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Economic Growth and Diplomatic Successes of Ethiopia - An Elephant in the Room

Economic Growth and Diplomatic Successes of Ethiopia - An Elephant in the Room

Teshome Beyene Berhe 07-23-18 teshbey.berhe@gmail.com

The wholesale dismissal of gains so far made that one hears here and there has provoked me to compose this piece. And, I am writing to provoke a discussion as a keen observer of events, and not as a practicing economist or political economist.At the same time, I want to challenge the budding narrative that economic growth and change in the country is kind of unreal. 

I must say the economic growth of Ethiopia and its diplomatic success is an elephant in the room, not something we can run away from. Even more, I say that the economic and diplomatic successes of the last 27 years should be unifying and energizing truths.

As we know, the 10% plus economic growth of Ethiopia was a constant ‘news’ peddled day in day out by the government media. It was an excessive work of promotion, reminiscent of the communist style of hammering a point.Interestingly, we now hear little commentary or footage about it. Therefore, what attracts one’s attention right now is the near to total abandonment of such an assertion. No doubt, this stands in sharp contrast to the daily drumming up of economic success by government media in the past. At times one even gets the impression that the government is going back on assertions made in the past about economic miracles.There are actually subtle allusions to that effect. Sadly, it looks like festering internal division in the ranks of the EPRDF has cast a shadow on this as well. Apparently, the truth of economic success has fallen prey to internal politicking.For that matter, so much in our country is a subject of short term political expediency.

Some members of the public seem also to genuinely or otherwise accept an emerging narrative that the economic success was just spurious and fabricated. No matter how disappointed one may be about the EPRDF led government, the truth about the transformation that this country has gone through should not be doubted. This is because I reckon it is here for everyone to witness. The EPRDF can take its due credit for what has taken place. The central message is, however, that we Ethiopians have woken up from age old half-slumbers and have improved our economic lots.The economic successshould also be a source of pride for us Ethiopians, for we have achieved it collectively as people and millions in the farms, factories and service outlets toiled to make it happen.

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Irrespective of domestic arguments on the set of facts, we know for sure our achievements are well recognized the world over. And, it is a source of inspiration for many around the world. It may be helpful to remember that, for many in Africa, Ethiopia is a beacon of hope and potential. There are so many good stories that make the rounds in Africa about Ethiopia. Some are even attributing to Ethiopia the epithet of ‘the China of Africa’. Whoever has traveled in Africa away from Ethiopia must have met inquisitive questions about how we have made it possible.

Let us first take politics out of our way by briefly discussing it. Our country has a well-crafted international standard constitution even though we can still pinpoint to some undesirable alien articles here and there. We are not also short on democratic institutions that are set up to implement the 1994 constitution. The institutions however are not independent and vocal. In spite of the fact that the leaders of the EPRDF are articulate in professing democracy and the proliferation of democratic institutions, the EPRDF government failed miserably in the spheres of politics and promoting national values. This is time and again alluded to by the EPRDF itself.

Elections are perceived as systematically manipulated; political institutions such as the judiciary, Election Board, government media, the Ombudsman, the civil service at large are regarded as mere tools of the ruling party, with fledgling independence. The parliament is correctly judged to be just an extension of the ruling party and has no real power of its own separate from that of the party. Effectively, the country is a one-party system, if the rhetoric is dealt away with. Nepotism and favoritism are rampant, and an overwhelming number of government positions are given to party faithful and the mediocre. A large swath of the intellectual has been marginalized from public service and citizenry duty. And, most deplorably, corruption has risen steeply, and national values remain fragile. The litany of inaction and failure continues.

At the same time, we should acknowledge the cultural and linguistic revival of communities in the country thanks to the policy and ideology of the party. The devolution of power to the lower echelon of administration and to the grass root is highly commendable. As a corollary of this, empowerment of the people is advanced as a political right and it has been nurtured as the right track for development. As undesirable outcome of party policy and ideology, however, and largely inherent to it, real tension between societies (nations) festered over the years. Much of the party ideology and policytended to over emphasis differences and domestic politics was seen through the prism of ‘either or’ dichotomy - either it is ethnic federalism or unitary governance in the style of pre-EPRDF. The middle ground was not sufficiently explored. 

In respect of the economy, there were bouts of serious inflation in the country. There is a constant challenge of shortage of foreign currency afflicting industries in particular. There is frequent fluctuation and power cuts. Major urban centers are suffering from low supply of tap water. Much remains to be desired in the quality of education and various social services. And, the future economic scenario is uncertain, if not bleak, if heavy government involvement in the economy continues unabated. According to economists worth the name, many of the difficulties in the economy emanate from over ambitious plans, heavy government led growth and incentive misalignment. Moreover, the sustainability of economic growth hinges upon the prevalence of peace, which in turn depends on the right mix of politics, continued democratization, good governance and growth of independent institutions. That remains the concern going forward, and it is the utmost hope of many that the current EPRDF administration is cognizant of the criticality of these factors for continued growth.

Coming back to my major point, there is certainly so much to celebrate in our country. If we start with the big picture; some ten years ago, the EPRDF ushered in an appealing and reasonably-realistic vision. It goes as ‘reaching the middle income status by 2025’. And, the driving values of the political economy were singled out as rapid, sustainable and broad based economic growth. Prompted by its vision, ambitious plans and its capacity at mobilization, the EPRDF-led government brought about huge economic change in this country, which is verified time and again by international observers.

We know it, as citizens, where we started 27 years ago. Back then, the narrative was overwhelmingly about drought and famine. Agricultural production stagnated for decades and hardly any new infrastructures were built during the Socialist era pre-1991. The per capita income was at a standstill of 110 USD for many years. And, per capital income is now, from official sources, close to $USD 800. Unlike what happens in many developing economies, income disparity remains on the lower side measured by the well-known Gini Coefficient of income disparity. Asset formation in the farming community is augmented, raising the coping capacity of the peasantry to risks.

Credit should be due where it is due.I must say the EPRDF government should be lauded for three major transformations in our country. First, poverty and social deprivations have declined enormously. Poverty head count now is now below 30% and has come down from somewhere around 60%. On health indicators such as child mortality, life expectancy and maternal mortality, the positive change is impressive. A new born Ethiopian can now expect to live 62 years, 14 years longer than a new born three decades ago would expect. Ethiopia is one of the few developing countries which met the MDG targets. It fell short by only two targets from the eight globally agreed eight targets. Education has expanded remarkably; and gross and net enrollments are high (even though when the percentage is usually contested). There are over 45 universities and we can look back to where we have come from; only 3 universities in 1991. In short, there is hardly a location in the country where there is no a primary school and a health post.

Second, the expansion of infrastructure such as roads, airports, telecom, railway, power etc is many folds. Harnessing of renewable energy; hydro, wind and solar, is exemplary for the developing world. Ethiopia now claims to have reached the sub-Saharan average in many indicators such as road penetration and density, and telecom expansion. All weather roads were only hovering around 30,000 KMs in 1991, while it is reported that the figurehas climbed to about 120,000 KMs. There are now over 20 all-weather airports, half of which are suited to international flights. In few years’ time, Ethiopia expects to be well connected internally by railway, reducing freight cost considerably, and rendering the movement of people much easier. Moreover, true to the credo of fair distribution of the EPRDF, the distribution of social and physical infrastructure is more or less even across the country.

The third area of achievement is international relations. Ethiopia is now growing to be a strong competitor to host international events, and a country with the third or fourth largest concentration of diplomatic corps in the world. The African Union is indisputably housed within its capital. It is country well represented in international discourse including on environment, peace and security. Its leaders are consulted by global leaders in G-20 and other forums.We all know also the great accomplishments of Ethiopian peace keeping army in war torn Africa. Ethiopia is now a country that is attracting FDI from the West and East, and competing well with other African countries to even attract more. Its industrial park model of industrialization has already an enthralling effect on global policy leaders and opinion makers. The building of GERD has a global acclaim and has been a big factor in unifying the country around a common cause. The flow of tourists has hiked recently, and we have started to take advantage of the diverse tourist destinations in the womb of the nation. The Ethiopian Airlines is a success story to emulate with over 100 destinations and fast growing revenue.

The private sector has started to show vibrancy, even though not to the level it should. Business people are running factories, real estates, big hotels, commercial farms and more. There are 16 private banks, and 17 private insurance companies. Capital has started to democratize with thousands of Ethiopians owning shares in companies; banks, insurance companies, beverage companies, cement companies and so on. And, in here too, we started from a dismal level where business owners could only run small trading houses and nothing more. In short, the juice of entrepreneurial creativity has started to flow.

My point is that the more we recognize the success, the more we get initiated to bring about more success. The more we deny it, the more we debilitate ourselves, and the more damage we bring to the improving image about us by the external world. There is definitely a psychological dimension to it; in that it has the attribute of being self-fulfilling. Honestly, if EPRDF and we, as people, have to be proud, it should be about the economic changes we have engineered, about the gains secured in poverty reduction, and about the diplomatic success achieved.

My humble message is ‘let us recognize whatever is positive’ and 'let us not throw the baby with the bath water'. For that matter, let us recognize whatever positive the Derg achieved and never write it off wholesale. Let us recognize whatever the imperial regime achieved, and never doubt it. The same holds true for what the EPRDF accomplished. When we do that, it means we are not into the undesirable act of undercutting one another and sullying our image.

 


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