7 January 2013

Ethiopia: History Recounts Rough Chamber-State Relationship

The outbreak of a revolution in Ethiopia, in 1974, and the ensuing turmoil was the most challenging moment in the history of the Addis Abeba Chamber of Commerce, both to its members and leadership. During the early periods of the revolution, the highly radical, pro-communist propaganda, against private ownership and entrepreneurship, primarily targeted the growing private sector.

The political environment, and the unfolding confusions in the policy direction of the government, put the Chamber of Commerce in a problematic situation. It became difficult to articulate a clear position and to promote and safeguard the interests of its members. The Chamber had been the most enduring and credible representative of the private sector and it was quite logical that any interaction between government bodies and the private sector would be made through it.

ImperialEthiopiawas in favor of the private sector, as evidenced in its laws and policies. "It is true that government leadership under the emperor was authoritarian and paternalistic, but official policy encouraged cooperation with the private sector," noted Taffara Deguefe, in his book entitled, "Minutes of An Ethiopian Century".

Taffara was elected as president of the 'Addis Abeba Chamber of Commerce' in 1969, which was later renamed 'Ethiopian Chamber of Commerce', after the 'traditional ceremonial approach' made by board members of the Chamber, who finally persuaded him to be the lone presidential nominee. This approach was a pragmatic technique, still practiced by the Chamber today, in order to solicit the best candidate to lead the business community.

Taffara's long experience as the staff and general manager of the Commercial Bank of Ethiopia (CBE), director general of the Civil Aviation Authority, and eventually, the governor of the National Bank of Ethiopia (NBE), along with his sound academic background, led to his nomination. In turn, he effectively carried out his responsibilities as president of the Chamber until 1975. "[It was] the most satisfying duty," Taffara candidly admitted in his book, when writing about his six years as president of the Chamber. "[It was] one of the highest positions of public prominence that I ever had."

Towards the end of Taffara's presidential tenure, the Chamber experienced one of the most turbulent times of its existence, which threatened both its members and leadership. The Dergue regime quickly galvanised the communist rhetoric that dominated the revolutionary forces of the time, and proclaimed socialism. This subsequently resulted in the drastic measures for the nationalisation of major industrial and commercial undertakings, under a proclamation for the ownership and control, by the government, of the means of production. This proclamation immensely affected the most vibrant members of the Chamber and private entrepreneurship, as a whole, in the country.

The highly radicalised and communist orientation of the regime also issued a law on the nationalisation of urban land and additional houses. This sent a shock wave, which jeopardised the ownership of private urban houses, along with other properties. It also brought a large part of the Chamber's building under government ownership. This greatly diminished its revenue sources and made it difficult to finance its activities.

It was against the backdrop of these successive and hostile measures, in opposition to the private sector and its association, that Taffara served as president. This task thus required a subtle approach and interaction with official policies, in order to redefine the role and responsibilities of the Chamber in light of the changing situation, whilst safeguarding the interest of individual members and the business community as a whole. Thus keeping the Chamber relevant and worth reckoning.

Teffara recounts, in his book, several incidents that brought him in touch with the most dangerous and erratic internal politics of the early period of the Dergue regime, where he superbly carried out his responsibility with devotion, courage and humanity, both as governor of the NBE and president of the Chamber.

With the sweeping measures of confiscation, undertaken by the Dergue regime, it was imperative that the Chamber looked into all available means of the promotion and safeguarding of the interests of the business community, which were not prohibited, discouraged or perceived as threatening, by the new regime. It is recalled that there were adverse propagandas against the private sector, private ownership and the inflow of investment, during the period of the revolution, which made the activities of the Chamber extremely difficult and uncertain.

Initially, the regime adopted the so-called 'Ethiopian Socialism', with its subsequent vague policy, which did not adequately define the extent of intervention of the private sector, within the national economy. There was, reportedly, a high degree of confusion, mainly due to the prevailing communist rhetoric in favor of outright nationalisation. Accordingly, it was natural that seeking a clear and concrete clarification of government policy, by its officials, regarding the private sector was highly demanding.

Exploiting his closeness with core officials of the regime, in his capacity as governor of the NBE, Taffara revealed that he approached and pleaded with Aman Andom (Gen), the first chairman of the Provisional Military Administrative Council (PMAC), "to present the government's policy statement to the business community at large." His selection of the general was not merely due to his position as a chairperson of the PMAC, but rather, as he put it, because unlike his junior comrades, "he was at the time making the rounds of public institutions, and as he spoke with sincerity and directness, he was drawing large crowds wherever he went and made a favorable impression with his address."

It was hoped that the address, by the General, would clear the cloud hovering over the private sector, for Taffara painfully admitted, "the local press seemed to revel at the flaying and abuse of private business and business people." He further noted, "in the process, entrepreneurs were frustrated and felt helpless in trying to swim against the tide. It was to redress this situation that I had pleaded with General Aman to talk to the local business community as soon as possible."

Having obtained the 'green light' from the General, as stated by Taffara, he then undertook the preparation of a "moderate" draft speech, to be delivered to the business community, together with his press officer, "who insisted on adding a few of the revolutionary phrases of the day." The draft speech, which was proposed to be read by the General, was in a nutshell, aimed to calm down the unsettling rumors that were circulating, regarding the confiscation of 'property of the monarch and the nobility'. Thus, Teffera indicated in his draft that "the PMAC has explicitly stated on several occasions that the private firms, big or small, foreign or domestic, have nothing to fear in this regard."

Taffara pointed out, in his book, that he proposed and it was agreed for the address to be delivered to a large constituency of the business community and, to this effect, either the Post Office or the City Hall were selected. Shortly afterwards, however, he was left puzzled when the General's press officer, who was also in a meeting held between Taffara and Aman, informed him that "it was General Aman's wish that the meeting be held at the Chamber of Commerce hall". The meeting with the business community and the speech was due to be made on Monday, November 18, 1974, at 3pm, and although the draft speech he prepared was in Amharic and English, "for convenience of the large business community and the foreign trade representatives, (General Aman) decided to speak in English."

After a few days of hectic preparations to organise the meeting, along with the most difficult task of ensuring the attendance of Chamber members at the arranged venue, on the scheduled day of the meeting "exactly at noon, the press secretary phoned to say that unfortunately General Aman would not be able to speak at the Chamber that afternoon."

Therefore, the long awaited policy clarification and the highly anticipated meeting of the Chairman of the Dergue with the local business community was cancelled, with just a quick phone call. The distressed President of the Chamber then rushed to persuade the then Minister of Commerce & Industry, who was far less worried than him, to inform the invited members of the Chamber of the postponement of the meeting. Taffara was surprised to learn, on the same day, that the turn out for the meeting was small and confessed in his book that "many of the business people, tapping the grapevine, knew more than we did."

"Looking back now with the benefit of hindsight, I believe that must have been the time when [General Aman's] clash with the Dergue occurred," reflected Taffara, when looking back on the day of the cancelled speech. Indeed, days before the scheduled Chamber meeting, as disclosed in a recently published book on Colonel Mengistu Hailemariam, the de facto Dergue leader at the time, a serious conflict between General Aman and Dergue members occurred, and the former withdrew from the "general meeting of the Dergue", which was followed, a few days later, by his tragic killing.

Considering the various proclamations issued, which not only dispossessed and marginalised the business community, but substantially curtailed private entrepreneurship in communist Ethiopia, General Aman's speech, even if made, would have had no effect, other than temporarily soothing the business community. Nor could it have halted the adoption and enforcement of the revolutionary and communist confiscation laws.

Regardless of his official capacity at the NBE, Taffara must be highly congratulated and remembered in addressing the concerns and fears of the business community, as the president of the Chamber. He was president at a time where it was absolutely impossible to advocate and safeguard the interest of Chamber members by soliciting official policy statements, which could enable the business community to decide on its own fate, for good or for bad.

All the same, Taffara was perfectly aware that General Aman's speech wouldn't have changed the course of the Dergue's decision either. In fact, the latter adopted a "Declaration of Economic Policy of Socialist Ethiopia" on December 20, 1974, ushering in a new system; a bad omen for the growing, but suddenly aborted market economy of the country. Regardless, his legacy will always be remembered.

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