Tag Archives: World Bank

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
http://www.ethiopiaobservatory.wordpress.com

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?

“…ኢትዮጵያ እንዲህ ያለ ዲፕሎማሲያዊ ፈተና ገጥሟት አያውቅም”—በዋሽንግቶን በዐባይ ጉዳይ አንድ ኢትዮጵያዊ ተደራዳሪ

15 Feb

Posted by The Ethiopia Observatory (TEO)

ዋዜማ ራዲዮ– ውጥረትና ውዝግብ የበረታበትና የመጨረሻ ነው የተባለው የህዳሴው ግድብ የውሀ አያያዝና አለቃቀቅ ድርድር በሱዳን በኢትዮጵያና ግብፅ የውሀ ሚንስትሮች መካከል ረቡዕና ሐሙስ በዋሽንግተን ሲካሄድ ቆይቶ በሚቀጥሉት ሳምንታት በመሪዎች ደረጃ ስምምነት ለመፈራረም የሚያስፈልጉ ዝግጅቶችን ለማድረግ እቅድ በማውጣት ተበትኗል።

ዋዜማ ያገኘችው መረጃ እንዳመለከተው ከፍተኛ የአሜሪካ መንግስት ሹማምንት ባለቀ ሰዓት ተደራዳሪዎችን ለማግባባት ቢሞክሩም በግብፅ በኩል በተነሱና የኢትዮጵያን ሉዓላዊነት የሚዳፈሩ ፍላጎቶች ሳቢያ ድርድሩ ወደተፈለገው ስምምነት አልደረሰም።

የአሜሪካ መንግስት ምንጮች እንደሚሉት በቀሪ ጉዳዮች ላይ አጭር የባለሙያዎች የማጠቃለያ ምክክር ተደርጎ ከዚያም በመሪዎች ደረጃ ስምምነት ለማፈራረም ዋሽንግተን ዝግጅት ታደርጋለች። ይህን እውን ለማድረግም የአሜሪካ የውጪ ጉዳይ ሚንስትር ማይክ ፓምፒዮ በቀጣይ ቀናት የአዲስ አበባ ጉብኝታቸው ጠቅላይ ሚንስትር አብይ አህመድን በተዘጋጀ ረቂቅ ሰነድ ላይ እንደሚያነጋግሯቸው ስምተናል።

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PETITION REGARDING THE GRAND ETHIOPIAN RENAISSANCE DAM (GERD)

29 Dec

Posted byThe Ethiopia Observatory (TEO)

Editor’s Note:

TEO’s Editor fully supports the action taken by the under-listed 56 fellow countrymen petitioners—academics and professionals of Ethiopian origin in the Diaspora.

Congratulations to my compatriots for their thoughtful petition and am happy to extend my fullest support for their timely action. Of late, the direction the Nile talks have taken has been troubling due to it being reduced to a unilateral Cairo showThis Ethiopian petition, which has adequately covered the issues our citizens attach importance is also directed to the attention of the appropriate international and regional bodies.

Surely, of late Ethiopia has appeared tragically defenceless and its citizens insecure. In my Dec 1 /2019 Open Letter to the PM (A & B) I have tried to express my concern at the lack of government action, following the Oct 23 barbarism and inhumanity our citizens were forced to experience.

This situation is a function of Ethiopia’s weakening that Egypt and its friends have considered the right time to strike.

While Egypt’s water problem is understandable, Cairo should have known better it cannot compensate that coming with another historical miscalculation—no matter the cost—that Ethiopia cannot and would not allow to stand. I

f Egypt continues with present course, let it be known it would become cause of wider conflict involving Africa and the Arab world.

WHEREAS, the efforts of the United States and the World Bank to resolve the dispute between Egypt and Ethiopia are well intentioned;

WHEREAS, the Joint Statement of Egypt, Ethiopia, Sudan, the United States, and the World Bank, issued on November 6, 2019, sets dates that do not allow sufficient time for consultation or for a realistic examination of the ramification of any agreement to Ethiopia’s sovereignty and future generations;

WHEREAS, the assessment of the feasibility of a dam on the Blue Nile was completed more than half a century ago, and the site of the belated GERD project was identified during geological surveys conducted between 1956 and 1964 by the United States Bureau of Reclamation (Brookings, July 25, 2013);

WHEREAS, a robust framework was laid out under the Nile Basin Initiative (NBI) in 1999 by ten countries and the World Bank, which subsequently refused to fund the current project (Liersch, Koch and Hattermann, 2017), but appears now to play a “neutral” observer/mediator role;

WHEREAS, an agreement between Ethiopia and four other upstream riparian States (Kenya, Uganda, Rwanda and Tanzania), signed on the Cooperative Framework Agreement (CFA), favoring the equitable and fair use of the waters of the Nile River, was ratified by the Ethiopian Parliament on June 13, 2013;

WHEREAS, Egypt, Sudan and Ethiopia had agreed on a technical team studying the impact of filling the GERD, but Egypt still continues to backtrack on the agreements and refuses to negotiate in good faith;

WHEREAS, Egypt, instead of using modern transboundary water treaties, such as the NBI and the ones between the United States and Mexico as a framework for cooperation and negotiation, has demanded the inclusion of skewed colonial-era treaties, which are irrelevant to current realities and have no binding effect on Ethiopia because the latter was not a party to the treaties in spite of being a sovereign state at the time;

WHEREAS, at a time when the transition in Ethiopia is experiencing considerable challenges, Egypt has seized the opportunity to advance its own interests by undermining the NBI framework and the ongoing change in Ethiopia, as was evidenced by the official pronouncements of successive Egyptian politicians threatening implicitly to take a military action against Ethiopia while supporting clandestinely subversive activities through funneling funds to anti-government adversaries;

WHEREAS, it is well recognized that Egypt’s objective of thwarting the filling of the GERD within the appropriate time would cause extreme economic hardship on Ethiopia due to escalating costs and lost opportunities;

WHEREAS, the Agreement on Declaration of Principles on which the joint statement is founded is a step backward from the NBI, which requires three countries to negotiate separately, while deliberately giving large concessions to Egypt;

WHEREAS, a fair and balanced solution can be formulated and implemented only on the basis of a framework that guarantees and respects the sovereignty of Ethiopia over the sources of the Blue Nile and the operation of the dam;

WHEREAS, failure of a fair and balanced solution will create a major Afro-Arab conflict, with horrific and catastrophic consequences;

NOW, THEREFORE, We academics and professionals of Ethiopian origin in the Diaspora have filed this petition to:

  • The Secretary General of the United Nations, to exert influence against Egypt’s unacceptable behavior and avert potential conflict in the region;
  • The President of the Pan African Parliament, to support the Nile Basin Initiative and to demand Egypt to refrain from undermining Ethiopia’s sovereign rights over the sources of the Blue Nile and the dam; including but not limited to its operations;
  • The Chairperson of the African Union Commission, to support the Nile Basin Initiative and to demand Egypt to refrain from undermining Ethiopia’s sovereign rights over the sources of the Blue Nile and the dam, including but not limited to its operations;
  • The President of the United States, to be a neutral facilitator;
  • The President of Russia, to be a neutral facilitator;
  • The President of the World Bank, to use its good offices to play the role of a neutral facilitator and revisit its refusal to finance the GERD project;
  • The President of the Arab Republic of Egypt, to cease and desist undermining the Nile Basin Initiative, and the sovereignty of Ethiopia on the basis of a water security mindset
  • The Speaker of the Arab Parliament, to retract the recent letter and to cease intimidating Ethiopia;
  • The Egyptian academics and professionals, to find an amicable and mutually beneficial solutions to the problem; and
  • The Prime Minister of Ethiopia, to fight for a reasonable resolution, taking into consideration the water rights of future generations, based on a framework that does not compromise in anyway the sovereignty of the country over the sources of the Blue Nile and the dam, including but not limited to its operations.

The New Scramble for Ethiopia

2 Jun

Posted by The Ethiopia Observatory (TEO)

Ethiopia’s prime minister is making headlines as a Trudeau-like liberal reformer. But behind his progressive sheen, his economic policies are set to accelerate inequality and poverty.

The new government already embarked on a partial privatization of key state-owned enterprises, as well as a hasty overhaul of the country’s regulatory framework in the hope of securing foreign capital for development. US trade delegations are ready to pounce on the lucrative state-owned Ethiopian Airlines, which will sell 45 percent of its stake to foreign investors.Recently, the German development minister complained that Germany could not just sit back and watch the US and China making billion-dollar investments in Africa: Germany should be involved too.



Earlier this year, the German president and key German industrialists visited Addis to sign a memorandum of understanding between the Volkswagen Group and the Ethiopian Investment Commission to set up an automotive industry in Ethiopia. Nine months into Abiy’s new leadership, the new scramble for Ethiopia has already taken off.


The liberal establishment’s story of last year’s change in Ethiopia is a familiar one, told and retold countless times across the globe since the end of the Cold War. In 2018, this story goes, after decades of authoritarianism and a closed state-led economy, a new, enlightened leader finally arose to usher in a period of liberalization and the free market. Soon after, the World Bank approved US$ 1.2 billion in grants and loans in return for the standard package “towards supporting reforms in the financial sector including improving the investment climate.”

What happens in Davos, stays in Davos — at least for the majority of the Ethiopian public, who takes little interest in the exclusive annual gathering of the global financial elite. This year, however, the speech by Ethiopia’s new prime minister, Abiy Ahmed, at the 2019 World Economic Forum was shared widely on social media. Its spread highlighted the pop-star-like status that the country’s new, charismatic leader enjoys among Ethiopians, especially the country’s youth.

The forty-four-year-old prime minister addressed the World Economic Forum’s jet-setting global rich in their own language: literally, in English, but also in their neoliberal language of removing red tape for business, the power of the private sector, open markets, and integration (including Ethiopia’s commitment to joining the World Trade Organization).

Ahmed’s speech epitomized the usual pitch for global capital to come to cash-strapped developing countries (high returns! tax holidays!). But it also provided important insights on where the country may be headed, following its change of leadership in 2018 after years of protests.

The liberal establishment’s story of last year’s change in Ethiopia is a familiar one, told and retold countless times across the globe since the end of the Cold War. In 2018, this story goes, after decades of authoritarianism and a closed state-led economy, a new, enlightened leader finally arose to usher in a period of liberalization and the free market. Soon after, the World Bank approved US$ 1.2 billion in grants and loans in return for the standard package “towards supporting reforms in the financial sector including improving the investment climate.”

The practical results of two decades of the developmental state have been mixed at best. While the class of domestic capitalists is fairly small, wealth has become increasingly concentrated among a small group of party cronies and those directly linked to the military-run parastatal corporations. Though land is officially publicly owned, nomenklaturafigures and business people (domestic and foreign) linked to the party’s upper echelon became extremely wealthy through corrupt land deals and urban Ethiopia’s ubiquitous construction projects. This network has alienated other factions of capital, including among the large US-based diaspora, that were not linked to the political elite. These frustrated capitalists have become the base for the free market push, couched in the language of liberal democracy, in Ethiopia.

However, with Abiy’s Ethiopia aiming to become the world’s next low-wage paradise, inequality could increase dramatically. Foreign direct investment, while highly regulated and limited to certain sectors (mainly infrastructure, construction, agriculture, and textile), has taken on a significant role over the past ten years, growing from US $265,000 in 2005 to nearly US $4 billion in 2018.

Meles’s alternative path was financed with investments from China, estimated at more than US $12 billion between 2000 and 2015 and channeled towards infrastructure development (however, many of the country’s megaprojects went nowhere thanks to corruption). For instance, in 2017, a $4 billion railway, built and funded by the Chinese, opened to link Addis Ababa to the Port of Doraleh in Djibouti (where China opened its first overseas military base in August 2017).

The new government already embarked on a partial privatization of key state-owned enterprises, as well as a hasty overhaul of the country’s regulatory framework in the hope of securing foreign capital for development. US trade delegations are ready to pounce on the lucrative state-owned Ethiopian Airlines, which will sell 45 percent of its stake to foreign investors.

Recently, the German development minister complained that Germany could not just sit back and watch the US and China making billion-dollar investments in Africa: Germany should be involved too. Earlier this year, the German president and key German industrialists visited Addis to sign a memorandum of understanding between the Volkswagen Group and the Ethiopian Investment Commission to set up an automotive industry in Ethiopia. Nine months into Abiy’s new leadership, the new scramble for Ethiopia has already taken off.

A progressive platform must reject a development strategy that is built on exploiting the country’s rapidly expanding working class and demand that the spoils of economic growth finance the expansion of universal and free essential social services.

Neoliberalism Versus the Developmental State

In order to make sense of the transformation underway in one of Africa’s fastest-growing economies, it’s important to understand Abiy’s political project, its social base, and how it operates within the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF).

It’s ironic that the new prime minister’s 2019 World Economic Forum address was received with so much approval from global financial elites. Only seven years ago, Ethiopia’s former prime minister Meles Zenawi hosted the 2012 World Economic Forum on Africa in Ethiopia’s capital Addis Ababa. There, he shocked the international financial elite by telling them that neoliberalism was a failed project.

Meles, who ruled as prime minister from 1995 until his death in August 2012, advocated instead his version of the “developmental state.” In this scheme, the state is in the driver’s seat of development, with ownership over key sectors and a tightly regulated private sector that serves to advance the overall national development agenda.

This model, which became official state doctrine in the early 2000s, is an eclectic mix of social and economic policies, some inspired by the East Asian “tiger” states but also more recently China’s industrial park and special economic zone industrialization model. Ethiopia also implements its own version of import substitution, allowing a small bloc of domestic capital to hold a state-sanctioned monopoly over key imports and local manufacturing.

Meles saw an opportunity for African countries to pursue an alternative development path in the rise of China and the breakdown of the Washington Consensus. This was his response to three decades of IMF policy, which turned Africa into what Meles called a “continental ghetto.”

Meles’s alternative path was financed with investments from China, estimated at more than US $12 billion between 2000 and 2015 and channeled towards infrastructure development (however, many of the country’s megaprojects went nowhere thanks to corruption). For instance, in 2017, a $4 billion railway, built and funded by the Chinese, opened to link Addis Ababa to the Port of Doraleh in Djibouti (where China opened its first overseas military base in August 2017).

Meles’s model, following in a long line of twentieth-century projects built on distortions of Marx, envisioned the development state’s historic role as serving the peasantry, the state’s “class base.” In contrast to neoliberalism, where wealth becomes concentrated among private capitalists, the activist state would ensure that wealth is broad-based and invested in expanding the nation’s technological capacity.

The practical results of two decades of the developmental state have been mixed at best. While the class of domestic capitalists is fairly small, wealth has become increasingly concentrated among a small group of party cronies and those directly linked to the military-run parastatal corporations. Though land is officially publicly owned, nomenklaturafigures and business people (domestic and foreign) linked to the party’s upper echelon became extremely wealthy through corrupt land deals and urban Ethiopia’s ubiquitous construction projects. This network has alienated other factions of capital, including among the large US-based diaspora, that were not linked to the political elite. These frustrated capitalists have become the base for the free market push, couched in the language of liberal democracy, in Ethiopia.

Meanwhile, Ethiopia remains one of the poorest countries in the world, with a per capita GDP of about $860 (less than $2.50 per day) and a population of about 100 million expected to double over the next thirty years.

Still, under the developmental-state model, poverty declined from 45.5 percent in 2000 to 23.5 percent in 2016. This despite a population growth from 65 million in 2000 to 100 million 2016. Ethiopia has one of the lowest Gini coefficients (which measures income inequality) in Africa, much lower than neighboring “free market” Kenya. Large-scale and pro-poor investments in social services ensured that primary education (with gender parity) reached 100 percent, health coverage 98 percent, access to potable water 65 percent, and life expectancy at 64.6 years (up from about 50 years in 2000).

However, with Abiy’s Ethiopia aiming to become the world’s next low-wage paradise, inequality could increase dramatically. Foreign direct investment, while highly regulated and limited to certain sectors (mainly infrastructure, construction, agriculture, and textile), has taken on a significant role over the past ten years, growing from US $265,000 in 2005 to nearly US $4 billion in 2018.

With no private sector minimum wage in Ethiopia, low wages are seen as Ethiopia’s “comparative advantage” in the global race to the bottom, with the Ethiopian Investment Commission reporting that “the average wage of workers in the leather factories is US $45 per month, while the minimum wage in Guangdong is about US $300.” The recent Worker Rights Consortium’s investigation also reveals that Ethiopian factories are paying wages far lower than in any other apparel-exporting countries, with an average of 18 cents per hour.

In response to the International Trade Unions Confederation (ITUC) denouncing exploitative wages in Ethiopia’s manufacturing sector, local business-friendly media were quick to warn that it’s too soon to ponder wages. “The one prime opportunity the nation can offer investors is low-cost labour,” they argue, “and taking that away will only have negative consequences. It will just drive investment elsewhere and exasperate unemployment in the country.”

In a particularly telling convergence between the aid-industrial complex and Western foreign policy agendas, these low-labor-cost industrial parks double as European migration-control tools. Donors have pledged to mobilize $500 million for two industrial parks, as long as Ethiopia reserves a third of the projected 100,000 jobs for refugees. The necessary proclamation permitting refugees to work in the formal labor market was passed in January 2019. This was advocated for by Western governments who would never dream of proposing a 30 percent refugee quota on job-creation schemes at home.

Revolutionary Versus Liberal Democracy

Meles not only borrowed state-led industrialization strategies from China, but also a China-inspired version of “development-first democracy.” Meles maintainedthat democracy would come after development was achieved, and when the base of the developmental state (the traditional, noncapitalist peasantry) had been transformed into an industrial proletariat.

Until then, a political system was required that would not dispute the fundamentals of the national developmental project. In Meles’s historic mission of ending Ethiopia’s “humiliation of poverty,” there was no place for a political opposition that could jeopardize the country’s long-term objective of development.

The 2005 elections, which were somewhat freer than later elections, proved a shock to the Meles regime. The opposition swept all seats in Addis Ababa and initially appeared to have won a majority of parliamentary seats. Yet when official results were released four months later, the ruling party was declared to have won 59 percent of seats.

Since then, the democratic space became even more restricted, with an increasing number of political prisoners, intensifying legal repression (such as declaring opposition groups terrorist organizations or the very restrictive NGO law introduced in 2009), and forcing people into silence or exile.

The systematic and brutal clampdown of dissent ensured that the ruling party won 499 out of 574 seats in the 2010 elections and, finally, a China-style 100 percent of seats in the 2015 election. Critically, the harsh reactions and condemnations by the West have also strengthened the ties between China and Ethiopia given the former’s policy of not interfering in domestic affairs.

This model of authoritarian pro-poor growth, including protectionism and state subsidies for agricultural inputs, ensured that the large mass of rural poor saw some real material improvements in their living standards in return for relative loyalty to the state. The massive expansion of EPRDF party membership, especially at lower administrative levels, also provided an army of local party spies for the police state that could immediately stifle dissent.

The numerically tiny middle class, mostly based in Addis, became largely apolitical after the brutal crackdown in 2005, when postelection protests resulted in the deaths of at least two hundred protesters.

The urban middle class primarily focus on securing their own — fragile, as wealth does not run very deep — material status, including through petty tax-evasion schemes, profitable black-market currency exchanges, and acquiring smuggled Western brand-name clothing, iPhones, and laptops. For those who can attain a middle-class lifestyle — signaled by a car and modern housing (with a live-in maid, mainly young girls from rural areas who earn approximately $40–60 per month) — political freedom was not worth the prospect of imprisonment. Instead, they preferred to “sit out” the Meles regime while securing their own little piece of the economic and real estate boom. This class focuses on accruing enough cash (access to credit is very restricted) to lease a plot of land and build a property that will rise in value alongside the country’s spectacular growth rate.

The Qeerroos

When protests erupted in the countryside in 2015, the middle class failed to understand the revolt’s class nature. Instead they reduced it to an expression of backward ethnic chauvinism. In reality, the protests, led by Oromo youth known as Qeerroo, foregrounded struggles over class, exploitation, and discrimination.

The trigger for the unrest was the government’s controversial proposal to expand Addis Ababa into the surrounding Oromia region, threatening local farmers with mass evictions. The government’s continued use of excessive force against protesters resulted in a death toll of more than 900 people between 2015 and 2017. The government also jailed tens of thousands of mostly ethnic Oromo political prisoners, turning a land dispute into a much larger protest for Oromo ethnic self-determination and “national liberation.”

The protests’ base of rural, unemployed, and underemployed youth was the product of the past twenty years of fast-paced but uneven development and rapid population growth. As in the “Arab Spring,” social media played a critical role in shaping the Qeeroo movement’s collective identity, while facilitating the coordination of rallies, boycotts, and roadblocks (since Addis is surrounded by the Oromia region, protestors managed to cut the capital off from fuel and other supplies). This large generation of young people — 50 percent of the country’s 100 million people are eighteen or younger — is also increasingly literate. Youth literacy (15–24 years) increased from 27 percent in 1994 to nearly 70 percent in 2015.

Critically, protestors carried out many attacks against factories. They especially targeted joint ventures between foreign investors and local non-Oromo elites, who the protestors accused of land-grabbing and denying decent jobs to locals.

Fears began to mount that the prolonged violence and increasing international scrutiny of the government’s heavy-handed response would push away foreign investors. This played into the hands of reformist forces within the government, many allied with the US-based Ethiopian diaspora. These forces highlighted the developmental state’s failure to ensure stability and the superficial compliance with human rights (with the notable exception of labor rights) demanded by US and EU investors.

Still, protesters had little to lose in material terms and, unlike the middle class, no stake in the authoritarian development model. The protests continued for more than two years despite the government’s repeated implementation of states of emergency and total internet blackouts.

Real cracks within the EPRDF became visible in 2017 when Lemma Megersa — president of the Oromia region (and close ally and mentor of Abiy) and then-chairman of the Oromia’s regional EPRDF member party Oromo People’s Democratic Organization (OPDO) — began challenging his own ruling party’s heavy-handed response. He became the first “oppositional voice within,” preparing the blueprint for Abiy’s takeover of the EPRDF in the spring of 2018.

Dismantling the One-Party State From Within

When Hailemariam Desalegn — Ethiopia’s prime minister since Meles’s death in 2012 — stepped down after years of unrest in February 2018, few expected systemic change from within a party that ruled the country since 1991. After all, more than 60 percent of Ethiopia’s 100-million-strong population were born after 1991 and have never experienced another ruling party in their lifetime.

Real change also seemed unlikely given that the new prime minister was elected through a secret vote by the EPRDF’s opaque 180-member Council. Despite rumors of a division within the ruling party, it was unexpected that the party would elect Abiy. As an ethnic Oromo with a rural background and a base of support among Oromia youth protesters, he seemed set on implementing the opposition’s agenda.

But Abiy had another side. The urban middle class — silent through the years of mass repression of rural protesters — immediately flocked to support Abiy. He embodied the urban middle class’s cosmopolitan aspirations: his US resident wife and children relocated to Ethiopia only recently (his three children all attend Addis’s most expensive international school) and he works out regularly at one of Addis’s most upscale health clubs. Abiy’s most recent vanity projects highlight his bias towards an urban middle-class base: a digital museum, a mini-Ethiopian theme park, a zoo with 250 animals, and a $1 billion riverside greening project in Addis.

Upon gaining power, Abiy broke with the party’s biggest taboo by making peace with Eritrea, thus removing the permanent state of war and raison d’être for a strong police state. He then ended the state of emergency and released tens of thousands of political prisoners. In Davos, Abiy proudly announced that today there are no journalists in Ethiopia’s prisons (adding a cheeky comment that sometimes Western countries could learn from Africa too).

Abiy not only invited back exiled opposition leaders but installed a former political prisoner and high-profile opposition leader as the head of the Electoral Board and appointed a 50 percent female cabinet. He also passed amnesty laws, started the process to repeal Ethiopia’s repressive NGO law, and unshackled the media. And importantly, he began to bring military-run parastate organizations, responsible for embezzling billions of dollars, under government control.Meow is likeIf


If cats could talk, they wouldn’t.

~Nan Porter

The Social Question

While Abiy has largely delivered on promises of political freedom, his new government has so far been silent on the social question. Similar to other charismatic liberal darlings such as Obama or Trudeau, Abiy has enthusiastically embraced identity politics (within the culturally acceptable realm of a traditional and deeply patriarchal society such as Ethiopia), while treating poverty and inequality as issues best addressed through the market and technocratic means.

Abiy’s agenda is now clear: He intends to set Ethiopia on a path to (more) free market capitalism, reducing the role of the state while increasing the role of Western investors and the private sector more broadly.

However, Ethiopia’s political economy and development model remains dominated by China. Abiy may preserve the independence of Ethiopia’s development path by playing China and the West off one another. As one of the only two African countries that was never colonized, ensuring independence through strategic alliances and concessions would be a very Ethiopian approach (and in line with Abiy’s current careful regional maneuvering between Qatar and Saudi Arabia).

Meles said that during the 1990s, when neoliberalism was the only game in town, the government carried out its state-led development model “in stealth” to keep the Washington Consensus powers close. Abiy, who joined the EPRDF as a teenager and grew up politically under Meles, may pursue a similar dual strategy: short-term gains and additional non-China FDI through implementing just enough neoliberal reforms. Meanwhile, long-term Chinese funding will help maintain the primacy of the state and sustain the developmental agenda of pro-poor growth within a liberal-democratic setup.

The partial opening of the economy will meanwhile weaken the previous regime’s economic base, particularly its allies in domestic capital and the military. After all, one should not forget that while Abiy spoke eloquently at the World Economic Forum, he is also fluent in Meles’s two languages: his mother tongue Tigrinya, and the language of the developmental state.

In any case, progressives must insist that the ongoing political reform reflects not just “liberal” democracy but a radical one, in which “human rights” are indeed workers’ rights and women’s rights. Not in the Hillary Clinton sense of equal representation in top leadership positions, but through rights and protection of the country’s millions of female informal workers, women’s access to land, progressive sexual and reproductive rights, and an overhaul of the country’s legal and law enforcement sector that brings material rather than a symbolic change in women’s lives.

A progressive platform must reject a development strategy that is built on exploiting the country’s rapidly expanding working class and demand that the spoils of economic growth finance the expansion of universal and free essential social services.

Progressives must reject the neoliberal depoliticization of economic policy and the supposed supremacy of the free market. More importantly, progressives must insist that poverty and inequality are inherently political and man-made outcomes of social struggles. They must urgently organize and build a radical democratic agenda for Ethiopia that combines political with social and economic rights.

The renewed scramble for Africa shows that competing factions of global capital are itching to extract billions of profits from the African continent. Meanwhile, many African governments are willing to sell out their people and natural resources for a shameful price to remain competitive and “attractive for foreign investors.”

At times, this may be because local leaders are under pressure to quickly bring in money and jobs at terms they do not dictate. They hope to create a minimum level of economic opportunities for the growing number of young people who have nothing to look forward to and for whom the state has nothing else to offer. For some, this may be an issue of short-sighted state survival, and the lack of time or public support to try an alternative path when people are, quite literally, hungry.

Looking Ahead

From an international socialist perspective, the issue with Abiy’s speech at the World Economic Forum is not the speech alone, but the Forum and the power relations it represents.

As long as the global economy continues to serve the interests of a neoliberal financial elite — where in 2018 the world’s richest twenty-six billionaires owned as much as the bottom half of the world — there is only so much say the poorest countries can have in today’s international governance, shaped as it is by imperialist legacies.

It is the responsibility of socialists in the West to support political forces committed to implementing a socialist and anti-imperialist agenda that will change the rules of the game of the global economy, which are still mostly made in the Global North. For instance, much of the suffering in developing countries could be prevented if we had a UN Security Council with a President Sanders and Prime Minister Corbyn. They could even begin dismantling the Security Council from within. This is very much within the realm of the possible in the next two years.

At the same time, the global left should not leave “capacity building” to McKinsey, the Clinton Foundation or other Western NGOs. For young Ethiopian progressives, this is likely the first time in their lives that there is space to organize and build a left-wing political project. They need to learn very quickly before the “invisible hand” turns Meles’s “development without democracy” into Abiy’s “democracy without development” for Ethiopia’s poor.

 

Jacobin by Sephanie Jay is a freelance writer and independent international development consultant based in New York and Addis Ababa. She can be reached at stephaniejaynyc@gmail.com.

 

 

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