UN Africa Economic Report 2013 makes Ethiopia defensive

30 Sep

by Keffyalew Gebremedhin – The Ethiopia Observatory

The September 28, 2013 issue of The Reporter has very well reflected the nervousness Addis Abeba has experienced since last Thursday. This follows the launch by the UN Economic commission for Africa (ECA) of its flagship publication the Economic Report on Africa 2013.

Since the TPLF regime was aware of some of the report’s unpleasant truths and unfavorable data, it marshaled its activists from every corner to rebut those unwanted claims, especially its dethroning of Ethiopia from the top of the list of Africa’s top performers in economic growth rates. While such action is part of the usual strategy of the regime, what purpose such denials serve is not clear at all.

Therefore, The Reporter had to devise a way of this dilemma of the regime by softening the blow, referring Ethiopia as “a single digit, fast growing country three years in a row”.

I could not understand such an obsession with adjectives and higher numbers, when our country shown no interests in their implications to ordinary citizens or its dislike of transparency and strong indifference to the relationship between numbers and reality.

Not only that what The Reporter did was no consolation to those people in need of equal opportunities, fairness, justice and equity. But also it went to lamenting the situation, stating:

    “According to the [Economic Report on Africa 2013], Ethiopia performed well yet remains behind the top ten performers. Rwanda was mentioned for coming in the leading group, achieving a 7.6 (sic) percent growth of Gross Domestic Product (GDP). In contrast, Ethiopia shies away from the report in the top performers list, yet the East African nation has remained a single digit, fast growing country three years in a row. However, the economic outlook omitted Ethiopia following projections of 6.9 percent growth.”

Nevertheless, what this obscures is the fact that the report’s argument was not given a chance. For instance, it states that in East Africa growth slipped to 5.6 per cent in 2012 from 6.3 per cent in 2011, although most countries performed well in 2012 (relative as this is], marking a recovery in agriculture, vibrant domestic demand and expansion in services.

This could not be said about Ethiopian agriculture nor domestic demand growth in the country, where business expansion by the private sector was curtailed due to forex problems and problems with inflation, what the report refers to as financial consolidation.

In the circumstances, Ethiopia grew only 7.0 percent, compared to Rwanda’s 7.9 percent, Mozambique’s 7.5 percent, amongst non-oil exporters, thereby killing the much-vaunted claim of double-digit growth. A government willing to do better in future would have encouraged identification and removal of the bottlenecks.
 

How could bottlenecks be removed?

With the launching of this report, I must state, it would have been more useful if Ethiopia concentrated its energies on how to reverse the drawbacks the report has highlighted in its policies and practices and in other African countries. Even better would it have been, if its experts debated essence of and how the nine recommendations the report has presented could be implemented.

For instance, there is the problem of inequality affecting broad sections of African society. In some instances, inequality has come with full force, among others, on the back of double-digit inflation that is threatening with the danger of reversals of the poverty reduction gains made in the previous years.

At the same time, the report also addresses the failures of African countries to take advantage of the opportunities out there. In that connection, it underlines that the strong growth across the continent has not been translated into the broad-based economic and social development to lift millions of Africans out of poverty and reduce the wide inequalities seen in most countries.

The report also tries to show the policy inconsistency, coordination problems, and related weaknesses in a number of economies within the region.
 

Ingratiating oneself with the government

Those who could not accept the reality of these problems especially in Ethiopia have chosen to turn to attacking the report on the quality of data it used, notwithstanding that the report also points to some truths. It states that, while recent data show some slight improvement in poverty reduction, including in inflation-ridden Ethiopia, it pointed out that the region is in no position to achieve the MDG targets as pertains to poverty reduction.

Usually in such situations there are those ¬ locals and internationals that are ready to exploit the situation to ingratiate themselves with government officials. Thus, some dismissed the report as basket of errors. Still a few others diagnosed it as suffering from outdated data and oversight, notwithstanding that the authors have indicated “data in the report may differ from those published for reasons including timing and aggregation methods.”

The authors also explained that historical data could differ from previous editions of this report due to availability, recent revisions and timing. Nonetheless, a few more still jumped to charging that the African perspective was not seen tying with international forecasts.
 

Human development

In all this, I saw some courage on the part of the UNDP representative in Addis Abeba. He chose to stare at the problem in the eye and tell the Ethiopian regime and the likes of it in Africa that there is no shortcut when it comes to human development. Eugene Owusu, UNDP Resident Representative in Addis Abeba, observed that the economic growth of Ethiopia and most African countries hanged way below the margin to impact human development, according to The Reporter, referred to above.

Clearly, despite all the flattery to Addis Abeba around issuance of the report, the UNDP representative had no choice but to call spade a spade to avoid future criticisms against the United Nations and UNDP. In fact, Eugene Owusu indicated his awareness that only five African countries feature as making high progress in human development in Africa.

He further noted that economic growth in Africa resulted in depletion of natural resources of the continent, adding that Ethiopia is on the verge of discovering oil. However, he wisely qualified this latter statement with caution that the discovery of oil of itself is no guarantee for development in a human perspective.

Recall that the UNDP’s 2013 Human Development Index (HDI) put Ethiopia at the ranking of 173 out of 186 countries.

As the UNDP report was issued, the theme it wanted The Rise of the South: Human Progress in Diversified World to resonate. Unfortunately, for our country it does not appear that politics is allowing progress in the country’s human development. In this year’s report, the UNDP in the case of Ethiopia indicated that, in inequality-adjusted HDI value, Ethiopia is experiencing huge loss of potentials, i.e., in education the equivalent of 38.3 percent, in life expectancy 35.4 percent, and in income (20.8 percent) – the aggregate of which are pulling down its current global standing in terms of the country’s human development.

In a related matter, Prime Minister Hailemariam Desalegn was in a lecture circuit in New York on the topic of human development on the occasion of the 60th anniversary of the Africa American Institute. He was urging African countries to recognize indispensability of developing their human resources to exploit their natural resources, according to ERTA

I would have liked to hear if the prime minister managed to get out of this very narrow perspective of human resources development, based on natural resources.
 

Recommendations of the report

Since the theme of the report is Industrializing for Growth, Jobs and Economic Transformation, it has presented governments with nine recommendations with a view to helping African governments avoid, what it referred to as “a commodity linkage template”. In other words, it is suggesting to African governments to develop their own specific policies and implement mechanisms “to drive their own commodity-based industrialization.”

This in no way means wallowing in claims of development, but mobilizing all resources of society for development.

Fostering national skills, strong institutions, ensuring coordination of their activities, free from infrastructural bottlenecks and under consistent policy framework and guidelines are themes that recur in its nine recommendations. Its final word, however, the report urges awareness of African Governments also of the need:

    [T]o put their own house in order, in the sense of developing their own departments’ attitudes and capacity. Most government officials dealing with enterprises have never been inside a factory and have no hands-on knowledge of what firms do— let alone their competitiveness.
%d bloggers like this: