Tag Archives: Meles Zenawi

Reprint from 12/07/11 on this page: Meles’s appearance in parliament exposes latter’s unhelpful role in defense of the public’s interests

4 Feb

By Keffyalew Gebremedhin

Why this article now?

Initially, this piece was conceived in my mind as a personal reaction to the 5 July 2011 debate in the Ethiopian parliament at the conclusion of its debate on the 2011-2012 federal budget. I would return to that shortly with some observations, based on experience and career in another piece .

The intervention of Prime Minister Meles Zenawi has shed light on a number of important economic and financial issues in today’s Ethiopia, especially why things are the way they are. More importantly, I have been educated a great deal about the politics of governance in Ethiopia. This has weighed on me in a profound way, unable to answer where personal interests of politicians at the height of power should end and the national interest should predominate.

The fact that Ethiopia’s existing budget methodology is revamped and replaced by the results based program budget is an advance on its own. However, as I would discuss at some point in a separate article, what dumbfound me during the debate, among others, was how reforms and change are easily compressed and shown as policy advancements. In reality, however, the approach of the leading politicians has been akin to the methods of bees or ants how tirelessly they update their means of control, in like manner subordinating purported reforms or any anticipated or implied progress as means of consolidating more power by the ruling party, whose preponderance in every nook and cranny of the country—a favorite phrase of the prime minister’s—has already been overwhelming.

After watching the question and answer session on YouTube, I bottled inside me my reactions, for whatever reason. Probably I was extremely disappointed and shocked by what I saw and heard. I was restored only when I began leafing though the latest edition of Addis Fortune (10 July 2011) in the morning of 12 July, especially the excellent articles by Staff Writer Samson Haileyesus
 (http://www.addisfortune.com/Meles’%20Candid%20Admissions.htm) and the Editor-in-Chief Tamrat Gebre-Giorgis’s (http://addisfortune.com/Meles Dismissive of-Elusive on Former WB Director.htm). I was happily awakened from my inertia, realizing that others had also felt the same way and are writing about it fearlessly in a country where they can easily become victims the next moment.

Their articles are rare pieces of journalistic jewel, which I have so much enjoyed and for which I am very grateful. I did not realize until I wrote this piece that I was badly in need of therapy to overcome the shocks I suffered in watching that political drama on the Ethiopian parliamentary floor, until their observations encouraged me to do my part—go to my computer and write my observations as a concerned citizen.

Parliaments as a place where crooked whips prevail

In all countries, parliaments are politically cleansed of unwanted elements, i.e., opposition to the government in power, in democratic countries through democratic means winning by substantial majority of the electorate. In Ethiopia, this is done by doctoring the ballot box. In those other circumstances, experiences of ruling parties have shown that chance of parliamentary whips losing good night sleeps is one of the rare things in politics.

On occasions, when tough but non-fatal questions are asked in full public view in parliament in those other situations, the whips usually spend their pre-voting days harmonizing the thinking and actions of those members that dare to ask the tough questions. When the big mouth in question is their own, the whips may give him/her dress-down in private, bearing in mind the need to curtail such behavior in future.

For some, depending on their effectiveness, this may even bring rewards and promotion to buy their diffidence. Party whips keep in mind the need for balance between image of the party on one hand, i.e., avoiding criticisms by public that the party has become floor mat to critical remarks by unworthy opposition, which could be perceived by the electorate as sign of poor performance and poor delivery. On the other, account is taken of avoiding the danger of individual party members bolting out and joining the opposition altogether.

Such situations depend on political maturity and to some degree on appreciation for openness, i.e.e, after lessons learned-—never indulge the party into physical violence, which can sooner or later be traced to the culprit. They cannot venture into this in countries where the institutions of government first and foremost uphold the right of citizens, the public’s interest and the equality of everyone before the law. Nixon forgot that and lost the presidency on account of which he chose to go into thuggery and paid the ultimate price, after his involvement in the Watergate break-ins.

Aware of that, therefore, the other parties leave openings for internal debates so that individual parliamentarians speak their minds and get things corrected on societal concerns. Or they even systematically cultivate an internal dissident(s), deliberately making out of them heroes of the party that speak their minds. These individuals are assets to the party, whose credibility is an asset that can be used when things get pretty rough during the days of political slippage or misfortunes on hand.

The Ethiopian experience

When the questioning individual (parliamentarian) is from the opposition bench, as we saw it during the life of the last parliament in Ethiopia especially, senior officials of the ruling party usually from top down pounce at the questioner in public with manufactured accusations and embarrassments. They do that talking in codes, which in the end compels uninformed citizens to question the loyalty such marked individuals would have for the country. Allegations or charges of supporting or advocating secessionist and terrorist tendencies, e.g. Eritrean agency, OLF, ONLF, SLF, etc. are leveled at them, especially more often by the prime minister. His lieutenants and their media echoed this to the extent of making the individuals outright criminals and outcasts, without any investigations.

After they were out of parliament, none of them has been charged with treason and sentenced to imprisonments nor eliminated, even if the prime minister at the time had claimed before parliament that he had the evidences against them on hand. Why not?

Not only that, when convenient the state representatives position themselves into knitpicking a galore of human failures with intention to take away from either the truth uttered by any parliamentarian, or deprive him or her of credibility to speak again about anything, others—especially the government in particular. On moments of occurrence, at their lowest, their actions become no different from schoolyard ridicule by bullies. Recall the example of pronunciation differences between ‘fiscal’ and ‘physical’. Last time we witnessed rapping by the prime minister in public view, portraying the individual as incapable of pronouncing properly what he wanted to say in terms of ideas. This was intended to inject doubt whether that member of parliament was educated after all, although gossip had it at the time he is holder of MSc from a US university. Recall in this regard, the exchange at the close of the last and final session of parliament in 2010, when the PM jumped on a non-point on parliamentary opposition leader Temesgen Zewdie.

Perhaps it was then, the PM had vowed there should no more be opposition members in this parliament beyond one seat, which now is occupied by Ato Girma Seifu, whose interventions always are boiling the blood of the prime minister. Fortunately, during the 5 July parliamentary debate on final hearing of summary conclusions on the budget, it was only the rolling of eyes by the PM that the camera caught when he heard that member’s voice.

As a matter of fact, he was asking the right questions with utmost politeness. Evidently, many on the government side had displayed implicit doubts on government plans, but only feigning ignorance were asking the same questions to be educated, what is and what is not in the agreed document at the level of the parliament’s budget and finance committee in the Birr 118 billion. Clearly, from the point of view of the processes of considering and approving the budget, their questions have already made explanations provided by the PM after the budget was approved, which is superfluous. That is not what I am concerned about at this stage.

Was Ken Ohashi really an incompetent World Bank Country Director?

Among the many questions that were darted at the prime minister was what Parliamentarian Tadesse Meselu raised that got the PM reverting to his less statesmanly demure. The question was in connection with the critical article written by the outgoing World Bank’s Ethiopia Country Director Ken Ohashi, at a moment could not respond in self-defense, he suffered unfortunate lashing on the floor of the Ethiopian parliament from the usually unrestrained tongue of the prime minister’s on 5 July. He could in the right place, but absent as he was, Ken Ohashi could not defend himself against [Meles’s] charges of incompetence in his work.

He was also accused of being spoiled–a behavior, it was said–he allegedly acquired, when serving in an ‘underdeveloped country’ (emphasis added) before he came to Ethiopia. The prime minister went to the extent of stating that his evidence was the fact that Ohashi spoke with such liberty at his exit in retirement, meaning without any sense of accountability, as abnegation of responsibility both to the Bank and Ethiopia.

This he said was in complete contradistinction with the position of the World Bank that pumps money into Ethiopia, by the PM’s claim, with uninterrupted regularity in support of the government’s program, because it believes in Ethiopia’s programs. Astonishingly, the latest victim of this sharp tongued out of pocket attack by the Ethiopian prime minister was not a parliamentarian from the opposition side. It was the outgoing World Bank Country Director for Ethiopia Ken Ohashi and the incident took place on the floor of parliament.

Simply put, Ohashi was caricatured as a person heading to his twilight with frustration, meaning retirement years. The prime minister accused him of failure to change the lots of those countries he served before coming to Ethiopia. He added that in the years he was in Ethiopia the representative’s arrogant behavior and mentality was rejected as was his attempts at imposition of his neoliberal ideology.

What did Ohashi do to deserve this? What has that neoliberal subversive ideology tried to push that we Ethiopians do not and should not want to the extent that it should force the Ethiopian prime minister to engage in discrediting the personality and contributions of a worthy helping hand our country has ever had from the World Bank?

The answer to this could be found in the partying message Ken Ohashi penned on the 12 June issue of Addis Fortune as a commentary entitled “National ideologies and national blinders”

"I believe that this lack of bottom-up feedback may be the biggest blind spot for Ethiopia. A system that is long on top-down discipline and control may be strong in the sense that it is able to impose its will and execute certain kinds of plans well. It may also be stable, for changes are not readily permitted. But it may be “brittle,” as it is short on ability to adapt; it could break down when faced with a major crisis.The long-run stability and resilience of any system come from continual adaptation to changing circumstances. That in turn requires the free flow of information, even when the message is not what the top leaders hoped to hear, and the space for vigorous contestation of ideas.For Ethiopia to be a thriving nation in the globalised and fluid economic setting of today, it must become a system in which there is a profusion of new ideas, new technologies, and new products. To create such a system, Ethiopia will need more “empowered” children who would not have hesitated to say, “Teacher, we have a problem.”The government will also need much more feedback, from its own officials, the media, opposition parties, academics, the private sector, and citizens at large. And the country will need to expand the space in which different ideas are debated vigorously, to forge and sustain a national vision and to identify the best policies to achieve the vision. (In the diverse traditions of Ethiopia, there are ethnic groups that are far less top-down and more egalitarian, as Professor Donald Levine has shown in his works. In fact, such traditions can play a catalytic role in changing the dominant tradition of hierarchy.)I leave Ethiopia with a conviction that it is a country with immense potential. If it succeeds in reorienting its past approach and develops a more bottom-up and open way of achieving collective efforts, I believe that its future will be bright.”

Open up the system, respect your people, listen to their views are the sort of things that flustered Ato Meles Zenawi. The best I can say in the circumstances is I found the public hacking of an international civil servant embarrassing, for that matter with lies. For that matter, his professionalism and uprightness is appreciated by those who knew him closely. In his years of service to Ethiopia, Ken Ohashi had been upfront about speaking his mind. Those who knew him better, even outside office, say that he was itching to engage the Ethiopian government on its programs to discuss alternative mechanisms for effective program implementation and least cost possibilities.

By the same token, he was lightening road against international critics of Ethiopia, when he seriously thought their criticisms were unfair. A case in point is what he wrote on The New York Times (http://www.nybooks.com/articles/archives/2010/jun/24/cruel-ethiopia/) about allegations that aid to Ethiopia was waste of good monies. In his letter, he defended government policy and actions on elimination of poverty and realization of the Millennium Development Goals (MDG), indicating Ethiopia was one of the few African countries likely to attain their targets, as stated below:

Development assistance is a complex and difficult task. In a recent article, “Cruel Ethiopia” [NYR, May 13], Helen Epstein highlights some of the challenges. However, I think that Ms. Epstein’s argument conflates two closely linked, but separable, topics.

Fundamentally, development assistance aims to promote national development for the country and the reduction of poverty for its people. In this regard, Ethiopia has an impressive performance, with economic growth accelerating sharply on a sustained basis since about 2003, despite the global economic crisis. Since 2000, Ethiopia has recorded the second-fastest improvement in human development in the world, according to the UNDP Human Development Report 2009. This measure relates to more Ethiopians living a longer and healthier life, being better educated, and having a decent quality of life.

With regard to the globally agreed Millennium Development Goals, Ethiopia is making significant progress in all areas. The country is on track to meet goals relating to extreme poverty and hunger, universal primary education, combating HIV/AIDS, malaria, and other diseases, and developing a global partnership for development. Good progress is also being made in reducing child mortality and ensuring environmental sustainability. Despite having already achieved gender parity in primary schools, Ethiopia is likely to fall short, as of 2015, on the targeted improvements for promoting gender equality and empowering women and improving maternal health.

These achievements in national growth and poverty reduction are important measures by which donors assess the effectiveness of their support to Ethiopia. They show that donor funding to the country and peoples of Ethiopia has yielded substantial results that have had a significant impact on improving the lives of the poorest families. They are also testimony to the government’s strong commitment to improving basic services and building a backbone of infrastructure (i.e., roads and electricity) that can facilitate economic growth. Such government commitment is central to sustained progress in the development process.

As important as they are, the results sketched out above are not enough, for ultimately the goal of development in every country is the freedom for every individual to realize his or her full potential. There are concerns about the overall governance of the country, efficiency and fairness of resource use, the risk of dependence on aid, and protection of basic human rights, as Ms. Epstein points out. We recognize these concerns, and development partners in Ethiopia take them seriously.

We start, however, with a belief that in every country people want to be self-reliant and prosperous, and to develop a transparent, accountable, effective, and efficient governance system. Ethiopia is no exception. Our task, as an external development partner, is to support that innate tendency.

However, building institutions, public and private, that assure every citizen’s right to and effective delivery of public services takes a long time; indeed, it never ends, as we can see even in the most industrialized countries. Changes are incremental, and at times they may suffer serious setbacks. It is, therefore, crucial that development partners work with the long-term process of change, always in support of it, not in control of it (which is impossible in any case).

Of course, this does not mean that we ignore the negative impact that our assistance may bring. That is why we monitor the effects of our assistance closely and maintain continual dialogue with the host government on issues that hinder a robust and sustainable development process. And this is precisely the approach we follow in our efforts to assist Ethiopia.”

After all, is it not ridiculous that the government of Ethiopia should now claim that Ken Ohashi has proved ineffective in countries he served before he came to Ethiopia? His appointment by the World Bank to Ethiopia was supported by Ethiopia itself, when it gave its concurrence. How come that it did not reject him right from the start, if it knows full well, as it alleges, that he was incompetent and ineffective in countries he served previously?

The established practice in such appointments is that, just like the appointment of ambassadors, sort of agrément is sent for of reaction of receiving government. The person assumes his duties only when written approval is given in writing. All UN agencies do follow the same procedure, accepting or rejecting being the prerogative of governments, with no further questions asked about it at any time by anybody, not even informally. That is what all governments do in such circumstances. They carefully vet the person proposed to see if they accept or reject for such positions. In the circumstances, if the Meles regime has not done that in the case of Ken Ohashi, it must own its failures; it should neither blame Ken Ohashi or World Bank, although in this case, the source of the problem is official and habitual lose talk to which the prime minister is never criticized for his lack of proportion publicly or called upon to apologize to individuals over whom he usually rides roughshod.

The situation brings to mind the fact that availing oneself to statesmanship may seem a free ride to the ambitious, whose rise to power is a function of military might, not politics, as vetted by ordinary people in a free and democratic environment to reach that decision. In reality, statesmanship is not a cap one can pick up during a free ride. It comes with a very accurate measure of the individual possessing and demonstrating in action three long established criteria. I was recently reminded by the 2011 Reith Annual Lecture what Max Weber has brilliantly defined as the three pre-eminent qualities of a politician should be — “passion, responsibility and a sense of proportion.”

What have utterly been lacking all this time in Ethiopia have been a good sense of responsibility and a sense of proportion, as the above has demonstrated. How could a polarized society, such as Ethiopia constantly kicking and crying on the brinks of disaster and all round crises could heal, when political power simple-mindedly and single-mindedly pushes what only advances its stay in power?

In-depth: From Meles’ ‘Dead End’ to Abiy’s ‘New Horizon’

12 Jun

Posted by The Ethiopia Observatory (TEO)

Despite being only months away from his death, Prime Minister Meles Zenawi was on stellar form when the World Economic Forum on Africa came to Addis Ababa in May 2012.

“There has been very little infrastructure investment in Africa for the last 30 years. Since the 1980s, the gap in infrastructure investment has gone in the wrong direction. Why? Because since the 1980s, the policy has been that the private sector does infrastructure,” he told a rapt audience at the Sheraton Addis. Amid a stirring defense of his statist approach to development, Meles then derided the suggestion that democratization precedes prosperity: “I don’t believe in these bedtime stories and contrived arguments linking economic growth with democracy. There is no basis for it in history.”

Former UK Prime Minister Gordon Brown, sitting next to Meles, sheepishly disagreed, but some of the history of Western growth, as well as the recent examples of China and others, such as South Korea and Singapore, suggest the late Ethiopian premier had a point. Mindful of his audience, Meles also delivered soothing words about the essential role of private enterprise in development, but he remained clear-sighted: “What our policy is based on is making the public sector play its role so we have an Asia kind of growth.”

Western partners were frequently wowed by such displays from Meles, despite his illiberal leftist predilections, and stuck by his government, as he argued that developing countries must have policy space. Such ideas and Meles’ rejection of the “neo-liberal paradigm” and its “night watchman state” were the focus of his unfinished doctoral thesis, African Development: Dead Ends and New Beginnings. According to contested official figures under Meles and his successor, an “Asia kind of growth” was achieved over the last decade, as Ethiopia’s economy expanded by more than 10 percent a year.

Now, keeping pace with the dizzying ideological pivot last year by swaths of the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) regime, Western partners appear at least as impressed by Prime Minister Abiy Ahmed—who recently put in a star turn at Davos—as he takes the opposite approach: he prioritizes democratization, favors the private sector, and works hand-in-glove with the World Bank. “We are confident that international capital and expertise will deliver significant value for Ethiopia and contribute to the development agenda,” Abiy massaged the Davos set.

Ethiopia can’t afford a sustained slowdown

His office brands the strategy ‘A New Horizon of Hope’ and his advisors say public sector-led growth was unsustainable, as debt mounted, but with no equivalent increase in industrial exports, and a chronic and worsening foreign exchange crunch. The general idea now is to try and achieve returns on the last decade’s impressive investments in education and infrastructure by encouraging the private sector to capitalize on them, while rebalancing macroeconomic policy.

Given Ethiopia’s tenuous predicament, there’s popular support for the EPRDF political reforms championed by Abiy, and also the accompanying moves to temper the government’s economic role, although leftist dissent is flickering. After years of praise from all-comers of high growth driven by state enterprises’ borrowing and spending, now the dominant narrative describes the injustice, inefficiency, and corruption of that period, primarily focusing on the Metals and Engineering Corporation’s (MetEC) bungling.

Rather than a viable strategy for escaping poverty, opponents portray Meles’ so-called Democratic Developmental State doctrines as designed merely to entrench the hegemony of Tigrayan elites that formed the regime’s core. Consequently, Abiy-era economic policy has not been scrutinized closely, and bias has clouded positive and negative assessments. That needs to be urgently redressed. Now is a critical time for Ethiopians to decide which parts of the Meles agenda to keep and which to discard. The country cannot afford a sustained slowdown due to its poverty, bulging population—around 40 million people out of a total of 100 million are under 15—and volatile political crisis. State failure would produce seismic regional and international shockwaves. However, given the level of political dysfunction and elite disagreement, quickly forging a suitable new economic consensus looks like a tall order.

Privatizing prosperity

While some describe the approach under Abiy as a radical “neoliberal” departure, it is so far a pragmatic affair, involving significant continuity as well as novelty. The nuances are still unfolding. “The government will continue to play an important role. It won’t do everything as in the past, but in selected areas it will play a leadership role, and the Developmental State will continue for sure,” outlined Eyob Tekalign, a state minister of finance and former private equity man, one of a slew of key new policy-makers, in a February interview.

To illustrate, there have been no major structural changes to the financial sector and none are publicly planned, meaning foreign banks are still barred, state lenders remain dominant, the central bank politically directed, interest rates low, and capital outflows controlled. Similarly, an agriculture focus is set to endure, including an irrigation push, as are attempts to boost exports from industrial parks, and a bevy of new agro-industrial centers. There are no plans to introduce private land ownership, and certainly no advanced neoliberal policies, such as privatization of water, health, or education provision. In fact, large amounts of donor and government funds are likely to keep pouring into these areas where Ethiopia has made significant strides over the last two decades, reducing poverty, lengthening lives, and improving literacy.

That is not to say there is no change.

Last June, the EPRDF agreed to sell minority stakes in large state-owned enterprises other than public banks, including behemoths Ethio Telecom and Ethiopian Electric Power. Other entities such as railways and sugar projects will also potentially be offered for full sale. Those moves—initiated under former Prime Minister and EPRDF Chairperson Hailemariam Desalegn and advanced under Abiy—are the latest phase of a program to offload state farms, factories, and breweries inherited from the Derg’s command economy.

Although the privatization policy was expedited to ease a fiscal crisis, it’s unlikely equity sales and liberalizations will occur soon. Telecoms is a priority, and selling licenses to a minimum of two new operators may bring in close to $10 billion. There’s no clarity yet on whether Ethio Telecom will be broken-up, but a banker says it might take two years just to value its assets. The monopoly offers a shoddy and expensive service, despite a recent slash in prices. After mostly Chinese-funded efforts to expand mobile and data networks, now seems a reasonable time to expose it to competition.

One of Meles’ biggest misses

There are similar arguments in transport logistics, where state domination created a dysfunctional system. The World Bank and the government are prioritizing this area to try and boost textiles exports. Trucking a consignment from the flagship industrial park at Hawassa to Djibouti’s port costs more and takes longer than it should. This “critical bottleneck” faces a total “overhaul,” Eyob said.

In one of Meles’ biggest misses, the state-owned Ethiopian Sugar Corporation (ESC)—with the helping hand of MetEC, a major contractor that was run by military officers, which also failed on a $540-million fertilizer complex—couldn’t efficiently deliver large-scale schemes after it was tasked with turning Ethiopia into a top-ten exporter. Ethiopia is still a sugar importer, and ESC is generating no hard currency to pay back chunky Chinese loans. It also owes at least 50 billion Birr ($1.7 billion) to the Commercial Bank of Ethiopia (CBE), a giant that has around two-thirds of total bank deposits.

The Ethiopian Railways Corporation ran into similar management and debt difficulties, although it did oversee construction of the China-funded, -built, and -operated Addis-Djibouti line. The two main contractors are reportedly seeking shares in that railway. However, selling parts of Ethiopian Airlines, such as catering, is unpopular due to patriotic support for a successful public enterprise, so that idea is on the backburner.

Gradual modernization is planned for financial services. The central bank is studying options, while a health check is being conducted on state lenders. The power corporation owes more than 200 billion Birr to the CBE, and the Development Bank of Ethiopia is bogged down by bad loans. Supported by the World Bank, there’s a focus on creating a dynamic government debt market to plug the budget deficit with non-inflationary borrowing and an ambition to establish a stock exchange by 2020. Measures have been taken to ease foreign-exchange regulations and are under way to allow non-resident Ethiopians to invest in banking.

Given hard currency shortages, and the gap between the official and black-market rate, clamor is growing for exchange-rate liberalization. Flotation may lead to inflation, which has generally run at more than 10 percent for years, as essential imports such a fuel and medicine become more expensive or simply unavailable as the Birr depreciates. The World Bank says a cheaper Birr would boost exports and crimp imports, reducing foreign-exchange shortages, but gradual depreciation since 2007 and two major devaluations haven’t had that effect. Additionally, most exporters rely on some imported inputs, and depreciation would increase the burden of Ethiopia’s dollar-denominated debt.

Sululta area, Oromia region; February 17, 2017; William Davison

A vital sector with a major shift is energy where public-private partnerships (PPPs) are slated to produce solar, wind, hydropower, and geothermal plants, with the government agreeing to purchase electricity produced from privately funded and run power stations. That’s a departure for a government that borrowed over the last decade for the power corporation to oversee construction of large-scale dams such as Gibe III and the Grand Ethiopian Renaissance Dam (GERD), envisioned as Africa’s largest—although efforts were made to fund the GERD domestically to demonstrate self-sufficiency, partly through effectively mandatory public sector salary contributions in return for low-yielding bonds.

The PPP policy aims to produce public goods and private profits and so will be a critical test of Meles’ maxim that developing nations should not rely on the corporate sector to deliver infrastructure. It will also be a test of the government’s ability to negotiate favorable terms in complex contract negotiations, and its lack of experience suggests this will be a stiff challenge. Private funding of infrastructure is presented as a way of transferring risk to the private sector, although arguably the UK used it as little more than an accounting maneuver to take capital investment off the government’s balance sheet.

Electricity generating capacity was supposed to increase to 17,346 megawatts by July 2020, yet that was quietly, but spectacularly, downgraded to a target of 6,000MW in the one-page A New Horizon of Hope strategy document in November from the Prime Minister’s Office. That’s 4,000MW less than the target in a five-year growth plan rolled out in 2010. The revision acknowledges that the flagship 6,450MW GERD on the Blue Nile is years behind schedule, after more MetEC blundering. Although it’s plodding along, a project closely associated with Meles has lost momentum, perhaps partly due to its relative inefficiency.

The aim had been to capitalize on a comparative advantage in hydropower potential to become a regional electricity hub through developing 35,000MW of installed capacity by 2037. The government signed a preliminary deal in January to connect with Gulf nations, but it does not appear electricity sales are a priority, although officials claim otherwise. A new bout of power rationing has just begun as dam levels dwindle at the end of the dry season. This involves reducing exports to Sudan and Djibouti and reduced shifts at factories. The World Bank says it’s not electricity generation that’s deficient in Ethiopia but distribution that’s inefficient.

Seemingly insurmountable challenges

In October, the government listed 14 energy and three road projects worth $7.5 billion it wants built as PPPs. A new secretariat announced in January it’s looking for investors for six solar schemes costing $800 million, and aims to have all energy projects contracted this year. That scheduling recalls the ambitious missed targets of the five-year plans—soon to be trumped by a 10-year economic blueprint—and there are other doubts. A frustrated investor says energy PPPs face a seemingly “insurmountable challenges” due to reduced political support for new schemes, the lack of a sovereign guarantee in case the electricity utility defaults on payments, and increased compensation demands by land users. “Without oversized support from the government, Ethiopia’s energy sector is very risky,” they said.

The government’s had stuttering experience of energy PPPs since 2014 with the Corbetti geothermal scheme, although an obstructive regulatory approach should now end with the pro-private sector mindset. The electricity tariff needs further revision to try and make projects bankable, but that will reduce Ethiopia’s attractiveness to investors, as cheap power is one of few competitive advantages.

Ethiopian consumers enjoyed one of the lowest prices in the world at around $0.03 per kilowatt-hour, which was doubled recently to bring prices into line with inflation and devaluations. A new “cost-reflective” tariff will be introduced by 2023, although the World Bank wants “full cost recovery” by 2021, which is unrealistic. Although businesses and the wealthy will bear the brunt of overdue increases, the government will have to move astutely in this area. With around a quarter of Ethiopians earning 17 Birr or less a day, extensive subsidy of basic services will be needed for some time. Miscalculation could lead to the type of discontent over living costs recently expressed in Sudan and elsewhere in the region, further complicating the political scene and destabilizing the state.

Debt issue

The commonly stated reason for ramping up economic liberalization is debt: public borrowing is 54 percent of gross domestic product, while external debt is 28 percent of output. This is much lower than, say, Greece or Italy, but is considered problematic because of a debt-servicing bill that hit $1.5 billion last year. “The reason that they are classified in our analysis as at a high risk of debt distress is because of debt and debt service relative to exports,” explained Mathew Verghis, World Bank Practice Manager for Macroeconomics, and Investment, to journalists in December. Abiy’s government has, however, had initial success at renegotiating the terms of some Chinese loans. Since 2012, Ethiopia’s had annual foreign goods sales of only around $3 billion, primarily coffee and other commodities with volatile prices, while Ethiopian Airlines brought in another $2 billion. Remittances, aid, loans, and foreign direct investment ease a balance of payments pressured by a trade deficit that was $12.4 billion last year.

A key part of rebalancing is the World Bank’s $1.2 billion six-year Growth and Competitiveness Program to boost private enterprise and modernize the financial sector. The budget support is split equally between loans and grants that will be released if the Bank is satisfied with macroeconomic policy. There are also several policy-related conditionalities that Meles would have blanched at, although officials say they weren’t imposed. “It’s our reform, not their reform,” argues Mamo Mihretu, a senior advisor to Abiy. Conditions include passing a public-private partnership directive; cabinet approval for an electricity-tariff increase and privatization guidelines; removing restrictions on private investment in logistics; and streamlining trade licensing and business-administration processes—a welcome measure for long-suffering small businesses, entrepreneurs, and foreign investors.

Renewed efforts to enhance tax collection are underway, with Ethiopia still in the bottom third of sub-Saharan African countries in terms of gross tax take. Abiy’s cabinet has delivered a new Civil Societies Proclamation and approved the establishment of an independent telecoms regulator, two more Bank conditions. “Our sense is that if all reforms go through as planned—many steps in complex reforms—it would represent a quite significant change in Ethiopia’s development model,” the Bank’s Verghis said.

The jury remains out on whether that would be a good thing.

Eyob Balcha Gebremariam, a development scholar at London School of Economics, has cast his verdict. He wanted continuation of an East Asian-style developmental state tailored to Ethiopia. “The priority should be addressing the structural problems that make us a rain-dependent primary commodity exporter,” he says. For Eyob, rather than market efficiency and autonomous institutions, the mechanisms for rapid industrial growth are learning by doing, and close, thus sometimes corrupt, ties between business and political elites that are needed to get deals done. MetEC’s failures and outrageous abuse of its privileges should be treated as a useful if painful lesson, not used to justify curtailing industrial transformation efforts, he believes. Controversial ruling-party affiliated conglomerates and close ties with select tycoons were part of the Meles model. That said, Abiy’s highly personalized leadership is ideal for cultivating plutocrats, as he did recently with a lavish fundraising dinner. Recent reports suggest Saudi billionaire Mohammed Al Amoudi’s Ethiopian business prospects have not suffered unduly in the EPRDF power struggle and a well-connected Moroccan company may take over MetEC’s fertilizer debacle.

A food distribution point in Afdem Woreda, Somali region; October 8, 2014; William Davison

After a chaotic open election in 2005 ended with a deadly crackdown, Meles dropped any pretense of pursuing liberal democracy, used draconian legislation to crush dissent, and expanded the EPRDF to consolidate control of all tiers of government. He even rode roughshod over the federal system as he aggressively pursued national development at the expense of nominal regional autonomy on land and investment policies. The surge was the latest iteration of the EPRDF’s Marxist-driven class-based analysis, which led it to focus on the rural masses and dismiss urban elites as selfish “rent seekers” aiming to use pluralism to direct public policy in their narrow interests. The upshot of the EPRDF ideology was that liberal democracy was presented as an obstacle to improving the general welfare. Furthermore, democracy was recast as popular participation in the existential battle against poverty, rather than a system where government was accountable to people and individual rights protected.

This means the EPRDF took a side in a global ideological schism relating to development and liberty. For example, rather than seeing them as staunch defenders of fundamental rights, the EPRDF wildly characterized liberal Western organization such as Human Rights Watch as part of a fundamentalist neoliberal plot. As with the Soviet Union, Communist China, Chavez’s Venezuela, and many others, the EPRDF unabashedly prioritized the right to shelter, health, and food over civil rights, and were criticized for it. What this entailed was a brutally utilitarian approach to development, and that meant many people were knowingly sacrificed for a perceived greater good.

In Ethiopia, they were either moved out of the way for national priorities, such as hydro dams, or silenced because a hegemonic strategy didn’t allow dissent to be expressed, as countless opposition activists can testify. After more than three years of anti-government protests forced a rethink from Hailemariam and other EPRDF reformists, there is no doubt that this ruthless political-economic model failed in Ethiopia—but that does not disprove the developmental logic. More generally, there is no strong moral consensus among progressives on the rights and wrongs of China’s bulldozing state capitalism, which has certainly involved plenty of cronyism and crackdowns, while doubtless lifting tens of millions out of poverty.

The Meles approach was given some credibility by academics who grouped it under “developmental patrimonialism” along with the likes of Rwanda, another authoritarian state that’s received plaudits from donors for its use of billions of dollars of aid and fury for its human rights record, with critics doubting the veracity of its growth statistics. “The economic potential of developmental patrimonial systems, then, should be set against the loss of civil liberties they may entail,” wrote one scholar, Tim Kelsall. The claim was that undemocratic approaches could still be developmental, rather than extractive, if economic rents—such as the extra revenues generated by Ethio Telecom’s monopoly—were directed into productive areas, and that such a model might well produce better outcomes than more pluralistic systems.

Destitution is not solved by copying WB/IMF-inspired rules

Theorizing aside, Meles’ credit-driven high-risk coercive transformation effort was anyway essentially cut short by his 2012 demise and the subsequent unraveling of EPRDF control and discipline. It limped on under the dogged leadership of Hailemariam, who was torn between loyalty to his mentor’s approach and reformist inclinations, but internal fissures, popular discontent, and economic pressures surfaced in 2015. The rupture of EPRDF authoritarianism made a liberal democratic lurch the alternative to increasing bloodshed—but there’s no reason to think it will end Ethiopia’s poverty, according to Eyob from LSE. “Democracy is the solution for tyranny, but not for development,” he says, paraphrasing renowned late U.S. political scientist Samuel Huntington. “There’s an inherent contradiction between consensual democratic decision making and the radical action required to eradicate poverty.”

Eyob says Ghana is an example of a system where elites compete democratically but there’s no concerted effort to improve livelihoods. Ethiopia may be moving in that direction, or towards Kenya’s services-based growth. That may not be such a bad thing when you consider that, amid greater political freedom, Ghana’s GDP per capita went from $263 in 2000 to $2,046 in 2017, compared to Ethiopia’s increase over the same period of $124 to $768. However, Ethiopia had a higher population growth rate during that period. Coastal Ghana has a medium-sized population, while Ethiopia’s is the second-largest in Africa after Nigeria and it is by far the most populous landlocked country in the world.

Eyob’s case does become more persuasive when you consider that despite a relatively long history as a nation, and an infamously entrenched bureaucracy, Ethiopia’s still a developing nation with a weakly funded government, a fact that will only alter if tax receipts soar. Government spending is only 17 percent of GDP, while it is more than 30 percent for all but two of the 36 rich countries that belong to the Organization for Economic Co-operation and Development. As a comparator of the scale of global inequality in this area, Ethiopia’s annual government expenditure of 372 billion Birr is less than the UK NHS’s budget for mental health services, or the same as the cost of one U.S. aircraft carrier.

The EPRDF is praised for running extensive donor-assisted social protection programs, but foreign aid helps more than 10 percent of the population survive. Although Asian Tigers achieved sustained rapid growth with relatively small states, Eyob thinks Ethiopia’s autonomy has been sacrificed at a critical moment and policy is now geared towards constraining the state, rather than building it; and boosting private profits rather than improving general welfare. “The reality is development’s a political process about deciding how limited resources are distributed. There’s no country that’s addressed destitution by copy-pasting World Bank- and IMF-inspired rules,” he says.

How Ethiopia works

This sort of leftist thinking used to pervade the Prime Minister’s Office, but not any more, after Abiy recruited non-EPRDF policy whizzes, some donor-funded. One new face, Mamo a former World Bank official, is an arch-pragmatist, decrying sweeping ideological claims. He doesn’t rule out an interventionist approach, but wants to promote commercial enterprise, including where the state’s run out of steam: “There’s a huge potential we have not utilized in telecoms, energy, agriculture and logistics, where there’s been no meaningful participation of the private sector.” Mamo’s aim is to exploit unfulfilled economic potential to conserve and earn hard currency. Food security will be eased by expanding wheat production in irrigated lowlands, and he hopes negotiations with fertilizer giant Yara International, a concession holder, will catalyze $300 million worth of potash exports. Improved logistics and electricity distribution will be a shot-in-the-arm for manufacturing exports, he says.

Expedited World Trade Organization accession is not an end in itself, but incentivizes transparent economic governance, which is also how Mamo sees the Bank’s budget support. He says streamlined regulations and improved credit availability for the private sector should lead to a tech boom, and tourism will hit new highs, aided by relaxation of the visa regime, opening up Emperor Menelik II’s palace, and the Prime Minister’s 29 billion Birr Addis Ababa river project, the beneficiary of the fundraising banquet.

Given the enthusiasm for the Abiy era from citizens, business elites, diaspora, donors such as the U.S., and investors—many of whom turned a blind eye to EPRDF authoritarianism—some aspirations will be realized. Yet Ethiopia remains the world’s 17th least-developed country—just behind Afghanistan and Haiti—and there’s a nagging sense that the strategy may stimulate urban dynamism, so creating prospering pockets of Westernish modernity, yet leave tens of millions languishing in rural poverty, and do little to kick-start industrialization. This impression is bolstered by Abiy’s existing signature schemes being services- and Addis-focused: the riverside rehabilitation, and a deal for an Abu Dhabi real estate company to build high-end apartments and malls, albeit with a social justice component. Thus far, Abiy’s economic blueprint lacks a big idea—something Mamo doubtless approves of—and it also contains several recycled ones, such as large-scale agriculture in the lowlands, tourism, and mining.

Prime Minister Abiy Ahmed at the launch of the Abu Dhabi real estate project in Addis Ababa; February 19, 2019; PMO

In his influential book, How Asia Works, British writer Joe Studwell, another pragmatist, divided that continent into states that had pursued effective development last century, and those that merely created enough economic activity for elites to prosper. He found successful nations with activist governments like China, South Korea, Japan, and Taiwan used three key approaches—and none of them hinged on political or economic liberalization. They encouraged labor-intensive gardening-style small-scale agriculture; manufacturing was promoted and exposed to international competition; and economic policy, including the financial sector, was controlled so funds were invested to support the two sectors. His thesis is that various approaches can work, as long as policies are focused on improving productive capacity.

Studwell does not dwell on authoritarianism. Yet a lack of democracy means economic performance is harder to gauge accurately as independent research is tricky and statistics easily manipulated. There’s an ongoing cost to victims and opponents and, paradoxically, authoritarian systems are less stable, as Ethiopia has demonstrated. It is hard to justify a period of rapid growth if within years or even decades a regime implodes or becomes aggressively militaristic, causing destructive chaos. Development economist William Easterly has long argued that democracy produces better economic performance over a timescale of several decades or longer, and recent research suggests that democracy enhanced growth in southern Africa.

How Asia Works was praised by Bill Gates, whose foundation has funded the Taiwan-style Ethiopian Agricultural Transformation Agency (ATA) since 2011. The idea is for technocratic agronomic wizardry to improve yields and reduce middlemen’s cut. Yet agriculture is a mixed story. Long before the ATA, Ethiopia tried to boost smallholder productivity through an army of development agents that were linked to the EPRDF’s smothering political apparatus. Impressive yields were claimed, but there are doubts over statistics. “Very low levels of irrigation and mechanization point to the fact there is a huge amount still to do,” Studwell says in an interview. “It also links to the manufacturing challenge—making core technology like pumps and small engines.”

Ethiopia scores well on finance, which has been geared towards development and protected from volatile international flows. Since 2011, the government required commercial banks to buy central bank bills worth 27 percent of each loan to ensure they funded priority schemes. However, the policy struggled because of the Development Bank of Ethiopia’s weaknesses at assessing projects.

Studwell is optimistic, as long as the government keeps finance focused on strategic areas, and prevents destabilizing outflows of pension funds’ investments into financial instruments. “If they remove controls while allowing portfolio investment, that would be madness,” he warns. Instead they could ape Chinese or Taiwanese schemes that prevent portfolio investment being “pulled out on a whim.” Studwell says the government could help manufacturing by licensing foreign banks to import capital for trade financing, and that oligopolistic competition between state-owned utilities might best serve the national interest. The author, who like Meles sees no connection between early-stage economic development and democracy, is looking at Ethiopia as a potential Asia-style African breakout state—but only time will tell if Abiy’s government applies his policy mix.


Chunks of Abiy’s overall strategy should be uncontroversial regardless of the precise approach. That is because few economies remain as state-controlled, closed, or under-developed as Ethiopia’s, with, for example, few multinational franchises, no stock exchange, little in the way of electronic payments, and a public telecoms monopoly—not to mention enduring extreme poverty. Currently, the big picture is that despite almost $14 billion of credit from China in the 12 years to 2017 for investment mainly in mainly telecommunications, transport, and energy, the infrastructure deficit Meles described at the Sheraton Addis is still present.

Arguably, without more heavy investment in the infrastructural spine of a market economy, Ethiopia will struggle to industrialize, and so fail to move up the global economic food chain by producing higher value-added goods. Additionally, with more than two million Ethiopians hitting the labor market each year, and countryside space shrinking, rapid industrial growth is the obvious way to provide jobs—although the World Bank says even a highly successful manufacturing drive wouldn’t create nearly enough of them.

“Rebalancing macroeconomic policies could exert downward pressure on activity” the IMF said last year. Yet any such dip would be alarming given major political challengesexacerbated by restive and aspirational youth. Reduced borrowing and slower growth in government spending is already having an impact, although private-equity firm Cepheus Capital expect 8 percent expansion this year. This is partly due to an Abiy-induced feel-good effect, which includes foreign investment that could reach $4 billion, a similar figure to last year. The IMF expects Abiy’s pro-private sector approach to prevent a downturn, but if that doesn’t happen, growing ranks of unemployed young men would fuel an explosive political situation, and probably lead millions more Ethiopians to seek work abroad. That would be bad news for the European Union, which, far from dealing with an influx of Ethiopians, wants South Sudanese, Eritrean, and Somali refugees to settle in Ethiopia, with Sudanese possibly added to the list if its transition sours further.

Few contest that the Meles model was defective and ran into severe difficulties. However, ultimately, Ethiopia is one of the world’s poorest countries and afflicted by intense political, demographic, and environmental pressures. To prioritize its stability and development, foreign partners could back debt relief, not austerity. “There’s a question of whether the international community has fully appreciated the nature of the challenge. Ethiopia needs an infusion of cash on a scale that no-one is willing to contemplate yet,” says a diplomat worried about a Yugoslav-style fragmentation of a fractious multinational federation facing surging ethno-nationalism. Concurrent political and economic liberalization contributed to the collapse of the Soviet Union, while Yugoslavia’s disastrous fragmentation was preceded by serious economic problems.

There’s nothing significant that Ethiopian elites agree on

Ethiopia’s challenges combined with a more empowered population mean trade-offs are stacking up for policy makers. There’s already been a significant rise in labor disputes as workers demand rights, most recently in the health sector, while there’s been high-profile criticism of rock-bottom factory wages. Surplus labor, however, is also an asset for a nation with few comparative advantages trying to attract capital. Political liberalization means more of such demands, without force as a suppressive tool, as Abiy’s government is experiencing.

Last year’s transition occurred after more than three years of protests partly over the evictions of Oromo farmers on the edge of Addis Ababa; demonstrations that reoccurredbriefly in March. Past control and repression meant smallholders could be removed from their land for minimal compensation. That’s trickier now, as could be seen with protestsat Sendafa in 2017 that closed a new government landfill, contributing to a fatal landslide at the existing overloaded dump. In another example, three major donor-funded road projects, including an expressway along the route from Hawassa to Djibouti, are currently held-up by compensation demands.

Economic nationalism was part of Oromia’s uprising with flower farms and factories torched because of low wages and evictions. Pollution claims shut down the only commercial gold mine last year, while the manager of Dangote Cement’s plant in Oromia was murdered with colleagues a year ago, possibly due to a labor dispute. Other foreign mining and road workers have also been killed and held hostage. Former Oromia President Lemma Megersa expressed his frustration at counter-productive behavior that discourages investment.

Commentators discuss a new “elite bargain” to replace the EPRDF’s uneven regional power sharing, but some argue there’s nothing significant about their country that Ethiopian elites agree on. Others even hope that amid political and economic liberalization there will also be a consensus on a Developmental State 2.0 strategy, pointing to the heavy left tilt on Ethiopia’s political spectrum. But Meles tried to sell the nation on a concerted approach to statist development, and failed; currently, it is hard to imagine Abiy trying. Some see a silver lining with a liberalized political sphere producing popular support for rational approaches to issues such as energy investment.

Others see only dark clouds.

Addis Ababa land-lease prices at auctions were an average of $650 per square meter in 2015. The frustrated energy investor believes farmers occupying valuable real estate could now seek compensation of $100 per square meter. “Even at $50 per square meter the cost of the land will be more than the cost of the entire facility,” they say about planned power stations. “Abiy has created a sense of freedom and empowerment among farmers. But you cannot please everybody: you can’t pay market prices if you want to rapidly develop infrastructure.”

According to this thinking, greater democracy is an impediment to development, and Ethiopia does need a powerful interventionist state to bulldoze its people out of poverty. But that would mean partially disinterring Meles’ legacy and, so far, Abiy has barely mentioned the former Ethiopian leader—let alone borrowed heavily from his developmental doctrines to invest them in Ethiopia’s future.


/Ethiopia Insight


2008 Genet Mersha’s retrospect:       Is The Ethio-Sudan border a ‘repulsive rumour’, as alleged officially, or …?

4 Jul

By Keffyalew Gebremedhin, The Ethiopia Observatory (TEO)

by Genet Mersha, 21 May 2008

At a time when the scourge of drought and famine is casting its ugly shadow over residents of six out of the nine regions of our country,[i] the attention of Ethiopians is distracted by allegations of yet another injury to our territorial integrity. The recent story from Ethio-Sudanese border alleges that: (a) Ethiopia has handed over part of its territory to the Sudan, (b) Sudanese forces have taken some 33 Ethiopians prisoners, and, (c) the Agazi force is assisting Sudanese forces against the Ethiopians. If true, not only that this represents the height of insanity, but also it is extremely disturbing and unconscionable.

Admittedly, the information we have had so far may only be adequate for concern and worries, but not to pass informed judgement. Unlike the past, however, the current allegation has persisted, partly owing to unintended transparency on the Sudanese side and corroboration of the same on DW radio and the VOA that attributed their information this time to Ethiopian sources familiar with the situation. In the light of this, it is the duty of citizens to express their strongest concerns and exert pressure on government to restrain itself from exploiting the evolving Ethio-Sudanese relations for its narrower and short-term security and political interests. If the story is truly unfounded, as alleged in the 12 May statement, government should come out clean and provide citizens with sufficient clarifications, instead of its dismissiveness. That would give us all the much-needed opportunity for undivided attention to seek ways to help our people who are now suspended between life and death because of the drought and famine that has been creeping for some time now.

Understandably, many Ethiopian citizens are frustrated by the long and deliberate information blackout on an issue of such significance and national importance. For many, this current allegation revives memory of the toxic 1993 decision that rendered our country landlocked and has poisoned its politics ever since. The fact that the regime has made the question of access to the sea an important leg of its foreign and security policy since 1998 is only a reflection of its belated realization of Ethiopia’s dependence on a narrow corridor between Addis and Djibouti for its survival. Recently, in the context of the current Djibouti-Eritrea tensions, Prime Minister Meles indicated, “…Ethiopia will make sure the corridor is safe and sound.”[ii] Perhaps that message was intended for Eritrea. Nonetheless, as far as Ethiopians are concerned, neither has it provided them with a sense of security nor trust in government policies. On the contrary, as seen from the responses of citizens on the matter on the various WebPages, they have limited their comments to a strong attribution of charges of original sinfulness against the regime even 15 years after Eritrea was awarded its independence, without any say from Ethiopians. If the regime had grown wiser in 17 years, it should have now refrained from taking its citizens for granted, for it would only deepen their distrust of its motives and political judgements.

It is granted that Ethio-Sudanese relations are complicated, full of mischief and age-old claims and counterclaims of land that each side has seized or lost during decades of proxy wars. The fact is that Ethiopian citizens will never come to know, not even laser-eyed experts, about the true nature and quality of the agreements the two sides have concluded in recent years behind closed doors and at the highest levels possible. However, land transfers that involve displacement of high number of farmers, looting and destruction of investor properties cannot be hidden forever. In view of the seriousness of the issue, truth would always find its way giving citizens yet another opportunity to judge whether the policy of expediency has once again put Ethiopian territorial integrity to danger. Until the truth comes out, the current allegations of government dealings in land will linger on.

In response to the current gush of concerns and anger that hit the airwaves repeatedly a few weeks back, the Ministry of Foreign Affairs on 12 May issued a statement of denial[iii] that was only very late by a few years. As usual, its statement put the blame on concerned citizens, rather than its deliberate suppression of information. We are used to it that it is an indication the government is still unwilling to listen and respond in a timely fashion to its citizens concerns. On this serious issue, it should expect that the public would be of the mind that there would be no smoke without fire.

Consequently, government now finds itself in a tight corner of its own making. Even then, the most honourable course should have been to invite credible and independent media personalities, prominent citizens or academics to investigate the alleged story on the ground and the border incidents, immediately after the Deutche Welle and VOA reports. I do not think it is too late for that even now. Absent that, the stale statement by the Ministry remains mere denial by a ‘suspect’ against the words of an ‘accomplice,’ who of its own volition has revealed the appointed time for the handover of the disputed lands.


In his opening statement at the Seventh Session of Ethio-Sudanese Ministerial Commission at Addis Ababa, Foreign Minister Seyoum Mesfin on 26 June 2007 confirmed completion of the work of the Boundary Committee. At the time, the Foreign Minister declared:

…the significant achievements registered in a short period of time were sources of inspiration to redouble joint efforts…The completion of the Metema-Galabat-Gadarif road and the micro-wave link project as well as Ethiopia’s access to Port Sudan have paved the ground for enhanced cooperation between the two sisterly countries… The efforts made by the two sides to fully implement the agreements concluded during the Sixth Joint Ministerial Commission meeting regarding air transport, civil aviation and port utilization were encouraging. The joint Technical Boundary Committee has finalized the project proposal for the redemarcation of the long common boundary, [which is] extremely critical for putting Ethio-Sudanese relations on a firm and dependable basis[i] (Emphasis added).

That was 11 months ago. The key phrase in that latest revelation is “…has finalized the project proposal for the redemarcation…” which in practice involves territorial adjustments. Since this issue involves two sides, it is possible, so long as Ethiopia’s historical claims and the longstanding connection of the people to the land are respected and preserved. However, some chronological anomaly raises the question of timing. Almost a year before the above-mentioned jubilant declaration by the Ethiopian Foreign Minister, the Sudanese envoy Ambassador Abu Zeid, in an exclusive interview with Walta Information Centre (WIC), told the international community that agreement on the border was already the on the table in 2006. To that effect, he noted:

Ethiopia and Sudan have made boundary an issue of development and cooperation rather than of conflict. Sudan has about 10 [sic] neighbouring countries, but the way it manages its boundary issues with Ethiopia is exemplary to other African countries. The boundary of Ethiopia and Sudan is actually demarcated, yet the actual work on the ground remains a homework to both countries only because it is beyond their financial capacity.[ii] (Emphasis added).

Therefore, in reading the two positions side by side, one is left with more questions than answers. With respect to the Technical Boundary Committee, one also gets the impression that its individual members were assembled merely to carry out land surveys and to put marks on the ground, upon receipt of political decisions, despite the claim by the Minister that they “finalized project proposals.” The question here is did they have the requisite expertise in various disciplines and the independence, as in the past, to stand even on the way of political decisions when their findings warranted that? Commonsense dictates that government would do better, if it clarified to its citizens the process, if possible, and especially how the decision to hand over land is arrived at, if at all, that is true.

In addition, the Sudanese claim of 3 July 2007, which came one week after the opening of the Seventh Session of the Ministerial Commission, is an official position by the Sudanese government, as a party to the agreement. Their claim is unequivocal in its assertion that the actual handover of land “would start today”; that was eleven months ago, according to Governor Abdelrahman al-Khidir of Al-Gadarif State. At the time, the Governor said, “The joint Sudanese-Ethiopian committee would start today to hand over agricultural lands to residents of more than 17 Sudanese villages located in eastern Atbara River… Technical arrangements have been finished and a committee of seven experts from each side would give the Sudanese farmers their lands.”[iii](Emphasis added). If this is false, why were Ethiopian officials tongue-in-cheek this long, only to come one year later to tell the world that it was not true? The Ethiopian statement says, “What is going on at present is preparation to set the marks in the future.”(Emphasis added). On top of that, the strongly worded Amharic version of the statement rejects the allegation of land transfer as a “repulsive rumour.”

One thing is certain; both the Sudanese claim and the Ethiopian denial cannot stand the same test of authenticity. At the same time, given that two parties are involved in this matter, citizens understand that there is another side to this equation—the interests of the Sudanese side. Thus, could the Sudanese claim be a sleight of hand intended to prod Ethiopia into faster implementation of the agreement? Obviously, we do not know the answer to that question either. In the light of these, I have warmed up to Fekade Shewakena’s suggestion, where he says, “… we all need to take a step back and deliberate on the issue as one people with calm and reason and well founded evidence.”[iv]

Might I add at this point that, had government been forthcoming and provided its citizens with the appropriate information in a timely manner, it would not have found itself in the unfortunate position of contradicting its partner’s claims! 


As mentioned above, Ethio-Sudanese relations have always been sensitive, complicated and tricky. Until recently, the work of the joint Ethio-Sudanese Boundary Committee under successive regimes in Ethiopia and the Sudan had been decidedly nebulous and purposely ambivalent. Whereas the Boundary Committee got into the news on rare occasions, the post 1972 diplomacy seemed to give the air that the two countries were better off with the border issue left to slumber in the manner of the imaginary Rip van Winkle. The reason for that embrace of inaction was the fear of unsatisfactory solution being more ominous than the problem itself. In the meantime, the two countries continued to exploit every opportunity and for a better part of their relations and intensified their mutual bleeding quietly, including stepping into each other’s borders.

In terms of scores, therefore, against the best hopes or perhaps miscalculation of Ethiopian foreign policy of those days, long years of patient Sudanese efforts indisputably succeeded in 1991 in unseating the military government, thereby facilitating the reconfiguration of our territory with the secession of Eritrea in 1993. However, the two former beneficiaries of Sudanese assistance (TPLF & EPLF), continued proxy wars against the Sudan, instead of turning out to be grateful friends, as the Sudan had hoped or wanted to dictate the course of events.

In the case of Ethiopia, its proxy war this time aimed partly to counter Sudan’s aggressive efforts of the late 1980s that continued into the 1990s to Islamaize Ethiopia by showering poor rural citizens with Saudi, Iranian and Libyan monies. Therefore, Ethiopia supported the SPLA and had a brief courtship with the NDA too. This continued as an official TPLF/EPRDF policy until 2002, when the latter uncovered SPLM hosting 2,400 OLF fighters within the territory it had liberated.[v] They were directly flown by Eritrea for operation against Ethiopia. At the time, the commander of Ethiopian forces in the west told the BBC that captured OLF fighters had confessed that the leadership of both the OLF and Eritrea had deceived the fighters in telling them that they were being flown to the United States.[vi]

In its brief existence, hence, Eritrea’s major contribution has been to force closeness among the countries of the region. Its bellicose policies sent shock waves into the establishments in Addis Ababa, Djibouti, Khartoum and Sana’a. These countries took good note of Eritrea’s enormous capacity and expertise in what I call ‘insurrectionary diplomacy’, which proved effective in training, arming and dispatching insurgents faster than goods on sophisticated Chinese assembly lines. For these countries, therefore, the evidence of Eritrea’s mischief and trouble making had found ample expressions early on in its: (a) contention with the Sudan over their undemarcated border and its support for anti-Khartoum fronts in eastern, southern and western Sudan, (b) 1996 skirmishes with Yemen over the Hanish Islands, (c) repeated incursions into Djibouti, and, (d) 1998-2000 bloody war with Ethiopia.

History has hardly recorded times and places where mere sovereign earnestness has brought closeness and amity between nations, or sustained good neighbourliness in a vacuum. There is always, I repeat advisedly, always, a driving force that brings nations closer, much as there are always reasons for hostilities and termination of relations. Here also, there is ample evidence to suggest that since the late 1990s both Ethiopia and the Sudan have needed each other for similar and different reasons. The Sudan, which was beset by internal conflicts badly needed allies, especially a strong one, completely isolated as it was because of international disapproval of its behaviour. Ethiopia also needed security and an alternative access to the sea for its trade with the outside world, after Assab became off limits for it in 1998.

Therefore, the Ethio-Eritrean war of 1998-2000 provided conclusive evidence to both Ethiopia and the Sudan that they were better off coming closer together more than ever before. Consequently, in the years from 2000-2005, Ethiopia and the Sudan signed the largest ever number of bilateral agreements, compared to those from 1956-2000. At the same time, in the eyes of both countries, proxy war as an instrument of foreign policy now proved less valuable. They realized in time that it would undermine their fundamental interests and needs, because of the following reasons:

  • First, the immense pressure Eritrea’s aggressive posture exerted on both Ethiopia and the Sudan accentuated the vulnerability and security needs of the two countries that have a large number of opposition groups within their territories. For the Sudan, its internal conflicts were also widening.
  • Second, there is shared perception among analysts that the emergence of Ethiopia victorious from the war against Eritrea impressed upon the Sudan the need to improve relations with Ethiopia, now as the dominant power in the sub-region. Sudan recognizes that of the nine countries it is bordering with, Ethiopia is the only neighbour in the east that it faces on its northern front and the troubled south along their 1,606 km border. Therefore, the Sudan needed no proof that a stable Ethiopia is key to the solution, if possible, if not, to the containment of its internal problems, especially in the south and the east and diplomatically also in the West in respect of Darfur through its influence within the region.
  • Third, landlocked Ethiopia needed the Sudan to agree to its use of its Port Sudan on the Red Sea. Following a negotiation that took place longer than two years, Ethiopia got the right of use of the port in 2002.
  • Fourth, Since the mid-1990s the Sudan has become the third largest oil exporting country in Africa, with production capacity of 500,000 barrels per day (2005). According to some energy experts, Khartoum has proven reserves of 563 million barrels of light sweet crude oil that is easily refined and most desirable.[vii] A huge potential also exists in the regions that still need to be pacified—in the south and west.[viii] Therefore, Sudan realizes that it could pave its road to oil wealth only when it is at peace with its neighbours, and when there is security within the country.
  • Fifth, the common friendship Ethiopia and the Sudan have in China has helped the two countries in coordinating their regional and international policies on issues of common interest to both, thereby contributing to improved understanding and trust between the two neighbours. An evidence of that is the shift in Ethiopian foreign policy since 2003 in respect of Darfur. In 2004, Ethiopia’s position was less committal and only exhibited keen interest “to see the Darfur crisis resolved and the humanitarian tragedy dealt with as speedily as possible.”[ix]In January 2006, the Ethiopian Foreign Minister criticized “internationalization of the Darfur crisis,” noting “the issue is a local one.”[x] Furthermore, according to Chinese news sources, Prime Minister Meles has assured the Chinese of his opposition to any form of pressure or sanctions against the Sudan.[xi]
  • Sixth, isolation resulting from Sudan’s fundamentalist policies and the threat from the international community had helped in accelerating the break in the alliance between the al-Bashir government and the Turabi-led fundamentalists in 1999, thereby minimizing to itself the danger from outside while at the same time giving some degree of confidence to Ethiopia. Greater US military focus and involvement in Africa with the establishment of the Africa Command (Africom) in February 2007 also reinforced the change in Sudanese behaviour. Africom is established to respond to the dangers posed by China to Western interests in Africa on one hand and Islamic fundamentalism and terrorism in the Horn of Africa with the Sudan and Somalia as it targets on the other.


There is always the potential for Ethiopia and the Sudan to benefit hugely from closer cooperation. To date, the most important dividend, among others, has been Egypt’s acceptance after 102 years of shenanigan Ethiopia’s unchallenged right to use the Nile water for its national development. For a long time, Egypt has anchored its Ethio-Sudanese policy on the 1902 British colonial treaty and its bilateral 1959 agreement with the Sudan, thereby extorting veto power over the water and special privileges for itself. For several decades, Egypt succeeded in blocking Ethiopia from raising international project finance for irrigation and building dams for electricity, immensely contributing to the perpetuation of cycles of drought and famine and, hence, abject poverty in Ethiopia. Moreover, since the days of President Sadat, Egypt had declared intention to go to war if Ethiopia built dams on the Nile River. Times changed and the rapprochement with Sudan compelled Egypt in 2004 at a trilateral meeting of Egypt, Ethiopia and the Sudan to recognize for the first time Ethiopia’s right of use of the water. The Egyptian declaration came through Mr. Mahmud Abu Zeid, the Egyptian Minister of Water Resources, who uttered that famous sentence, “Ethiopia has the right to build dams.”[xii]

On the economic front, Ethiopia and the Sudan have fostered growing trade relations, although data is hard to come by. In terms of volume, not only that it is insignificant, especially considering that Ethiopia’s exports to nay market are supply constrained, but also that Ethiopia is hardly Sudan’s important trading partner. However, after Djibouti and Somalia, Sudan is one of the three important Ethiopian export destinations in Africa for live animals, coffee and pulses. Recently, the Ethiopian National Bank reported that of the 16.6 percent of Ethiopia’s export that went to Africa in 2007/08, 90 percent headed to those three African countries, of which the share of live animals for the three countries was 11.4 percent and pulse 10 percent.[xiii] In the course of these budding relations, however, while trade especially from the Ethiopian side has hardly shown meaningful increases, obviously the balance continues to be in favour of the Sudan. Presently, negotiations are also underway for the interconnection of electric grids between the two countries, possibly enabling Ethiopia at future date to sale electricity to the Sudan and cover the costs of its oil imports from that country.

One advantage so far for Ethiopia of their energy agreement is that, at a time when the skyrocketing price of oil is taxing heavily the economies of developed countries and bankrupting developing nations, the Sudan has been providing Ethiopia 80 percent of its gasoline imports at a fixed and, thus, relatively, cheaper price. As a result, since 2003 it is estimated that Ethiopia might have gained from seven to ten million dollars annually.[xiv]Moreover, in view of sanctions imposed on the Sudan by the United States in 2007 and the prohibition of transfer of currency to Sudanese banks, Ethiopian import prices are paid either through a Letter of Credit (LC)[xv] or in barter trade, with Ethiopia paying in agricultural products.[xvi]Finally, infrastructure development like highway (156 km Metema-Gadariff) and telecommunications are completed further facilitating trade and commerce between the two countries.

All said and done, it must be stressed that at this stage the driving force behind Ethio-Sudanese relations and cooperation has primarily been the security needs of both sides. The difficulties that sometimes both sides experience in their negotiations in other sectors rather reflect that dependence and caution, instead of the potentials or the inherent difficulties in the other sectors. Ethiopia needs to be able to foresee the needs of the other side clearly and evaluate it on a longer time scale.


We now live in a fast changing world, in which the interests and considerations of nations are also undergoing significant changes. In all history, however, what has been constant is nations’ commitment and determination to ensure and maximize their interests and gains. The TPLF understands that better than anyone else does. In March 2007, Ato Sebhat Nega reportedly assured TPLF members in North America that the TPLF/EPRDF regime would remain stable and in power as long as the Sudan does not allow its territory to be a staging ground for attacks by armed groups. While on the surface the assumption is plausible for any Ethiopian government, past, present and future, Ato Sebhat went further in stressing explicitly that the TPLF would do everything to maintain good relations with the Sudan in order to prevent opposition forces from obtaining bases in that country.[xvii]

On purpose, this paper has dwelt at length on the delicate nature of the relations between Ethiopia and the Sudan and their mutually beneficial aspects. Its intention is to impress on anyone interested in that part of the world the importance of Ethio-Sudanese relations today and tomorrow. However, the fact that today security is ensured, highways are constructed, commerce is facilitated or oil is sold to Ethiopia at preferential prices or the nation has an alternative access to the sea is no adequate justification for any government to give away Ethiopian lands, if at all, that is being contemplated or if it has happened . In any language and culture, the surrender of national territory is a treasonous act.

As history has proved time again, any agreement that is driven by the survival interests of the governing party alone would be no different from an attempt at reinventing the imaginary Frankenstein that caused the demise of its own creator. In other words, it creates alienation between citizens and government. Also, it would leave behind problems for future generations, in view of the fact that recouping today’s losses at any time in the future would be next to impossible. This is because the claim of the other side would be strengthened by virtue of origin of concession. Above all, it would spoil the otherwise relatively healthy people-to-people relations between the two countries. Unlike others, it does not need immense  efforts at revitalization or restoration, as the others especially in the north and the south that have been spoiled by years of wars and the ensuing enmity reckless propaganda have fostered.

As we live in a volatile region that is likely to remain so for the foreseeable future, decisions on agreements with long-term implications to our national interests should not be influenced by temporary security, political and economic considerations. Such an action would hardly spare any government of the wrath of present and future generations, not to speak of the judgement of history.

The changing needs of states and mutating cells are not necessarily the measures of essence or permanence. Similarly, Ethio-Sudanese relations need to be handled with foresight and fortitude borne of history, and bearing in mind our country’s place and destiny in the region and in the world.

[i] ENA, Ethio-Sudanese cooperation witnesses marked progress, 26 June 2007.

[ii] ENA, Ethio-Sudan border commission meet concludes, 26 May 2006.

[iii] Sudan Tribune, ‘Eastern Sudan farmers get back disputed lands from Ethiopia.’ 2 July 2007.

[iv] Abugidainfo.com, Some points on the Ethio-Sudanese border flap, 15 May 2008.

[v] J. Young, Sudan’s Changing Relations with its Neighbours and the Implications for War and Peace, 2002.

[vi] BBC, Fighting on Ethiopia-Sudan Border, 29 June 2002.

[vii] Council on Foreign Relations, China, Africa and Oil, 26 January 2007.

[viii] Michael T. Klare. Rising Powers Shrinking Planet: The New Geopolitics of Energy, 2008, p. 212

[ix] Seyoum Mesifn, Statement at UNGA 59, 28th September 2004, New York.

[x] Suna 20 January 2006.

[xi] People’s Daily Online, 19 June 2007,

[xii] ENA, Ethiopia, Sudan, Egypt reach agreement on Nile River projects, 29 June 2004.

[xiii] National Bank of Ethiopa, 1st Quarter 2007/08, p. 49.

[xiv] Alexander’s Gas and Oil Connections, Ethiopia to import oil from Sudan, 24 January 2003.

[xv] ibid.

[xvi] Fortune, 11 May 2008; The Sudan Tribune, 17 January 2008.

[xvii] http://www.alenalki.com, “Sebhat Nega’s meets Tigrayans in the Diaspora” 8 March 2007.

[i] United Nations Office for the Coordination of Humanitarian Affairs in Ethiopia,  Situation Report: Drought in Ethiopia, 16      May 2008.

[ii] Reuters, 15 May 2008.

[iii] Statement on border demarcation by Ethiopian Ministry of Foreign Affairs, 12 May 2008.

American writer urges the U.S. to stop promoting fake democracy in Ethiopia

30 Sep

Posted by The Ethiopia Observatory (TEO)
(ESAT) — American writer Dr. Helen Epstein, known among many Ethiopians for her hard-hitting article, “Cruel Ethiopia”, which detailed the brutal rule of Meles Zenawi and the TPLF, says that the United States should reconsider promoting fake democracy in countries like Ethiopia.

Dr. Epstein said the tyrannical TPLF regime is a roadblock to democratization and progress. She noted cannot be reformed and called upon the U.S. to stop supporting the TPLF regime and its corruption and tyranny.

Dr. Epsten, who recently published a new book, Another Fine Mess, talked to ESAT on a range of issues related politics in the Great Lake region and Ethiopia.

የሕወሃት ዋና ዓላማው ተሽቀዳድሞና ኢትዮጵያን ገቶ፡ትግራይን ማልማት ነው!

17 Aug

Posted by The Ethiopia Observatory (TEO)

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Ethiopia: The sordid story of Bado Shidisht, TPLF’s underground torture chamber

12 May

Posted by The Ethiopia Observatory(TEO)


Unrest in Ethiopia: the ultimate warning shot?

7 Feb

Posted by The Ethiopia Observatory (TEO)
by René Lefort
The culture of power is one of centralisation. But real federalism couldn’t be beyond reach. Oromiya shows that it is becoming an absolute requirement.

The Tigray Peoples Liberation Front (TPLF), the strongest component of the ruling coalition, from the middle of 2014 has faced the highest level of Tigrean popular discontent since its inception 40 years ago. That came first. Now the unrest in the most populated region of Ethiopia has sent to the regime as a whole the most shattering warning shot since its arrival in power in 1991.
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ሕወሃት ለሱዳን ስለሚሠጠው የኢትዮጵያ መሬት በበረሃ የገባውን ቃል ተግባራዊ ለማድረግ ሲዘጋጅ ለማዘናጋት አፉ በሁለት በኩል ነው የሚናገረው!

23 Jan

Posted by The Ethiopia Observatory (TEO)
በአዲስ አድማስ የኢትዮ-ሱዳን ድንበር ማካለል ዳግም እያነጋገረ ነው

    “ድንበሩን ለማካለል በዚህ አመት የተያዘ ምንም አይነት እቅድ የለም” – የኢትዮጵያ መንግስት

    “በዚህ አመት የድንበር ማካለሉ ይጠናቀቃል” – የሱዳን መንግስት

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