Meles’ starting point was that Ethiopia (and indeed Africa as a whole) lacked comparative advantage in any productive field.
He laid out his case in one discussion we held. ‘African workers produce textiles at nine times the price of the Chinese.’ Similarly, African foodstuffs could not compete in international markets. ‘In these circumstances, the best way to make money is through rent: natural resource rent, aid rent, policy rent. So the private sector will be rent-seeking not value creating, it will go for the easy way and make money through rent.’ In reaction to this, Ethiopia postponed private land ownership and kept state control of the financial sector and telecoms.
The argument continued, ‘If the state guides the private sector, there is a possibility of shifting to value creation – it needs state action to lead the private sector from its preference (rent seeking) to its long-term interest (value creation). So the state needs autonomy.’
Meles clearly identified the challenge of development as primarily a political one: it is necessary to master the technicalities of economics, but essential not to let them become a dogma that masters you. It is the politics of the state that unlocks development.
The ‘developmental state’ should, he argued, be obsessed with value creation, making accelerated and broad-based growth a matter of national survival. If Ethiopia could sustain its growth levels, it could achieve middle-income status and escape from its trap.
To succeed in this, a third element was needed, namely the hegemony of developmental discourse, in the Gramscian sense that it is an internalized set of assumptions, not an imposed order. Meles liked to give the example of corrupt customs officials in Taiwan, who exacted bribes worth 12 percent of the value of imports of consumer goods, while not demanding bribes on imported capital goods, illustrating how value creation had been internalized in this way – so that even the thieves followed the norm.
African countries might have the trappings of human rights and democracy, but, he said, ‘there is no sustainable democracy in a society characterized by pervasive rent seeking. We need value creation to be dominant for there to be a foundation of democracy, for politics to be more than a zero sum game, a competition to control state rents.’
Thus far, I found Meles’ case compelling, though I questioned if it were possible to create a common mindset of value creation in a country as vast and diverse as Ethiopia, in such a short period. Was there not a danger that a theory, however sophisticated, would degenerate into a set of dogmas parroted by party cadres who scarcely understood the meaning of ‘pervasive rent seeking’ but who knew the rewards of loyally following the party line?
Meles’ response was that the EPRDF had indeed neglected political education and party organization for years. But, he argued, a new generation of leaders was emerging and his policies were delivering results. Ethiopians had never, ever, experienced anything like the recent economic growth and the spectacular expansion in infrastructure and services – and this, he said, would transform the country in the next fifteen years.
Included in Meles’ paradigm was a theory of democracy. He writes, ‘Even if a developmental state was to be solely concerned about accelerating growth, it would have to build the high social capital that is vital for its endeavours. It would have to stamp out patronage and rent seeking. These are the very same things that create the basis for democratic politics that is relatively free from patronage.’
Meles condemned liberal formulae as ‘trickle-up democracy’ and said that, in a poor developing nation, political parties and NGOs would easily become patronage mechanisms, rather than the basis for a true associational political culture and sustainable development.
Developmental states could come in several forms, Meles argued, provided that they maintained the hegemony of value creation, were autonomous from the private sector, stamped out rent seeking and patronage, and maintained policy continuity for sufficiently long to succeed.
Meles said his preference was to have two competing parties, each of which stood for developmental values, but in their absence the option would be a stable dominant party or dominant coalition, such as Japan or Sweden enjoyed in post-war decades.
He said, ‘when [the developmental state] has done its job it will undermine its own social base, to be replaced by a social democratic or liberal democratic coalition’. Meanwhile, he argued, what meaning did liberal civil and political rights have in a context of abject poverty or political chaos? Development and a strong state were prerequisites for human rights, and Ethiopia needed to establish these first. Justifiable or not, this is a serious argument that deserves serious assessment.
Source: Alex de Waal (2012),
THE THEORY AND PRACTICE OF MELES ZENAWI