The ‘evidence’ Bloom cites for the veracity of Zenawi’s promises of African growth and development: the cranes he sees scattering Addis Ababa’s skyline, impressive buildings alongside the city’s informal settlements, and touted plans for an impressive transit system. These anecdotal observations are unfortunately not trustworthy snapshots of the health of the economy of the capital city, or Ethiopia more broadly. The cliché about how looks can deceive is particularly germane in informationally closed authoritarian societies.
So, if not evidence of Ethiopia’s economic health, what else could such urban development indicate? Practically, that Zenawi’s regime has borrowed and printed a lot of money – and the evidence for this truth is Ethiopia’s runaway inflation rate that rose above 40% in 2011, with food inflation peaking above 50% and the ratio of debt to exports reaching above 130%. The regime recently imposed extensive price controls that caused severe shortages in various food items and left long queues of people waiting to buy cooking oil and sugar, redolent of the days of Mengistu Hailemariam’s dictatorship. The country is also beset by a series of currency devaluations, acute shortages in foreign currency reserve and a widening trade deficit. This is patently unsustainable, as leading economists have repeatedly warned. Ethiopia is a macroeconomic disaster, despite Zenawi’s unwarranted image as economist king. Yet despite the economy’s vulnerability, this runaway borrowing and spending has secured him political stability, at least in the short term, by providing a means with which to buy the loyalty of military leaders and co-opt members of the urban elite.
