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DEVELOPMENT The Political Economy of Reforms in Ethiopia 1991 – 2005 Excerpts from our common interest Report of the commission for Africa The failed promises of trade and aid Marshall Plan for Africa As Gordon Brown - Rushes old plans while UK chancellor Gordon claims to have unveiled a Marshall plan for Africa, he is in fact promoting the policies of the lesser-Known Brandt commission By Marlene Barrett in the BBC No. 2002 Few would remember US Secretary of State George Marshall if it weren’t for the plan named after him, which delivered US$13 billion (US$ 100 billion today) in aid to Europe after the Second War. The name has come to prominence again in the last few years with the concept of a Marshall Plan for Africa. UK Chancellor Gordon Brown, in particular, has repeatedly announced his proposal for a modern Marshall Plan – and this year, with the UK presiding over both the G7/G8 and a commission for Africa Brown is pushing the idea with renewed vigour. Historians might debate what role US assistance really played in Europe’s post-war redevelopment, but behind the rhetoric of unprecedented generosity, self-interest was undoubtedly a key motive: America needed Europe as a trading partner and bulwark against communism. With infrastructure still in place beneath the war rubble, Europe’s situation was very different form Africa’s today, and Brown’s reference to Marshall is more an attempt to claim the same sense of moral purpose than to propose an identical plan. But his underlying aim does mirror the original: to entrench the prevailing economic ideology. In today’s political climate, African stability and prosperity are in Europe’s interests, but only if Africa fits into Europe’s neo-liberal model.
.debt sustainability remains a problem: the assessment of what these countries can bear as a sustainable level of debt is around five times higher than that considered realistic for post-war Germany Whilst Brown encourages his G7 colleagues to deliver a little more debt relief, he ignores one major objection: that debt relief is being used as a lever is being used as a lever to ratchet free market reforms. The same suite of discredited ‘structural adjustment’ policies that exacerbated the debts crisis in the first place are now being imposed through debt relief. To qualify for relief, poor countries must agree with the IMF and World Bank which policy reforms they will implement. The process is used to push privatization in public utilities or basic services, and trade liberalization, with the same prescription given no matter the economic context or the likely impact. In Zambia, removing tariffs has all but wiped out the textile industry because manufacturers cannot compete with imports of second-hand clothing form Europe, whilst privatization of the state bank was forced through via debt relief despite massive parliamentary and public opposition“" Debt relief is being used as a lever to ratchet free market reforms ”. On aid, Brown proposes raising more through bonds, but the US$50 billion figure bandied around now pales into insignificance against US $2.5 trillion that would have been available if the Organization for Economic Cooperation and Development (OECD) countries had honoured their commitment to give 0.7 percent of national income 30 years ago. Marshall pledged 1 per cent of US income to Europe. Although Brown counts the UK amongst the few countries with a timetable to reach 0.7 per cent, nowhere has he set out more than an aspiration to meet that target by 2013. With trade, Brown’s starting point is that Africa must open up to global markets. So whilst in one breath he recalls the words of Robert Kennedy that “solutions can neither be dictated nor transplanted to other”, in the next he talks only of empowering countries to “sequence” trade reform. African countries need far more than a little flexibility on the order in which they need to use the same kind of active industrial policies that Europe used in its development. Marshall said, “It would be neither fitting nor efficacious for this Government to draw up unilaterally a programme designed to place Europe on its feet economically. This is the business of the Europeans.” Africa is not given the same freedom. Proposal from African governments – on reforming trade negotiating practices, or no access to medicines – have been ignored. Liberalization has done little to help Africa diversify out of primary commodities, but developed countries have not been prepared to tackle falling commodity prices, or regulate multinational companies. Instead, they put forward raft after raft of measures pushing developing countries to embrace free trade, whilst not delivering their own promises on trade reform. Developing countries did win a commitment from rich countries to eliminated export subside – but no firm timetable has been set. They managed to get proposed new agreements on investment struck off this round of world trade talks – so Europe is pushing them in bilateral negotiations instead. In the current trade round, a new framework for removing tariffs on industrial products could lead to a wave of de-industrialization across the developing world. Will Brown’s name be immortal-lized in a Brown Plan? Even if they get beyond rhetoric, his proposals will not release Africa from poverty. They are just the latest attempt to use development as the gift-wrap to deliver pro-West polices to Africa. In addition, they are nowhere near as ambitious as citing Marshall implies. Instead, we should use another name for comparison: Brandt. Germany’s former Chancellor Willy Brandt chaired an eight-year long Commission whose recommendations in 1980 included stabilizing commodity prices, rolling back trade barriers on developing country exports, that the IMF should not excessively regulated developing economies, and that aid levels should reach 0.7 percent by 1985 and 1 percent by 2000. If politicians had made good on existing commitments and implemented those recommend-dations over the last 25 years, we would not be talking about Marshall Plans or Brown plans – now. Power Quotes If mend and women are in chains ,any where in the world, then freedom is endangered everywhere. Jonn F. Kennedy Oct 2, 1960 Wisdom is Better than weapons of war. Bible Ecclesiasts, ca. 180 B.C Peace and justice are two sides of the same coin. Dwight D. Eisenhower Feb. 20, 1957 Justice delayed is Democracy denied. Robert F. Kennedy "to secure these rights" the Pursuit of Justice 1964 Every new time will give its law. Maxim Gorky the Lower Depths 1903 We cannot allbe masters,nor all masters /can not be truly followed. William Shakespeare 16-04-05 AFRICA Excerpts from our common interest Report of the commission for Africa African poverty and stagnation is the greatest tragedy of our time. Poverty on such a scale demands a forceful response. And Africa – at country, regional, and continental levels – is creating much stronger foundations for tackling its problems. Recent years have seen improvements in economic growth and in governance. But Africa needs more of both if it is to make serious inroads into poverty. To do that requires a partnership between Africa and the developed world, which takes full account of Africa’s diversity and particular circumstances. For its part, Africa must accelerate reform. And the developed world must increase and improve its aid, and stop doing those things which hinder Africa’s progress. The developed world has a moral duty - as well as a powerful motive of self-interest-to assist Africa. We believe that now is the time when greater external support can have a major impact and this is a vital moment for the world to get behind Africa’s efforts. The actions proposed by the Commission constitute a coherent package for Africa. The problems they address are interlocking. They are vicious circles which reinforce one another. They must be tackled together. To do that Africa requires a comprehensive ‘big push’ on many fronts at once. Partners must work together to implement this package with commitment, perseverance and speed, each focusing on how they can make the most effective contribution. Systems Right: Governance and Capacity-Building Africa’s history over the last fifty years has been blighted by two areas of weakness. These have been capacity – the ability to design and deliver policies; and accountability – how well a state answers to its people. Improvements in both are first and foremost the responsibility of African countries and people. But action by rich nations is essential too. Building capacity takes time and commitment. Week capacity is a matter of poor systems and incentives, poor information, technical inability, untrained staff and lack of money. We recommend that donors make a major investment to improve Africa’s capacity, starting with its system of higher education, particularly in science and technology. They must help to build systems and staff in national and local governments, but also is in pan-African and regional organizations, particularly the African Union and its NEPD programmed. Donors must change their behaviour and support the national priorities of African governments rather than allowing their own procedures and special enthusiasms to undermine the building of a country’s own capacity. Improving accountability is the job of African leaders. They can do that by broadening the participation of ordinary people in government processes, in part by strengthening institutions like parliaments, local authorities, trades unions, the justice system and the media. Donors can help with this. They can also help build accountable budgetary processes so that the people of Africa can see how money is raised and where it is going. That kind of transparency can help combat corruption, which African governments must root out. Developed nations can help in this too. Money and state assets stolen from the people of Africa by corrupt leaders must be repatriated. Foreign banks must be obligated by law to inform on suspicious accounts. Those who give bribes should be dealt with too; and foreign companies involved in oil, minerals and other extractive industries must make their payments much more open to public scrutiny. Firms who bribes should be refused export credits.With out progress in governance, all reforms will have limited impact. The Need for Peace and Security The most extreme breakdown of governance is war. Africa has experienced more violent conflict than any other continent in the last four decades. In recent years things have improved in many countries, but in other places violent conflict is still the biggest single obstacle to development. Investing in development is investing in peace. The most effective way to tackle conflict – to save both lives and money – is to build the capacity of African states and societies to prevent and manage conflict. That means using aid better to tackle the causes of conflict. It means improving the management of government incomes from natural resources and international agreements on how to control the ‘conflict resources’ which fuel of fund hostilities. It means controlling the trade in small arms. African regional organizations and the UN can help prevent and resolve conflict when tensions cannot be managed at the national level, through, for example, effective early warning, mediation and peacekeeping. Donors can support this by providing flexible funding to the African Union and the continent’s regional organizations; and supporting the creation of a UN Peacebuilding Commission. The co-ordination and financing of post-conflict peacebuilding and development must be improved to prevent states emerging from violent conflict from sliding back into it. Leaving No-One Out: Investing in People Poverty is more than just a lack of material things. Poor people are excluded from decision-making and from the basic services the state ought to provide. Schools and clinics must be available to the poorest people in Africa. This is an urgent matter of basic human rights and social justice. But it is also sound economics: a healthy and skilled workforce is a more productive one, fulfilling their potential with dignity. Investing for economic growth means rebuilding African health and education systems, many of which are now on the point of collapse. This requires major funding, but it is not only a question or resources. It is also about delivery and results. These are powerfully strengthened when local communities are involved in decisions that affect them. Properly funding the international community’s commitment to Education for All will provide all girls and boys in sub-Saharan Africa with access to basic education to equip them with skills for contemporary Africa. Secondary, higher and vocational education, adult learning, and teacher training should also be supported within a balanced overall education system. Donors need to pay what is needed to deliver their promises – including the cost of removing primary school fees. The elimination or preventable diseases in Africa depends above all on rebuilding systems to deliver public health services in order to tackle diseases such as TB and malaria effectively. This will involve major investment in staff, training, and the development of new medicines, better sexual and reproductive health services and the removal of fees paid by patients, until countries can afford it. Funding for water supply and sanitation should be immediately increased, reversing years of decline. Top priority must be given to scaling up the services needed to deal with the catastrophe of HIV and AIDS which is killing more people in Africa than anywhere else in the world. But this must be done through existing systems, rather than parallel new ones. Governments should also be supported to protect orphans and vulnerable children and other groups who would otherwise be left out of the growth story. Almost half of the extra aid we are recommending should be spent on health, education and HIV and AIDS. Going for Growth and Poverty Reduction Africa is poor, ultimately, because its economy has not grown. The public and private sectors need to work together to create a climate which unleashes the entrepreneurship of the peoples of Africa, generates employment and encourages individuals and firms, domestic and foreign, to invest. Changes in governance are needed to make the investment climate stronger. The developed world must support the African Union’s NEPAD programme to build public/private partnerships in order to create a stronger climate for growth, investment and jobs. Growth will also require a massive investment in infrastructure to break down the internal barriers that hold Africa back. Donors should fund a doubling of spending on infrastructure – from rural roads and small-scale irrigation to regional highways, railways, larger power projects and Information & Communications Technology (ICT). That investment must include both rural development and slum upgrading without which the poor people in Africa will not be able to participate in growth. And policies for growth must actively include – and take care not to exclude – the poorest groups. There should be particular emphasis on agriculture and on helping small enterprises, with a particular focus on women and young people. For growth to be sustainable safeguarding the environment and addressing the risks of climate change should be integral to donor and government and addressing the risks of climate change should be integral to donor and government programmes. This programme for growth takes over a third of the total additional resources we propose. More Trade and Fairer Trade Africa faces two major constraints on trade. It does not produce enough goods, of the right quality or price, to enable it to break into world markets. And it faces indefensible trade barriers which, directly or indirectly, tax its goods as they enter the markets of developed countries. To improve its capacity to trade Africa needs to make changes internally. It must improve its transport infrastructure to make goods cheaper to move. It must reduce and simplify between one Africa country and another. It must reform excessive bureaucracy, cumbersome customs procedures, and corruption by public servants, wherever these exist. It must make it easier to set up businesses. It must improve economic integration within the continent’s regional economic communities. Donors can help fund these changes. But the rich nations must also dismantle the barriers they have erected against Africa goods, particularly in agriculture. These barriers hurt citizens in both rich and poor countries. They must abolish trade-distorting subsides to their agriculture and agribusiness which give them an unfair advantage over poor African farmers. They must lower tariffs and other non-tariff barriers to African products, including stopping the bureaucratic application of rules of origin which excludes African goods from preferences to which they are entitled. And they must show this ambition by completing the current Doha Round of world Trade talks in a way which does not demand reciprocal concessions from poor African nations. Careful attention must be given to ensure that the poorest people are helped to take advantage of the new opportunities and to cope with the impacts of a more open system of world trade. Africa must be provided with the funds that can help it adjust to the new opportunities of a changed world trading regime. Where Will the Money Come From: Resources? To support the changes that have begun in Africa, we call for an additional US$25 billion per year in aid, to be implemented by 2010. Donor countries should commit immediately to provide their fair share of this. Subject to a review of progress the, there would be a second stage, with a further US$25 billion a year to be implemented by 2015. Ensuring the money is well-spent will depend on two factors. First, good governance in Africa must continue to advance. But, second, donors must significantly improve the quality of aid and how it is delivered: that means more grants, more predictable and united aid, and donor processes that are less burdensome on the already stretched administrations of African countries. It must also be better harmonized with the aid of other donors and better in line with the priorities, procedures and systems of African governments. Above all, it must be given in ways that make governments answerable primarily to their won people. These changes are needed not just from individual donor nations but also from multilateral institutions – both African and global. The African Development Bank needs to be strengthened and the role of the Economic Commission for Africa enhanced. They also need to become more accountable both to their shareholders and to their clients, and to give Africa a stronger voice in their decision-making. Rich nations should commit to a timetable for giving 0.7 per cent of their annual income in aid. To provide the critical mass of aid which is needed now, the aid should be front-loaded through the immediate implementation of the international Finance Facility. Practical proposals should be developed for innovative financing methods such as international levies on aviation, which can help secure funding for the medium and longer term. For poor countries in sub-Saharan Africa which need it, the objective must be 100 per cent debt cancellation as soon as possible. This must be part of a financing package for these countries – including those excluded from current debt schemes – to achieve the MDGs, as promised in Monterrey and Kananaskis. Conclusion Bold comprehensive action on a scale needed to meet the challenges can only be done through a new kind of partnership. In the past contractual and conditional approaches were tried, and failed. What we are suggesting is a new kind of development, based on mutual respect and solidarity, and rooted in a sound analysis of what actually works. This can speed up progress, building on recent positive developments in Africa, towards a just world of which Africa is an integral part. Aids in Africa: Three Scenarios to 2025 The failed promises of trade and aid As we sit here, perhaps 40 million Africans live with HIV or AIDS. More than 80 million people have died. We are asking; what went wrong? While all of the traps and legacies that I have described so far have global dynamics, the next two traps particularly illustrate the challenges that Africa has had to face in finding its place in the world over the last 20 years. The challenges of globalization: Integration and marginalization
he united front presented by developing countries, that promoted the collapse of talks on world trade at Cancún in 2003, was not maintained, but replaced instead by a plethora of bilateral and preferential trading agreements. Some developing countries found favour; other was overlooked. For many African countries, any protection they gained from multilateral trade agreements has disappeared. Many of the new bilateral arrangements are ‘deep integration agreements’, indicating the opening of markets and restriction of local production and financial autonomy of African states. Increasing bilateralism has spurred competition, not just within Africa, but also between Africa and other developing countries. The united opposition that stalled the earlier talks has splintered across diverse national and economic agendas. We should recognize the very different types of economy in Africa, with different international opportunities and national agenda. It is, however, possible to generalize. · Some countries are disadvantaged by the commodities they have to trade, particularly those depending on three or fewer commodities for over 50% of export revenues. Often based on low-value primary (raw or unprocessed materials) exports—such as cocoa, coffee, bananas, sugar, or cotton, for example—these commodities generally suffer from high price volatility or even falling prices over time. They are extremely vulnerable to price drops, product disruption, bad weather conditions, and slumps in demand. · In contrast, there are countries whose economies are based on the extraction of high-value primary commodities such as gold, diamonds, or oil; or rely on more than three commodities such as gold, diamonds, or oil’ or rely on more than three commodities for 50% or more of their export revenues. Their commodities often attract the attention—and money—of foreign investors. However, these countries also tend to be especially vulnerable to political instability and resource-based conflicts. These two categories of countries can each be further divided into those with high HIV prevalence and those with lower prevalence. As we’ve seen, AIDS hits hardest in the most proactive age groups—as those countries with high prevalence began to experience around 2005 to 2010. As more people fell sick, skilled workforces shrank, locking economies into low-or no-growth paths. This, in turn, made it impossible to meet the growing demand for health care, while, for those receiving treatment, antiretroviral drugs only delayed death by a few years. In countries offering low-priced commodities, the impacts were seen more quickly—since there simplywas not the money to provide necessary services. A number of those countries that were able to export a high-priced commodity were able to keep things going for longer. Some sucked labour in from surrounding countries to replace the people who were dying; other received financial support from foreign governments anxious to ensure the security of their supply of a particular commodity. After a while, even these more optimistic stories started to sour. For some, the epidemic spread too fast; for others, global market prices sank and their export revenues dropped. For most people, these changes made little difference—only a small, privileged part of most populations had seen any benefits from national income and few of even the wealthier governments has invested their money in developing rural infrastructure.
oreign investment hasn’t helped much, either. Few countries with medium or high HIV prevalence have been able to attract sufficient levels of foreign investment because it costs these foreign firms too much to train—and treat—people who would probably have to be replaced soon anyway. Countries with high HIV prevalence that could still afford to invest in the education and health of their people were diverting much of their revenue to treatment and the replacement of sick employees. Across the continent there has been little available to invest in new technology. In 2004, Africa captured around 3% of global foreign direct investment (FDI) (some US$ 12 billion of around US$ 400 billion globally). This proportion has gradually decreased, struggling to exceed 2% in 2010 and 1.5% in 2025. Most FDI in Africa had been going to mineral-rich or the effects of the AIDS epidemic have seriously compromised semi-industrialized economies— but many of these economies. Few countries were able to diversify their resources and escape from dependence on what were usually primary commodities. In a number of countries, despite the environmental improvements in resource extraction, the context of poverty, under-development, and population growth has led to serious environmental degrada-tion, both directly and indirectly. International business digs in … Back in 2004, there were many different kinds of businesses setting up in Africa. However, for most it has proved too dangerous and difficult to continue: companies with movable assets have relocated somewhere safer; other, after weighting up gains against potential risks to security or reputations, have divested and pulled out. Exceptions are the international extractive businesses, which tended to cling on, protecting their assets through the creation of camps and safe havens—and other tactics. Oil and gas producing countries have attracted the funds and attention of the international superpowers and multinationals. Money has flooded into a number of these countries, and some with enclave economies have been able to create small centres of excellence. There are, even now, countries and individuals who are thriving on the proceeds of a particular commodity. The process of commodity extraction, and the lives of those enriched by it, is hidden behind the high walls and barbed wire of gated communities. Some of these havens are very large, complete with residences, offices, shopping centres, sports facilities, and Western metropolitan lifestyles and health standards. They also come with small armies of cleaners, nannies, and gardeners—and of course, security guards—each of whom is certified ‘AIDS-free’ as a condition of employment. But few of these benefits are filtering through to the general population, and resentment builds among those who are not so fortunate. In the early 2000s, many multinationals tried to provide health programmes to staff, families, and the surrounding communities—and, in many cases; this was positively received by local or state governments. But as expectations rose in local communities, global competition intensified with the rise of the economies of Brazil, Russia, India, and china (the BRICs) and availability of local skills declined, and the programmes proved unsustainable. Partner-ships within the private sector, and between the public and private sectors, have faltered and outreach programmes have shrunk. Back in 2000, a World Bank survey identified the impacts of AIDS on business, including: costs of insurance and benefits going up; increasing disruption and absenteeism in the work force, which affects overall productivity; and worker experience falling and morbidity increasing, which affects labour productivity. Initially, an increasing number of big companies in Africa were making concerted efforts to tackle the effects of AIDS. Their approaches varied—for example, some focused on just AIDS and some on wider health impacts; some focused on just core workers, while others also extended health care to contactors. It was felt that effective partnerships with other private sector actors might help to ensure cost-sharing and the building of the wider infrastructure and capacities needed to meet other health, nutrition, and psychosocial needs—but these partnerships were difficult to negotiate and mange.
urthermore, the private sector was not allowed access to global funds and financing relating to AIDS treatment, irrespective of whether private sector consortia might be more efficient and effective than NGOS in developing and executing wider treatment and care plans in parallel with initiatives for their own staff. Africa’s rising population and level of underdevelopment meant that health needs, and the expectations of contractors and wider local communities in which companies operate, have continued to rise. It has been increasingly difficult for companies to draw a line between who gets treatment and who does not. As jaruzelski points out in his Brief history of the integrated world (2023): In retrospect, it is clear that, after the first of the big terrorist attacks on September 11, 2001, there was more concern about failed states in Africa providing shelter for terrorist than about facilitating knowledge and technology transfer to the continent. It took a long time before the newest and most complex drugs were manufactured generically. However, first generation antiretroviral drugs, that made possible first and second line regimens against AIDS, continued to fall in price because of price-cutting from the generics industry. However, low prices did not resolve the supply chain and infrastructure problems in getting the drugs to patients. At the same time, corrupt local officials and arbitrageurs diverting drug shipments to the highest bidders around the world made things worse.
t the beginning of the century, some countries issued compulsory licenses under the TRIPS agreement—but that didn’t seem to make a big difference. Polarization deep-ened. In response to the continued slow progress in drug, access in Africa many activist organizations campaigned for the total abolition of patents. Quality control led to low confidence in their products. In addition, the US government-negotiated bilateral trade agreements spread beyond their initial high- and middle-income country partners, including provisions that compensated for delays in regulatory approval-effectively extending patent periods. By 2015, developing countries still saw little return on the commercial exploitation of their genetic heritage, while the cost of financial obligations established by new patent regimes was many times higher than the value of any tariff concessions given by developed countries. The Doha agreement to extend the period of grace for less developed countries’ compliance with TRIPS to 2016 was not extended further. As a result, the ambition of some countries to take over from India as centres for non-patent governed manufacture came under legal challenge. The problems of counterfeit or adulterated drugs also continued to plague small-scale manufacture. Nevertheless, there were efforts by the research-based industry and by generics manufactures in countries as diverse as Brazil, Candida, India, and South Africa to transfer technology to, and develop manufacturing capacity in, Africa. However, the continuing polarization of the global intellectual property debate has meant that these efforts were not well supported across the continent. Develop-ing countries remain net importers of technology even as globalization of intellectual pro-perty protection continues to expand. A growing informal sector Throughout this period, global markets and consumers have become increasingly concerned with the security of their supplies. But many smaller African producers are unable to meet the resulting costs, which keep rising. Overall, there has been little incentive for people to set up businesses or make any kind of formal investment. Most people have never managed to leave the informal sector-which means the informal sector-which means that there are never enough tax revenues to support the needs of growing populations. There is less money per capita accruing in state revenues and not enough to spend on services—education, health care, diversification of industry, and training the next generation, who, as a result, tend to remain in the informal sector, where it’s hard to make a dependable living. Few people build savings—and the widespread failure to address individual property rights or strengthen, revive, or adapt traditional forms of collective stewardship means that most people have no collateral.
or most farmers, the lack of development of rural infrastructure has meant that it is very costly and difficult to reach urban markets—and market prices are not high enough to compensate for this. Although rural farmers have plenty of land, they have little incentive to produce more than they need most have fallen back into subsistence farming. There are a few islands of high, intense growth; mostly in areas that ate, close to cities or ports, have well maintained either connections, or irrigation systems. The paradox and marginalization primes the other traps—exacerbating underdevelopment, poverty, and disease; and increasing social divisions and inequality. It is also closely related to the next trap—that of aid dependency and concerns about global security ETHIOPIA
I. Political Background to the 1991 upheaval
Until July 1991, natives and foreigners alike had viewed Ethiopia as the mythological Pandora’s Box of many unknowns. Such misgivings were accentuated by the official propaganda of the Derg and the conflicting views of different movements, some of which had been locked in armed struggle and polemical battles with one another for years. As a consequence of this atmosphere of conflict and political acrimony, people could not even theoretically contemplate which regime might be worth their while. In part, this explains the early withdrawal of people from politics and their general lack of trust in public institutions or political organisations. There was a sense of social and political fragmentation felt and expressed by most Ethiopians. Regardless of their role in politics, people were genuinely apprehensive about what the new change might bring with it. Underlying such misgivings was the fear of a repeat of the blood-letting and horror which followed the 1974 upheaval and the chilling story of how the bloodless revolution turned into a series of nightmarish episodes which claimed the lives of several thousands.1 Events leading to the overthrow of the Derg After six decades of effective rule as Regent, Crown Prince (1916-30) and Emperor (1930-74), Haile Selassie’s rule came to an abrupt end in 1974. The collapse of the empire was caused by many forces but brought to a head by the revelation of government indifference to the Wollo famine of 1972-74 which claimed more than 200,000 lives. In January 1974, a wave of civil unrests led by teachers, students and taxi-drivers, and subsequently aided by mutinies in the armed forces, culminated in the resignation of the erstwhile Prime Minister. This reached its grand finale with the removal and presumed execution of the Emperor in September 1974. At this critical juncture, what began as a popular revolution by the people degenerated into a coup by armed forces. The deposition of the Emperor was followed by three years (1974-77) of acute conflict ranging from labour strikes and urban unrest to military mutinies which were contained through draconian measures of military reprisal. The period also witnessed the rise and speedy disappearance of prominent members of the Derg or the Provisional Military Administrative Council (PMAC) and a heavy toll of civilian casualties during the “white” and “red” terrors.2 The rise and gradual consolidation of the position of Colonel Mengistu H/mariam was consummated in three stages. First came the removal of the royal dynasty and political aristocracy linked with the Empire. This move was carried out through the summary execution of 60 senior officials of the old regime and the subsequent killings and arrests of genuine and presumed supporters of the old regime. The second act was the execution of prominent members of the Derg. The first non-monarch head of state, General Aman Andom, was killed in November 1974, and the second one, General Teferri Benti, in February 1977. In November of the same year the first vice-chairman of the PMAC was murdered. This effectively sealed off the chapter of internal conflict and paved the avenue for 14 years (1978-91) of autocratic rule under Col. Mengistu. But the third and final act which replaced the fading dream of democracy in Ethiopia with the grim and inevitable reality of military dictatorship and the rule of Col. Mengistu, was the powerful but ideologically farcical division of the Ethiopian leftist elite who played into the hands of the Derg. As the division of the left deepened and degenerated into random killings of its supporters, the PMAC responded with ferocious vindictiveness and used this pretext to stamp out even the most remotely suspected opponents of the junta. In the wake of the bitter power feud which saw the emergence of the white and red terrors, it is conservatively estimated that more than 100,000 educated Ethiopians were decimated while several hundreds of thousands more were forced to flee the country to settle in Europe, the U.S. and in countries around the region. Ironic as it may sound, in the ultimate act of the power craze of 1977-1978, what remained of the Derg under Mengistu exterminated the intellectuals who had sided with it and put itself on the saddle of power. For a while, this gave the impression that the business of settling old scores was over, but the enigma which was to haunt the regime remained.3 The Birth of a “Republic” During the Derg Era The period 1979-84 was devoted to the process of reconstituting the Workers Party of Ethiopia (WPE) based on the model of the Communist Party of the USSR. At the end of the first decade (1974-84), the Workers Party of Ethiopia was created with Mengistu as its General Secretary. Following this act, the People's Democratic Republic of Ethiopia (PDRE) was established in 1987. It appeared then that the legal and institutional process of consolidating Mengistu’s hold to power was theoretically over. But, as it turned out, even the painstaking process of the edification of the state did not bring peace and stability to the country. In fact, it was the pompous parades and extravagant celebrations of 1984-85, which contrasted with the horrid spectacles of starving people in Wollo and Tigray that signalled the beginning of the regime’s inevitable disintegration.4 The PDRE Years (1987-91) Right from the outset, the PDRE was greeted by a sceptre of massive starvations. Thus, the regime was preoccupied with the business of managing the crisis precipitated by the new famine. As a result, other developmental activities were abandoned throughout 1985 and 1986. Making matters worse, 1987 also became another year of drought. Besides, the years after 1987 saw a gradual escalation of the nationalities conflict in Tigray and Eritrea. This was exacerbated by the regime’s inability to start dialogue at home and a conspiracy of a host of international factors which militated against it abroad. Domestically, by choosing not to seek meaningful dialogue with the opposition, the regime torpedoed its regional-cum-nationality reform program which was destined to fail without the approval of all interested parties. By brushing aside the nationalities movements in particular, it dissipated the bona fide goodwill for compromise which the opposition had showed until then. This removed the ball of initiative from its court and consigned it to that of the opposition which kept it until 1991. Through this act of neglect and disregard, the regime virtually signed its capitulation warrant four years before the event. Internationally, with the rise to power of Mikhael Gorbachov in the USSR, which led to an East-West rapprochement, Mengistu was deprived of a powerful ally and his only source of arms. This, coupled with the series of humiliating defeats which the regime sustained until May 1991, made its collapse merely a matter of time.5 The Political Mood before the Departure of Col. Mengistu Against the above background of tension and uncertainty, few Ethiopians believed that the country would ever gravitate toward some form of ethnic or national federalism or a political denouement along such lines. Even when the hope of democracy crossed the minds of some, very few really believed that it would materialise. In fact, for many, such a reflection was a luxurious diversion from the harsh reality of repression. This might explain why Ethiopians were apprehensive about the prospects of change. But then, why were they so pessimistic? Anyone who even sporadically witnessed the agony of war and famine which visited most Ethiopian homes would understand and fully appreciate why people took such a dim view of life. People’s expectations of peace and prosperity under a socialist order had been shattered. Nearly all the promises pledged to them by the Derg in the wake of the 1974 upheaval had not been delivered. Yet, the memory of the boisterous demonstrations and the loud rhetoric of the period remained vivid in their minds.6 Their lack of confidence was also heightened by the brutality of the military regime which afflicted a broad cross-section of the society. The regime had humiliated the Amharas and stripped them of their dynastic credentials by liquidating the Emperor and his aristocracy. It co-opted the Oromos only to throw them away later. It never really understood the Tigray region and its people where it inadvertently promoted an insurgency movement which turned out to be the regime’s Achilles’ heel. Nevertheless, despite public disappointment with the Mengistu regime, people did not know what to expect of the EPRDF which had already been projected as a movement which emulated Albanian Socialism. There were also those who feared the notion of Tigrian domination which was effectively circulated by Mengistu to canvass Amhara and Oromo support for his government. Yet, this negative attitude was to prove unfavourable to the regime and its coalition. However despite the adverse propaganda of the Derg, the movement (TPLF) which soon formed league with the OLF and other organisations was favoured by three factors. First, people were happy that the war was finally over and that their children did not have to be sacrificial lambs. Second, there was a longing among many for democracy. The third crucial factor was the international approval which the EPRDF, OLF and EPLF received in London and the speed with which the EPRDF restored calm and order in the country. The image of the EPRDF was also somewhat redressed by a more positive media coverage. But, by far the most crucial agenda which enhanced the position of the new government led by the EPRDF were the proposals tabled at the nationalities convention held in Addis Ababa from July 1-5, 1991. This became a convergence point for nationality movements and political organisations of various shades and hues. More than twenty nationality movements and other political organisations including the OLF, ALF, Somali, Isa Gurgura, ENDO, EDU and others were represented. Surprisingly enough, too, nearly all of the issues tabled by the EPRDF were debated and subsequently adopted by the movements.7 I. The New Political Landscape of the EPRDF Since the May 1991 upheaval, a number of cardinal events which have won admiration in many international circles and provoked anxiety in others have taken place. As observed above, least controversial of all was the manner in which normal life was restored in Addis after days of looting and chaos, and the formation of an interim government which made preparations for the July convention. At the July convention, the debate, which involved virtually all Ethiopian nations and nationality movements, mainly focused on the following issues:
The debate on these issues and the resolutions reached on some of them are, as we shall see later, significant milestones on the bumpy road toward the creation of democratic institutions. Nevertheless, one should also take cognizance of the fact that the avenue toward realising them has not been entirely smooth. For instance, the lively democratic debate has at times alternated with a temptation to switch back to arms. The above, given the complexity of Ethiopia’s multinational composition and its historically nurtured conflicts, is scarcely surprising. In fact, it was long overdue and is of paramount value for promoting a democratic tradition. This exercise is of great value in a traditional society like Ethiopia where even the educated in modern garb continue to imbibe anachronistic feudal values condemning ethnicism in one breath and preaching the same gospel in another.9 Economic Development as a measure of enhancing Human Rights Having extricated itself from the pincer-grip of three decades of internal strife, misguided policies and elitist control, Ethiopia at present seems firmly committed to the onerous task of reconstruction and development. This commitment is buttressed by the country's recently promulgated socio-economic and political decrees, aimed to steer the country away from the grip of the totalitarian regimentation which had previously choked economic growth. The decrees are also aimed to free the creative potential of economic regeneration and social innovation.10 Fortunately for the war-fatigued country, the decrees have been matched by a commitment to pragmatism and a dedication to their implementation. The result of this has been notable for the improvement in the quality of life of a large segment of the Ethiopian population. The latest proof of this commitment is Ethiopia's temporary attainment of self-sufficiency in food production. This happened in 1996/97 ahead of the projected target date by a decade. Nevertheless, this might be difficult to sustain as agriculture is, to a large measure, dependent on rain fall which is generally erratic. Moreover, the failure of rain has often led to drought and famine in parts of the country as was the case in 1999/2000. One of the reasons for the drought is the effect of global climatic changes as is evidenced by the phenomenon of El Niňo and other factors which might lead to occasional bumper-harvests as was the case in 1996/97 which was a source of optimistic respite and of confidence in the future. Ethiopia's positive development in agricultural production has had a salubrious immediate effect on economic growth and on other macro-economic indicators. The 1996/97 bumper harvest had for instance led to a GDP growth of 10.2 percent in addition to the lowering of inflation to less than one percent, a steep rise in foreign exchange reserves, reduced budget deficit, increased investments and savings, all of which brought down government borrowings. This was also a harbinger of good news for overall macro-economic stabilisation. However, according to informed analysts of the Ethiopian political economy, the positive developments are also partly attributed to the sweeping economic reforms introduced since 1992. The reforms included: the large-scale liberalisation of the political economy bolstered by the devaluation of the Birr, interest rate adjustment, privatisation of state companies, and the investment code introduced up to 1998/99. But even more important to the improved economic performance are the socio-economic reforms and political decentralisation by the EPRDF government. These positive trends were also reinforced by the decision of the new government to take a back seat by minimising state intervention and restricting its role to the task of co-ordination and facilitation. The process of decentralisation basically resulted from the recognition of the value of power-sharing and reliance on the verdict of the ballot box. Milestones of the Transitional Phase of Reforms According to the World Bank and IMF assessment, the positive trend of the first phase of the reform (1992/93– 1994/95) had resulted in the following heartening pointers. During this period: 1. The Birr was devalued by 58.6 percent in US dollar terms; 2. An auction system was introduced to determine the exchange rate applicable to most transactions; 3. Procedures for export and import licensing were streamlined; 4. New interest rate structure was introduced and positive real rates of interest maintained; 5. A number of tax policy reforms and other government revenue enhancement measures were introduced; 6. Public expenditure was rationalised; public sector salaries were adjusted upwards and ceilings on public salaries were removed; 7. The first public enterprises were sold; 8. New investment, labour and public enterprise laws were enacted; 9. Direct price controls were virtually eliminated, and internal marketing, transport, and trade were de-controlled; 10. In the external area, restrictions on payments for invisible transactions were considerably liberalised; and 11. The maximum tariff rate was reduced from 230 percent to 80 percent. Similarly, the second phase of the reform (1994/95–1996/97) led to the following impressive results: Ethiopia achieved a real average annual growth rate of 6.6 percent, and inflation averaged 8.2 percent during 1992/93–1994/95 as against 15.7 percent during the period 1989/90–1991/92. The overall fiscal deficit (excluding grants) averaged 8.9 percent and broad money growth averaged 17 percent during the same period. External current account deficit, excluding official transfers, averaged 6.0 percent of GDP. The overall balance of payments situation improved markedly and gross official reserves reached about 5.8 months of imports. The second phase of economic policy reform was implemented during the period 1994/95–1996/97. The objectives of this phase of the program were to continue to revitalise the economy and to create a conducive environment for labour-intensive development, to limit the role of the government to selected economic services, to promote greater private sector activity and investment. These objectives were to be achieved by implementing the long-term development strategy of Agricultural Development-Led Industrialisation (ADLI), mobilising external resource to rehabilitate and reconstruct economic and social infrastructures, and pursuing more liberal external trade and foreign exchange policies to improve the competitiveness of the industrial and agricultural sectors. Real economic growth slowed down from 6.2 percent in 1994/95 to 5.6 percent in 1996/97, with an exceptionally high growth rate of 10.6 percent in 1995/96; the inflation rate dropped from 13.4 percent in 1994/95 to negative 6.4 percent in 1996/97 and the value of exports rose by about 33 percent while imports grew by about 32 percent. Gross domestic investment rate rose to 19.1 percent of GDP from 16.4 percent in 1994/95, and the share of gross domestic saving to GDP increased from 7.4 percent to 8.7 percent during the same period. The ratio of government revenue to GDP went up form 17.4 percent to 19.2 percent, while that of expenditure declined from 24.8 percent to 24.3 percent. Thus, fiscal deficit (excluding grants) as a percent of GDP dropped from 7.3 percent to 4.9 percent. There were other improvements in the financial sector. For instance, “liquidity (broad money) slowed down from 24.3 percent to 3.4 percent. Despite this financial improvement, the overall balance of payments worsened and gross official reserves decreased from 5.8 to 4.2 months of imports of goods and non-factor services during 1994/95–1996/97.” The significance of the above results is further underscored by most recent assessments. An August 1998 report of the IMF for instance lauded and cautioned Ethiopia for the positive impact of the past reform measures. GDP growth for that year was close to 6 percent. However, the report of the International Monetary Fund (IMF) also said that Ethiopia must get a grip on its finances to avoid squandering its economic progress of the earlier two years. Praising the East African country’s “prudent macroeconomic policies,” the lending agency said it nevertheless was concerned about the expected widening trade gap caused by a global fall in the price of coffee–Ethiopia’s key export–and its effects on public spending. It also expressed concern about the effect of the war with Eritrea where tens of thousands of soldiers have reportedly been killed in battles along the two nations’ 600-mile (1,000-km) border since May 1998. Further, returning to the economic issue, it continued, “the main challenge facing the authorities now is to strengthen fiscal discipline, notwithstanding the current spending pressures and the unfavourable external environment, so as to preserve the hard-won gains in macro-economic stabilisation.” The IMF said this in its annual review of the Ethiopian economy. The report further advised the Ethiopian Government to improve tax collection, if need be by introducing new legislation and broadening the tax base. The IMF urged Ethiopia to help secure its economic future by restarting talks with international donors, including the Washington-based agencies. It went on to add, efforts to strengthen all aspects of transparency, including financing of military spending, would serve to enhance donor confidence. References1-10. Kinfe .Abraham , Ethiopia: From Bullets to the Ballot Box, New Jerseys, RSP,1994 TO BE CONTINUED IN THE NEXT ISSUE QUOTABLE QUOTES No government can continue good but under the control of the people. Thomas Jefferson Letter to John Adams Dec 10, 1819 The only legitimate right to govern is an express grant of power form the governed William Henry Harrison Mar 4, 1814 The people’s government, made for the people, made by the people, and answerable to the people. Daniel Webster Second speech on Foote’s Resolution Jan 26, 1830 Men living in democratic times many passions, but most of their passions either end in the love of riches, or proceed form it.Alexis, Comte de Toqueville Democracy in America 1838 Where the people possess no authority, their rights obtain nor respect George Bancroft “to the Workingmen of Northampton” Boston, Oct 22, 1834 The principle of our Government is that of equal laws and freedom of industry. Andrew Johnson First annual message to Congress Dec 4, 1865 The demand of the Labour party is for economic freedom. It is the natural outcome of political enfranchisement. Keir Hardie Speech to the inaugural conference of the Independent labour party Jan 13, 1893 I would rather belong to a poor nation that was free than to a rich nation that had ceased to be in love with liberty. Woodrow Wilson Speech sep 12,1912 |
