Transferring public assets to friends


Ethiopia sells off seven state firms

Meles and friends are continuing the transfer tradition of public assets to private hands that they started long ago. In the latest bout of auctions 5 of 7 firms went to their good friend Al-Amoudi – the same person that has previously received many other public assets including a gold mine.

Of course if the Ethiopian people had any say over their governance, this privatization process would not only be transparent but it would also need to provide some evidence that privatization is in the interest of the current owners – THE PUBLIC! Unfortunately, Meles and friends operate as if what is “government owned” is owned by them personally.  They thus see public engagement as an unnecessary exercise. The government is thus trading a one time cash infusion for its ownership stake without any public discussion.  What is more, much of these assets are going to those connected to the regime!

Shouldn’t the goals of privatizing be open to discussion?  Doesn’t the public need to know the basis for the decision to privatize some firms but not others? Shouldn’t the bidding process and the terms of what is expected of the  new company be open to public scrutiny?

I have no problems with privatizing as long as there are objective and convincing reason for doing it and the process can be kept transparent, but  I don’t think it should just be blindly embraced. Where are the studies that have looked at the benefits and costs of privatizing?   How is it that firm after firm goes to the same joe? Of course there isn’t going to be an answer from this regime on any of these questions.