Although it is not a completed work, it has been publicly circulating through media such as the Walta Information Centre and prompted a lot of comments. The concepts in this paper formed the basis of much of the ‘training’ for senior officials in Adama (Nazareth) a short time ago.
The main thrust of the thesis is to argue against the neo-liberal agenda, and to present an alternative which buttresses the role of the state in the economy. It also connects this economic argument to a broader social and political analysis, arguing that ‘democracy,’ defined in a way which I shall be returned to, is also a good thing for development and that social forces have to be organized to support rather than thwart economic development.
This in particular focuses on ‘stamping out rent-seekers,’ who have contributed very much to the economic stagnation in Africa.
While much of his argument has commendable point, the central thesis breaks against two rocks: it uses a straw-man argument, setting up a caricature of a neo-liberal model which has never been applied anywhere, and secondly it completely misses the reality of Ethiopia and the model which Prime Minister Meles’s administration has been applying here. This is a blueprint for continued rule and maintenance of the current policies by the ruling party.
In fact, this thesis seems to represent a return to, or perhaps continuation, of the classic role that Meles played in the Tigray People’s Liberation Front (TPLF), during their long struggle against the previous Derg government. He was the lead pamphleteer for the Front, and parlayed his expertise on the propaganda side into the intellectual and eventually formal leadership of the party.
I see several motivations for the Prime Minister to produce this rather long and impressive document; first he may want to re-legitimize his role and that of his party in leading Ethiopia to a better future after the earth shattering national elections of 2005, in which a large proportion of the Ethiopian electorate voted against the ruling party, particularly in urban centres.
Even within his party, crisis after crisis has shaken his authority over the past years – the split in the TPLF, saw Meles fighting for his political life initially against a sizable majority in his own central committee. Meles prevailed, but not without imprisoning his former comrades in arms, and creating a lasting division within the grassroots of his party. Hardly had he reconsolidated his position in the party before he was faced with a substantial drought affecting almost 15 million Ethiopians in 2002-03. Apart from the economic losses and massive foreign assistance, which fighting the drought required, it also shook his ideological basis, that his party was successfully overcoming the vulnerabilities of the rural areas through ‘peasant centred’ policies which he had been claiming for years.
The Tigray Regional State itself, a centre piece of the development model promoted by the TPLF, was as vulnerable to drought as any other parts of the country – and received a disproportionate amount of food assistance. Not only had self-sufficiency not been achieved, with population growth the number of vulnerable had increased. This, I would argue, has led to much soul searching within the ruling party, and a search for new development alternatives.
Finally, Meles had begun to emerge on the international stage over the past few years, hob-nobbing with people such as James Wolfensohn, president of the World Bank, and Joseph Stiglitz, a former World Bank chief economist, who has now turned into one of its biggest critics. Perhaps the biggest stage given to Meles was by our own Tony Blair, who appointed him to the Africa Commission, a high profile platform to broadcast his social and economic theories beyond the borders of Ethiopia to the rest of Africa.
This thesis is clearly directed at correcting the mistakes of not only the African continent, but the misguided westerners who have attempted, often with goodwill but just as often with brutal self-interest, to help Africans. Meles has now overcome his modesty and stepped onto a world stage. Unfortunately for him, his step out onto the world stage has been badly timed, with a rather mishandled election still fresh in people’s minds. Even old friends like Tony Blair have been seen to publicly distance themselves from Meles. His international friends have become scarce. The legitimacy of the state has not been re-established except amongst hardcore supporters; so I see the government has been on the offensive about how wonderful the economy is and how it is the one who is bringing prosperity to Ethiopia.
This has never stopped Meles before, and certainly will not stop him now. He is confident that he is right, and whether anyone agrees with him or not is a matter of indifference.
The neo-liberal straw-man set up by Meles is based on the notion that after the ‘predatory state’ phase of African rule, which followed the exploitation of colonialism, the neo-liberal model was applied in Africa. This was done because of “There Is No Other Alternative” (TINA), which meant that the economic crises of the 1980s, brought on by the predatory states of Africa, needed to have an intellectual and political alternative.
When Meles concentrates on the inadequacies of the predatory state, he is quite good and convincing. Martin Meredith makes the same case in the Fate of Africa, his monumental review
of post colonial Africa.
Where Meles and other analysts differ is in what happened afterwards. Meles argues that the neo-liberal agenda of opening markets and allowing free investment was applied in Africa. This was confirmed by the ‘Washington Consensus,’ which was developed in reaction to the East Asian financial crisis of the late 1990s, in which, according to Meles, the state faults were emphasized and the private sector faults were forgiven.
It takes a monumental stretch of the imagination to say that the neo-liberal agenda has been tried on this continent. In fact, most of the analysts and writers of the period bemoan the fact of so little changing in Africa. The continent remains the worst place to do business, according to all the indicators, and the least neo-liberal place in the world (Communist China is far more neo-liberal than almost any African country.
The predictable exceptions in Africa, which continue to be good places to do business, South Africa, Botswana and Namibia, with Mozambique and Madagascar amongst others beginning to develop some credentials, have in fact been the ongoing economic success stories of the continent. None of these countries have applied a crude neo-liberal programme; they all retain highly activist states. However, they are the exceptional cases which break with the bulk of Africa, including Ethiopia, which continues in the old mode of the predatory, state-blocking the private sector from being the driver of economic growth which it is in the rest of world.
When comparing the reality of Ethiopia and government policies to the picture painted by Meles in his paper is also a visit to the ‘Twilight Zone,’ a place where reality is overtaken by fantasy.
No one sensible would argue that there is no critical role for the state in the economy, especially in a developing country. However, the role that the Ethiopian state is playing in the economy, and the ruling party for that matter, leaves little space for a genuine private sector.
This, of course is blamed on the private sector itself.
Combined with the other parastatals, an intensely bureaucratic system and an aggressive as well as interfering state in most sectors, it is no wonder that the private sector does not leap at the ‘opportunities’ offered by the state. It is amazing how much the independent private sector has been able to accomplish in Ethiopia given all the constraints. And the apparent economic growth in the modern sector in Ethiopia has been in spite of the government, not because of it.
Critical areas of the economy – such as telecommunications in which the private sector has accomplished so much almost everywhere else in the world – continue to be state dominated; and Ethiopia continues to fall behind. There is also the example of finance, where the state sector is gradually declining in domination only due to private banks and insurance firms staffed by former government employees with barely perceptible improvements on the awful state system. As in telecommunications, small steps forward – like ATMs – are heralded as big advances, while neighbouring countries charge ahead with the help of state of the art international banks.
The message from Meles’s paper is clear: the EPRDF must rule for 50 years, and the tiny advances combined with the many failures of the state and party-dominated economy will continue. This is not a formula for democracy or development.
— Addis Fortune is an English weekly based in Addis Ababa, Ethiopia.
