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What would political reforms mean for the Ethiopian success story?

What would political reforms mean for the Ethiopian success story?

Earlier this year the Ethiopian government announced it would release political prisoners and shut an infamous Addis Ababa prison in an effort to “foster national reconciliation”.

This came as a surprise from a regime that had previously denied the very existence of political prisoners and whose heavy-handed approach to opposition had become an Ethiopian reality. Positive reactions, however, were muted as the government has promised reforms in the past, but rarely delivered.

Within days the government back peddled on its statement saying it was “mistranslated” from Amharic by the media and only some political leaders would be pardoned. Days later one of Ethiopia’s most prominent opposition politicians, Bekele Gerba, was sentenced to six months in prison for contempt of court after singing a protest song during proceedings. A few days after that the government dropped charges against 528 inmates as part of the first phase of releasing prisoners, and freed Merera Gudina, an influential opposition leader.

Mass protests

Although the extent and sincerity of the reforms are still unclear, it’s obvious the government recognises the magnitude of the opposition it faces, and is at least entertaining a less repressive solution. Over the past three years an uneasy Ethiopian People’s Revolutionary Democratic Front (EPRDF) coalition dominated by members of the Tigrayan ethnic minority has struggled to appease political and civilian elements of some of Ethiopia’s larger ethnic groups like the Oromo and the Amharas.

These groups have long protested marginalisation from Addis Ababa and the Tigray elite, and feel excluded from Ethiopia’s otherwise remarkable development story. After protests against a “master plan” to expand Addis Ababa into Oromo land in 2016 snowballed into countrywide demonstrations, the government imposed a state of emergency which was in effect until late last year. During the months of unrest that followed, hundreds of people were killed and thousands arrested as Ethiopians demanded reforms to a political system steeped in authoritarianism and marginalisation.

As it stands the EPRDF is at risk of internally fracturing and knows it must provide concessions or face the consequences. “The EPRDF have understood that this is a critical time in the history of the country,” says Fisseha Tekle, Ethiopia researcher for Amnesty International. “If they don’t use this opportunity it’s going to be very difficult not only for the ruling party but for the country itself.”

Mohammed Ademo, founder and editor of an independent Ethiopian news website, put it in even starker terms, saying: “If hardliners in the EPRDF opt for more authoritarianism and resort to purges and demotions, then, I think we are looking at state collapse, civil war, and the end of the EPRDF as we know it.”

Releasing prisoners from jail is one thing, but the question now becomes how far these reforms will go and whether or not they are a small step on the road to a real democracy.  If proper reforms do begin to bear fruit and the political space is eventually liberalised, what bearing will this have on a development model which was largely characterised by heavy state influence? 

Rapid growth

Somewhat paradoxically the same state that has repressed its people and centralised power has also been responsible for a remarkable economic transformation over the last 20 years. Transitioning from the ruinous economic policies of a brutal military dictatorship in the 1970s and 80s, Ethiopia has averaged 10.8% annual growth between 2004 and 2014, according to the World Bank. It is one of the fastest growing economies on the planet.

This growth has largely been attributed to strong state-led development policies, focusing on services and agriculture, and partly using state-generated revenue from public companies like Ethiopian Airlines and Ethio Telecom to finance large infrastructure projects. The much-debated Grand Ethiopian Renaissance Dam has gathered $460m of its $560m finance target through public funding, according Chinese news source Xinhuanet. Ethiopia does not have a stock market and prefers instead to finance from state coffers when possible.

It is also in the process of establishing itself as a light-manufacturing hub and is using investor friendly industrial parks to attract capital and know-how. “Golden opportunities” are being offered in textiles, leather products and pharmaceuticals. Ethiopia has been likened to China for the success of its state-led development model.

However, one issue in particular highlights a flaw in this model, and how it may change if the EPRDF is forced to liberalise. All land in Ethiopia is owned by the state. The government has in the past displaced traditional communities and settlements in order to offer land to foreign investors.

The protests against the expansion of Addis Ababa were for these very reasons. In 2016 angry civilians torched foreign-owned flower factories and damaged a mine owned by Nigerian billionaire Aliko Dangote. Presumably this land-grabbing policy – although economically driven – will have to change if the EPRDF is looking to perpetuate its rule.

Some have even argued that the Ethiopian success story has been overstated and numbers have been cooked from within the EPRDF. Certainly GDP growth is no accurate representation of inclusive growth, and even though the country’s poverty rate fell to 31% by 2011, the Oromo and Amhara regions would argue the boom has benefited only the Addis elites.

A slowdown?

Signs are emerging that the economy is spluttering and the EPRDF may have to change its economic strategy alongside a change in governance. Most significantly, the government recently welcomed Christine Lagarde in what was the first visit of an IMF chief in the country’s history. According to a report by CNBC Africa an EPRDF official was once credited with saying Ethiopia would “prefer to be dragged over burning coals” than turn to the IMF for assistance.

The country is struggling under high public debt, rising inflation and a shortage of foreign currency. President Mulatu Teshome has said that the country is in “serious financial crisis”. In response the country has turned to the international lender and devalued its currency, the birr, in order to attract foreign investment. This is certainly a new approach in the country’s economic logic.

Ethiopia finds itself at a crossroads. The context of the country’s state led development triumphs has changed, and in order for Ethiopia to continue its success story the government may have to welcome reforms and move towards a period of economic and political liberalisation.

Tom Collins

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Written by African Business Magazine

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