the Reserve Bank of India acquired the controlling interests of the Imperial Bank of India and the State Bank of India was created by an act of Parliament to succeed the Imperial Bank of India. SBI is the largest commercial bank in India today in terms of profits, assets, deposits, branches and employees. As of March 31, 2000, the Bank had total assets of 59.95 billion Dollars, and total deposits of 45.12 billion Dollars. With a domestic network of 8,998 branches, the Bank commanded about one-fifth of deposits and loans of all scheduled commercial banks in the country. Together with its seven Associate Banks, SBI commands about 30pc of the market share in banking. The Bank's top management consists of the Chairman, group executives for National Banking Group, Corporate Banking Group, International Banking Group and Associates & Subsidiaries, and four staff functionaries in charge of finance, credit, human resources and technology management, and inspection and audit. Three Strategic Business Units (SBUs) under the Corporate Banking Group have been set up for focused attention to very large corporate customers, lease finance and project finance, all reporting directly to the corporate office. SBUs has features of integration of operational planning with operations within each SBU, a delivery system with appropriate specialist inputs and attention on profitability. Functionaries at various levels have been delegated higher financial authority to ensure faster decision making in credit areas and disposal of a large number of credit proposals at operating units' level. A committee approach has been adopted, both at the apex and circle levels, for sanction of large advances. For this purpose, Central Office Credit Committee and Circle Credit Committees have been set up. Credit and systemic risk processes have been streamlined. Simplified and concise credit appraisal formats have been designed to ensure improvement in the quality of credit decisions, better quality of assets and reduction of NPAs. Spreading its arms around the world, the SBI's International Banking Group delivers the full range of cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division. The Bank is also engaged in international banking principally for its Indian customers. The International Banking Group serves the needs of the Bank's domestic corporate and other customers in financing import and export transactions. In addition, an increasing number of the Bank's corporate customers access international funds through SBI's international branch network as well as its 720 correspondent banks. The bank provides short-term finance through buyers' and suppliers' credits. The Bank has foreign offices in 31 countries with a network of 52 branches/offices spanning all time zones. The Bank's foreign offices include full-fledged branches at centers such as London, New York, Frankfurt, Paris, Hong Kong, and Tokyo. Besides full-fledged branches, the Bank also has offshore branches, representative offices, subsidiaries, and other arrangements for conducting business. While these offices service the international needs of the Bank's foreign customers as well as conduct some retail banking, they primarily focus on India-related business in, and investment flows from, the host countries. The Bank also processes remittances back to India for local expatriate communities. With the introduction of Euro in January 1999, the Bank's offices in Antwerp, Frankfurt and Paris acquired capability to open accounts and handle transactions in Euro. The Frankfurt branch, which has the advantage of being located in the financial capital of Germany and EMU and also the seat of the European Central Bank, has evolved Single Window Euro Services for banks in India, as a gateway to Euroland for Indian banks and corporate. In addition to its own branches and offices overseas, the Bank also has three wholly owned subsidiaries (SBI European Bank, SBI Canada and SBI California), two other subsidiaries (SB International Ltd., Mauritius, and Indo-Nigerian Merchant Bank Ltd. Lagos) and two joint-venture Overseas Banking Subsidiaries (Nepal SBI Bank and Bank of Bhutan) for providing banking services overseas. The Bank is registered as a consultant with several multilateral funding institutions including the World Bank, the Commonwealth Fund for Technical Co-operation UK, the Food and Agriculture Organization, the European Bank for Reconstruction and Development, the Asian Development Bank and the African Development Bank. The Bank's new link office, Global Link Service, was set up in 1997 to provide international correspondent banking services to the Bank's branches as well as to other banks. It aims to provide an efficient system for realizing the proceeds of clean and documentary collections drawn on overseas centers. The GLS offers correspondent banking products on matching terms with similar products of foreign banks. Top.   Dean of Ethiopian Bankers Wins Back Board Seat, But Rivals Retain Control Bulcha Demeksa Unsure He Will to Stay to Run Ethopia's 1st Private Bank By Dawit Taye Fortune Staff Writer The corporate intrigue involving Ethiopia's first post-Derg private bank has ended with an election that saw both sides of a bitter rivlary ascending to become members of the board of directors. The extraordinary shareholders meeting, which a was re-run because of allegations of fruad in an earlier election, dragged on past 1 a.m. Sunday, Agust 12. Reportedly, 62.4pc of the bank's 1,434 shareholders were present for the reelection. Bulcha Demekssa, who had cried foul alleging the first election was deliberately shammed to push him aside from board membership, managed to clench the sixth sport on the board, winning 34,924 votes in the reelection and rejoining the 12-member board. "I am very happy because it proves to me that the shareholders did not reject me in the first place," said Bulcha hinging people who came to congratulate him. "It was the croooks who did that." Hambissa Wakweya and ODA S.C. followed with the ranks of seventh and eighth, with 33,732 and 32,473 votes, respectively. Awash Insurance S.C, won the highest ballots with 38,981 votes seconded by Leykun Berhanu, general manager of the Bank, Bekele Nedi, and Berta Construction, who ranked third to fifth respectively. Hamissa Wakweya, who was the short-lived board chairman who replaced Bulcha of the bank before the reelection, told Fortune: "There has been a temporary problem. We worked on it and we solved it. It shows the vote of confidence by the shareholders. It is simply one man in, one man out." The list of the newly elected board of directors show that all the members are intact except that Bulcha bounced back taking the place of another member, Getachew Desta. But Bulcha does not have Hambissa's win-win feelings, however. He says one thing still makes him uncomfortable. "I am very distressed by the fact that people whom I distrust are elected in the board. After consulting with my supporters and people close to me, I will soon decide to stay in the board or resign," he said. Yesterday's general assembly of shareholders of Awash International Bank (AIB), met at the Addis Ababa Hilton, was not ordinary event, which was followed by the traditional handshakes and profligate parties. In fact, shareholders hurried to their homes after mid-night. Prior to that, Fortune was informed that the meeting was rather tense, sensitive, controversial and laborious in resolving the controversial election held last April. The result of that election has ever since been contested by former Board Chairman, Bulcha Demekiss, who has now forced the external auditors call an extra-ordinary general assembly of the shareholders. This is for the first time in the bank's six years history that shareholders cast vote to elect board of directors responsible to lead their bank in three months time. The exhaustive meeting had originally agreed that the previous election was not entirely non faulty, while it has agreed that neither the recounting done up on the request of Bulcha was any better. Following these arguments, the assembly has passed the resolution in a consensus to conduct another election, leading to the resignation of the existing board members and chairman, Hambissa Wakawaya. Until this point, Bulcha was leading the race. If not all, he had successfully managed not only to call for the assembly, despite strong protests from his foes, but also led to the resignation of his bitter adversary, Hambissa, though returned back to the board. The assembly then nominated 30 people that had included both the adversaries, and other prominent businesspeople such as Wolle Gurumu, Teshome G. Mariam, and Wolderufaiel Tessema, while big voices in the bank such as ODA Share Company (the single largest majority shareholder that owns 20pc of the bank), Mekaneyesus Church and Berta Construction were in the list. The question that lies ahead of Awash Bank is to elect the new chairman which may sound tricky and whether people who distrust each other will work together in one board for a mutual interest putting personal squabble aside. Hopefully time will tell us. Awash Bank's election saga, that remained shrouded with mystery for the past three months following the general election of shareholders alleged to have been entrenched in fraud, ended in the last crescendo yesterday past mid night (1:00 a.m.) at the extraordinary shareholders meeting where shareholders reelect the board members of the bank. Reportedly, 62.4pc of the bank's 1,434 shareholders were present for the reelection. In an ironical turnout, the bitter rivals that were bickering for having swindled the original now voided election and at the head of the internal strife have all been elected to be included in the newly elected board of directors. Bulcha Demekssa, who was crying foul alleging the first election was deliberately shammed to push him aside from board membership, has managed to clench sixth rank winning 34,924 votes in the reelection managing to be aboard the newly elected 12 board of directors. "I am very happy because it proves to me that the shareholders did not reject me in the first place," said Bulcha hinging people who came to congratulate him. "It was the crocks who did that." Hambissa Wakweya and ODA S.C. followed with the ranks of seventh and eighth, with 33,732 and 32,473 votes, respectively. Awash Insurance S.C, won the highest ballots with 38,981 votes seconded by Leykun Berhanu, general manager of the Bank, Bekele Nedi, and Berta Construction, who ranked third to fifth respectively. Hamissa Wakweya, who was the short-lived board chairman who replaced Bulcha of the bank before the reelection, told Fortune: "There has been a temporary problem. We worked on it and we solved it. It shows the vote of confidence by the shareholders. It is simply one man in, one man out." The list of the newly elected board of directors show that all the members are intact except that Bulcha bounced back taking the place of another member, Getachew Desta. But Bulcha does not have Hambissa's win-win feelings, however. He says one thing still makes him uncomfortable. "I am very distressed by the fact that people whom I distrust are elected in the board. After consulting with my supporters and people close to me, I will soon decide to stay in the board or resign," he said. Yesterday's general assembly of shareholders of Awash International Bank (AIB), met at the Addis Ababa Hilton, was not ordinary event, which was followed by the traditional handshakes and profligate parties. In fact, shareholders hurried to their homes after mid-night. Prior to that, Fortune was informed that the meeting was rather tense, sensitive, controversial and laborious in resolving the controversial election held last April. The result of that election has ever since been contested by former Board Chairman, Bulcha Demekiss, who has now forced the external auditors call an extra-ordinary general assembly of the shareholders. This is for the first time in the bank's six years history that shareholders cast vote to elect board of directors responsible to lead their bank in three months time. The exhaustive meeting had originally agreed that the previous election was not entirely non faulty, while it has agreed that neither the recounting done up on the request of Bulcha was any better. Following these arguments, the assembly has passed the resolution in a consensus to conduct another election, leading to the resignation of the existing board members and chairman, Hambissa Wakawaya. Until this point, Bulcha was leading the race. If not all, he had successfully managed not only to call for the assembly, despite strong protests from his foes, but also led to the resignation of his bitter adversary, Hambissa, though returned back to the board. The assembly then nominated 30 people that had included both the adversaries, and other prominent businesspeople such as Wolle Gurumu, Teshome G. Mariam, and Wolderufaiel Tessema, while big voices in the bank such as ODA Share Company (the single largest majority shareholder that owns 20pc of the bank), Mekaneyesus Church and Berta Construction were in the list. The question that lays ahead of Awash Bank is to elect the new chairman which may sound tricky and whether people who distrust each other will work together in one board for a mutual interest putting personal squabble aside. Hopefully time will tell us. Top.   Road Authority and Foreign Company Building Addis-Jimma Road in Squabble BY MIKIAS WORKU FORTUNE STAFF WRITER The Ethiopian Roads Authority (ERA) and the European joint venture, Dragados - J&P, which took over and commenced executing the Addis-Jimma road rehabilitation project, are in the midst of a disagreement instigated by a staggering 300 million Br compensation claim the company demanded as additional cost for the completion of the project. The disagreement has brought the rehabilitation work to a standstill for the past year after Dragados - J&P decided to cease carrying out the project in May 2000 in retaliation to the government's refusal to accept the disturbing claim. Dragados-J&P, formed by Spanish and Greek construction companies, was awarded the 335Kms road project in May 1999 initially proposing 406 million Br to undertake and complete the project, which is financed by the European Union. Sources in ERA told Fortune that the company requested payment of the appended sum as compensation for alterations it said should be made in the original design that would expose it to extra costs from the price it had originally offered. The Ethiopian Transport and Construction Design Enterprise has originally designed the controversial project. The company had filed its claim on two occasions, both times rejected by the government, which finds the charge far-fetched to be acceptable, according to our sources. A committee composed of representatives from Dragados - J&P, a German consultancy firm, and the government, has been formed in an effort to hammer out a win-win situation, for the resumption of the interrupted works. Followers of these negotiations anticipate that agreement would materialize in three months from now. The consortium has also won and is about to complete the rehabilitation of the Addis-Modjo-Awassa road, which is also funded by the European Union. The company won the bid initially offering 310.9 million Br, which has now escalated to 340 million Br, mainly due to the extension of the completion time attributed to bad weather. Work on the 266Kms long road, launched in October 1997 and at the final stage now, was presumed to take 40 months to be concluded.Top. Parliament Terminates IT Contract BY MARY DEJENE FORTUNE STAFF WRITER The extraordinary meeting called by the Speaker of the House of People's Representatives, Dawit Yohannes, to determine the fate of the controversial parliament IT project, has decided to terminate the one million Dollars contract that was awarded to Global Computing Systems (GCS), sources informed Fortune. The decisive meeting was attended by the deputy speaker, Petros Olango, who wrote last week a letter of protest against Speaker Dawit's decision in suspending the project, the Auditor General Lemma Argaw, members of the bid awarding committee, representatives from Science and Technology Commission and the Ministry of Finance. "I perceived that the special session declared the contract award to GCS was illegal and as such cancelled, and the Ministry of Finance would further confirm the decision to give the project to the next company on line, SbCnet", said a source close to the implementation of the Parliamentary Information Systems Project (PIS). Based on an investigative report by the Auditor's General, Speaker Dawit had suspended the project three weeks ago saying there had been unlawful procedures on the bid awarding process. The Auditor's general report, which instigated the suspension of the contract then the reported cancellation, has revealed that the bid committee made price adjustments on the financial offer of GCS that has enabled the company to win the tender over the other competitor SbCnet that had originally submitted the lowest price quotation. GCS had sent a letter, under the letterhead of NCR, of correction to the parliament on February 2, 2001 following the bid opening claiming that its finance division has discovered "arithmetic errors" and made adjustments, accordingly. "Correcting the errors our grand total C&F comes to 725,100.56 Dollars (without including training) instead of 834,671.90 dollars," the letter signed by the GCS Managing Director, Dr. Ahmed Kello, stated. The Auditor General believes that the bid committee should not accept this letter once the bid has been officially opened, according to sources. Despite GCS' claim that its finance office found an arithmetic error, one of the reduced quotes says: "The second error is that we have quoted for 4 units where your requirement is for 1 Ms - Back Office Server. By correcting this, the total price of this item comes down to USD$ 18,506.67 instead of USD$ 98,702.22, I.e. difference of USD$80,195.55." The Auditor's General Report faulted this procedure of submitting a revised financial offer after the financial tender opening, according to sources that also said the Auditor General looks at this "arithmetic errors" as more than just errors. SbCnet and GCS were short listed before the bid committee finally decided to award the project to the latter in February 2001, while other participants Router Engineering and Snap Trading were disqualified at the early stage of the process. Excel IT and EMJ Data System Ltd & Dora Net scored below 70 pc in the technical evaluation. The project is financed by the International Parliamentary Union (IPU) and consists of the supply, installation and configuration, testing and implementing a data network infrastructure within the parliamentary information system.Top. Surprise Awaits Police in Star Bank Accounts New Boards Visits Star Companies on Saturday BY DAWIT TAYE FORTUNE STAFF WRITER The bank books of the six companies - four conglomerates of Star Business Group, and ABMAR International and AJEMEA - under police investigation for alleged corruption and whose accounts were frozen last week by order of the Supreme Court, unveiled a surprisingly low deposit of a little more than 1.4 million Br in aggregate. A report submitted to the Supreme Court last week by the Federal Police revealed that the amount frozen by the court and scattered in 16 branches of both the Commercial Bank of Ethiopia and private banks totaled a scant 1,434,643.53 Br. Eight branches of CBE, three branches of Dashen, one owned by Awash and four branch offices of Wegagen are the branches where the companies had chosen to open their accounts, according to police report. The multi-million Birr business empire of Star Business Group and its affiliates - Tana Trading, Ethiopian Investment Group, Tis Abay Trading - own the accounts. The blocked sum also includes amounts found in the accounts of the other two companies owned by Abraham G. Kristos and Asnake Jembere, respectively. The court has passed a decision on these companies to be governed by a board composed of representatives from five government organizations until the release of their owners from detention. According to our sources, members of this new board have toured these companies for a site visit held on Saturday, August 10. According to data compiled by the police, a total of 174,049.92 Br were found in the bank accounts of Star, deposited in 11 branches here in the capital and in the regions. And the books of Tis Abay at the time of police intervention read only 1,402.93 Br, which it had deposited in a single bank diveded in different account numbers. More than 652,000 Br was found in the bank account registered under the company owned by Abraha G.Kristos, ABMAR, opened with Dashen Bank, whereas more than 606,000 Br were discovered in the accounts of AJEMA Plc. Under a request made by the Federal Police, the court has ordered all the accounts to be blocked for investigation, as well as the shares in the Bank of Abyssinia bought by the three shareholders of Star and its affiliates. Similarly, a paid up share value of 125,000 Br in Nib Bank owned by AJEMA and ABMAR's shares worth 400,000 Br in the United Bank have been put under the control of the newly appointed board. Information obtained by Fortune show that the six companies have more than 500 different heavy and light vehicles under their proprietorship. Tana Transport, sister company of Star, was operating 224 dry cargo carriers and 82 tankers until the end of the past Ethiopian year and acquired 50 additional dry cargo conveyors this year, Fortune learnt.Top. Council Approves Punitive Bill on Illicit AGOA Trade BY MARY DEJENE FORTUNE STAFF WRITER Upon requests made by the government of the United States to promulgate a new penalty law on unlawful procedures of textile export under the African Growth and Opportunity Act (AGOA), the Council of Ministers has approved Friday, August 3, 2001 a strict regulation on those abusing or violating opportunities offered by the Act. It has also submitted a letter of commitment to implement the law once Parliament resumes session and endorses the bill. Although the public notice by the Ministry of Trade and Industry has pronounced that the Ministry shall cancel the business license of any person apprehended in illicit practices, the U.S. government has requested Ethiopia to introduce yet another punitive law with a fine amounting three folds of the value of the seized unlawful export item, which is what the Council has approved. The new regulation also includes that a new license for any trading purposes would not be issued for five consecutive years for businesses found involved in illegal practices and would also be deprived of opportunities under AGOA for five years.. After an intensive negotiation between the two countries on the export of apparel under AGOA, which enables eligible African countries enter duty and quota free in to the U.S. market for eight years, Ethiopia has received on Friday, August 3, an official letter signed by U.S. Trade Representative, Robert Zoellick, heralding the start of the export. One of the major issues of the negotiation had been the enforcement of a penalizing directive on unlawful export procedures including transshipment, rerouting, submitting false certification documents, forging visa documents and refusing access to an authorized U.S. officer or customs service officials to facilities involved in the production or exportation of AGOA textiles and apparel. Two textile factories, Garment Express and Addis Izmir, have already started exporting to the U.S., even before the official submission of the letter to Ethiopia on Friday. According to the Deputy General Manager of Garment Express, Zinash Zewdie, her company has exported sportswear in May 2001 contained in a 20ft container. "We knew that we had to wait for the green light to start exporting under AGOA, but we had to take the risk and send the items, as our clients requested for the shipment as urgently as we could get," she said. According to Zinash, eventhough the first shipment was not under AGOA, the textile factory, laid on 2000 Sq. meters of land around Yerer Ber, is now ready for a second round shipment of its products in about a week to benefit from opportunity. In a press briefing on Tuesday, August 7, Trade and Industry Minister, Kasahun Ayele, said that his office has organized a workshop that will be given next week in an effort to create awareness on the trade act. He said that Ethiopia is one among the 28 less developed countries from the 34 AGOA beneficiary countries below the Sahara, thus has the opportunity to import fabric from any country, do the finishing job here and export it to the U.S. This particular opportunity lasts until 2004, nonetheless. Among the 6,500 items certified under AGOA, Ethiopia could benefit from the export of traditional clothes, souvenir articles, leather products and livestock, Kasahun said. Customs officials also said that they have finalized preparations to start issuing certificate of origin and visa stamp on commercial invoices. U.S.-Sub-Saharan Africa Countries Trade and Economy Cooperation Forum, signed in May 16, 2001, where policy makers would confer on annual basis, will be kicked off on October 4, 2001, on a two-day conference to take place in Washington D.C.Top. Sugar Auctions Regain Momentum BY DAWIT TAYE FORTUNE STAFF WRITER The weekly sugar auction that was once hit by market depression during the past consecutive rounds, resulting in devastating effects on the income of the Ethiopian Sugar Industry Support Center, has shown slight revival this week, as it managed to attract more bidders and sell out a comparatively higher amount of sugar. The 75th round sugar auction that took place on Tuesday, August 7, attracted 14 participants, who bought a total of 49,000 quintals of sugar for an aggregate of 19.8 million Br of the 80,000 quintals put up for auction. The Center was only able to sell in the previous round 13,000 quintals, which brought to the company a meager 5.2 million Br compared to the more than 30 million Br it used to collect in each of the auctions prior to the downturn two months earlier. Even if some progress was observed in the quantity of sugar sold and number of bidders, the highest prices offered at the auctions are still hovering just a little above the bottom level. The highest bidder this week, Jel Transport and Trading Plc, which made its first appearance at this auction, offered 400.30 Br to buy 1000 quintals from the given floor price of 400 Br. Merchandise and Wholesale Import Trading Enterprise (MEWIT) took the highest volume of sugar, paying eight million Birr in aggregate (400.01 Br per quintal) for the 20,000 quintals it has proposed to buy. The rest of the participants parted with the remaining 28,500 quintals offering 400.00 Br per quintal. Star Business Group, which has been the bulk buyer at the auctions, has only participated in one round after its owners were put behind bars for two months now after allegedly involved in corruption. Star officials explain their prolonged absence at the auctions saying that they have already accumulated sufficient stockpiles of sugar from the previous auctions. Surprisingly, the company owned by Asnake Jembere, AJEMA, one of the firms under police investigation and whose accounts the Supreme Court has ordered to be blocked last week, also took part in this week's sugar auction purchasing 500 quintals for 200,000 Br. The court has also ruled this company, including its shares worth 125,000 Br in Nib Bank, be administered by the new five-member board composed of representatives from five government organizations. Top. City Denies Land to 61 Investors BY MELAKU DEMISSIE FORTUNE STAFF WRITER The Addis Abeba City Administration has annulled requisitions of 61 investors and developers for plots of land in different spots of the capital claiming incoherence in their applications and proposals. According to the notice issued by the Department of Investment Development Projects Research and Evaluation, applicants had demanded to be given plots totaling 62,000 Sq. meters found in 16 woredas of the city. The Department suspended the requests of 13 applicants saying the proposed plots are already occupied by public institutions. Nile Business Group, which had asked a plot in Woreda 17 Kebele 19 was told that the plot is in use by the Kebele's Public Department Store, while OMEDAD Plc's request to retain a plot in the same area has been rejected as the land is reported to be occupied by a kindergarten. The Department has also rejected proposals from 13 developers of residential complexes that it says have failed to produce investment certificates, project proposals and declaration of investment capital. According to sources, a religious group's, Jehova Witnesses, land application for the construction of a congregation in Woreda 27 Kebele 11 failed to be ratified due to lack of investment certificate in their application. The Department has suspended proposals for recreation parks and agricultural development of 10 investors, including Sheble Plc, wanting to assess the directive on the establishment of such facilities before approving the applications. Around 25 proposals for acquiring land submitted by companies such as Altar Steel & PVV Manufacturing Enterprise, Saba Engineering, Abas Trading & Transport Enterprise, Ziqualla Construction & Freight Transport, Ethiopian Petroleum Enterprise, Dil Trading, and Almeta Impex, all applied for the purpose of building industrial infrastructure, have been impended as a result of their irregularities of solicitation. Applications submitted without attaching project proposals; studies and investment certificates are among the reasons cited by the Department for the cancellation. Berhane Gidey, who is now under police custody suspected of involvement in a high level corruption, has also been barred from getting land for submitting two different proposals for a single plot, while a foreigner, Mr. Ali Mohammed Ali Ibrahim, was asked by the Department to forward his investment profile from the Federal investment office. From the 52 plots denied access to investors, nine are located in Woreda 17 and six are located in Woreda 19.Top. . Privatizatgion Agency Blamed for Failure to Hand Over Factory to Former Owners BY DAWIT TAYE FORTUNE STAFF WRITER Owners of Nifas Silk Yarn Factory, which has been restituted to its former proprietors, are blaming the Ethiopian Privatization Agency (EPA) for refusing to give them the factory even if the decision was given three years ago. They said the delay is entrenching them in a substantial financial losses due to pilling up interest on loans taken to settle payments made to the Agency. The Agency had decided that the factory should be restored to its former owners three years ago following their claim of ownership lodged six years back in respect to proclamation No. 110/1995 of properties taken by the Derg regime, but the transfer never materialized. One of the seven owners of the factory told Fortune that a letter signed by Beshah Azmite, general manager of the Agency now under police custody, had been sent to all the claimants in January 1998 informing them that decision has been made to restitute the factory to the rightful owners. "The transfer has not taken place up to now putting us in a difficult situation," the co-owner said. He said that they have fulfilled all the formalities the Agency has been asking, including payment of more than 3.1 million Br asked in compensation of the investment the government has made on the factory during state-ownership, to be paid 80pc in advance and the remaining in a long term arrangement. "We had first objected to this requirement because the amount we were asked to pay is improbable considering the present condition and capacity of the factory," complained one of the claimants. "But our appeal to the Agency failed to bear fruit and we were told that if the payment is not effected the factory will not be transferred to us." According to the claimant, even though they have taken loans from a bank to channel the demanded sum to the account of the Agency, it still could not hand them the factory. EPA sources, however, said the problem emanates from disagreement between the owners over the settlement of the required sum. According to this official, one of the claimants wants to withdraw from the ownership settling to his own fair share, hence the squabble followed this disagreement made things difficult for the Agency officials to whom to transfer the property. "We are ready to transfer the factory when the formalities are met and problems between the owners are resolved," said an official of the Agency. The Board Chairman of the Factory, in a letter written to the Agency, said that the Factory has been through difficult times for the past six years due to the controversy over the ownership claim and delay of transfer and has presently reached a critical point. The Chairman has noted in his letter that the Factory was recently forced to stop production because of a severe shortage of finance and a loan request has been rejected by the bank, which said it will not provide loan to an entity that is in the process of ownership transfer. "The Factory and its employees are in a critical situation and urge the Agency to come up with a decision as soon as possible," wrote the Board Chairman.Top. . ESL Vessel Comes Through Tempest Loses a Crusher BY YIBEKAL GETAHUN FORTUNE STAFF WRITER Few weeks following the sea storm that had hit Tekeze, one of the 11 vessels owned by the Ethiopian Shipping Lines, another vessel of the national liner was caught by a raging summer typhoon, which forced to it to raft weltering for 72 hours in the Indian Ocean. The vessel, Netsanet, which was sailing home from the Fareast loading 8,180 tons of general cargo and 14 containers, arrived at the Port of Djibouti on July 16 after five days delay from schedule and minus a 25-ton stone crusher machine that went overboard during the storm. The Chinese construction firm, China Wanbao Engineering Corporation, which undertook the construction of Tis Abay and Finchaa power plants, among other road construction projects, owns the lost machine. According to the public relations head of ESL, the vessel has reportedly encountered storm worse than the recent storm that took the lives of five crews of Tekeze. The PR head said that it is common to encounter typhoons during the months from June to August and the West-Easterly wind usually thump vessels sailing on China Sea. He also said that these types of incidents result in damaging or tossing cargoes overboard into the ocean and insurance always covers the losses. The Chinese company has not disclosed the value of the crusher as the responsible person has been in Djibouti to follow-up the case, neither did the company file any claim for the property. The forwarding agent of the Wanbao Engineering Corporation, Wendi Trading, was not cooperative to Fortune inquiries, as usuall. Top. . Fin'l Inst's, Customs Highly Prone for Corruption, Study Reveals BY KALEYESUS BEKELE FORTUNE STAFF WRITER Purchase of goods by government offices, determination of customs duties, financial and government revenue collecting institutions are highly susceptible areas to indulge in corrupt practices, discovered a study conducted by an indigenous non-governmental organization. The 72-page study has identified determination of customs duties as more prone to corruption than other areas of corruption in Ethiopia. Among the targeted groups approached by researchers assigned by Action Professionals Association for the People (APAP), 91.2pc of the public, 92.1pc of civil servants, 94.3pc of police officers, 90.8pc of prosecutors, 92.3pc of judges and 90.3pc of administrators have agreed with this conclusion. APAP, established in January 1993 with objectives of providing legal and professional services to the community, particularly to the needy, women and children, has conducted the study surveying more than 700 respondents from different groups in six sample regions. Administrators, civil servants, judges, police officers, prosecutors and the public, totaling 734 people in the Southern Nations and Nationalities, Amhara, Oromia, Harari, Dire Dawa and Addis Abeba, were made to respond to the study. The study has thus revealed that the procurement of goods in government offices was identified as highly prone to corruption, according to surveys made of 90.7pc of the public, 97.0pc civil servants, 93.3pc police, 94.7pc prosecutors, 92.3pc judges and 89.7pc of the officials. The study pointed out that police activities, especially traffic police, immigration, licenses and permits, distribution of items under government monopoly, construction and land distribution are other areas where corruption is relatively higher. Abera Hailemariam, executive director of APAP, told Fortune that the survey took the involvement of eleven people and more than a year to be concluded in April 2001. It includes case studies made in Awassa and Nazareth to examine activities related to levying taxes by finance bureaus and procedures of bids and government auctions. The directive of the finance bureau in Awassa gives all the discretion to impose tax on local businesses to only two persons giving free hand to manipulate the rates, according to the study. Whereas many businesses in the same town complain that they could not exercise their right of equal opportunity without giving bribes to purchasers or persons responsible for procurement. The survey also criticizes several articles in the Oromia Region's legislation for financial administration, particularly for the procurement of goods and services describing them as "opening loopholes for corruption, not transparent and giving wider power to public officials that could easily drag them into corrupt practices". According to the study, 86.5pc of the surveyed judges have agreed that low pay is the cause of corruption, joined by 82.9pc of the prosecutors, and 72.4pc of the police officers. Absence of punitive measures, lack of transparency and appropriate rules for monitoring and follow up, and inefficiency of the law enforcement bodies as well as the judiciary system are also found among the list of items cited as causes for the rampant corruption. Fear of retaliation from the corrupt public official; the belief that reporting the crime has no effect and to avoid testimony during investigation are stated in the research as reasons for shunning to witness against corruption, in return aggravating the problem. The study reveals that more than 84pc of respondents from the public asked to answer the question as to why people shy away from exposing acts of corruption, agreed to fear of retaliation from corrupt public officials. Although the government has established an anti-corruption institution and promulgated new punitive laws, the study says: "the efforts of the government alone could not bring about the intended result without the contribution of civil societies and the media, and therefore it should take measures that ensure access of information to journalists". The survey also recommends that the government should establish a specialized agency consisting of well trained and highly skilled personnel to investigate corruption offences, strengthen law enforcement institutions to fight corruption, as well as making procurement rules and regulations in government offices free from ambiguity. The executive director of the association says the study would be a platform for other researchers to conduct further study.Top. . Inventor Automates Injera Making BY WESSNSEGED MESHESHA FORTUNE STAFF WRITER He was into innovations of film productions to ETV during the 80s before he went to Saudi Arabia. Girma Zeleke, the innovative craftsman, had introduced cosmopolitans to the moving visual, Prizmavision, billboards right after his return home in the 90s. This creativity was followed by an electronically advanced advertising method on TV commercials, presenting a jigging graphic android he baptized as Sinziro, among many others. He did in fact has helped the Ethiopian TV a lot in terms of information technology transformation that it now appears, more than ever before, a bit sophisticated in presenting its programs. This innovative-enthralled person is back in the beginning of the 21st century with a craft that will revolutionize the way Ethiopians make their favorite food. Girma has now broached an automatically operated machine for baking Injera. The Ethiopian Science and Technology Commission has registered in August 2001 the sophisticated gadget, which has an unusual shape and way of functioning compared to the traditional round-shaped clay stove. His years in Saudi Arabia, hence observations on how Ethiopians there had had difficulties to get their much loved fresh Injera in foreign land, led Girma come up with the idea of inventing the machine. He says that he manufactured a similar machine and used it to bake the traditional food, which he had been selling to compatriots before coming to his homeland. The produces of Girma's invention has no circular shape as familiar in every Ethiopian households, but puts out the products in rectangular shape bringing it forward on a conveyor belt resembling a flour mill. According to Girma, the machine is capable of generating four KW horsepower per hour and making 720 Injera a day. "It is possible to manufacture machines which can produce one million or two million a day with the assistance of investors who are willing to join hands with me in financing the project," he said. Girma said his door is open for investors and engineers who are interested in working with him. He has plans to set up a production chain where Teff is milled, changed into dough and Injera is finally produced. "Anyone who assists in the realization of this project will be of great benefit to the country," Girma confides. With such innovations, Girma is hopeful that the traditional baking system of Injera that has so far been confined within household production will be transformed into a huge commercialization, perhaps changing the diet-style of Ethiopians for good.Top. Computer Firm Takes City IT Networking Project BY MELAKU DEMISSIE FORTUNE STAFF WRITER The Addis Abeba City Planning and Economic Development Bureau has awarded the technical part of its computer system implementation project to a private computer company, Cybersoft Plc. The firm has signed the agreement with the Bureau on July 8, after winning the bid in which Ernest and Young, Advance Computers System House, Information System Services and Infotec Plc had also been participants. The company has offered to be paid 600,000 Br for designing and implementing software for integrated regional planning information system (IRPIS). Assefa Dagne, CEO of Cybersoft, said that his company will undertake and finalize the job in five months. "The software is so far the most complex in the country," he says, adding that the development of the software, sold to the Bureau, took the efforts of 30 computer engineers and two million Birr investment. "We are targeting markets abroad and we consider the amount we offered to be paid as contribution for the country's development program," Assefa said. The software implementation that would be compounded in the Bureau has 17 sub-systems such as public investment program, national income accounting, demography, natural resources, capital budget, project management, loan and grant management, among others. "It is an important tool for socioeconomic development because it is a reliable source of national or regional information and is a strategic tool for the development of planning, monitoring and policy formulation," the expert said. According to him, the company has already carried out similar projects for the Ministry of Economic Development and Cooperation (MEDaC) on system analysis and design, and is currently working on a turnkey IRIPS project for the Amhara Regional State. Sources in the Bureau said that the overall project is worth three million Br, the highest portion expended for the purchase of the computer hardware. Assefa has also pledged to provide a one-year technical assistance to the Bureau after finalizing the project. Top. Fed Retreats on Withholding Tax BY MELAKU DEMISSIE FORTUNE STAFF WRITER The seven - day strike by the coffee suppliers and exporters, that has resulted in the complete standstill of the nation's precious commodity market, has came to an end with the Fed retreating from its position of imposing the five percent withholding tax levied, on all businesses including coffee traders. Brook Debebe, vice minister of Trade and Industry, has indeed kept his promise made earlier this week to the striking coffee traders in an effort to pursuade them to stop the strike and resume supplying coffee to the daily auctions. The deal was simple. The vice minister pledged to hold talks with his colleagues in the government and come up with a tangible response for their demand in three days. The traders returned to business accordingly. So did he come back with results. Fed has suspended the withholding tax in coffee business until January 9, 2002, although not fully responding to suppliers' demand that the government should suspend the new withholding tax for a year time. Suppliers were claiming to suffer from unfavorable market conditions and hard hit by bad check swindlers that had already put heavy burden on them to cope with retraining limited finance for the new tax system. "I would have made to pay more than 78,000 Br," said one coffee exporter, but in a sense of relief. He said the major bottleneck created was as a result of the Fed's late announcement of the new tax regime. There was in fact a gap of 17 days between the announcement of the law and the day it has went effective. "We have been effecting payments without withholding the taxes to be told at the end we should pay for it from our own accounts," said the exporter. Ministry of Finance's last Thursday, August 8, announcement was more news to the suppliers than the exporters, who are already paying two per cent withholding tax to the Fed. The boycott that persisted for the past seven days had alarmed government officials that it may plague the already troubled coffee export market and foil revenues from the country's top foreign currency earner. The coffee auction recommenced on Tuesday, August 6, and according to data obtained from the authority, a total of 1,214 tons of coffee were put up for auction and sold in followed four days.Top. Addis Gets Australian Consultant to Examine Roads BY MELAKU DEMISSIE FORTUNE STAFF WRITER The Addis Abeba Roads Authority (AARA) has hired an Australian consulting firm for nine million Birr that will conduct a survey on the existing road network in the capital and produce a compiled inventory. The Authority has signed the 18-month contract agreement with the Australian Snowy Mountains Engineering Corporation (SMEC) on Friday, August 10. Tekeda Getachew, public relations service head of AARA, said the contracted company will study the existing number of roads, their conditions, standards, period of maintenance, and establish bridge and maintenance management system. It would also put in place a database, as well as a road referencing system based on geographical information system (GIS). "This system is very useful for us to know the reality about the existing situation of our roads and it will help us in having at hand the necessary information for the implementation of future projects," the PR head said. He disclosed that maintenance and rehabilitation works in the city had previously been undertaken without detailed study, but the new system would enable the Authority to manage, administer, and maintain roads, while helps to control the traffic circulation of the city in an advanced way. SMEC has committed itself to an 18-month period to complete formulating the inventory and make the survey of the roads. AARA had invited 13 international companies to bid for this project and eight companies showed interest to participate. "We selected SMEC because of its technical capacity and reasonable financial offer," Tekeba said. The Authority will award the designing project of the roads to an international company in the near future, according to Tekeba.Top. Economic Commentary The Exigency of Dealing with Unemployment By Abebe Tadesse It now becomes a norm for the Ethiopian Investment Authority to inform us that it has provided large number of investment licenses for investors. If all transformed themselves to reality, then these undertakings could absorb a large number of job seekers. The truth is, since many licensed investments would not go beyond the paper of formation or the news consumption, they would contribute little in tackling unemployment problem, a problem that is becoming disquieting not only to the economy, but to what I hate to think is a threat to the national stability. The swing of pendulum from the public sector to the private sector as a result of the economic reform has not led to increase in employment opportunities. I sometimes could not help but simply wonder whether the swing had been truly from the public sector to the private sector or from the public sector to the politically affiliated business organizations? We have so far witnessed that the role of private investment in alleviating the problem of unemployment has been relatively insignificant. This is mostly because the challenges of employment in our context remain to be one of the long-term development objectives of the country, relating to the inherent characteristics of the economy. The economy fails to generate adequate job opportunities for the labor force. Neither the availability of job opportunities in turn depends upon the overall economic performance. Deteriorating economic conditions, low labor productivity and skill levels, combined with declining public sector employment, further aggravate the problem of labor absorption. From the point of view of development, what really matters is that labor is the relatively abundant factor, per capita output is low, and the supply of labor remains larger than the demand for labor. Although, unavailability of well-disaggregated employment/unemployment statistics has curtailed the effort to establish reliable indicators on the magnitude, structure and nature of employment, it is generally known that unemployment is a feature of urban centers, while underemployment is believed to be a rural phenomenon. The only available and reasonable statistics to measuring unemployment is the result of the 1994 population and housing census statistics. This census supports the argument that unemployment is more of an urban phenomenon. For instance, in 1994, the rate of unemployment in the urban areas was about 22pc, while that of the rural areas stood at less than one percent. According to this same census, urban unemployment was severe in the city states of Addis Abeba, Dire Dawa and Harari, with unemployment rate of 35.4pc, 35.1pc and 27.1pc, respectively. There is no doubt that unemployment among school-leavers has reached alarming proportions. However, the crucial question is not the amount of such unemployment but the delineation of significant factors determining its incidence. It seems clear that mass unemployment among school leavers is due to dysfunctions existing between the gross rate of school output and the slow expansion of occupational opportunities. It may be easy enough to increase the output of the schools but it is far more difficult to expand opportunities. More than 60pc of the army of the unemployed have formal education of a certain level. Visible unemployment is only the tip of the iceberg: The real problem is the disguised unemployment or underemployment resulting from jobs that are so irregular or so unproductive that they provide inadequate income to cover the basic requirements of workers and their dependents. The declining trend in per capita land availability (particularly in the highlands) is believed to have aggravated the underemployment problem. For instance, if there are five persons trying to till an amount of land that could be tilled as well by only two persons, then only two of these could be considered as fully employed, and the other three represent disguised or concealed unemployment, which frequently appears in Ethiopian agriculture. Far more people eke out a meager living in unproductive and excessively duplicated service activities, than are actually required by the volume of work performed. What are feasible policy approaches to improve the very serious unemployment situation? The efficiency and quality of vocational training can be improved by training oriented toward meeting employment demand, increasing employer participation and strengthening the transition from training to work. Offering incentives for self-employment after training would also contribute significantly to the solution. Increasing access to land, introducing improved technologies, providing marketing and credit facilities, in both farming and none farm activities and improving the hard and the soft infrastructure would help to reduce rural unemployment as well as underemployment. Encouraging labor-intensive technologies and small-scale industries is important so that they can absorb significant portion of the unemployed army. The promotion of small-scale enterprises and micro enterprises in the informal sector would also contribute to job creation. The economic loss of underemployment is unbearable, it behooves the government to formulate polices designed to achieve reduction in unemployment. Top. Restaurant Review ADDIS ABABA HILTON JACARANDA RESTAURANT Tel: 518400 LOCATION: Addis Ababa Hilton, Ground Floor SERVES: European dishes and offers daily live instrumental music. Opens always after 7:00 P.M. Service ***** Although it has been a bad week for the management, that more than 200 employees had been on a strike, hardly did customers feel the trouble that had surrounded this spacious hotel. Customer is a King, they say. One should really try this place to feel like one, even for too short a time. Service at this restaurant is beyond exemplary: Just magnificent. The elegantly groomed attendants, professional up to their teeth yet warm and considerate, deliver a kind of service, which we can classify as one of the finest available in the capital. Guests usually escorted to a convenient place depending on the entourage, are thoroughly and patiently briefed on the menu to make their choices. The waiting staff exhibits an extraordinary communication skill and professionalism all along their performance. From the beginning to end of the course, a customer has attendants, sensitive to even a faint gesture, even an intentional one, ushering around her table picking pieces of bread or rectifying the table set up or bringing something they feel is lacking. The place has sufficient attendants all of whom deliver a uniform and harmonized service. All of them are at customers' delight at all times ready to fulfill their desire. An ambitious restaurant owner should really dine at this place just to try to facsimile the service in his own place. Take our word, it is worth a try. Food ***** Variety of bread, having various forms and colors to choose from, are first served with butter put in a bawl filled with ice. Then follows the starter and the main dish as ordered. The soups, to start with, are well prepared, spicy and full of flavor. The steaks are also succulent and lip-smacking. What makes the dishes even full of textures are the imaginative presentations: Different and colorful plates are placed on the table during each course when dishes are presented with various adornments, which of course appeal to people to eat more. Environment ***** Well, it is the Hilton that we are talking about here. Strangely and despite its crowd of so many people jostling around, the first thing one would notice at this place is the uncommon tranquility. Inside the spacious room with elegantly dressed tables arranged for a single person or groups, the serenity of the house may even sometime be imposing, if it had not been for the instrumental music filtrating the atmosphere performed by a two-man live band. The attendants are so discrete that they communicate, whenever possible with indiscernible signs, if not making sure their voices are down to the lowest volume. Despite rows and rows of light bulbs on the ceiling, the light is close to dim, increasing the grandeur of the place together with the expert color combination of all things present in it; including the natural watermelons other fruits with incised designs displayed adding touch of nature to the simple but wonderful environment. It would have been even further refreshing if trees behind the front glass wall were not barring diners from what could have been an enchanting view - the swimming pool - while enjoying good food in a zestful atmosphere. Price ***** Judging from the best service and environment the place holds out, the price is not at all expensive. One would enjoy, for instance, a full course meal, including a soft drink, for 130 Br. But the prices on the menu and those on the bill afterwards are confusing and way apart. The starters, separately quoted in the menu, somehow seem to be included in the main dish appearing at the same time on the bill. For instance, one may order a Coconut Beef Soup (48.00 Br) and beef steak (108.00 Br). When expecting to read a total of 156.00 Br on the bill, the amount asked is about 130.00 Br, inclusive of the dessert (also separately rated in the menu) soft and hot drinks. While other diners who only had the soup and a soft drink pay around 62.00 Br. Is there any especial discount? Or is it we have wrongly understood the pattern of the menu? Prices should be mentioned clearly on the menu or the attendants should aptly explain the billing system. Parking ***** One who has been to the Addis Ababa Hilton would surely be confident that s/he would not drive back because of lack of parking lot. Sanitation **** The Ladies' and Gents' room, on the top floor, have four rooms each with all facilities available. Hot and cold tap waters are accessible, including a dryer. However, the toilets in the ladies room are seen unflushed and baskets were not regularly disposed off, though the rooms were kept neat. In hotel of such class and cachet, the management should make sure that all facilities, especially restrooms, are kept impeccable. Customers may forget to flush the toilets, and honestly speaking, they do not have to, if we push mannerism aside for the moment. It is up to the staff members assigned for this job to be vigilante to watch over the restrooms and clean them up as frequently as it may deem necessary.Top. In brief Commission Warns Against Computer Virus The Ethiopian Science and Technology Commission (ESTC) has dispatched an alert to Internet and e-mail users against a new computer virus, which it said is similar to 'code red' is spreading since Monday. The Commission said users should opt for new anti viruses to guard against the newly spreading virus that is affecting computer network systems. The Ethiopian Herald, August 8. Six Years Lease Revenues at 511m The Addis Abeba Administration Lease Office said it has collected more than 511 million Br from plots leased in the past six years. According to Tsegaye Kiros, head of the office, the stated amount was obtained from leasing 21,212 plots for total investment and residence quarters. Addis Zemen, August 8. Police to Finalize Investigation The metropolitan police said it would finalize in two weeks the ongoing investigation on individuals accused of looting and property destruction during last April's riot in the capital. Police said that upon completion of the investigation, it will start filing charges of vandalism, robbery and riot instigation against suspects. The Ethiopian Herald, August 7. IMF Approves $22m in Loans The International Monetary Fund (IMF) has approved 22 million Dollars loan for Ethiopia to stimulate economic growth and reduce poverty. The South Africa Broadcast Corporation (SABC) quoted IMF as saying that the loan, which would be available immediately, is part of the three-year 110 million Dollars loan approved in March for the country's Poverty Reduction and Growth Facility program. On the other hand, Ethiopia has obtained about 666 million Dollars of the total 3.4 billion Dollars the World Bank loaned to African countries below the Sahara during the financial year ending June 30, 2001. The amount extended to Ethiopia makes it the second biggest beneficiary for this year, next to Uganda. The Bank's loan to the sub region has shown a 56pc growth compared to last year's 2.2 billion Dollars. The Ethiopian Herald, August 4. Saudi Business Delegation to Arrive Here A Saudi Arabian business delegation will soon be here for a business visit where they have planned to look ways of investing and establish new business contacts with Ethiopian entrepreneurs. According to the Ambassador here, Mohamed Ali, about 40 entrepreneurs of Saudi nationality have so far engaged in the construction, mining and health sectors in the last ten years. Addis Zemen, August 3. ERA Undertakes 199m Construction The Addis Abeba Roads Authority announced its finalization of 95pc of the construction of roads and related projects at a cost of more than 199 million Br in the just ended Ethiopian budget year. The project includes the construction of ring road, buildings and procurement of construction materials. Addis Zemen, August 3. Authority to Undertake 30m Br Construction Project The Addis Abeba City Administration Water and Sewerage Authority has disclosed its preparation to undertake the construction of branch offices and laboratory facilities at a cost of 30 million Br. The Authority said the World Bank and the Ethiopian Government have pledged to cover the cost. Addis Lisan, August 4.Top. My perspective Marriage and Population Explosion in Addis By Yonas kebede One of the first things that one notices on returning to Addis Abeba after a long absence is that the city is bursting at the seems with people. During the rainy season, the city feels even more crowded. Pedestrians are not particularly thrilled about walking in knee high mud. They opt to fight the vehicle traffic for walking room on the paved road. But you hardly ever see pregnant women on the streets. In the past two years, I must have seen three pregnant women. Maybe I am not exactly focussed on women with bulging stomachs. Still, you would think it is taboo for pregnant women to leave the house and take a stroll down the road. Somebody is responsible for the population explosion unless children are growing on trees. It is said that during the long Derg years of curfews and nightlong shootings, sex became sort of a national pastime. Judging from the increase in population, it must have been quite a popular sport. Too bad, it is not an Olympic event. Procreation is, of course, sacred. The pressure from society to get married and produce offspring is almost unbearable. One could not admit to anyone, it seems, not wanting children without inviting scorn and ridicule. How could anyone, in his right mind, not want to be a parent? How can you not want a wonde lij eskenekachlu, you are often asked. Never mind that your life long ambition is not to get married and make babies or that married life is overrated or that it is obviously not for everyone. Participation in the population explosion is a required course. This stuff is not music to the ears of the restless man, who is visiting to escape the stressful life of the Diaspora for a few weeks of mindless fornication in Addis Abeba. Not to worry, the thought police could not care less about breaches of the Ten Commandments. On the other hand, the Vatican would love to confiscate your "goods" till "death do us part". Even then, your genitals would be restricted for purposes of procreation only. It even advocates abstention as the only means of preventing AIDS in Africa. No condoms! Reality flies out the door. For most folk, "use it or loose it" rings louder. Regardless, this has little to do with the population explosion. A 1994 census indicates that 46pc of the residents of Addis are migrants from other parts of the nation and almost 60pc are from other urban areas. Addis is a magnet. Of course, in few years later some will be found sleeping on the doorstep of the nearest embassy with a visa for sale. Or purchase a marriage from a foreign passport holder. The number of residents in Addis Abeba rose from an estimated 1.4 million in 1984 to 2.2 million in 1995 and was expected to increase to five million by 2030. Some people will tell you that it is already close to six million. Whatever the number it is time to rethink the universal prescription of "marriage and children" for everyone. Among the many other peculiar things one observes in Addis is the proliferating mom and pop grocery stores that call themselves "Super Market". There is even a mini super market, if you can believe that. The grocery stores are really liquor stores where you can purchase alcoholic beverages only. You can also order your drink by the glass. So, you visit the grocery store to load up with some cheap shots of Whisky before going to the more expensively fashionable places in town. There you lean against the mahogany bar nursing your 60.00 Br drink for hours on end. Other businesses adopt strange names too. You take the first three letters of your first name and the first three letters of a partners name or your mother's name, combine and . . . bingo! You now have a business name that no one will remember if his life depended on it.Top. VIEW POINT - PART I What It Takes to Become Capitalist Clues into the changes to come Fully ten years after it has first offered to the Ethiopian people as an alternative to socialism, the Ethiopian People's Revolutionary Democratic Front (EPRDF) seems to have rediscovered capitalism. The short and rare glimpse we got at an EPRDF session during the exchange between our President and our Prime Minister seems to indicate that, the loudly ballyhooed declarations of 1991 notwithstanding, the EPRDF is only now earnestly considering to adopt capitalist ideology to form the basis for the country's development strategy. Given the record of the EPRDF and that of the government it replaced, it is only natural that many Ethiopians do not put much stock in the government's pronouncement of conversion. The lack of credibility is heightened by the fact that this most recent promise to carryout fundamental change is proffered within what the government calls "revolutionary democracy" - an ominous and ambiguous framework in which to couch what is proclaimed to be a radical departure from the past. Nonetheless, an insight into how such a change may impact the daily lives of the Ethiopian people but specially an introspection regarding the kinds of changes one might expect in the manner and extent of interaction between the people and their government might be at least intellectually stimulating. Should such a change actually materialize, this kind of analysis might actually prove to be of some practical use. To begin with, success in achieving the EPRDF's capitalist mission requires fundamental changes in the country's current constitutional, legal, economic, and social framework. In a capitalist democracy, change of this magnitude can only be promulgated if consensus has been achieved following an exhaustive discussion and consultation between the people and their representatives. Understanding the path to capitalism, including the sequence of the necessary changes in the constitutional, legal and economic framework, allows citizens to monitor progress and to play an active role in sustaining change. Not only does capitalist democracy require an actively engaged citizenry for its success, engagement and vigilance prevents the sense of betrayal that often descends on the population that has been deceived by its own government. It is with this realization that I am compiling this simple guide to capitalism. It is not my intention here to provide all the answers to all of the issues associated with the transition to a capitalist democracy. Instead, it is my intention to nudge constitutional and legal experts, economists, sociologists and others to step forward and to engage the population in a discussion of the various aspects of capitalist democracy. As an economist, I am bound to appear to place economic issues more prominently than they deserve. I also invite others to make their contribution to the discussion. MARKET ECONOMY The model of political economy we call capitalism was mapped out by Adam Smith and his followers two and a quarter centuries ago to help England harness the full potential of the Industrial Revolution. That model has survived the test of time and now serves billions of people around the world as a model for organizing their economic affairs. The primary feature of a capitalist economic system is the supremacy of the free market as a guide for economic decision-making by businesses, families and their governments. Economists long ago arrived at a consensus on the elements of the capitalist model and the specification of what is required to ensure the proper functioning of free markets. Indeed, these prerequisites of a market economy are now well known even by the general citizenry of capitalist countries and are frequently published within the first few pages of most principles of economics textbooks. RIGHT TO PRIVATE PROPERTY All economic processes, regardless of the system in which they take place, consist of decisions about the allocation of finite resources (land, capital, labor, etc.) for the production of goods and services (food, healthcare, housing, education, etc.). These processes require participants in the economic system to regularly make choices regarding what to produce with the resources at one's disposal as well as choices regarding what to do with or who to allow use of the goods produced. Each economic system deploys a set of unique processes for addressing the problems of resource allocation and of the distribution of goods and services among competing uses. In a market economy, self-interest is the primary guide for making choices in resource allocation and product distribution. Those who own resources have the final say as to how these resources are to be used. Those who produce goods and services in turn make decisions regarding the circumstances of use of such goods and services. An invisible hand that aims to maximize their self-interest guides resource owners as well as producers of goods and services. In a system that places the enhancement of self-interest at the center of economic decision making, the extent to which those who own valuable assets, be they physical, financial or intellectual assets, can be sure of protecting their right to those asset determines how effectively markets function. Market efficiency requires that each economic actor feels reasonably secure that ownership rights are protected by law. Owners of resources, property, products and all other things of value must be confident that the owner's right to use any owned resource in a manner he deems appropriate and in keeping with his self-interest is not impinged upon. Owners must also be confident that the right to transfer ownership right or user right to one's property, be it quid pro quo or probono, as one deems necessary is safeguarded. If a market economy is to flourish, these rights must apply to all private goods and services, to all productive resources, such as land, labor and capital - inclusive of natural resources, to all classes of assets be they tangible or intangible and to all property classes - intellectual property included. The operation of a free market economy depends on price signals triggered by consumer choice to serve as the means for decision-making by families, businesses and government. Should the laws of the land selectively apply private property rights in some areas but not in others, then price signals fail to serve their role and a market economy cannot function. RIGHT TO INITIATE ENTERPRISE One of the important features of a business enterprise operating in a market economy is the risk of loss of invested capital faced by those who own the enterprise. For a market economy to function efficiently, this risk and human's natural aversion to risk should be the only regulator to the initiation of a business enterprise by a citizen. An economic system that allows its citizens to act in the pursuit of self-interest requires that citizens should also be allowed to fail if they miscalculate the risk/return tradeoff. The government should, in general, require no more than simple registration, only requiring basic demographic information indicating the who, what and the where of the business. The only exception to this general rule consists of license requirements for enterprises whose products or methods of operation may raise public interest issues such as public health and safety and worker health and safety. Even here, the law should be transparent and its administration be efficient such that those who wish to enter these fields can clearly understand the requirements of the law and form reasonable expectations as to its likelihood of being in compliance. Governments and the laws they make should not serve as hurdles blocking business startup. In our country, as is true of many others, well intentioned but not well thought laws create a series of stumbling blocks that frustrate would - be entrepreneurs from consummating their business plans. Interestingly enough, studies have shown that the more advanced a country is, the more supportive and encouraging its laws are likely to be to business start-ups. It seems poor countries which by definition should be more anxious to attract and encourage new businesses in their domains, have the most restrictive and unfriendly business environments, as well as the least generous system of incentives. In a market economy, the government office that deals with registration and/or license should not act as though it is a credit analyst at a bank. Such an office has no business evaluating or even taking a look at the business plan of the prospective entrepreneur beyond noting the key parameters of the project. The risk of business failure as well as the reward of success is for the owners of the enterprise to bear. In a market economy, the appropriate role of any government at any level, be it state, local or national, is to assess the potential impact of the proposed enterprise on the local economy. When inquiry is received from a prospective investor, the government should first estimate the employment, fiscal, environmental and the technological impacts of the proposed enterprise. These estimates should form the basis for deciding whether and how much incentives are to be offered in order to entice the owners to initiate the enterprise in that locality. In today's global economy, competition for hosting business startups and expansions is intense and frenzied. A poor and technologically backward country such as Ethiopia cannot afford to allow government officials to play credit analysts or business plan critiques. RIGHT TO SELECT ONE'S OCCUPATION As stated earlier, a capitalist economy is one where free market prices give the appropriate signals for the allocation of resources among alternative uses. In a market economy, this will apply for labor resources as it would for machinery and land. Individuals should be free to respond to market signals by selecting and changing their occupations when they deem it to be profitable. The very arguments against government interference in private decisions pertaining to the deployment of capital and business startups, would also hold against government interference with private decisions in the deployment of labor. Typically, governments interfere in occupational choice by controlling educational choice, regulating business startup activity and controlling access to capital. Thus, arguing for freedom of occupational choice is tantamount to arguing for enhancing the educational choice of citizens, the removal of obstacles to business startup and the facilitation of citizen access to capital. Only then would each citizen be able to evaluate all occupational options and select that which is particularly suitable for him. This constitutes the minimum requirement for the optimum allocation of the most important resources: the human resources of a country. Top. Editorial EFFORT Disappointing, If Not Disturbing! It was a slap in the face of the Ethiopian business community that has been pressing the ruling party to withdraw from all business ownership and leave the field for genuine private actors. The recent decision by the ruling TPLF to maintain the front companies or business conglomerate under the umbrella of the Endowment Fund for the Rehabilitation of Tigray, otherwise known as EFFORT, comes as a disturbing surprise for all those who expected that the renewal movement would put an end to the unfair and unwise ownership of property by the party. The end of the TPLF business empire would have meant the redressing of one of the economic wrongs the private sector has been forced to suffer under in the last six years. It would have meant the end of the illegal involvement of the party in business transactions because under Ethiopian law, any party, in power or otherwise, is prohibited from involvement in any business activity no matter what the disguise of justification there may be. By taking the decision to maintain its business empire, the TPLF has once again proved that it does not really care about that particular legislation or about the negative impacts that decision had on private sector development in the country in the future. For the TPLF, EFFORT might symbolize economic might but for the business community it represents unfair competition, the spread of nepotism and corruption, uneven playing field in the market, favoritism and monopoly practices and unethical behavior. That was why hopes were high when the TPLF announced its renewal movement. Businesspeople expected that the party would put an end to all these evils that have hampered the free growth of domestic entrepreneurship. In the last few years, the TPLF has grown so overconfident and become so insensitive to the plights of the business community that it never tried to stop and think about the negative impacts its business empire might have on the private sector. It did not respond to critics of its policies and practices both at home and abroad. It is, however, legitimate to once again call on the party leaders to reconsider their decision because it has already proved disastrous to the growth of a genuine market economy in the co