By Mathza


May 10, 2010


One would have expected that some semblance of realism and sense of integrity and principles would prevail during the televised election debates. Unfortunately, this was not the case. It is clear that oppositions have not learned lessons from their past behaviors and failures. The debate was characterized by lack of criticism among opposition parties and rampant denials of progress made by the government and promises of doing miracles by oppositions, if elected. This piece concentrates on some of the denials and promises expressed at the 8th round: Urban Development and Industrial Policy.



Progress made by the incumbent government in peace and security, governance, democracy, economic and social development and diplomacy are too obvious for those with eyes to see, ears to hear, will to judge impartially and conscience to sense right and wrong. I do not dare to deny that the nay sayers do not have the capabilities and capacities to observe what goes on. In fact, in order to criticize the government they most likely keep their eyes and ears wide open to inform themselves. This being the case why do they go on denying any and every achievement of the government and yet virtually ignore criticizing one another? The answer is simple. They think that by following the denial strategy and targeting EPRDF they can hoodwink and win over the electorate and get rid of EPRDF. This strategy may work with the gullible and their blind followers. For the rest it is an insult on their intelligences. I for one am insulted.


Denials concern all sectors: political, social and economic. Let us, in this section, look at two glaring ones in the economic sector. These are double-digit growth of GDP and development of cities and industries. Regarding the first, oppositions dismiss it by saying they do not see its positive impact on the improvement of the standard of living of the people. They would be right if they were referring to the whole population. This, of course, cannot be because of huge population and its high rate of increase that absorbs the major part of the increase in GDP. It should be noted that, in addition to around six million people under the safety net program, every year there are two million additional mouths to feed and provide access to other basic necessities, particularly health. This would, evidently, mean that the number of people transiting to the desired life style is a small part of the targeted population. Because of the preparatory work undertaken and the experience accumulated already this number henceforth is likely to accelerate in the coming years. This is a reality that a person with a sound mind cannot deny.


In the countryside, many farmers are enjoying better living conditions. Some have even become millionaires and models for and helpful to their fellow farmers. In the cities, hundreds of thousands, particularly those engaged in small and micro enterprises (SMEs) are gainfully employed. Many of them are accumulating wealth to transit to higher levels and thereby create new jobs, the cumulative effect. The growth of small-, medium- and large-scale industries had and will have similar effects.


That Ethiopians are increasingly edging towards better living conditions is corroborated by the unprecedented high annual growth of demand for utilities (more than twice the GDP growth rate) and for commodities, such as sugar. In the case of telecommunications, an Investment Opportunities in the ICT Sector in Ethiopia: 2010 report expects the number of mobile subscribers will increase by 43% annually in the next five years. The hiccup that the electric power generation is currently facing will be over soon and Ethiopia will start exporting electricity within a couple of years. According to plan announced recently the county is poised to have electric generating capacity of 13,472 MW at the end of the next five years. Thanks to the government vision the energy resource is being diversified. In addition to rivers, geothermal and wind are being harnessed to generate electricity. In the case of energy to power vehicles use of ethanol has already started. Biofuel is under development. With the many of the prospects and explorations being carried out it will not be long before Ethiopia will use its own natural gas and petroleum products. All these alternative sources of energy auger well for Ethiopia’s development, and hence its competitiveness in world market and improvement of the standard of living of its people.  


Another factor indicative of the relative well being of an increasing number of people is the reduction of the number of people below the poverty line. Despite population pressure, the level of poverty fell from 59% during the 1990s to 38.7% in 2005 (United Nations and the World Bank). As this happened before the fast economic growth started it is quite likely that the level is substantially lower at present. In fact, according to Mr. Wondimu Asamnew, Charge d'affair, Ethiopian Embassy in DC, it now stands at 27%.


Now let us move to the second, denial of urban and industrial development. One of the opposition parties put it this way “betam, betam ejig betam whala qer new.” His comparison of Ethiopia’s industrial output with the income of a world oil giant does not make sense. It would have made sense if the comparison had been with the industrial outputs of developing countries.  Another stated “yalutun industriwoch kemasfafat yiliq endimotu eyetederge new.” A third said it differently “ketemoch’na industriwoch befstum aladegum.” If anything, these statements constitute the mother of all denials and lies. In any case, suffice it to say that those who have traveled in Ethiopia would automatically dismiss the denial regarding cities. With respect to industrial development (excluding the 167,835 micro and small enterprises (MSEs) created) we all have, quite often, been hearing and witnessing on TV and other media the start up or expansion of industrial projects. One of the latest is the $140 million Aika Addis Textile with a work force of 10,000 at full capacity. Obviously, the nay sayers are telling us that they have not heard of the hundreds of medium and large scale industries that were established throughout the country. These include agro-industries (textiles, leather and leather goods), metal and engineering industries, pharmaceutical industries, cement industries, glass industries and vehicle, electronic goods and computer assemblies. It should be noted here that, unlike situations pertaining in other African countries, development in Ethiopia had to start from scratch. There is no denying that the credit for fast development in all sectors, including industry, attained so far goes to the EPRDF government.


The complaint by one of the debaters that there are no industries in areas he mentioned is unwarranted at this stage of development. Although there is more to be desired regarding the decentralization of industries there is no comparison whatsoever with the past. The government is doing its best and succeeding to expand the coverage of infrastructure that constitutes the precondition for the establishment of industries. It should, however, be noted that, at the end of the day, it is the private sector that decides where to locate industries, not the government. Is not this what the so-called liberals preach? Why do they then shamefully accuse the government for just doing that? All the government can do and is doing is to encourage, provide incentives and facilitate investing, including making project ideas available and access to loans. It has in many cities and towns designated and established industrial zones with access to utilities. This strategy is helping in the dispersal of industrial establishments to cities and towns in the regions.



Now let us look at some of the promises that opposition parties would implement if elected. The promises include: creation of not less than one million new jobs every year, increasing salaries substantially, reducing utility tariffs, vat and vehicle tax, subsidizing petroleum products, and providing houses to all registered to own homes. All these promise are to be implemented during the five year in power, a very tall order.


New governments usually try to differentiate themselves from the government preceding them by instituting systems of governance consonant with their ideologies, general policies, etc. Some even go to the extent of what amounts to starting from scratch. The new government will, therefore, be expected, at least, to make some administrative changes. This plus formulating policies, strategies and plans based on liberal democracy will probably take up to a year. In other words, the party in power cannot do much in terms of mobilizing the private sector and resources for implementation during the first year.


This is particularly so in regard to creating the one million jobs a year compared to EPRDF government’s 1.3 million engaged in 167,835 micro and small enterprises (MSEs) since 2006. Agriculture, mining, industry and services which are supposed to create one million jobs a year take many years from project inception to growing crops, extracting minerals, producing industrial goods and providing services. We know that after over a year projects, such as fast speed trains, are still under preparation for US government funding aimed at providing employment, among other things. How on earth a poor country lacking in financial and skilled manpower resources and technology can achieve the impossible is beyond me. Apparently, those concerned seem to have no notion of what and how long it takes to plan and implement programs and projects.


Some of the promises made by oppositions are the same as those that are being implemented or are being planed by the EPRDF government. Examples are meeting demand for electric power and developing railways (9th round). The former is already fait accompli as the projects under construction will not only cover local demand but will export electricity to neighboring countries for which transmission lines are under construction. In regard to the latter, the government has a project awaiting implementation. With Chinese multi-billion birr loan assured (Ethiopia Railway finally gets Chinese funding after Indian delay, May 10, 2010), construction is expected to start before the end of this year. What the party, in effect, is then saying is it will complete the electric projects under construction and implement the railway project. If this is what the party is saying, well and good. It should, however, clearly acknowledge that this is so.


Raising the salaries of employees and workers is not only desirable but also a necessity when living conditions become unbearable. The current government has been doing this. There are, however, many factors that need to be considered. Timing, budgetary constraints, danger of aggravating inflation and untended consequences are among such factors. In regard to the second, it is not clear what the party will do other than that has been and is being done by the EPRDF government, i.e. expanding the tax base. Besides, lowering tax rates, utilities tariffs, and subsidizing prices of petroleum products would exacerbate the shortage of finance. It will be next to impossible to balance tax collection with expenditure that would be incurred to expand the economy that would create one million jobs every year. It would simply mean unbearable deficit financing which the country could ill afford.  




It is not unusual for politicians to downplay the successes of an incumbent government and make promises they cannot keep. Some, however, overdo them. The denials and promises referred to in this piece are among those that were expressed in no uncertain terms during the election debates. This piece has tried to show the promises, particularly the one million-employment generation per year, are impractical to implement within the five years the concerned party would be in power, i.e., assuming it will win the elections. Come judgment day the electorate will remember such outrageous denials and empty promises on the 23rd of May.