Ethiopia's Need for 'Deep Renewal'

Three major challenges face Ethiopia as it endeavours to maintain growth and widen its benefits, improve its international relations, and steady its domestic politics.

“Democracy is an existential issue for Ethiopia. There is no option,” says former Prime Minister Hailemariam Desalegn, “but multipartyism.”

Hailemariam, who had taken over as the Prime Minister from Meles Zenawi on his death in 2012, resigned in February 2018 following a protracted period of violent unrest, states of emergency and mass arrests. In an interview in Harare in July 2018, where he was heading the African Union’s election observation mission, he said that “if I had not resigned, we would not be talking now”.

Until this happened, Ethiopia’s high rates of economic growth were taken to extol the virtues of authoritarianism or, put more politely, what was described as “a development state”. According to the International Monetary Fund, Ethiopia was the third-fastest growing country of 10 million or more people in the world between 2000 and 2016, recording more than 10% annual growth, nearly twice the regional average.

High growth has been necessary, but the country remains poor, with a per capita income of under $800. Jobs are hard to come by with a burgeoning population, expected to nearly double to 190 million by 2050. Despite a 40% reduction in poverty this century, a quadrupling of primary school enrolment, halving of child mortality and doubling of those with access to clean water, the political unrest has its roots in perceptions of exclusion: of widening wealth inequality between the majority and those with access to power, and of access to power itself.

“Since Meles,” observes the former PM, “there has been a fierce power struggle within the party which I was able to navigate through, as I was considered a neutral person – between those who considered the TPLF [Tigryan People’s Liberation Front] to be the dominant party and those in the other three parties which wanted to end this dominance.”

The Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), which has ruled since the removal of the Derg, the military regime led by Mengistu Haile Mariam, in 1991, is made up of four political parties from Oromo, Amhara, the South and Tigray. The TPLF, which led the struggle against Mengistu, has disproportionately benefited from this relationship. Each of the parties has 45 seats in the EPRDF, a structure which grants the Tigrayans disproportionately more power given they comprise just 7% of the population.

Until now, the EPRDF, while formally being elected, has tightly controlled the country and allowed only limited space for civil society and private enterprise.

“Many in the TPLF felt,” maintains Hailemariam, “that even after Meles, that their experience gave them the exclusive right to rule. Whenever I brought new reforms before the EPRDF, these were always undermined by the TPLF, who felt that they owned the existing order.

“I considered how to proceed with such an interparty environment, without it hampering growth and our diplomacy. Yet to get the politics right was very difficult because of the internal power struggle. I had a weak constituency in the EPRDF, among the Southern Ethiopian People’s Democratic Movement, SEPDM, as it was considered the youngest and the weakest, and most divided with 56 ethnic groups among its membership. Thus I did not have a high degree of internal support if I took strong action within the EPRDF.

“So I took the message to the party that there was a lack of good governance, and that people had to check the party and its leadership. The danger was otherwise to degenerate into corrupt practices, which was happening, which created internal divisions. Lots of things were not in our control. People, especially young people, who were unemployed, rose up to demand a fair and equitable share of resources, against the TPLF’s perceived disproportionate benefit from the system. This instigated violence across different parts of the country, especially in Oromia.

“There was also the issue of Meles’ stated succession plan. This had not been concluded. Younger leaders, including myself, interpreted this as being the need for older leaders to give over power. This created a clash with the older guys, who were communist-minded, in both ideological and generational terms. This caused instability in the party as we tried to reduce the influence of the old guard, who were particularly influential in the TPLF ANDM [Amhara National Democratic Movement],” tensions which were exacerbated “by corrupt practices”, he adds.

“I believed that if we did not settle these differences, that the country would degenerate. The reforms were very clear, and could not be pushed with my weak capacity and my weak constituency. I believed that there had to be a new person with a dominant force who could save the country. I also thought that this person should come from Oromia, otherwise it would be difficult to stop this.”

Demonstrations in Oromia and the Amhara region, comprising the two biggest ethnic groups in the country, had their roots in economic conditions and political restrictions. And until the politics come right, and the policy contradictions are thrashed out, things would not improve at the rate expected and required.

“Our reforms,” he notes, “had been going too slowly to save the country from ethnic disintegration.”

While Freedom House had considered the political system “partly free” in 1995, reflecting the advent of multiparty elections, it regressed to “not free” in 2010 as the government clamped down on political opposition, in which hundreds died. This reached the point, in the words of one minister in July 2018, when “by December [2017] it was not even certain that we could continue as a nation, so great was the crisis. There was a total disconnect,” he said, “between the population and the ruling party” of which he is a member.

“By resigning,” he noted, “Hailemariam made himself part of the solution.

“Before my resignation,” observes Hailemariam, “we had a 17-day discussion among the party. I presented a paper there on deep renewal, which I said should be our motto as we are lagging behind on democratisation, judicial reform, in respecting human rights, in fighting corruption and embezzlement. We needed to discuss these issues openly.”

Hailemariam was replaced six weeks later as prime minister by Dr Abiy Ahmed Ali, 41, who also became chairman of the ruling EPRDF. It was the first time an Oromo, the majority ethnic group in Ethiopia, had led the country. Abiy moved quickly, releasing political prisoners, taking steps to normalise relations with neighbouring Eritrea against which Ethiopia had fought a costly war at the turn of the century, signalled his intent to institute multiparty system, cleaned out the top leadership in the security forces, and launched reform steps in the economy through the sale of stakes in state-owned enterprises.

The economic malaise is most notable in the increasing problem of public debt, which has grown to more than 55% of GDP, or $40-billion, and the shortage of foreign exchange, equalling just two months of import cover. These are however symptoms of more dramatic problems relating to the philosophy behind the economy, the space for the private sector, delivery and corruption.

The government has taken on a lot of debt to build mega-projects, such as the $2.5-billion railway to Djibouti, the light railway bisecting Addis, the controversial 5,000-megawatt Grand Renaissance hydro-dam on the Nile near the Sudanese border, 10 large sugar mills, a giant fertiliser plant and low-cost housing. The problem is less about the need for these schemes than their completion.

Three Major Challenges

Now three major challenges face the country as it endeavours to maintain growth and widen its benefits, improve its international relations, and steady its domestic politics.

The first is to institutionalise the reform agenda, making them less vulnerable to the vagaries of individuals, ensuring their continued progress. This requires, Hailemariam says, “including all political parties, including civil society, in these debates and processes”. For example, all parties should be represented through their nominees in the national electoral commission, and that, too, on human rights.

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A second challenge is to reconcile the two competing national narratives. Given its guerrilla-struggle origins, unsurprisingly the EPRDF traditionally adopted a far-left, “command” economic model, with the state at the centre. This has morphed into a developmental-state narrative, but still one in which there is little space for the private sector, especially foreigners, to operate. Banks are state-owned and there is, for example, no stock exchange, simply because there is no shares and stocks to trade. The private sector, which is supposed to be driving the productive side of the economy, has been frozen out by the power of the state, both through competition from state-sponsored or -owned enterprises, and by a squeeze on investment capital created by the government’s need to extract resources for its infrastructure plans.

Some government enterprises have worked well in spite of the limits of statism. Ethiopian Airlines, for example, has grown to become the largest (and apparently most profitable) African airline. Over the last 20 years the airline has grown passenger numbers from one million to 11 million, and increased revenue threefold in the last five years. It has driven up its growth through a hub-and-spoke model rather than domestic tourism, flying to 116 destinations with 70% of its passengers transiting through Addis, and through its adroit, far-sighted and professional management.

Then again, Ethiopian Airlines remained well run even during the Mengistu years. This cannot be said for most of the other 25 SoEs, especially the Ethiopian Sugar Corporation (which is supposed to be generating export revenues and has been a disaster), along with those concerned with telecoms, railways, agriculture and chemicals. Overarching problems of corporate management in these bodies have been compounded by preferential political access. Metek, an engineering corporation run essentially by the military, and EFFORT (the Tigrayan firm with its fingers in all manner of pies), offer for example a quite different story to Ethiopian Airlines, one that threatens to undermine the economy while prompting an increasing level of corruption.

This is not the only competing narrative. There are two visions of the Ethiopian state per se. One is ethnically organised, in the reflection of the EPRDF’s regional party composition; the other, apparently favoured by Abiy, is of a unitary, nationalistic model.

“One of the flaws in our current system,” notes Hailemariam, “is the contradiction between a group right and a citizen right. We were skewed in favour of recognising group rights, of an ethnic identify over a national identity. While in theory these rights should be two sides of the same coin, in practice this does not do so. The TPLF but also the Oromo are major beneficiaries of this practice. How this is resolved depends on how Abiy presents himself and how we deal with the tension between these rights.”

As a start, an independent commission on the subject has been proposed.

Third, finally, while Abiy will have to keep moving, there is a need to deliver on the promise of reform.

The most dangerous movement for a bad government, wrote Alexis de Tocqueville in 1856, is when it begins to reform. Abiy has public sentiment on his side, whatever the delivery, at least for a while. As De Tocqueville also noted:

“If a [democratic] society displays less brilliance than an aristocracy, there will also be less wretchedness; pleasures will be less outrageous and well-being will be shared by all; the sciences will be on a smaller scale but ignorance will be less common; opinions will be less vigorous and habits gentler; you will notice more vices and fewer crimes.”

But given that Prime Minister Abiy is likely to encounter resistance from entrenched bureaucratic interests, he would benefit from immediately freeing up capital flows and making it easier for foreigners to invest, for example, by committing Addis to joining international arbitration conventions. There is also a need to strengthen institutional mechanisms dealing with corruption, especially, says Hailemariam, in the areas of “major corruption: land registration, construction, tax administration including customs and revenue, and the judiciary and court system”.

The message from the events in Ethiopia during 2018 is clear. Ethiopians, including the majority of the ruling elite, do not believe that their model of authoritarian politics is sustainable if they want to be an economic success. That much is a lesson to authoritarians elsewhere as much as in all countries in need of reform.

This article was originally published in The Dialy Maverick.