Ethiopia bets on grand projects in drive for industrial power

The IMF said last year Ethiopia was “on the cusp” of shifting from low to moderate risk of debt distress. Earnings from the state telecoms monopoly are helping fund a railway linking Addis Ababa to a port in Djibouti, for instance.

Hefty state-led investment has kept the economy of Africa’s second most populous nation growing at more than 8 percent a year for over a decade, but economists say Ethiopia’s rulers need to relax their grip and give room for more private enterprise to maintain momentum.

“If you have an efficient effective state development model, great,” Colin Coleman, managing director for Goldman Sachs based in South Africa, told a conference in Addis Ababa last month.

“If they are looking at achieving their goal of being a middle-income country and getting employment, you must enable access to financial options,” said James Kanagwa of pan-African lender Ecobank (ETI.LG), one of half a dozen foreign banks with representative offices in Addis Ababa but barred from commercial work.

By Edmund Blair and Aaron Maasho

Banks must rely on equity and deposits for funding, in a nation where only one in 10 people have a bank account, because there is no developed capital market.

ADDIS ABABA Sun Feb 8, 2015 6:52am EST

Others in Africa have looked with envy at Asia’s inexorable rise but few governments, if any, have proven as single-minded as Ethiopia has in mobilizing its resources in a bid to turn an agrarian nation of 96 million people into a manufacturing hub.

U.S. Other east African states have at least four months.

For now, even Ethiopian banks have limited room for maneuver. But it remains clear about its economic goals.

“Without investing in infrastructure, it is now abundantly clear that Africa cannot sustain growth,” Finance Minister Sufian Ahmed told Reuters in December.

The government insists it will not rack up unsustainable debts because funds are used to finance infrastructure and other projects such as sugar factories and industrial zones.

Yet it comes at a cost. Clothes retailer Hennes and Mauritz (HMb.ST) is starting to source supplies from Ethiopia, consumer goods maker Unilever (ULVR.L) is building a factory, Diageo (DGE.L) and Heineken (HEIN.AS) have bought breweries.

1 of 3. “Where you are making a lot of infrastructure investment, there is a risk that the pay-off may not be as big as you thought,” he added.

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At the heart of the state’s “Growth and Transformation Plan” are railway, road and dam projects to give the landlocked nation cheap power and reliable transport, as well as the metro line – the first urban light railway network in Sub-Saharan Africa.

The government says it wants to keep banks in the hands of Ethiopians and telecoms controlled by the state as the sectors provide funding for national projects such as infrastructure. private equity giant KKR invested in a flower farm last year while an Ethiopian winery is among the investments of 8 Miles, an African-focused fund chaired by singer Bob Geldof who launched Live Aid to help Ethiopian famine victims.

But Ethiopia is no model for political and media freedom – there is just one opposition party member in the 547-seat parliament and international rights groups say the authorities muzzle critics. Kal Wajid, the outgoing Ethiopia mission chief for the International Monetary Fund.

ADDIS ABABA (Reuters) – Chinese workers mingle with Ethiopians putting the finishing touches to a metro line that cuts through Addis Ababa, one of a series of grand state infrastructure projects that Ethiopia hopes will help it mimic Asia’s industrial rise.


Central bank foreign reserves barely cover two months of imports – an inadequate level, according to the IMF. A labourer walks along a Metro-line construction in Ethiopia’s capital Addis Ababa February 7, 2015.

After launching a debut $1 billion Eurobond in December, Prime Minister Hailemariam Desalegn said tapping international markets did not herald “liberalizing the financial sector”.

But that leaves few domestic funds available in the market for businesses that could create jobs in future.

Credit: Reuters/Tiksa Negeri

“This is a country where, relative to rest of Africa, there is pretty good state capacity and a commitment to a development mission,” said S. Total debt at about 50 percent of gross domestic product was still manageable, but tougher if it rises much more.

Sufian’s deputy Abraham Tekeste said this month the new plan would likely continue “most of the priorities” of the last one.

(Writing by Edmund Blair; Editing by Pravin Char)

“We will become an example for the whole of Africa.”. And few executives cite corruption as a big hindrance in business, although it can be elsewhere in Africa.

The government can point to a list of investors suggesting its formula works. The government insists politics is open to all and that it allows free speech.

Foreigners cannot invest in banking and telecoms and foreign retailers are barred, while Ethiopian banks are directed to buy low-yielding government development bonds.

“This is the future,” said Abate Yaye, 27, from the poor south as he helped complete the $475 million system being built by China Railway Engineering Corp, much of it on concrete stilts to keep it above the crowded streets of an expanding capital.

Ethiopia, with average annual per capita income of $470, aims to reach middle-income status by 2025, which the World Bank says starts at $1,046.

The current five-year growth program ends in June and the government has given little away about the next plan.

“In the next five-year plan, there should be a clear indication of a change of emphasis and a significant emphasis on the private sector,” said Wajid, referring to the next Growth and Transformation Plan starting in July.

The government’s ban on foreign retailers is aimed at encouraging local manufacturing, to cut back on imports, not wanting a consumer culture that could drain foreign exchange.

“But you must allow businesses to develop in order to get the dynamism in the economy.”

Investors also say Ethiopia benefits from better security than others in a region blighted by Islamist militant attacks. They must invest the equivalent of 27 percent of their loan portfolio in the development bonds, hindering their ability to lend to the private sector.

Brought to its knees by “Red Terror” communist purges in the 1970s and famine in the 1980s, Ethiopia has been transformed in the last quarter century, becoming one of Africa’s fastest-growing economies.

“The lending capacity of banks is growing very slowly,” said Mulugeta Asmare, president of Bank of Abyssinia, one of 16 private banks in a sector dominated by state-owned Commercial Bank of Ethiopia.


But he said private business needed room to grow and generate income so the economy could reap greater benefit from the new projects

Exposed: Tourist blackjack scam in Vietnam

Most players would consider him the ideal opponent; he’s throwing around lots of cash carelessly.

The game sours

In a letter sent last March to Thanh Nien Weekly, the Philippines’ ambassador, Jerril G. She hands it to the men, who accept, saying a loan shark could cover the rest.

Lunch turns into a friendly blackjack game, when suddenly one of the players, a “Singapore banker,” pulls out a case containing around US$50,000.

Even though the group may successfully lure a victim to a secluded location, they aren’t always able to dupe them into card games. He has told the woman beside him, Martha, that he is a local gym teacher.

“As well as the money I handed over to them, they also took my camera and I was threatened with violence if I didn’t co-operate. “I lost US$12,000, I feel like such a fool, I knew I should have walked away but I didn’t,” blogs a victim named Mick.

A well organized syndicate

Vietnam card scamVictims have accused this man of posing as a dealer named “Woody” or “Let.” This story is one that’s often repeated in Saigon.

The gang let her go, now that they have what they were after.

Efforts are being made to clamp down on the scam artists.

Manoy and Louie are not Vietnamese, nor are they Malaysians, as they claim.

Martha makes an agreement with the banker: he can keep some of her personal valuables as collateral while Louie and the rest of the family escort her to a bank to withdraw the rest.

Our banker isn’t Singaporean or even a banker. She’s just a regular backpacker visiting Vietnam on holiday and today she’s also the Filipino card sharps’ “mark.”

According to sources however, most or all of these individuals have since been released. 

Their daily stakeouts include landmarks like 29 Thang 9 Park, adjacent to Pham Ngu Lao; the front entrances of Parkson and Vincom shopping centers; and Bach Tung Diep Park in front of the Ho Chi Minh City Museum. 

Sitting across from Martha is a man who Manoy introduces as a banker from Singapore.

The scam artists’ aim is to snare foreigners who are traveling alone and have just arrived in Vietnam for the first time.

The stories are often similar in nature: a person claiming to be from Malaysia strikes up a conversation with you in the street. A Japanese national allegedly lost US$8,000

The “banker” ups the ante to US$1,000. … She wins again. 

Martha manages to withdraw nearly US$1,000. Martha, a recent victim of the scam and whose name has been changed here, explains: “If I walk away, he wins the pot. Both are still regularly seen with groups approaching tourists.According to some estimates, more than 50 individuals are working in an organized gang within Saigon, divided into multiple cells. He says he’s a professional dealer at the “Royal Hotel.”

Another common scenario starts with a request for the victim to translate a letter received from overseas.

He added, “A few arrests of Filipino nationals reported to the Embassy by other Filipinos did not progress into court cases.”

. Already over-extended by US$1,000 and not wanting Manoy to lose his money, I panic.”

Some victims lose big

An invitation is extended for you to meet the daughter, due to the coincidental connection.

However, on arriving at home, the daughter is at the hospital because the grandmother has been taken ill. Santos, wrote: “As of December 2, 2010, we know of five cases involving nine Filipinos in detention centers or awaiting trial in court … All three men are from the Philippines and unknown to Martha, have been running a gambling scam in Ho Chi Minh — also called Saigon — for several years.

The hook

Police said one victim had been taken for US$20,000. One ploy is to say their daughter is applying for a visa to visit your home country.

“Cousin Louie” sits opposite. So instead you will be invited to lunch.

“Uncle Manoy” is dealing. Manoy, who has previously agreed to be her “secret partner,” winks and lends her the necessary US$1,000. only arrests that progress into court cases are officially conveyed to the Embassy for appropriate consular assistance and representation.”

When six Filipinos in the group were arrested last May, grabbing headlines across Vietnam, city police said they had assembled a special investigative task force following complaints from mainly Japanese and South Korean tourists who had been fleeced out of large sums of money by “Asians speaking English.”

Those aren’t their real names.

While most scenarios involve a conversation that evolves into an invitation to meet a family member who happens to be visiting the victim’s country of origin, there are other variations.

Though most travelers who are approached do not go along with the con artists, many visitors have complained that the group is a nuisance.

vietnam card mafiaTwo card sharps flee security guards at a shopping mall. The hardest part is getting past the humiliation and anger at myself for allowing this to happen to me.”

Meanwhile, the card sharps continue to stalk the streets of Saigon, waiting patiently for the next innocent tourist to fall into their trap.

A difficult investigation

Travel warnings regarding these cases have been posted on the U.K., U.S., Australian and Canadian embassy websites.

“I tell them that they’re the 10th, 11th, or 12th person who knows someone going to work in a hospital in my home town and I think it’s very interesting,” says one traveler, sarcastically.

Not so fast

Some victims are not as lucky as Martha. She has 21 but not enough cash to keep going. In these cases, some victims allege being drugged or kidnapped and then robbed.

Inside a small house in Ho Chi Minh City in Vietnam, four people sit at a table playing blackjack.

They wait on streets frequented by tourists, such as Phan Ngu Lao, Le Loi, and Dong Khoi.

But not everything — actually nothing — in this high-stakes card game is what it seems.

More importantly, Martha isn’t a professional gambler. Most are from the Philippines although they have Vietnamese accomplices.

That’s when everything falls apart. Martha’s heart pounds


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Sports Gambling, Not Bounties… | Jason Grill

More than six million people filled out NCAA tournament brackets on alone. This is the only sports related issue Congress should be talking about right now.. Following Nevada’s lead across the country in a legal, regulated and taxed way would lead to millions of new revenue, hundreds of new jobs, increased economic development, thousands of tourists from across the land, and cut down on all the illegal offshore and internet sports gambling.

Are they serious? Well, yes they are. These states should have the option to share in the major economic and revenue benefits that sports betting can provide.

Reports have shown that nearly half of all American adults make some sort of wager on the Super Bowl. The federal law is outdated and is truly discriminatory towards 46 other states. Last week the Senate Judiciary Committee announced there would be an upcoming hearing about bounties in professional football and other major sports as a result of recent allegations that the New Orleans Saints employed a system in which players would receive extra cash for hits that hurt high-profile opponents.

States throughout this country are dealing with budget problems and cuts to vital services and education. The dominos are beginning to fall and political grandstanding has already begun. Overall, legal sports wagering in Nevada represents less than 1 percent of all sports betting nationwide. Most importantly, the National Gabling Impact Study Commission (NGISC) estimates that illegal wagers are as much as $380 billion annually. The 1992 law prohibited all but four states from offering sports gambling. Dick Durbin (D-IL) wants to examine whether a federal law should make bounty systems a crime. It is estimated that nearly $75 million will be legally wagered in Las Vegas on March Madness this year. This week reports have surfaced that the IRS is now poking around and monitoring the situation about the payments that were made to players. Can you say unfair? Missouri currently allows 12 gambling casinos in the state. I am not a pollster, but if I had to guess I would assume more Americans are concerned with their pocket books and the economy right now than on professional sports bounty programs. One of those is sports gambling.

The Final Four is taking place this week in New Orleans with four historically good programs. Allowing states around the country to make the decision on sports gambling in their state is the right thing to do. Last month the Super Bowl game garnered the prize as the highest-rated television show in United States history with an estimated 111 million people watching.

Politics and sports are two things that incite strong emotions in nearly every individual in this country, but they should very rarely converge. The time has come for Congress to open its eyes when it comes to sports gambling.

Hello, Congress! Sports gambling and wagering is widespread and commonplace in our country and it’s being done illegally every minute. Shockingly, I know I am going out on a limb here. Instead of bickering and political pandering about professional sports bounty programs, Congress should do the right thing and repeal PASPA and allow states to have the option to legalize sports gambling.

Sports and politics will always make strange bedfellows, but make more sense as a couple when they involve the economy. Sen. Of the total amount bet on the Super Bowl in 2010, only about 1.5 percent is wagered legally.

Since 2006, nearly $620 million has been legally wagered in Nevada sportsbooks on the Super Bowl, and in 2012 nearly $94 million was legally wagered on the Patriots v. Giants game. Lastly, the FBI estimates that more than $2.5 billion is illegally wagered annually on March Madness, but Nevada sportsbook operators estimate less than 4 percent of illegal betting on March Madness is wagered legally on the tournament in their state.

As a member of the Missouri House of Representatives, I sponsored a resolution calling on Congress to repeal the Federal Professional And Amateur Sports Promotion Act of 1992 (PASPA). They should have the option to put a sportsbook in each one of them. The four states exempted from this act were Delaware, Montana, Nevada and Oregon. Seriously though, Congress should only involve itself in sports-related matters on very rare occasions