Bethlehem Alemu was voted a "Woman to Watch" as part of Forbes World's Most Powerful Women list
Florence Beaugé

ADDIS ABABA - Initially, her idea was to provide work for her family in her native village of Zenabework, about 30 kilometers from Addis Ababa, the Ethiopian capital.

When she announced that she was going to start her own company on a plot of land lent by her grandmother, everyone said: You are crazy! You are a woman. Worse yet – an African! You have no chance of making it!

Bethlehem Alemu did not give up. Eight years later, her company has earned her international recognition and helped changed the image of Ethiopia. Using artisanal craftsmanship, soleRebels makes shoes that are cool and comfortable, but also good for the planet and certified Fair Trade.

SoleRebels only uses materials produced in Ethiopia: organic cotton, organic jute, koba plant fiber, leather and… used tires. The soles are made from recycled tires, just like the sandals worn by the Ethiopian rebels as they were fighting off the Italians in 1935. Hence the name – soleRebels.

For the rest, the shoes are modern, colorful and comfortable. And beautiful to look at. Case in point – their huge success in the UK, U.S. and Asia. Today, soleRebels is competing with the big brands on the international market.

Bethlehem Alemu has been amassing prizes and distinctions. She was voted a "Woman to Watch" as part of Forbes annual World's Most Powerful Women list. The most surprising thing when you meet the 32 years old entrepreneur is her will. Small, energetic and almost distant, except for when a smile suddenly illuminates her face, the young woman speaks fast, without elaborating. She has the natural reserve of the Ethiopians.

She decided to become an entrepreneur in 2004. Two years earlier, Ethiopian had started its economic takeoff. The GDP growth rate is around 11% – but it is relative since the country is starting from nothing, and its population is one of the poorest in the world. Bethlehem, who has a biblical name – Ethiopia is predominately Christian Orthodox – is the eldest of four children and the only girl.

She launched her company with four other people: her husband – “my most ardent supporter,” she says smiling, her younger brother Samuel, who was 16 at the time and two craftsmen. “My sister didn’t have the slightest idea about how to make shoes. I’d help her everyday after school,” recalls Samuel. Bethlehem says her first pair of shoes looked more like “miniature beds than shoes!”

The young woman learned quickly. She designed the models, decided what materials and colors to use, started recruiting people. She photographed the shoes, put them on line and started selling them on Amazon. Six months later, the first order arrived from the U.S. It was a retailer. “Seventy-five pairs at once! We were overwhelmed with joy. It was a party,” laughs Samuel.

Ethical workplace

Today, soleRebels has 300 employees. Some make the shoes – by hand from start to finish – in the small factory in Zenabework, while others produce the cotton or jute, weave it, or recycle tires. They are all paid three or four times the average wage in Ethiopia ($40), and benefit, along with their families, from medical coverage. “We sometimes hire people that have never had a job. They earn a good living, but mostly, they learn the meaning of the word hope,” says Alemu.

Over the years, the soleRebels collection has grown. After sandals, the company launched sneakers, moccasins, ballet slippers. “Our goal is not to increase the number of clients but to keep them for life!” explains Samuel.

Parallel to its online sales, Alemu has opened stores all over the world. Besides the flagship store in Addis Ababa, she opened three shops in Taiwan and one in Switzerland. In April, she will open a new one in Singapore. Regarding its turnover, the young woman is very discrete, but she hopes to exceed $10 million per year by 2016. Half of the sales are made in Asia. The Ethiopian market itself, does not account for more than 10%.

Projects? Alemu has plenty. Her goal is to have “the best shoe brand in the world in the next five to seven years” and in May she will launch a clothing brand called Alemu. She has already designed and commissioned a series of dresses, shirts, hats and handbags that she is very proud of.

Still, there are many obstacles, one of them being, “competition, which is not always fair,” she says. The allusion, no doubt, is to Huajian, one of the largest Chinese shoe manufacturers, which just opened a factory in Ethiopia. Attracted by the low cost of Ethiopian labor (four times lower than in China) and the abundance of raw material (leather), the shoe giant relocated one of its factories in Durkem, about 20 kilometers south of Addis Ababa. Everyday, 2500 shoes are produced in this factory, before being exported to the U.S. and Europe.

To ward off the competition, Alemu has opted for quality. But she must fight against another Ethiopian handicap – the image of famine that the country can’t get rid of.

“Ethiopia has changed. We don’t need to be assisted by the West anymore; we want to be considered as business partners,” she insists. “We don’t want charity. We are creative, and can bring something to the world as well. We need others to change the way they see us.”

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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