Success Story of Ethiopian State-led Development

Ethiopia has achieved a great deal of socio-economic success through state-led development: A development system seemingly shaped after the South Korean model of economic miracle. In its Markets report in November 2014, the top-rated Washington DC financial services firm, The Motley Fool, published an analytic article about “The 5 Fastest-Growing Countries in the World”. It ranked Ethiopia number three on the fastest growing economies list, averaging about 10.5pc of gross domestic product (GDP) growth over the last decade. The article stated that workers in traditional low-cost manufacturing countries, such as China are achieving high living standards. So companies are seeking cheaper labour and “greener pastures”and that “Ethiopia could be one of the biggest beneficiaries of this shift”. Following such a shift, the article cited, Chinese apparel companies and other manufacturing firms “have begun to set up shop in Ethiopia to capitalise on the low wages”.

According to the World Bank, Ethiopia has made “significant progress in key human development indicators”. Such achievements include, the Millennium Development Goals (MDGs), in reducing child mortality, improvement in access to clean water, gender equality and education. Unlike many oil-rich nations in the world, Ethiopia does not sell oil and all its economic achievements are based on ingenuity, visionary leadership and commitment to national prosperity.

Any dispute of their ingenuity, I assume, is a debate that Ethiopian leaders would be happy to have. Ethiopia’s stated policy is to become an export powerhouse through industrialisation across economic sectors and to also become a mid-income nation by 2025. In other words, it will have a large section of middle-class out of its population of 95 million. If Ethiopia creates 40pc of middle-class consumers, combined with the projected industrial capacity, then, it will be less dependent on both imports and exports because of domestic market meeting a big part of the aggregate demand and supply. By 2025, Ethiopia’s middle-class population alone would be close to the whole population of Kenya or about three and half times of the total population of Somalia.

Many argue, Ethiopia is ruled by an authoritarian regime that does not respect human rights and political dissent, therefore, is not following the western orthodox of economic prosperity. Contrary to the old assumptions that Jeffersonian democracy and market capitalism have a monopoly on economic progress, many nations in the world had progressed without following the western model. As evidenced by the economic prosperity of Singapore, South Korea and China, liberal democracy, market forces and laissez-faire economics are not preconditions for development and economic prosperity.

Ethiopians admittedly have a state-run economy, and according to The Economist, their leaders “are more competent at running a big state than the Soviets were”. The article by the newspaper cited that Ethiopian leaders had “set out defined goals” and remained committed to implementing them with great discipline till now. The Ethiopian economic success has been achieved through well-coordinated efforts across the country, progress monitoring, welcoming outside advice and adjusting their programme on the advice of experts. But the most compelling underlining factor in the Ethiopian success is their impressive and admirable culture of high ethics and intolerance for corruption.

A large centralised system like that of Ethiopia could not function without a highly ethical culture. According to Transparency International’s worldwide survey of corruption carried out in 95 countries, Ethiopia ranked as one of the least corrupt nations in Africa. Another hallmark of the Ethiopian success is a sense of nationalism and patriotism. An article by Standard Digital, compared Kenyan Security to that of Ethiopia in dealing with terrorism. The article stated that, whereas “a Kenyan police officer is a civil servant working to earn a salary”, the grass-root Kebele Militia for security in Ethiopia is a vigilant force inspired by a strong sense of patriotism that is “incorruptible by terrorists”. It added that many in the Kenyan security system “are money-driven civil servants who are more than willing to sell their motherland for less than thirty pieces of silver”.

Ethiopian patriotism has also manifested itself elsewhere, with an example being the building of the Great Ethiopian Renaissance Dam (GERD) over the great objection of Egypt and even a military threat against Ethiopia by that country. It is well-established fact that the Nile Water has historically been the lifeline of Egypt and an existential Egyptian preoccupation since antiquity. So the control over the Nile has been a “red line” drawn on the sand for Egyptians since the days of the Pharaohs.

In modern times, Egyptians have gained virtual control of the Nile by proxy through the British Empire which had a vested interest in seeing Egyptian control over the Nile water. The Brits had ensured Egyptian control over the Nile because of their interest in Egyptian cotton for their textile industry in Lancashire and Manchester. It is a common knowledge that for six decades, Ethiopia and Egypt have repeatedly clashed over the Nile water because the Ethiopians had plans to build hydro-electric power projects on the Blue Nile as early as 1956.

As a result, Egypt had pursued hostile and subversive politics against Ethiopia. For instance, Egypt objected to the independence of South Sudan because Egyptians saw a new nation of South Sudan as a threat to their interest in the Nile water. Egypt also promoted the separation of Eritrea from Ethiopia to become an independent nation, making Ethiopia one of the biggest landlocked nations in the world. The Reporter published an article in June 2013, stating that Anwar Sadat warned Ethiopian leader, Mengistu Hailemariam in 1976 of a military strike by Egypt against Ethiopia, after Mengistu invited Soviet experts for a feasibility study of hydro-electric power on the Blue Nile. It is also believed among political circles on the Horn of Africa, that Egypt was behind the catastrophic Somali-Ethiopian war of 1977.

Egypt encouraged and provided to Somalia heavy Soviet-made weapons to take advantage of the chaotic political conditions in Ethiopia to regain the Ogaden region. Egypt never wanted Ethiopia to have the peace of mind that will allow the implementation of such a beautiful water project as GERD. Even during the so-called Arab Spring of internal chaos and military weakness, Egypt has used all its regional and international influence especially, at UN, IMF and World Bank to choke off funding for GERD.

In the face of such adversities, Ethiopians have shown a great deal of patriotism, strong courage and national unity. Ethiopians have not only succeeded in self-financing of the GERD project, but they have also demonstrated political adroitness and a quick reaction to adopt a “strike the iron while it is hot” type of policy, to take advantage of the Egyptian political turmoil and weakness during the tumultuous period. Such a great display of political agility and rallying popular support is an achievement about which many nations and societies can only dream. Ethiopia’s economic success is a lesson for Africa and especially for neighbouring Somalia. According to the African Development Bank’s (AfDB) Economic Outlook, Somalia is highly dependent on one commodity, namely livestock, and highly dependent on one nation for such exports: Saudi Arabia. Instead of self-congratulating on Ethiopia’s doom, Somalis would be far better off if they followed the footsteps of their brothers.

After all, Ethiopia sacrificed many of its precious sons during the military intervention in 2006 to 2009. The argument of how well-intentioned that military intervention might have been is another debate for another day. Ethiopia is not just a neighbouring state; it is a historic and a natural brotherly state.
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http://www.addisfortune.com
By Mohamud Ahmed
Mohamud Ahmed, an American, has graduated in economic sociology from University of California at Los Angeles (UCLA). He can be contacted at gurey@sbcglobal.net.
Published on Oct 26,2015 [Vol 16 ,No 808]

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