Amen Teferi


It is as nice as pie and even uplifting, if you like, to hear news about the superlative performance of Ethiopia in the economic sector. This unprecedented economic achievement has put Ethiopia on the map, as various international organizations are praising its progress. Economic reports are now telling us that the bags and baggage of the Ethiopian economy replenished with blank checks of opportunities. It is, therefore, attracting giant foreign investors from all corners of the globe.

In the last couple of weeks, we had heard incredible news about the economic boom in Ethiopia and other African and Asian countries. One famous French research institution had announced that BRICS’s boot will soon be on the foot of other countries -Ethiopia included- whose economies are now booming.

However, there are groups and individuals who criticize the economic policy EPRDF has been pursuing for the last two decades now. It is not a bipartisan economic policy that has commanded the agreement of the ruling and the opposition parties. This contention over the economic policy has recently been displayed on a symposium organized by AAU school of journalism. Here I would like to raise and discuss points that I think should receive due attention. One of the most contentious and interesting issue revolves around the complimentary or in-complimentary nature of “democracy and developmental state.”

There are those who argued that democracy and developmental states ideology inherently contradictory. According to these critics the ideology or the philosophy of developmental state is “development should precede democracy.” They also described it as “neither socialist nor free-market but something of unusual combination.” According to these critics developmental state is bluntly authoritative or oppressive. Developmental states work round the clock to undermine vibrant civil society organizations. They are always bent on working to see weakened private sector. They simply aim to win their legitimacy through impressive performance in the economic sector.

On the other hand, advocates of model have argued “the most important and defining feature developmental state is an active and scrupulously selective intervention of the government in the economic process so as to facilitate growth and transformation. The intervention of the developmental state is in fact oriented toward less public ownership. It uses economical leverage such as subsidies, tax breaks, tax credits, import - export control and promotions, targeted financial and credit policies as incentives to promote the private sector. It also promotes extensive dialog and cooperative engagements with private sector. It also strives to have professional and effective bureaucratic apparatus which exclusively adhered to norms and ideas of the developmental state.

According to Sibhat “developmental state” refers to a state that selectively intervenes in the economy to fill the gap created by market failure after scrupulously selecting areas. Its primary agenda is enhancing economical growth and transformation. These are the fundamental percepts that won an all-inclusive agreement amongst the various parties who advocate contending views about the nature of “developmental state.” This is the conventional and practical definition of “developmental state.” Contrary to the prescriptions of the neo-liberal paradigm, it intervenes in the economy and plays a leading role in guiding the direction and the pace of economic development.

The veteran freedom fighter Sibhat Nega contends his detractors who argued that “democracy and developmental state” are inherently contradictory. According to Sibhat the vanguard social groups for any democratic system are the private sector and the labor. All the rest have truly subsidiary role. As the history of the world has clearly indicated the private sector and the labor are the prime mover and legitimate owner of the capitalist system. To put it another way, in the process of the economic development and transformation these two groups would gradually emerge to serve as the social basis for democracy and held their rightful place in the system. This can only be realized through development said Sibhat.

Zadiq Abrham also argued “one may argue that democracy and developmental state are incompatible citing the cases of South Korea or Taiwan.” Granted, governments in South Korea or Taiwan were not democratic. But these governments were undemocratic not because democracy and developmental state are inherently contradictory.”

“They were undemocratic, simply because they had historical, geopolitical, socio-cultural and above all political-economic conditions that were favorable for them to be undemocratic. The enabling conditions just mentioned and the undemocratic tendency of the political leaders combined to lay the foundation and create the necessary condition for the authoritative governments in South Korea and Taiwan.”

Expounding on the political-economy of the two governments in the 1980s, Zadiq said, “Historical circumstances and the political-economy of these two East-Asian countries have disposed and allowed the governments to be undemocratic. These were the culprits to the undemocratic nature of these states. Therefore, it would be fatally wrong to highlight the case of Taiwan and South Korea and then come up with conclusion that democracy and developmental state are inherently contradictory.” He further commented, “However the enabling objective conditions that had predisposed and allowed the two governments to be undemocratic are non-existent in Ethiopia.

Unlike the case in Ethiopia, the people of Taiwan and South Korea are homogenous in culture. The linguistic, cultural, ethnic and religious diversity in Ethiopia are non-existent. Also the atomized peasantry in both countries was inapt and incapable to resist or check the undemocratic tendencies of these governments. As the peasants were not commercially interconnected, within or without, they lack the will and political consciousness for democratic system of governance. The governments in Taiwan and South Korea were also far-right movements, which would again narrow the possibility of their becoming truly democratic. Moreover, these governments did not have thrust on the people, as their relatively ‘wealthier’ neighboring states i.e. China and North Korea were enticing the people of Taiwan and South Korea with overt motive of annexing them. These factors, among other things, had nourished the undemocratic tendency of these two governments.

Back then in 1991, EPRDF was reorienting itself with capitalism under the shadow of various important global trends that were taking shape in post-cold war era. The collapse of the soviet-bloc and the end of the cold war in 1990s was assumed to be the as the last chapter of human history. The brand name for the hymen of the international body politic in post-cold war era is “end of history.” The world was assumed to have a single path of development, i.e. the liberal democracy and free market economy. Then, capitalism becomes the sacred cow of the whole world.

Let us get back to the basic. What is capitalism? Capitalism is an economic system that is based on the private ownership of money and property used to create profits. It is also the economic system, where money and property are owned privately and businesses are run for profit by their owners rather than by the state. Well, but do we ever have a “pure capitalism?”


To begin with, there is no such a thing as "pure" capitalism. Exploring capitalism as a phenomenon through both time and space would reveal the distinguishing features of capitalism being implemented all over the world, which one legitimately describes as “local capitalism.”

Scholars have noted that explosive economic growth in Asia, the implosion of socialism in the former Soviet Union and throughout eastern Europe, and the partial recovery of the political and economic hegemony of the United States in the world's markets have combined to create a variety of new fronts of capitalist activity. To better understand the new scene, we need to explore capitalism as a phenomenon in both time and space.

Our exploration would tell us not to be bashful about imagining capitalism as a phenomenon grounded in a variety of historically specific types. Nowadays, scholars are beginning to describe with relative equanimity the existence of different types of capitalism that had come about in response to the historical context that have shaped their formations throughout both east and west.

In fact, Max Webber had envisioned the possibilities of an unlimited number of capitalist types in our time, so long as their analysis could pass causal muster in explaining particular economic phenomena. It encourages further explorations of the types of capitalism without prematurely closing off awareness of alternatives to capitalism in any given society. No matter how generously we may define capitalism, when all is said and done, capitalist activities are and should be related to the fulfillment of our fundamental needs.

Overseas investment in manufacturing in the People's Republic of China has prompted some scholars to speak of the specificity of “Diaspora capitalism.” The "patronal" or "comprador" forms of capitalism, which bind Indonesian state elites and ethnic Chinese business leaders in unholy combination, as some scholars noted, to have led to the organization in Indonesia of more "Islamic" forms of business and banking among Muslim elites. Others find a "bureaucratic capitalism" embedded in the daily operations of Japanese markets, whereas the post-socialist economic successors in Eastern Europe is described as a form of "political capitalism." Still others opted for "booty" capitalism to describe banking in the Philippines, whereas other scholars characterize capitalism as ceremonially oriented in China.

This listing suggests the degree to which scholars are seeking to capture variation in capitalist activities through typification. The advantage of this strategy is that it usually attributes capitalist activities to specific agents and groups, which adds an important dose of realism to an exercise that could degenerate into nominalism. In short one can say that all capitalisms as well as political dispensations are local.

Marx and Weber are the modern founders of the study of capitalism. Marx predicted a succession of crises that would destroy capitalism through proletarian revolution. While Weber imagined that capitalism's inner compulsion to rationalize economic life would enervate the human will needed for its reproduction. Both have furnished us with admirable, if less than applicable, ideas in the current context. Furthermore, both Marx and Weber noted how capitalism historically concentrated economic and political power in the hands of the few.

You may even recall the idea that capitalism is the space of the anti-market, where financiers, speculators, and the political powers of states come together to make profits without the constraints of competition. The political nature of capitalism and its fit within the world system of states, in sum, expands the economic context to include the problem of governance. In the current world setting, the United States' political and economic hegemony is a crucial variable in what is to become of the variation in capitalisms scholars have discovered. This, in turn, affects what is to become of capitalism.

The unusual aspect of United States' hegemony in the world economy, in contrast to its British and Dutch predecessors, is its unprecedented control over international organizations that regulate the international flows of capital, banking, and trade. In this context, the significance of the World Bank and the IMF after the 1997 Asian financial crisis can hardly be underestimated. Strict enforcement of US-directed norms governing Asian nations' banking and corporate practices in bail-out plans destroyed the usual elite policy consensus and encouraged prominent dissenters such as Jeffrey Sachs, Paul Krugman, and Joseph Stiglitz to describe IMF policies not only as wrong-headed but as instruments of America's self-interested will.

Supposing that the variability discovered by scholars is a consequence of capitalism's spread and growing intensity within new spaces and territories, the viability of these local capitalisms may indeed depend on the degree to which they are concordant with US-inspired international norms, or the degree to which they successfully resist US hegemonic pressures. Analysis of the new capitalisms' conformance with international norms leads inevitably to a more serious assessment of the empirical and causal significance of each case.


Long before the collapse in the communist bloc, the world had been undergoing through fundamental ideological permutation that have made and unmade the cold war era political dispensation of many countries. During the last 60 years the ideological stance of different scholars and policymakers go through permutations. Hence, the international thinking on the role of government in creating socio-economic development had been shuttling between two opposite poles, always backing the wrong horse.

During the 1950s and 1960s there was general consensus on the role governments played in effecting economic growth. It is to be recalled that in the era following the decolonization of Africa there was greater confidence in the role of government as engine for economic development. However, the hope vested on governments has changed into thin air as government in Latin America and Africa went headlong into daunting economic, social and political crisis. Hence, state led development began to be considered as grave stupidity of policymakers. In the post-cold war the intrusion of government in the economy was assumed as disruptive to the orderly function of the economic that would eventually plunge countries into deeper crisis. That was then when the idea of structural adjustment has become a pronounced and mandatory prescription of the international financial agencies. Unfortunately, the weakening role of governments in Latin American and African has resulted in catastrophic economic crisis.

On the contrary, East Asian countries were going through a unique experience that had attracted the attention of the world. These countries were implementing a development model, which later become known as “developmental state.” Scholars find the experience of these countries impressive, as the East Asian countries have been registering remarkable economic progress while other developing countries were suffering under various political and economic crises. As this spectacular economic growth was unfolding in the East Asian countries, many scholars began to ponder on the secret that made possible this economic miracle. Witnessing the indispensable role of the state in the marvel economic progress of these countries, scholars were forced to revisit their notion about the role of the state in development endeavor of a nation.

It was phenomenal to see these classical developmental sates in East Asia leaping from agrarian to industrialized economy within a time span of not more than four decades. These authoritarian governments were registering a sustained economic growth while their counterpart in the third world were gasping under autocratic regimes and suffering in deep social and economic crisis. Until then such an impressive economic progress were assumed to be the function of a free-market and liberal democracies. Hence, everybody was asking, “how come these East Asian countries made such incredible economic progress?” These historical circumstances have gradually given birth to the new concept we call “developmental state.”

These East Asian countries have never dreamt or know that they are implementing a developmental model which we later on referred to as “developmental state.” They were simply trying to figure out what it takes to see development in their respective countries. They were simply responding to the existing historical, social, political and economic demands of their people. They have clearly identified their unique situation and made attempt to respond to the reality of their own unique situations. They had problem in their context, and they struggling to respond to the existing situation in which they found themselves.

These developmental states have manifested some common characteristic features. Among other things, all of them had considered development as the fundamental objective and mission of their leadership role. Relatively speaking, all of them also had uncorrupted and visionary leadership with a sustained commitment to realize structural transformation in the economy and had garnered the capacity to implement their articulated vision.

These states have devised an institutional structure where merit is an established norm of the bureaucracy. They were also successful in carving singular focus and were unswervingly committed to insulate their bureaucracy from advancing myopic interests. These governments had strived to ensure their autonomy from the influence of private investors with ulterior and overt motives that would erode their policy independence and in the end subvert the developmental nature of the states. The fiscal and monetary policies were employed in promoting and encouraging fast and sustainable development in as much as they are instrumental in ensuring wealth distribution. A developmental state should anchor itself and broaden its base the society. The government should always be accountable to its citizens so that it would always be in touch with its constituency and manage the predatory interest of the rent-seeking elites.

The important question is how the Ethiopian government would go about it looking to the East Asian case. The classical developmental states used to be authoritarian. But the Ethiopian government has adopted a democratic constitution that promotes multi-party political system before it has officially declared itself as a developmental state.

This is the dilemma the symposium was discussing. How does the Ethiopian government would implement the democratic and human right provisions enshrined in the constitution while it has adopted the developmental state model of the East Asian countries that were characterized as authoritarian? The classical developmental states were not multiparty system. They were rather a single dominant party system. The developmental state project needs a long term effort to realize economic transformation. But this seems to be impossible in a multi-party political system, where government can be replaced by another political party that professes to advance a completely different political program. How can it mobilize the general public to focus on a single developmental agenda?

According to Dr. Abdisa Zereay these incompatible situation may obstruct the mission of the developmental state in Ethiopia. Dr.Abdisa has noted that democracy devolves power while developmental state naturally tended to have strong central control. Performance legitimacy and electoral legitimacy are the two daunting burdens of the Ethiopian state. The most efficient governments in the world are not democratic rather authoritarian. Because democracy is the function of long negotiation process a give and take venture which would delay the implementation of central decision. We are not able to suspend developmental interest.

According to the veteran TPLF/EPRDF politician, Sibhat Nega, we have no capitalist government in the world that does not somehow involve itself in matters of economy. Therefore, any capitalist government can legitimately be deemed as a “developmental state”; if we take the involvement of the government in the economy as the defining characteristics of a developmental state. Then, it is hardly possible to imagine a capitalist state that does not, to a lesser or greater extent, involve in the economy. This fact becomes all the more clear, when we consider the reaction of the US government to the recent financial crisis that had swept the western world. As a response to the financial crisis that had resulted in an unprecedented economic crisis, the US government has decided to rescue its bankrupted financial institutions injecting trillion US dollars as bailout.

The Obama’s administration unhesitatingly meddles in the economy to defile the “sacred market” with the dirty fingers of the government. This generous bailout measure taken by the As Sibhat argued that the American government is an unimpeachable felony of the capitalist world.

Sibhat tried to recount how his party, the EPRDF, had changed its mind and opted to embrace “white capitalism.” He then continued saying “Capitalism was an animal alien to the mindset and knowledge of the EPRDF, in as much as it was an extraterrestrial monster to the Ethiopian people;” while he tried to expound the historical circumstances that had forced his party to be engaged in the task of domesticating the wild animal that has crept into its compound right at the time of its ascension to power. He further noted that EPRDF has hastily tried to recap the essence and modus operandi of the capitalist free market economy. However, before he had time to expound on how the transition and decision of embracing the developmental state model of development he was forced to stop by the chairman.

It was then Zadiq Abrham, who got an ample time to tell us how EPRDF traversed the journey from socialism to capitalism. Zadiq had conveyed the well coached ideas of his party as to how it decided to chart the line of the economic development. He also explained why EPRDF chose to adopt the democratic-developmental state model. The EPRDF has pursued a developmental state model for it has concluded that it is the only path that could adequately address the most pressing agendas of the nation, nationalities and peoples of Ethiopia.

Under the historical and global circumstances EPRDF has no any viable option to follow other than the developmental state model. Zadiq has highlighted that national question was the top agenda for Ethiopia that was on the verge of disintegration. His party has the strong conviction that the peace, democracy and development were the three priority agendas of Ethiopia. The constitution was a political and legal document that is designed to address the most pressing agendas.

At that historical juncture the liberal, neo-liberal and social democratic path of development were the options. But all these cannot adequately address the pressing agenda of the country. It was only the democratic-developmental state model that could address the issues. It was the only viable way to follow and ensure sustainable development. All the rest were not attractive options under the circumstances and specific social configuration of the then Ethiopia.


It is true that economic growth, by increasing a nation’s total wealth, also enhances its potential for reducing poverty and solving other social problems. But history offers a number of examples where economic growth was not followed by similar progress in human development. Instead growth was achieved at the cost of greater inequality, higher unemployment, weakened democracy, loss of cultural identity, or overconsumption of natural resources needed by future generations. As the links between economic growth and social and environmental issues are better understood, experts including economists tend to agree that this kind of growth is inevitably unsustainable—that is, it cannot continue along the same lines for long.

First, if environmental and social/human losses resulting from economic growth turn out to be higher than economic benefits (additional incomes earned by the majority of the population), the overall result for people’s well-being becomes negative. Thus such economic growth becomes difficult to sustain politically. Second, economic growth itself inevitably depends on its natural and social/human conditions. To be sustainable, it must rely on a certain amount of natural resources and services provided by nature, such as pollution absorption and resource regeneration.

Moreover, economic growth must be constantly nourished by the fruits of human development, such as higher qualified workers capable of technological and managerial innovations along with opportunities for their efficient use: more and better jobs, better conditions for new businesses to grow, and greater democracy at all levels of decision making. Conversely, slow human development can put an end to fast economic growth. Since slower human development has invariably been followed by slower economic growth, this growth pattern was labeled a “dead end.”

Sustainable development has various components. The relationships among its main components—the economic, social, and environmental factors of sustainable development—is important to decide what it means. One should consider the relative significance of the various components based on one’s own system of values.

According to the classical definition given by the United Nations World Commission on Environment and Development in 1987, development is sustainable if it “meets the needs of the present without compromising the ability of future generations to meet their own needs.” It is usually understood that his “intergenerational” equity would be impossible to achieve in the absence of present-day social equity, if the economic activities of some groups of people continue to jeopardize the well-being of people belonging to other groups or living in other parts of the world.

Imagine, for example, that emissions of greenhouse gases, generated mainly by highly industrialized countries, lead to global warming and flooding of certain low-lying islands—resulting in the displacement and impoverishment of entire island nations. Or consider the situation when higher profits of pharmaceutical companies are earned at the cost of millions of poor people being unable to afford medications needed for treating their life-threatening diseases.

“Sustainable” development could probably be otherwise called “equitable and balanced,” meaning that, in order for development to continue indefinitely, it should balance the interests of different groups of people, within the same generation and among generations, and do so simultaneously in three major interrelated areas–economic, social, and environmental.

Hence, sustainable development is a function of equity; if equality is defined as equality of opportunities for well-being, as well as about comprehensiveness of objectives. Obviously, balancing so many diverse objectives of development is an enormous challenge for any country. For instance, how would you compare the positive value of greater national security with the negative value of slower economic growth (loss of jobs and income) and some, possibly irreversible, environmental damage?

There is no strictly scientific method of performing such valuations and comparisons. However, governments have to make these kinds of decisions on a regular basis. If such decisions are to reflect the interests of the majority, they must be taken in the most democratic and participatory way possible. But even in this case, there is a high risk that long-term interests of our children and grandchildren end up unaccounted for, because future generations cannot vote for themselves.

Thus, to ensure that future generations inherit the necessary conditions to provide for their own welfare, our present day values must be educated enough to reflect their interests as well. The challenge is further complicated by the fact that in today’s interdependent world many aspects of sustainable development are in fact international or even global. On the one hand, many decisions taken at the national or even local level actually have international consequences–economic, social, environmental.

When these consequences are negative, the situation is sometimes referred to as “exporting un-sustainability.” On the other hand, national policies are often inadequate to effectively deal with many challenges of sustainability. Thus international cooperation on the wide range of so-called trans-boundary and global problems of sustainable development becomes indispensable. Arguably, the most critical problem of sustainable development—in each country as well as globally—is eradicating extreme poverty. That is because poverty is not only an evil in itself. It also stands in the way of achieving most other goals of development, from clean environment to personal freedom.

Another, closely related, global problem is establishing and preserving peace in all regions and all countries. War, as well as poverty, is inherently destructive of all economic as well as social and environmental goals of development.

In the final analysis sustainable development is about long-term conditions for humanity’s multidimensional well-being. For example, the famous Rio Declaration, adopted by the United Nations Conference on Environment and Development in 1992 (also called the Earth Summit, held in Rio de Janeiro, Brazil), puts it this way: “Human beings are at the center of concern for sustainable development. They are entitled to a healthy and productive life in harmony with nature.”

Development is a process of discovery and since every country has uniquely different circumstances, there is no one-size- fit-all model of developmental state and policy to all countries. Therefore, Ethiopia is experimenting to forge nexus between development and democracy.


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