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“DIFFERENT BUT THE SAME, THE SAME BUT DIFFERENT”: TWO CONTRASTING TRADING SYSTEMS IN SOUTH AND EASTERN ETHIOPIA [Abstract ID: 0301-04]
This study looks at the institutional evolution, performance and constraints of the institutions and structures that govern the khat trade in Ethiopia. Through a comparative analysis of the trading systems at two major khat trading centers, Aweday and Wondo Genet, it explores the key institutions, structure and economic principles underpinning the khat business in Ethiopia. The study seeks to document the development of some key features in the running of the khat business and the various work processes that have kept the industry in Ethiopia vibrant. The issues exhaustively explored in this study include, among others, the institutional evolution of the khat trading system and the role of the state in the khat trade. The fact that khat traders operate in a risky and unsettled business environment makes trade relationships and the structure of trade highly uncertain and demands continuous renegotiation of the terms of engagement. I argue in this paper that decentralization and autonomy are the hallmarks of the main khat trading systems in Ethiopia. Khat trade in the Ethiopian context has inadvertently espoused, and been guided by, principles and/or approaches that can best be characterized as neoliberal. Some of the fundamentals of this economic approach, such as the reliance on market mechanisms, the individualist rationale, the deregulated market, the profit maximizing entrepreneur, are active forces that shape the modus operandi of the khat value chain in Ethiopia. I will also show that the khat economy in the Ethiopian context is not state-driven and less of a standardized economic undertaking. Rather, the khat business has for a long time been run by an agglomeration of small local firms and to some extent foreign-based business groups. Some of the data required for this study have been collected over the past three years in frequent field trips to both study sites in eastern and southern Ethiopia. In adition, my familiarity with the issue as well as with the local people and local circumstances are my key assets when collecting oral data.