Ethiopian flowers a success, but exploitation looms large
Cut flowers have become Ethiopia’s third-largest export earner over the last decade, in large part due to massive investments by Indian-owned companies. Revenues have soared, from about $28 million dollars in 2002-03 to $212 million dollars in 2011-12. Some estimates suggest returns of more than $500 million in just a few years.
The country’s competitive advantage is clear: the climate is incredibly favorable, labor costs are low and the Ethiopian Government has offered vast incentives to agricultural investors. Indian companies such as Karuturi Global and ASK Flowers and Greens jumped in and now export millions of blooms to markets in Europe, the Middle East and Africa every year.
That ‘rosy’ story has a darker side, however. Corruption is rampant in the Ethiopian government, labor violations are routine, and charges of forced displacement often accompany the agricultural development projects.
Tax avoidance also remains a huge issue in developing countries like Ethiopia, where little of the profits ever trickle down to the society at large. Karuturi, responsible for one in nine of every roses bought in Europe, was in fact just found guilty of tax evasion in Kenya, where the company also operates.
"Companies like Karuturi are hemorrhaging Africa," Dr Attiya Waris, a senior lecturer in tax law at the University of Nairobi, concludes grimly.
Sources: Daily News India, AllAfrica, Grain.org
