Ethiopia & Netherlands sign MoU: How much have Ethiopian producers directly benefitted from their cooperation?

5 Apr

by Keffyalew Gebremedhin

Ambassador Dina Mufti

Ambassador Dina Mufti

This article is based on ERTA news report: Ethiopia, Netherlands sign MoU . It dwells on the remarks of Ambassador Dina Mufti, Spokesperson of the Ethiopian Ministry of Foreign Affairs.

On Thursday April 4, the spokesperson is quoted stating, “Netherlands is one of those countries that have remarkable economic and diplomatic relations with Ethiopia.” By that sentence, I was induced into expecting to read in the next line how much Ethiopia, as a country and Ethiopians as investors and entrepreneurs, have benefitted from that “remarkable economic and diplomatic relations” with the Netherlands.

Unfortunately, the spokesperson left me hanging waiting to hear more. All he did is to proceed to further elaborating an interesting argument that defeats his point. He said, “Most of the foreign investors engaged in horticulture development in Ethiopia are citizens of the Netherlands … The country is a major importer of Ethiopia’s flowers, vegetables and fruits.”

If my reading of Ambassador Dina’s remarks is to do justice to what he has wanted to put across, I regret to say that he has only shown that he still is in the thrill of the chase how many foreign investors are involved in Ethiopian horticulture. As a testimony bearer to the nation on its all-round activities from the vantage point of the foreign ministry, he ought to be an informer and educator from whom Ethiopians should derive beneficial information about their country’s activities.

One could clearly sense from the quotation above, alluded to the spokesman, that Ethiopians are hugely endowed with a mindset that emplaces the country and its people at the receiving end of the “favors” of others. Often officials are heard singing praises of others, sadly without even meaning it.

That is why that this article has become an expression of that disappointment, making known my inconvenience with his hyperbole in Ethio-Dutch cooperation in the fields of investment, economic, trade and technology and technical assistance.

Put in simple terms, his official remark deafeningly ignores that the Netherlands has been the most successful horticultural market for over 500 years. In the modern era, I might add, it has built well-managed and efficient global market importing at cheap prices from developing countries and re-exporting at competitive but fairly profitable prices to Europe.
 

“Remarkable economic and diplomatic relations”

The spokesperson’s remarks ought would have done justice to the glaring reality and both countries’ interests, if he addressed himself to how much both sides have benefitted, or are likely to benefit their “remarkable economic and diplomatic relations.” I bring this because, at heart I have the desire to see in particular Ethiopian investors benefitting from best lessons in the production and marketing of horticultural produces from the Netherlands innovative and trendsetting greenhouse technologies.

Moreover, the Netherlands success is predicated not only on their production capacities. But also it is founded on their sophisticated ability, strategies and mechanisms to import cheap flowers, fruits and vegetables from developing countries and make them available to markets throughout Europe.

My understanding is that good policies prevent exaltation in sterile protocols and (memorandums of understanding) MoUs. Good policies rather move like laser in search of national benefits from best lessons, such as the Dutch experience and knowhow with their extensive wholesale trade networks of boards, councils and associations in the horticultural business.

Notwithstanding the important measures that have nudged Ethiopia during the past decade into showcasing its enormous potentials to move forward, there is no doubt that it still finds itself in backward state. Amongst other things, this is what the UNDP’s 2013 human development metrics have just confirmed, on which I had extensively commented. At least, the Dutch seem to give the impression that they attach importace to it. Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen, who moved from the past of Minister for International Trade and Development Cooperation, in February visited activities of the Ethiopian horticultural sector, accompanied by a huge trade delegation.

In addition, evidently for the first time we also heard through official admissions from the Bahr Dar ruling party congress at the end of March 2013 the plea about the need to tipping the balance away from the impending serious economic and political difficulties into which Ethiopia has now been mired.

As one strand, one can see possibilities for the Ethiopian Foreign Ministry, in collaboration with the Ethiopian Horticultural Association, to play useful role in getting a study by serious experts – kind of a road map for Ethiopia’s horticulture. The purpose of such an undertaking is to tap into Dutch all-round support, especially in sharing their knowhow to improve Ethiopia’s production capacities, especially individual and enterprise competitiveness at home and abroad.
 

Putting to work the “remarkable economic and diplomatic relations”

In diplomacy, it is usually the protocol and formality that gets the first page. Nobody wastes time to see what is in the second or the remaining pages. That is why there is little tangible progress and benefits on the ground or in the lives of our citizens right from the hundreds and thousands of agreements and protocols initialled in the past century. The suggestion here is to stop talking in a vacuum.

To help that process move forward, there already is a mechanism in place between Ethiopia and the Netherlands ready for utilization. We know that this Ethiopia-Kenya-Netherlands Green Farming ‘consortium’ has been in existence for a while now. Theoretically, its purpose is to provide solutions to small scale farmers in these two developing countries with “for profitable and sustainable business results.” This, I understand, is fortified by the backing of “26 leading [Dutch] companies in horticulture technology and Wageningen University and Research Centre.” If the two countries agree and if the benefits are to be increased a parallel mechanism could be developed to help small enterprises.

What is needed is rendering the existing protocol(s) sensible and substantive. Once the understanding and the playing field is established, the operation should move out of the sterility of diplomacy, and from being used as means for frequent fun visits to the two capitals by respective dignitaries from the two foreign ministries. Far away fro political cadres, it should be put close to experts to assess the evolving situation, especially the need to develop Ethiopia’s capacities in horticultural production and marketing spheres.

The World Bank since 2005 has been advising its clientele that, unlike the low return rate of staple production, horticulture is increasingly showing that it is the path to the future by a margin of one to five/six. This could help small-cale farmers supplement their incomes. Unfortunately, in Ethiopia with no sense of awareness of the evolving reality, the misguided politics and policies of the uniquely state-engineered land grab ended up favoring allotting the country’s rich fertile all weather lands to foreign investors and local political and ethnic cronies.

Incidentally, even Karuturi is having second thoughts about persevering in food production. He recently told Bloomberg that he would pick $100 million loan by the end of this month to invest in more flower farms in Ethiopia and Kenya. I would not be surprised if he puts up his assets in Gambela for sale.

In the Netherlands, horticultural associations boast of no less than euro 10 billion annual return already three years ago.
While that is not the only source of income for that country, the Netherlands is one of the few rare developed countries with recurring positive balance of trade record. For instance, Historically, “from 1960 until 2013,” according to Trading Economics, “Netherlands Balance of Trade averaged 817.51 EUR Million reaching an all time high of 4729.50 EUR Million in April of 2011.” It registered a record low of -907.60 EUR Million only in May of 1993, according to the same source.

In the intellectual realm, in fact the Dutch horticultural market has its important contributions to economic ideas. For instance, the “tulip mania” which since the wake of the 2007/08 financial crisis has been domesticated has its origin in the 17th century Netherlands, which now is in global use. This term came from an historical accident, when tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. This situation led to speculative bubble and the terminology has since been used to describe the eventual economic and financial crisis originating from bubbles forming in markets.

There is also the “Dutch disease”, a term christened in 1977, on the basis of the Dutch experience. It is designed to elaborate how and why the manufacturing sector is forced to its decline. This is comes from a reading of a situation evolving from huge gravitation toward the exploitation of natural resources and the adverse consequences thereon – the neglect of manufacturing.
 

Let Ethiopia draw its gratification from beneficial cooperation

I fully agree with Ambassador Dina Mufti that politically and diplomatically, relations with the Netherlands may have derivatives benefits for Ethiopia in its desire to get closer to the European Union (EU).

Ethiopia and the Netherlands are not new to each other, with their diplomatic relations alrady 92 years old, after it was established in 1921. Therefore, it is improtant to keep a sense of proportion to avoid the implicit impression that this signed memorandum would transform things overnight or in another century.

I would reiterate that the essential point in today’s world is making the relations beneficial for both sides.

This does not overrule the importance of keeping in mind the clear distinction between the interests of the market and the bilateral interstate ties. The latter are forwardlooking, especially if measured on the scale of our nation’s interests.

I see our partners doing it more often, as Ethiopian officials flagellate in form in the now and the moment, rather than the substance and utility of any or all of our natiion’s friendships with others.

The Ethiopia Observatory

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