I am in Ethiopia, and it is good to see how much the environment for private economic activity has improved since my last visit a few years back. The economy has been booming since 2003, growing at Chinese rates. But there are ominous signs that the good times will be interrupted by an old-fashioned macroeconomic crisis.
Most seriously, the economy is running out of foreign curency, with reserves falling well below two months of imports. The National Bank has so far not depreciated the currency by much and has been effectively rationing foreign currency instead. Talk about a foreign exchange shortage is everywhere.
The gap between the black market and the official exchange rate has widened to--wait, there is no black market! Yes, that is right. From all accounts, the rationing of foreign currency has not led to a burgeoning parallel market. To be precise, the government has cracked down on what there was of it, and that seems to have done it.
Which raises the question: is it just a matter of time before the black market takes off, or are Ethiopians such law-abiding people and their government so capable of making regulations stick that we should talk about an "Ethiopian exceptionalism"?