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Looking into a foreigner’s view of changes in Ethiopia
Bereket Gebru
The Economic Times website posted an article by Neeraj Kaushal, a Columbia University scholar, entitled: “once famine-stricken, Ethiopia has many lessons for a country like India” a couple of weeks ago. I have come across numerous articles in the international mainstream media that praise Ethiopia’s efforts to root out poverty but this topic in itself waxes lyrical more than any of them. It is a great honor for Ethiopia to receive such rave reviews about the ongoing changes in the country.
Accordingly, this article closely looks into the achievements and challenges of Ethiopia as raised by the article. As these achievements and challenges are merely states and seldom looked into, this article sets out to provide more information on some points while clarifying the state of other factors.
The writer starts the article by presenting his account of the infamous famines that painted a gloomy image about Ethiopia to the whole world. “In my youth, parents chastened their children if they wasted food by reminding them that millions starved in Ethiopia. Ethiopia was the country stricken with famines. Lakhs died and millions were impoverished during the famines of the mid-1980s.” The write came to realize about the changes in Ethiopia when he made a business trip recently. Until then, this introductory part might have been his impression about the country. Despite the commendable changes we have seen over the last fifteen years, it is important to note that there is yet a lot more to go before the world changes its old outlook.
Immediately after that comes the writer’s new information, which is that the World Bank’s projections indicate that Ethiopia is set to become the fastest growing economy in the world in 2017. The way the information is presented is a clear indication of the level of astonishment that the current situation has created on someone who might not have been a close follower of Ethiopian issues. With all the problems that we still have, it is good once in a while to have such a reminder of the positives we have achieved together.
It then credits sustained peace, improved infrastructure, a switch to market economy, globalization and a few sound policies for the transformation. The emphasis on market economy, increased private investment and globalization along with the blatant denouncement of signs of protectionism and control in the economy are indications of the writer’s ideological preferences. As there is not a single definite way of achieving development, insisting on the use of a certain set of policies only reflects ideological stubbornness.
In all fairness, the use of protectionism does not herald an impending demise for an economy. In fact, the developed capitalist states use it in specific conditions. For instance, the U.S. government went ahead and loaned billions to the very organizations that set the 2008 financial crisis in motion. In principle, it should have stayed out of the private realm and let foreign firms buy their stock but it wanted to protect the financial and other sectors from falling into foreign hands.
Let’s look into each of the factors pointed out by the writer as contributors to the transformation in the economy.
Sustained peace: since the fall of the Derge regime in 1991 and the ascendance of EPRDF to the helm of state power in Ethiopia, there has been a long period of peace. The major breach of peace was the war with Eritrea but it seems to be in the distant past now. There were also isolated cases of unrest in some parts of the country a few times but not at a scale that can disrupt the quest for development.
This period of sustained peace is also a reflection of the internal and foreign relations policies of the regime. With a federal system that ensures self administration and equal rights to the over eighty ethnic groups in the country, the hotbed for conflicts among one another is chilled down. The foreign policy agenda of the state that emphasized economic diplomacy, regional cooperation and shared benefits also promotes peaceful relations with neighboring countries. Eritrea, in this regard, stands out as the odd case because it has dragged Djibouti, Yemen and Ethiopia into conflict.
Improved infrastructure: the state of infrastructure in Ethiopia has radically changed over the course of the last 26 years. The total length of all weather roads has increased in folds with the focus now on roads that connect the smallest units of local administration, kebeles, among themselves. Currently, 75% of the kebeles have been connected with universal connectivity expected in the coming three years.
For an agrarian economy in which agriculture employs nearly 85% of the population and contributes 37% of GDP, access to roads plays a tremendous role. It is these roads that hasten the transportation of agricultural products to the market while simultaneously speeding up the delivery of inputs and services to farmers and pastoralists. The accessibility of schools, health facilities, electricity and clean water has also enjoyed considerable growth over the past years. Most kebeles in the country have at least got a health post while primary school education is almost universal throughout the country. Access to education, health service, market, electricity, clean water and the rest of the things that make livelihood of citizens easy would soar even further with the introduction of these roads throughout the country.
A switch to market economy: even though the country abolished command economy with the instatement of EPRDF, it took a while to adopt a market economy with the middle ground reigning in between. With the transition to the market economy, however, Ethiopia adopted some country specific policies that would help get the best out of the system. The idea of gradually making the ground suitable for a full blown market economy was reflected with the restriction of foreign firms from venturing into certain sectors. The idea was that the introduction of big international banks, for instance, could be catastrophic as the legal and financial infrastructure needed to make sure that they don’t lead us the way they led the developed world is not there yet. Another section of this transition to market economy incorporates a large public investment in infrastructure and pro-poor projects. These things are thought to uplift the country to the level it needs to become competitive internationally. The World Bank looked into these approaches and came up with a report applauding Ethiopia for adapting policies to fit its long term goals.
Globalization: Ethiopia also pursued different investment promotion policies and incentive packages to draw foreign investment into the country. It clearly identified its comparative advantages and used them to draw investment by setting the starting point low. For instance, it has cheap labor and vast arable land. The price of labor and agricultural land in the country is lower than its competing countries, allowing Ethiopia to attract companies from all over the world. The incentive packages are also lucrative to businesses investing in Ethiopia as the goal is to gradually make the country an industrial hub. It has also built industry parks to mitigate the problems of infrastructure and provide companies with readymade areas for investment.
Its efforts have obviously paid off with the country considered as one of the strongest attractions of investment in East Africa and the continent in general. The article actually points to this fact when he asked Indian businessmen in his visit to Ethiopia what attracted them to come to Ethiopia. “Their answer: cheap labour, inexpensive electricity and a non-corrupt, business-friendly government determined to attract foreign investment.” That surely sums up the situation.
Conclusion
It is very encouraging to come across media reports that put Ethiopia in a positive light. Although staunch capitalists tend to follow their orthodox approaches to growth and development, we have seen too many cases to adopt those policies raw. As long as the end is social prosperity, keeping an absolute adherence to an ideology is not as noble as improving the lives of citizens.
