Finance and Economics；Investing in Ethiopia; Frontier mentality;
A new fund attests to the country's allure—and to the value of connections;
Long benighted, Ethiopia is attracting attention for a better reason. It has become Africa's fastest-growing non-energy economy (see chart). Investors have noticed. South Africa's largest consumer-foods firm, Tiger Brands, expanded into Ethiopia last year with a big acquisition. Diageo and Heineken recently paid nearly $400m combined to acquire state breweries in the country.
The latest proof came on May 9th, when Schulze Global Investments, an American investment firm and family office, announced that it had launched a $100m Ethiopia fund, the first private-equity fund focused exclusively on the country. Anchored by at least $15m from Britain's CDC, a government-owned provider of development finance, and $10m of the family's own money, the fund will invest in sectors from agribusiness and cement to health care and natural resources.
Investing in Ethiopia is not for the faint-hearted, however. With a projected national income of $38.5 billion this year, its population of 85m still ranks among the world's poorest. The government's big spending carries risks, including high inflation (32.5% in March was near a nine-month low) and heavy state borrowing that has shrunk the credit available to private firms. Much more borrowing and spending is planned, and needed. The heart of the Ethiopian capital may be traversed by new concrete arteries and bridges, built by Italian and Chinese contractors with Chinese loans. But the rest of Addis Ababa is a patchwork of dirt paths lined by corrugated-tin dwellings that are the capital's shantytowns and slums.
Poverty is pervasive, raising questions over how fast a consumer class will emerge. Agriculture is still a big source of national income, accounting for more than 40% of GDP and more than 80% of employment. Almost all private businesses are small: family-owned vendors and repair shops, the kind whose customers cannot suffer inflation for long. Credit is hard to come by for the unconnected. Only licensed exporters consistently benefit from repeated devaluations of the currency. To invest in Ethiopia is to invest in the frontier.
That suits Gabriel Schulze, who runs SGI (as the firm is known in Addis Ababa). He is the scion of an American frontier family. His great-great-grandfather, William Boyce Thompson, flirted with bankruptcy in the Old West and founded Newmont Mining, now a $23 billion company. Mr Schulze operates smoothly in Ethiopia because of connections built through his family (three of his younger siblings are adopted Ethiopians). In 2008 he established a permanent office in the capital, staffed by members of Ethiopia's class of returning exiles, including two daughters of former officials under the late emperor, Haile Selassie.
这种状况正像经营SGI（在亚的斯亚贝巴众所周知）的Gabriel Schulze。他是美国前线家族后裔。他的曾曾祖父，William Boyce Thompson，在老西部破产，后来成立了Newmont Mining，现在是一个资产230亿的公司。Schulze先生在埃塞俄比亚经营的很顺利，因为他的家族的关系网（他的三个年轻的同辈都是收养的埃塞俄比亚的孩子）。2008年，他在埃塞俄比亚首都成立了一个永久的办公室，员工都是逃亡归来的埃塞俄比亚人，包括末代皇帝Haile Selassie时期的前长官的女儿。
Connections are crucial. Ethiopia's doors are not all swung wide open to foreign investment, but rather opened selectively. The regime of Meles Zanawi, the prime minister, is ideological and authoritarian: the ruling party and its allies won 99.6% of seats in parliament in the 2010 elections. Its labyrinthine bureaucracy is the bane of the smallest of private businesses. Mr Meles is working from a neo-Chinese blueprint, long on public investment and state enterprise (banking, telecoms and retailing are off-limits to foreign investors). Outsiders wanting to do business in Addis Ababa must forge good relations with Mr Meles and his ministers.
这种关系网至关重要。埃塞俄比亚的大门向外国投资商敞开，但也是有选择地敞开。总理 Meles Zanawi是个独裁主义者：统治党和其联盟党在2010年大选中赢得99.6%的席位。它复杂的官僚机构是小企业经济的致命毒药。Meles先生很长时间都在公共投资与国营公司工作，是新中国人的代表。外界想在亚的斯亚贝巴做生意的人就必须与Meles先生和他的内阁大臣们建立好关系。
Similarly, the larger, existing SGI investments in Ethiopia—in a coffee-export business, a cement plant and an oil firm—are investments in the elite families who run them, with family and personal networks that extend back generations. The Bagersh brothers, owners of the coffee business in SGI's portfolio, represent a third generation of coffee exporters. Tewodros Ashenafi, the founder of SouthWest Energy, an oil firm, is the great-grandson of a former minister of war. Shonaid Jemmett-Page, chief operating officer of CDC, says that this is the nature of investible companies in places like Addis Ababa. “One of the problems in most frontier markets is there's generally a pretty small entrepreneurial class,” she says.
同样，更大的SGI投资项目，包括咖啡出口、水泥厂和石油公司，都是精英家族在经营，拥有几代的家族及个人关系网。拥有SGI咖啡贸易Bagersh兄弟已是咖啡出口商的第三代接班人。西南能源石油公司创始人Tewodros Ashenafi是一位战时部长的曾孙。CDC首席运营官Shonaid Jemmett-Page说这是诸如亚的斯亚贝巴这样投资地的特色，他说：“大部分前沿市场都存在一个问题，就是一般创业阶层非常小。”
Some critics of Mr Meles nonetheless worry that he will give away the store to foreigners—including bits of the country itself, they grumble, in the form of land farmed for export, which has become a fast-growing business. At the Sheraton Addis (a luxury hotel owned by Mohammed al-Amoudi, a Saudi-Ethiopian sheikh), a returned exile who makes introductions and brokers deals dismisses this notion with a story. A 19th-century emperor once saw off foreign visitors who had perhaps overstayed their welcome. The emperor was said to have ordered the bottoms of their shoes to be checked carefully on the way out. Not a crumb of Ethiopia's soil was to go with them.
尽管如此，有些评论家也担心Meles会把生意都卖给外国人，包括这个国家本身，以土地收成形式的出口已成为一个快速增长的企业。而在Sheraton Addis（沙特-埃塞俄比亚酋长Mohammed al-Amoudi拥有的豪华酒店）的一个回国的逃亡者和经纪人讲了一个故事，否认了这样的看法。19世纪的国王在一次送别一队外国游客时，让他们仔细检查鞋底，不允许他们带走埃塞俄比亚一丁点的尘土。