https://www.washingtonpost.com/world/africa/investors-shy-away-from-ethiopia-in-the-wake-of-violent-protests/2016/11/01/2d998788-9cae-11e6-b552-b1f85e484086_story.html
Investors shy away from Ethiopia in the wake of violent protests
By Paul Schemm
Africa
November 2 at 3:00 AM
ALAGA DORE, Ethiopia — The smell of rotting mango and passion fruit
still hung in the air over the blackened shell of a juice factory near
this village more than two weeks after the plant was looted and burned
by an aggrieved mob.
As employees swept out the empty rooms, Abraham Negusay, AfricaJuice’s
production manager, worked on his laptop in the former lab.
“We are evaluating the damage and destruction, cleaning up the factory
and doing a cost analysis,” he said, noting that the Dutch company had
yet to decide whether to keep its multimillion-dollar investment in
Ethiopia.
The assailants, estimated by AfricaJuice farm managers to number in
the thousands, descended on the factory in the Upper Awash Valley,
about 90 miles southeast of Addis Ababa, on Oct. 4. Wielding axes,
spears and some firearms, they overwhelmed the armed guards while
workers fled into the nearby forest.
“It was not expected, so many people at once,” Negusay said.
The attack was part of a week-long spasm of violence that followed a
deadly stampede on Oct. 2 during Irreecha, a thanksgiving festival
held annually by the Oromo, Ethiopia’s largest ethnic group. That day,
police fired tear gas into crowds chanting anti-government slogans,
and in the ensuing panic, dozens died. The opposition put the death
toll in the hundreds.
In response, mobs attacked industrial farms and factories across the
country, focusing on those with state ties or owned by foreigners.
Several tourist lodges were also targeted, and at least two were
destroyed.
Once held up as the hot, new investment destination in Africa because
of its cheap labor, plentiful water and stability, Ethiopia’s
industrialization program is at risk of faltering — along with its
impressive economic trajectory — as current investors reconsider their
options and new ones shy away.
The unrest has shown the limits of the authoritarian nation’s
Chinese-style development plan, which favors growth over public
accountability, even as residents in some areas have defended the
factories as their main source of employment.
A largely agricultural economy, Ethiopia has been luring foreign
investors for the past decade to set up light industries, such as
textile companies, and agribusiness ventures, such as flower farms.
Foreign investment has increased 10-fold, from $265 million in 2005 to
$2.16 billion in 2015, according to the World Bank, and the country
has surpassed Kenya as East Africa’s largest economy.
The unrest started last year here in Oromia, in central Ethiopia,
when some residents began protesting the expropriation of land for
foreign industries, poor local administration and their ethnic group’s
historic marginalization. It quickly spread to the northern Amhara
region, and there were sporadic attacks on farms and factories.
That all changed after the Irreecha stampede, when activists abroad
called for five “days of rage” and systematic attacks on foreign and
state enterprises.
What started as a holiday celebration for Ethiopia’s Oromo people
turned into a deadly protest in the town of Bishoftu on Oct. 2 as
demonstrators tried to flee police firing tear gas and warning shots
into the crowd. The ensuing stampede killed dozens. (Reuters)
What started as a holiday celebration for Ethiopia's Oromo people
turned into a deadly protest as demonstrators tried to flee police
firing tear gas and warning shots into the crowd. It triggered a
stamped that killed dozens. What started as holiday celebration for
Ethiopia's Oromo people turned into a deadly protest as demonstrators
tried to flee police. (Reuters)
The government responded to the violence by declaring a state of
emergency on Oct. 8. Thousands were arrested, and bans were imposed on
protesting, inciting others to protest, damaging public property and
communicating with terrorist groups — including listening to
anti-government media outlets based abroad.
The measures have prompted concern from the United Nations, Germany
and the United States, which noted that they don’t address the
political crisis underlying the protests.
Ethiopian officials say the state of emergency was the only way to
restore order in the country.
“We have been able to arrest the rate at which the destruction was
visited on our people, and the violence has been controlled,”
then-government spokesman Getachew Reda said last week. He was
replaced in a government reshuffle Tuesday.
An army unit is camped out in front of AfricaJuice, and
machine-gun-mounted pickup trucks circle the lush Awash valley.
President Mulatu Teshome has also toured devastated factories and
promised investors that the government will help them recoup their
losses.
Interviews with elders and the bystanders to the attacks in the Oromo
region made clear that the deaths at the Irreecha festival left people
all across the country desperate to vent long-simmering anger over
land acquisitions for foreign industry. AfricaJuice was reportedly
involved in one such land dispute.
In a few cases, though, investors’ ties to a particular community may
have saved their farms. Marc Driessen, a Dutch flower grower, recalled
watching smoke billowing into the sky as the AfricaJuice factory
burned just six miles from his own 12-year-old farm, Maranque Plants.
“It was really an end-of-the-world kind of thing,” he said.
Inside the vast greenhouses that would be so vulnerable to a mob,
hundreds of workers — mostly from nearby Alaga Dore — tended the
delicate chrysanthemums, dahlias and poinsettias that would later be
packed up and shipped to 35 countries.
As hundreds of angry young men and women approached the main gate on
Oct. 4, Driessen and his managers feared the worst — until the village
elders intervened.
“We went on motorbikes,”elder Shumi Telila recalled as he sat under a
tree in Alaga Dore. “We said: ‘This is our property. We are getting a
lot of benefit from this company. You cannot burn this.’ ”
The young villagers were beside themselves with grief and rage over
the deaths at the festival, he said, but they listened to their elders
and left the farm alone.
At least 800 people from Alaga Dore work at the farm, which also
maintains the village’s water pump and generator and poured a concrete
floor for its school.
Yet just 18 miles away, the Giving Tree Nursery was attacked by
another group two days later despite the Belgian company’s own efforts
to support the local community.
Ingrid van der Schaaf, Giving Tree’s research manager, was there when
reports of the attacks began, and she fled for the capital in a
harrowing cross-country drive.
Workers and some locals tried in vain to protect the farm, which grows
beans, peas, peppers and okra for export to Europe. When van der
Schaaf returned, she found much of it gutted.
“They destroyed the manager’s compound and staff quarters,” she said,
speaking by phone from the Netherlands. “It was shocking to see.”
The fields and some of the bigger equipment were untouched, but the
farm now has no means to sow, harvest or transport a crop. “You see
all the damage and think, ‘For what?’ ” van der Schaaf said. “There
are 500 jobs.”
The Machiels Group, which owns the farm, is still deciding its future
in Ethiopia.
“What the next few months will bring, you simply don’t know,” said its
foreign projects manager, Hendrik Schoebrechts, speaking from Belgium.
“Will there be another uprising?”
According to Emma Gordon, East Africa analyst for Verisk Maplecroft, a
U. K-based risk consultancy, many investors are waiting to see whether
the government has a better solution to the unrest than repression.
“The protests have raised issues that will need more than a military
response, and unless there is a perception that some of these
underlying problems are being tackled, I think risk-sensitive sectors
will be cautious to enter the country,” she said.
In the wake of the state of emergency, the government has reshuffled
the cabinet, adding several more Oromo ministers and promised a more
representative electoral system that will bring in opposition parties,
which since 2015 have not had a single seat in Parliament.
New elections, however, are four years away, and the political crisis
stems in part from the lack of faith Oromos have in their
pro-government politicians.
Walking the perimeter of his farm, the sole untouched operation in the
area, Driessen expressed doubt about the future, given the recent
violence.
“It will affect new investors dramatically,” he said.
Received on Wed Nov 02 2016 - 08:58:01 EDT