Ethiopia PM Introduces Tough Anti-Inflation Measures

Ethiopia's Prime Minister Meles Zenawi has introduced tough measures to stabilize soaring prices, including a crackdown on what he called "economic criminals," but he says the African nation's economy is essentially sound. From Addis Ababa, VOA's Peter Heinlein reports opposition leaders ridiculed the claim of economic health in a country facing drought and a massive financial scandal.

Prime Minister Meles Tuesday declared war on what he referred to as greedy business people, blaming them for sharp price increases that boosted Ethiopia's inflation rate to 20 percent.  In a speech to parliament, he lashed out at what he called "fraudsters" who recently caused a five to 10-fold increase in the price of salt in a single day.

Mr. Meles announced establishment of a task force to prosecute businesses engaging in what he called "persistent illegal exploitative activities."

"Such greedy and illegal business persons will only respond when each has been identified and punished," he said. "As a result, the government has decided to completely change its approach toward those committing economic crimes. A task force comprising members of the Ministry of Trade and Industry, the federal police and the National Security and Intelligence service has been set up to permanently monitor illicit activities and take prompt legal measures as necessary."

The prime minister urged all citizens to cooperate by providing information about those engaging in price gouging.

Mr. Meles also announced two other inflation fighting measures; an immediate end to sales taxes on food grains, and sharp restrictions on the growth of the money supply.

At the same time, he described Ethiopia's economy as "healthy."  He predicted the country's economic growth rate would top 10 percent for the fifth year in a row.

Opposition leaders questioned the claim of economic health. Lawmaker Temesgen Zewdie pointed to recent reports that nine million Ethiopians are facing drought-induced famine. He called Mr. Meles's response "unacceptable."

Lidetu Ayelew of the Ethiopian Democratic Party called the report of 10 percent economic growth misleading because the growth does not touch millions of impoverished people.

"There are people who are being left behind. So there's a problem with distribution, of reaching everyone," Lidetu said. "Therefore, the economy is not fully healthy. So someone with high blood pressure cannot be seen as fully healthy. He can fall... So if this problem is not resolved, we cannot say the economy is healthy."

Prime Minister Meles shrugged off the criticisms. In his rebuttal likened Ethiopia's economic condition to a common cold. But he acknowledged several setbacks, including a recent discovery that a significant portion of the country's gold reserves was fake, and the arrest of several people allegedly involved in a black market money-changing scheme.