Lessons from a Bootstrap Economy

We were packed into the back of a crowded minibus somewhere on the outskirts of Addis Ababa, heading in the direction of Lake Kuriftu and the city of Debre Zeyit, which hugs its shoreline. I was sharing the back seat of a minibus with Yikeber, a young man I’d met standing in the line waiting to board the bus at the “station”—a dusty windblown lot on the edge of the city. Yikeber was one of Ethiopia’s emerging young professionals, a civil engineer who had found work in the capital but still commuted from his family home in Debre Zeyit to avoid the high rents in the city. Assuming the role of gracious host, he paid my $4 fare and also took on the role of tour guide, pointing out the sights of suburban Addis Ababa along the way.

“That’s a textile factory,” he said, pointing to a red and white prefabricated shed on the left. “It’s owned by the Chinese but employs local workers. They don’t need much skill for the work. They can learn the job in few days.”

A little further up the road he pointed to a blue and white office complex: “That’s a pharmaceutical plant. Most of the workers are Europeans but the products go to the local market.”

Yikeber was clearly proud of these sights, as proud as any bona fide tour guide waxing rhapsodic over Ethiopia’s ancient churches and historic ruins. But this was Ethiopia’s present and future being touted, a topic equally deserving of national pride. And Yikeber was a fitting representative of this “new” Ethiopia, having worked on similar projects all over the country.

“We do just about anything,” he told me, “schools, health clinics, office buildings, residential—that’s a garment factory,” he said, pointing to another industrial complex halfway up a hill on the right.

Also lining the road were wood and steel frames that would eventually become houses and apartment buildings for young professionals like him, who would work for the foreign bosses at the pharmaceutical plants and textile factories. They harkened a sort of suburban life, Ethiopian style—a far better alternative than cramming into crowded apartments in the city or bunking with parents well into adulthood.

The road our minibus was trundling along wasn’t just the road to Debre Zeyit but the road to Ethiopia’s future. What we had left behind were remnants of the country’s difficult past and the morass of its present: off Meskali Square, the Museum of the Red Terror documented the horrific tortures and oppression of the communist era under Mengistu Haile Mariam, whose brutal rule lasted from 1974 to 1987. Throughout the Piazza district, young prostitutes offered “quick marriage” to strolling tourists outside cheap hotels and bars that blasted African pop onto dimly lit streets. And then there were the vast slums in the surrounding hills and neighborhoods beyond the city center, chock-a-block with shanties of corrugated metal in narrow lanes that became rivers of waste during the seasonal rains.

But the capital was not devoid of signs of promise. A sparkling new Sheraton Hotel occupies the center of a neatly manicured concourse, and the city hosts the headquarters of the Organization for African Unity, the EU Economic Commission for Africa, and other international organizations. The Bole Road, leading to Addis Ababa’s international airport, was lined with half-finished construction projects, mostly upmarket housing and retail space for the city’s well-heeled expatriates and growing middle class. And for all its blemishes, Addis Ababa was a reasonably safe city, as African capitals go, petty theft and pickpocketing the most common nuisances. Even foreign women could walk the streets at night in all but the sketchiest neighborhoods.

But all of that was now behind us. We had arrived at Debre Zeyit’s main street, a dusty, traffic-clogged thoroughfare lined with shops and small market stalls and kiosks selling mobile phones and cheap electronic goods—in other words, the common commercial traffic seen in much of Africa. We hopped out of the minibus and were about to part when Yikeber offered to be my guide for the afternoon. It was Saturday and he had the rest of the weekend free, he said, so we climbed into the back of a bajaj, the three-wheeled motorized taxi that passes for cheap public transport in much of Ethiopia, and headed out to Lake Kuriftu just beyond the center of town.

Debre Zeyit is a military town, home to a large air base where Yikeber told me his father served as a colonel, but tourism was the growing industry in the region. A string of resort hotels had sprung up along the shores of the lake in recent years, and more were being built. Our bajaj dropped us off at the Kuriftu Hotel and Resort, Debre Zeyit’s most popular vacation spot. Curious to find out what a room in a luxury resort in an impoverished country like Ethiopia would go for, I dragged Yikeber into the lobby up to the check-in desk. The snappily dressed concierge produced a rate sheet that told us that the cheapest single room went for $136 per night, moderate by Western standards, a whopping sum in a country like Ethiopia, far beyond the wildest imaginings of all but the thinnest strata of the country’s upper crust. But the concierge informed us we could enjoy all the facilities—the pool, sauna, restaurants, café, beach, gym, and massage room (massage not included)—for only $25 for the day.

I wasn’t all that interested in a workout or a plunge in the pool, so Yikeber and I took a stroll along a trail that led beyond the grounds of the Kuriftu, and returned to the everyday world of rural Ethiopia. Broad, flat fields stretched on to a row of hills that lined the horizon, and a pair of little boys tended a herd of cows that had gathered around a giant eucalyptus tree, whacking their hind quarters with rickety sticks whenever they got out of line, or whenever they wanted to give themselves a sense of purpose and importance.

It was a delicate question, but I asked Yikeber if there were there enough Ethiopians to fill hotel rooms that cost almost half a year’s wage.

“No,” he admitted. “Most people only come out for the day, to get out of the city on the weekend. The rooms are mainly for foreigners.”

But Yikeber was an unabashed, unapologetic optimist. He had great faith in the emerging Ethiopia, and as one of the country’s newly minted professionals he had reason to be, even if his wages still far fell short of his hopes.

“The main thing we have to do is bring up the level of education,” he continued as we strolled under a burning sun. “The government knows this. It has set a goal of attaining one hundred percent enrollment in seven years.”

This sounded impressive, and not mere pipe dreaming. In the remotest parts of the countryside it wasn’t unusual to see young children lugging firewood and five-liter plastic water jugs, but spotting a foreigner they would squeal, “Pen! Pen! Pen!”—hoping to dash off with a prize more precious than a piece of penny candy or a ragged bank note.

“We now have half a million students in universities,” Yikeber continued, “and that’s only in the state universities. If you add in the private universities we have another hundred thousand.”

I didn’t want to burst Yikeber’s bubble, since he was obviously intent on getting as much mileage out of the education promise as possible, but a sober question remained: where were the jobs for all of them? And could the country keep them? Many of Ethiopia’s graduates were being siphoned off by European companies offering dazzling salaries, by Ethiopian standards, and their weak bargaining power made them far more attractive recruits than the choosier native born. At the Yenshi Coffee Shop in the Piazza district of Addis Ababa one night, I had met three young professionals working in Germany—Stuttgart, Munich, and Hamburg were all represented. All were back for their annual holiday visit. All would be returning when the month was over. None was planning ever to return to Ethiopia.

I tried to look at the glass half full: with all the building going on in the city, weren’t there plenty of jobs for engineers, architects, and construction firms?

Even perennially optimistic Yikeber was now a little downbeat: “The problem is investment. Projects start and stop, and then, sometimes the money, well—it disappears, into people’s pockets. A few years ago the finance minister was caught with a million dollars in cash in his house—the finance minister!”

We were now back at the hotel, and Yikeber phoned our bajaj driver for a pickup. We waited in the shade of the trees in the driveway, and Yikeber assured me he would come back: a guaranteed five-dollar fare was well worth the 10-minute drive from the center of town.

“Sure, there are pessimists,” Yikeber went on. “They say it will always be this way. People with opportunities outside this country will leave. Half the money that comes in will keep going into people’s pockets. They don’t think things can change.”

I noticed that several cars parked in the driveway were not owned by middle-class weekenders out spending their newfound “wealth.” Two of the cars bore blue and white U.N. license plates, while a few more were part of the diplomatic fleet from any of the capital’s foreign embassies. Few benefits of any trickle-down theory had reached the driveway of the Kuriftu Hotel and Resort.

“There is another way,” Yikeber continued. “The pessimists are right in this respect—the top-down approach doesn’t work. Too much money disappears into people’s pockets. Wealth has to be generated from the bottom up.”

“You mean—?”

“Yes, microfinancing.”

Our bajaj driver swung into the driveway a few minutes later. Back in the center of town, Yikeber was intent on showing me what he meant. He led me up the main street to a group of young men at a Ping-Pong table set up under a thicket of trees. It looked like a scene of weekend idleness, but no, Yikeber assured me, this was grass-roots entrepreneurship, Ethiopian style.

“Someone owns the table,” he explained. “They rent it out and the players pay to use it, a fixed price per game.”

How much prosperity could be generated from pickup Ping-Pong matches on weekend afternoons was dubious to say the least; in Ethiopia’s grass roots economy, the soil was not very fertile—an ironic contrast to the actual countryside, which was green and lush and glowed with promise—but in both cases the roots ran deep.

I told Yikeber that on the flight I had taken from Dubai I estimated that about ninety percent of the passengers were women, and almost all of the men were foreign tourists like me. I knew, from glancing around the waiting area in the departure lounge, that virtually all of the women were working in the Gulf as housemaids and in other forms of domestic servitude. What was most striking was the amount of luggage many of them had pushed toward the check-in desk—trolleys piled with five and six extra-large bags, each one big enough to ship the goods for an entire family.

“Before they return they shop for all their family and friends,” Yikeber explained, “and with the money they earn many of them come back and start small businesses. They partner with family members or friends, or invest it. Very few of them are uneducated girls from the countryside. They have educations, but they can earn more working as maids in the Gulf than anything they can do here, so they go for a few years, save their money and then come back.”

We were sitting on the second floor terrace of one of the city’s fancier hotels, drinking Bedele beers and watching the action on the street below. Another sign of Ethiopia’s new economy was in view all around us: several customers were making use of the hotel’s free Wi-Fi to surf the Internet on laptop computers worth a year’s salary.

Our beers finished, Yikeber walked me up the street to the spot where I could catch a minibus back to the capital. On the way I stopped into a local market, partly to see what was for sale in this semi-prosperous city, mainly to pick up something to snack on for the hour and a half ride. But the shelves were disappointing. Almost everything was sold in large bulk packaging, simply wrapped in plastic with minimal labeling, and in the Ethiopian alphabet. There were tubes of Colgate toothpaste, small boxes of laundry detergent, and plastic bottles of dish soap, but almost everything else had come directly from the wholesalers to the shop, bypassing the middlemen who would have only driven up costs. Individual packages of nuts or potato chips, especially of an imported brand, were beyond the reach of the average Ethiopian.

My stomach rumbled a bit on the way back to the city, but a far better dinner awaited me that most Ethiopians would enjoy that night. I had been to many “poor” countries, in Africa and elsewhere, but there were always small corner kiosks where the locals could buy cheap snacks, candy bars, and cigarettes. The absence of these simple treats signified a far deeper level of poverty. Call it poverty squared. It was like the trash, or absence of it, all over Addis Ababa, and Debre Zeyit was no different: nothing was thrown away because nothing could afford to be thrown away. It was as simple as that, and it yielded a dark irony: the poorer the country, the cleaner the streets.

When we reached the edge of the city four young women boarded, all dressed up and made up for a night on the town, no doubt on an Ethiopian budget—the price of the entire night the same as the cost of a single drink in a Soho nightclub. But as we lurched through the traffic they immersed themselves in their mobile phones, texting and chatting just like club hoppers in London’s Soho. For the “new” Ethiopia, this was the Soho lifestyle brought home, or at least an imaginary substitute, all through the power of modern technology.

The next day Ethiopia faced off against African powerhouse Nigeria in a World Cup qualifying match. Outside the stadium near Meskali Square, fans had gathered shortly after sunrise for a chance at a steeply priced $4 ticket. Ethiopia “scored” the first goal in the first half—but it was denied by a referee who ruled that the ball had not crossed the goal line before it was batted away by a defender. Replays from several angles showed otherwise, and Ethiopia “lost” 2–1.

The match was sadly emblematic of the Ethiopian condition: “victory” was ever palpable, but the route to it was littered with booby traps and miscues of fate that could deny it at any moment. The world was not a level playing field, and never would be.