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LETTERS TO THE EDITOR
 

 

Public Relations Vital to Success

Dear Editors,

I read your fascinating editorial headlined, "Wallowing in Profits, Public Enterprises Suffer from Legitimacy Deficit" [Volume 10, Number 485, August 16, 2009] with great interest. As you pointed out, many managers of the state enterprises are strangers to the value and quality of corporate communications.

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Regulations for Downside of Stock Market do not Exist

 

Dear Editors,
 

When the issue of stock exchange was raised in your editorial headlined, "Putting the Wagon before the Horse?" [Volume 10, Number 486, August 23, 2009] many people mistakenly assumed it is a venue to buy and sell shares like any commodity. But beyond its basic functions, a platform to buy and sell securities, it attracts a lot of speculators, noise traders, spread betters, gamblers and arbitrageurs.

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Ignorance of the Law Inexcusable

 

Dear Editors,
 

Your news story headlined, "Four-Year Tax Shock" [Volume 10, Number 484, August 9, 2009] contains fundamental errors which could mislead taxpayers. The headline implies that it is somehow shocking to request accounting information to assess and collect tax arrears or that there is a statute of limitations for tax collection.

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India, International Standards Differ

Dear Editors,

I am very much disturbed by your news story on Indian investors working in Ethiopia headlined, "A Stranger Comes to Town" [Volume 10, Number 486, August 23, 2009]. I believe you have put the situation very clearly.

There are a number of issues related to the Indian culture and way of working that could damage the Ethiopian labour ethics and its progress, diverting it to an undesired direction.

I had an opportunity to attend culture training on the Indian way of life, and more importantly, took a course on human resource management: The Indian Way Compared to the International Standard. I must say it is not a way of life I would ever wish to see implemented in our country.

It would further hamper any future progress we dream of, both economically and culturally. However, given the circumstances, there are still ways to protect those farmers and other workers in the area. And action should be taken as soon as possible.

I would like to kindly ask you to do a follow up on this issue from time to time. I strongly believe that it is a very important issue, and unique from other investors' issues. I am specifically concerned with Indian Investors.

 

Daniel Hiruy

 

 

Recognize Competitive Companies, not Monopolies


 

Dear Editors,
 

I am one of your frequent readers. But I have a question regarding why the Ethiopian Telecommunications Corporation (ETC) and the Ethiopian Shipping Lines (ESL) are sharing the "bonanza" along with the Ethiopian Airlines.

In my judgment, they should mourn and cry for their achievement you described as "bonanza" [Volume 10 Number 484, August 9, 2009].

May I also ask who their competitors are?

I would crown Ethiopian and its management for their achievement. They are competing with more than 10 carriers and they are doing well. Please forward my question to ETC and ESL; what are they going to do when this monopoly is broken?

 

Yonas

 

 

Evicting Hotel Tenants, Un-Ethiopian


 

Dear Editors,

It was a nightmare on the morning of August 10, 2009, when a group of authorized personnel ordered me to immediately evacuate my room in the Omedla Hotel, which had become my permanent home, pending a lingering court case to retake my own residence. At first, I had flash-backs of the Red Terror I had gone through during the Derg regime and could not even respond.

Upon returning to my senses, I started to look for my enemies; I realized there were none. They were all God fearing, obedient, dedicated fellow Ethiopians, I congregate with daily.

Reflecting on the episode, I find this procedure of evicting hotel tenants rather ugly and against every aspect of Ethiopian hospitality and culture. It pains me even more when I think of Seyoum Mesfin, minister of Foreign Affairs, my mentor, my hero who strives so hard to keep up the image of Ethiopia, to attract Ethiopians to repatriate to their motherland and to promote tourism and foreign investments.

What a disaster this would have been if similar chaos had taken place at the Sheraton or Hilton?

 

God Bless Ethiopia
Vartkes Bilemdjian

 
 

 

Is Fortune's Case Really Historic?

Dear Editors,
 

Your news story headlined, "Fortune Wins Landmark Case against Ayat" [Volume 10, No. 476, June 14, 2009] gives extensive coverage to the court battle your publisher has fought against Ayat Share Company.

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Pankhurst Family Distances Itself from Memorial Institute

 

Dear Editors,

 

My attention has been drawn to an advertisement by the Sylvia Pankhurst Education and Training Institute entitled Sylvia Pankhurst Memorial Institute, on page 11 of your issue of June 7, 2009 [Volume 10 Number 475].
 

Though I have given my approval to naming a school after my mother, I have not been asked, and have not agreed to the use of my mother's name for the said Sylvia Pankhurst Education and Training Institute. Neither I, nor members of my family, hold any position or have any affiliation with the Institute share company.

 

Thank you

Richard Pankhurst (Professor)

 

 

A Case for Telecom Privatization

Dear Editors,
 

I read the news headlined, “Amharic Office Word Application Software Almost Complete” [Volume 10, Number 473, May 24, 2009]. It was great to know that the age old language of Ethiopia is entering the information age. My appreciation to the three organizations: Microsoft Inc., the Ethiopian Information Communications Technology Development Agency (EICTDA) and the Addis Abeba University (AAU).
 

However, all this effort is of no use as long as a single monopoly operator owns the generation and transmission of information and networks without the involvement of the private sector. As a result of such a policy, Ethiopia, with telecommunications services for over a century, is now known as a prime example of least developed countries (LDCs) in the information communications technology sector.
 

The private sector is excluded from owning a network, and small and medium enterprises, which could provide local language based content services, are absent from the scene. Perhaps Microsoft Inc. and the other influential organizations should clearly take a stand against the disabling policy on telecom and ICT monopoly in Ethiopia.

 

Only then can we talk and expect innovative and sustainable development through ICT.   

 

Asteway  Abebe
Nairobia

 

 

Is AU's Priority Cash or Development?

Dear Editors,

When I was covering the 4th African Health Ministers Conference for my government earlier this month, I was delighted to meet African officials in large numbers for the first time. I felt blessed for being assigned to Addis Abeba, as my first African posting. In naivety, I used to think Africa was as homogenous as are most European countries. I was fortunate to learn that the diversity is immense, and incredible.

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Ethiopian Journalists Must Support Each Other

Dear Editor
 

I read the commentary by Lulit Amdemariam headlined, “Ethiopian Journalism” [Volume10, Number 473, May 24, 2009]. It was a timely and fascinating piece.

Most media houses usually ignore such indispensable issues. Journalists in our country are seen complaining about their profession only when they are imprisoned, charges are pressed or when a new media law is imposed on them.

 

Read More

 
 

 

Textile Labour Union Needs Reality Check

Dear Editor
 

I was amazed to read a story headlined, "Local Textile Labour Case May Go International" [Volume 10, Number 470, May 3, 2009]. This story says a local employer and union's case may go international because the case was not getting resolved here in Ethiopia.
 

I cannot believe the union chose this particular time to take it that far. Its leaders are thinking about getting in touch with the employer's clients through the International Conference of Free Trade Unions (ICFTU) in order to urge them not to buy the product from the local factory.
 

What are they thinking? Where have they come from? Do they live in the same world we live in? Do they follow the news on what is going on around the world, that countries are doing all they could to make it through this turbulent times? Have they heard stories of employees losing their jobs, in millions, and companies getting bankrupt? Do they know that employers and employees are working together to avoid bankruptcy of their companies so employees have job security (even on a concession basis) during these trying times?
 

Besides, when they say they will contact the exporter's clients and ask them not to buy the product, have they not heard about the foreign exchange crunch this country is facing?
 

Maybe they were not aware that the products exported by individual companies do bring back the hard currency we all (as a country) depend on. I suggest they should get a reality check; they should also be thankful that their members do have jobs during these tough times while millions are desperately looking for one.
 

Their timing is so bad that instead of taking their case to international level, they should rather focus on increasing productivity. Our work attitude should change too. Working together with management, we should find a way we could be more a productive workforce.
 

Our industrial production output is too low, even when compared to other Third World countries.

We should keep in mind that our industries, all imported machineries purchased with foreign exchange, are established after consuming huge investment capital. If the exported products were not competitive enough, those industries could get bankrupt and close their doors with loss of jobs as avoidable consequences. It is in all our interest to see the success of these companies.

We should also be careful not to send the wrong signal to prospective investors, both domestic and foreign.

Ayenew Awole

 

Strengthening Credit Information Exchange among Banks

Dear Editor
 

Banks in most circumstances require sufficient collateral to ensure repayment in case of failure on part of the borrowers to repay a loan. This is despite the views of some who regard collateral as a minor matter; they take the view that having a good borrower with a good business is a far more important basis for lending than collateral.
 

For banks in a country like Ethiopia, the importance of collateral is beyond doubt as it ensures the repayment of the loan in case of default by the client. If an information asymmetry problem exists, where banks do not have information about their borrowers as much as the borrowers know about the banks, it is natural that banks will continue to take the collateral issue though the magnitude may differ from one bank to another. 
 

One of the main problems with collateral is establishing clear title. Banks might go to seize collateral only to find that the borrower had already pledged it to other banks, or in our case, as your newspaper reported last week headlined "Amendment Proposes Leeway in Mortgages Collateral" [Volume 10, Number 471, May 10, 2009], without fulfilling the article on the 1960 Civil Code that the mortgage collateral should be signed before courts or notary.
 

The government's move to amend the article related to mortgage collateral is a great relief to the banks, which otherwise may fall in serious jeopardy and which will ultimately have consequences on the financial sector. However, there are other issues beyond mortgage collateral: The issue of strengthening credit information exchange among banks in Ethiopia, as this ultimately narrows the huge information gap banks have on their borrowers or that narrows the information asymmetry problem in the country.
 

Information is basic to banks for making decisions they would not come to regret. In fact, it is one of the competitive tools where a bank that manages to collect adequate and timely information about its clients can make better credit decisions - hence reducing the risk of default - than others that fail to do the same or that focuses very much on collateral. Proper evaluation of credit requests, hence, requires pre and post information about the borrower in addition to other requirements, including the pledging of collateral, assessment of the applicant's business and financial reports.
 

Hence, credit information exchange among banks prior to the provision of the loan is a task that the banks should give utmost attention. 
 

Though collateral and mortgage of collateral continue to be taken seriously by banks in Ethiopia and the recent move by the government to amend the article in the 1960 Civil Code is appreciated, the focus should go beyond the issue of collateral to strengthening the information base banks have on their clients.

 

Abraham Tesfaye
Commercial Bank of Ethiopia (CBE)

 
 
 
 
   
   
   
 
 
 

 

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