Ethiopia: No More A Country Of Tomorrow

Not long ago, Ethiopia hit the world headlines for all the wrong reasons—mass hunger, civil war and the AIDS pandemic. Famine decimated Ethiopia in the mid-1980s. It was caused by the Marxist regime’s brutal “development” policies. Television pictures of three-year-old Birhan Woldu’s emaciated face became the iconic image that shook the conscience of the world. The greatest ever act of charity was initiated by pop stars to provide succour to the Ethiopian people. The 1984 Band Aid number ‘Do they know it is Christmas’ and the Live Aid concert the following year brought the miseries of Ethiopians to millions of drawing rooms.

Today, Ethiopia is projected by UNDP, Forum of Federations and others as a model of multicultural living for the East African region. Democracy has taken root, the economy is booming and peace reigns. The model that Ethiopia has followed has gained wider acceptability and many in the region may be replicating it. The late Prime Minister Meles Zenawi was the architect of this model of democratic development which is a prudent combination of market forces and state intervention. In the words of Zenawi, “the state plays a leading role not only in providing infrastructure and basic services, but also in providing the right conducive environment for the development of productive and manufacturing capacities.”

The face of Addis Ababa is changing which its rapidly changing skyline indicates. The average 6 per cent annual growth for several years is a measure of Ethiopia’s good performance. Investors in Ethiopia can count on low-cost labour; rich natural resources; and a business-friendly government that is encouraging public-private partnerships. Ethiopia’s motto is “Africa’s Link to the World,” and to enhance the country’s position as a trade hub for Europe, Africa and Asia. The government has spent around US$44 billion on transport-infrastructure development over the past decade. The country is also rapidly developing its air transport services. It has three international and 18 domestic airports, and international flights link Ethiopia with over 45 cities on four continents. Ethiopia has left its tragic past way behind when Bob Geldof sang in 1984 about the country “where nothing ever grows/ No rain or rivers flow.”

Ethiopia is predominantly an agriculture economy. Thanks to prudent policies, farm productivity as well as farmers’ share of profits have grown manifold. Ethiopia has amassed the biggest livestock population in Africa, with 50m head of cattle. The peasants who make up approximately 85 per cent of the population have been freed to make their own decisions about which crops to plant and when and where to sell their produce.

Ethiopia is among the countries most affected by the HIV epidemic. With an estimated adult prevalence of 1.5 per cent, it has a large number of people living with HIV (approximately 800,000) and about 1 million AIDS orphans. However, Ethiopia has shown commitment to prevent its spread and mitigate its impact. The government’s policy has succeeded in reversing the rate of new infections. Ethiopia is one of the sub-Saharan countries demonstrating more than 25 per cent decline in new HIV infections. The World Food Programme has introduced vouchers into its urban HIV/AIDS programme in Ethiopia on a pilot basis, in place of traditional food assistance. People benefiting from the project can redeem vouchers for locally produced food. It’s just one part of a programme that helps people living with HIV and AIDS to get back on their feet.

Results are indeed encouraging. Using vouchers as a new tool supports local food production and gives people more control over their food choices. Before the vouchers were introduced, the HIV/AIDS programme had already had a significant impact for people living with HIV/AIDS, through direct food assistance.

Ethiopia’s experience in establishing democracy has been a remarkable success. The administrative structure of the country has been transformed, and a new form of government—ethnic federalism—has been adopted.

Ethiopia’s balkanisation was averted thanks to the federal system. In the region where the colonial powers arbitrarily drew frontiers indifferent to ethnic divisions, Ethiopia under the leadership of Zenawi survived as a nation by granting autonomy to its provinces including the right to secede. As Zenawi often claimed, “the successful management of our diversity has become one of the pillars of the on-going Ethiopian renaissance.”

In fact, Ethiopia’s new leaders have been conducting one of today’s more dramatic experiments in governance. The process has received little attention because it has been comparatively peaceful. Ethiopia has also taken steps to make governance more transparent. In 2000, it created an ombudsman to rectify “administrative abuses arbitrarily committed against citizens. The institution has supervisory powers and an independent budget. Ethiopia has also incorporated anti-corruption provisions in its criminal code.

The Ethiopian model has produced impressive developmental goals. Ethiopia has gone from having two universities to nearly three dozen in two decades. It has put schools and clinics in every village. According to some sources, infant mortality rates have fallen by 40 per cent since 2000. Of course the big question is how much of the benefits of growth reach the intended beneficiary. Some scepticism also remains regarding the growth data.

Ethiopian model—competent generosity combined with draconian controls—has run into trouble on several fronts. First, its finances are not working. Inflation is still quite high. Foreign-exchange controls keep out much-needed imports. Dollar transfers are compulsorily converted to Ethiopian birr. Nevertheless, Ethiopia’s all-round development is there for all to see.

The rise of BRICS has dramatically changed the dynamics of growth in Africa. The demand for commodities, Ethiopian government believes, has given Ethiopia a window of opportunity to benefit from its natural resources. The emergence of this new international force has increased the competition, and from Africa’s perspective, choice and competition are certainly better than monopolies.

China’s growing presence in Ethiopia is quite visible. The new headquarters of the African Union, the 20-storey building in Addis Ababa, was built and gifted by China to Ethiopia. Leading African writer Chika Ezeanya says it is “an insult to the African Union and to every African that in 2012 a building as symbolic as the AU headquarters is designed, built and maintained by a foreign country –it does not matter which.” Among the many luxuries of the building is a helicopter landing pad so visiting dignitaries will be flown from the airport. Besides, there are three conference centres and office space for 700 people.

What is China’s goal in Ethiopia and elsewhere in Africa except the strategic pursuit of resources. China’s industries are getting raw materials from Africa. Hillary Clinton, during her visit to Zambia in 2011, raised the spectre of Chinese colonialism in Africa. Alemayehu G Mariam of California State University has put it characteristically—“the dragon eating the eagle’s lunch in Africa”.

China is definitely in full force in Africa with traders, investors, lenders, builders, developers, labourers and others. The gift of the $200 million African Union building is not necessarily seen as demonstration of China’s good faith, good will and good works in Africa; many see it as a subtle hint of its neo-colonial ambitions and hegemonic designs. However, Zenawi saw China “leading Africa on a long march out of the winter of despair and desperation into the spring of hope and renaissance.”

India is, of course, nowhere near China in Africa in general and Ethiopia in particular. And yet, Indian investment in Ethiopia over the last two decades has grown manifold reaching over 5 billion US dollars. A sizeable number of Indian companies have a presence in Ethiopia. The areas in which investments have been committed are agriculture and floriculture, engineering, plastics manufacturing, cotton and textiles, pharmaceuticals, healthcare and ICT. India has extended lines of credit amounting to around 700 million US dollars. A large part of this credit is committed to the development of the sugar industry in Ethiopia. India has made huge investment in the farm sector.

India has lost out to China because China has plenty of cash and an ambitious agenda. India’s policy is often reactive. Not long ago, India lost out to China in the race to build the Ethiopian railways because of complacency. China has a formidable war chest in its foreign reserves and given China’s one-party system, decision making is swift. In India where regional parties have begun to dictate foreign policy terms to Centre, and our officialdom is notorious for red tapism, India will never do what China is capable of. India should be prepared to be caught flatfooted by Beijing in Ethiopia.

By Ash Narain Roy from Addis Ababa

(The author is Director, Institute of Social Sciences, New Delhi. He was recently in Ethiopia.)