Illicit trade and contraband trade practices pose a major threat not only to the economic development of the country but to the entire statehood of the nation. Contraband is a major component of the multi-faceted socio-economic and political war on Ethiopia. Of late however, it is getting much worse than ever.
The economic problems that the country is currently facing must be viewed from several perspectives. Deeper research on the causes, consequences and drawing up applicable solutions is necessary if Ethiopia is too thrust out from the vicious circle of poverty.
Before going into the details, the author would like to dwell upon some salient features of the current economic sabotage and conspiracy that is gaining momentum in the country. Inflation and inflationary sabotages that specifically focus on consumer goods badly needed by the public has been ever growing.
Inflation is driven by too much demand relative to supply. More precisely, as former us Fed Chair Ben Bernanke remarks “Inflation occurs when the aggregate quantity of goods demanded at any particular price level is rising more quickly than the aggregate quantity of goods supplied at that price level.”
Greedy merchants and those who refuse to abide by the rule of law either hoard substantial amount of consumer commodities in their warehouses deliberately creating shortage so that they can demand higher prices that exceed 100 per cent and even more on some food items like teff, egg s, onions of all types, oil, sugar, pepper, dairy product and a number of goods that are daily used for food. This is done in the name of “free market” which is actually free for the merchants but not for consumers who are forced to pay inflated prices to feed their family members with limited prices.
Public servants and citizens within low income bracket are those who suffer the most. Manipulating the huge imbalance between supply and demand and even creating artificial demands makes merchants have full control of the economy in their quest to obtain exorbitant profits reducing the purchasing price of official banknotes.
The other tactic used is to flood the market with commodities, apparently trying to show that supply is abundant and making the demand for some goods to show fast diminishing returns on the demand schedule. This again causes inflation to grow in double digits because consumers run to the market to purchase cheap items to keep them for seasons in which they become very scarce.
In Ethiopia, it is difficult to assume that the economic demand curve works because even when the demand for certain goods becomes low, their prices still remain low. The worst case scenario is when suppliers join the game of skyrocketing prices by deliberately cutting down on supplies. The entire processes disrupt the economies of scale in the economic management of industries.
The government and sector ministries are not short of fiscal and monitory policies and control by regulatory bodies but these policies are not strictly enforced by those who issue them. Therefore the burden falls
on federal and regional police and security forces that are forced to chase those who are engaged in theft and contraband trade which the author will deal in greater detail later in this contribution.
Among other things, the disruption of peace and security in Ethiopia triggered by ethnic based conflicts which happen to disrupt logistics, transport systems, looting on supply lines by gun tottering groups also tend to drive inflation on basic goods and services. Food inflation for 2023 has reached 27.3 per cent but is in reality higher than this.
Narcotics, cigarette goods, clothing, electronics materials, drugs, food and beverages including the expired ones, cars and spare parts, individual or group firearms, bombs, cash, and minerals have all been confiscated by the Commission while unlawfully entering Ethiopia. Mulugeta explained that nearly everything, including humans, is smuggled out of Ethiopia. This may also include legally imported items such as petroleum, which are then sold in neighboring nations.
Exportable commodities such as Khat, oilseeds, pulses, and even coffee from Ethiopia are recently being smuggled out to neighboring countries, only to be exported from these countries later, as admitted by key government officials.
Here the author would like to deal with some health, social, security and political implications of contraband trade in Ethiopia. For instance health related commodities and medicaments that enter the country through porous borders all around Ethiopia.
The medicaments and health related drugs that are smuggled into the country are in most cases not included in the Essential Drug List of the Ethiopian Food and Drug Authority and in several cases these drugs have surpassed their expiry date and have no curative value for patients who take them posing a threat to public health.
On the other hand various narcotic drugs that are smuggled into Ethiopia have continued to seriously affect the moral and health conditions of the youth some of which turn out to engage in crimes to get money for the drugs. It is alarming to know that some of these young persons are from secondary schools and universities across the country.
In north western borders of the county, firearms are smuggled almost on daily bases affecting the peace and tranquility in several parts of the country. Although the law on arms control has been issued long time ago, poor enforcement has led to the proliferation of unlimited type and amount of firearms into the country.
Contraband trade in firearms encourages terrorism both in Ethiopia and the Horn of Africa threatening the security of the already volatile region in Africa posing continuous danger to the sovereignty and territorial integrity of the country.
The implementation of nationwide inclusive and all-embracing strategy must be devised to effectively tackle the multi-faceted socio-economic and political conspiracy on Ethiopia. The political parties and civil society organizations need to contribute their part accordingly.
BY SOLOMMON DIBABA
THE ETHIOPIAN HERALD 27 AUGUST 2023
