By Keffyalew Gebremedhin – The Ethiopia Observatory (TEO)
The seventh report on Illicit Financial Flows from Developing Countries: 2004-2013 has been released Tuesday, December 8, 2015.
The report reveals a staggering $1.1 trillion being spirited out of developing countries in 2013.
Certainly, any Ethiopian putting his/her hand on this report would first rush to find Ethiopia’s name and see how much the nation has been fleeced by the collusion between internal and external fraudsters, individuals and groups, businesses and senior and mid-level officials.
Irrespective of who is responsible for this criminal act, Ethiopia’s loss is sordidly huge for a poor country, as can be seen from the map below, revealing the degree of thievery in GDP terms, when over half of our population cannot even find their daily sustenance.
Cumulatively, the loss incurred by Ethiopia during the period under study is estimated at $25.8 billion, i.e., $2.6 billion annually, as shown in the table below.
The bleeding began immediately as the country shook off its first of the 21st century drought in 2001-2003. Moreover, the country was also emerging fresh from the devastating war of 1998-2000 with Eritrea, followed by the power struggle with the TPLF and the consequent split within the Front.
The first humiliation for the ethnic minority regime in power, which since it arrived onto the scene has made it a habit of blaming all its predecessors for everything – including the drought – appealed for international humanitarian aid for over 15 million starving Ethiopians.
Irrespective of whether there has been real growth or the illusion of the low lying fruits is giving the regime cover, Ethiopians from 2004-2013 had been losing annually $2.6 billion in illicit financial outflows. Whether it is true or the campaign of their detractors, TPLF officials are being accused of passing money through various pretexts, i.e., businesses set up or funds funneled by individual investors with interests in Ethiopia informally transferring funds. While the names of some Western are constantly mentioned, most notorious in this regard are Middle Eastern and some Asian countries – especially United Arab Emirates, Turkey, Qatar, Hong Kong, Malaysia, Indonesia.
In Ethiopia’s case, the financial leakage is either done by misinvoicing or underinvoicing exports and imports or in general through trade misinvoicing.
Global Financial Integrity wars developing nations; “Trade misinvoicing is the primary measurable means for shifting funds out of developing countries illicitly.”
In Ethiopia’s case, the country’s misfortune is the huge amount of foreign exchange that the family members of senior officials, wives and sons in particular, fill suitcases with forex, and minerals, as the Ethiopian stowaway on Ethiopian Airlines to Sweden revealed to the world last summer.
While the media and the world were fascinated by his dexterity and luckiness to survive the eight hours tribulations in the plane’s cargo room, for Ethiopians most disturbing was his knowledge of how used to deal with suitcases that were loaded with foreign exchange and was loaded on the plane without any screening.
This, he said, is simply because of the ethnic collusion. Some are more equal than other citizens, and thus the security gives them clearance to carry out anything they want.
GFI’s report does not deal with this, since it is not within its competence. Were those loots to be added, Ethiopia would have been ranked in the 20s, instead of its current ranking of 46th ransacked nation, out of 149 countries.