Why ethnic-federalism deters people-centered, equitable and integrated development (Part 1 of 10)

Whether it
is a country that is well governed such as the United States where the middle
class is squeezed by the one percent rich in whose hands incomes and wealth are
concentrated; or in a poorly governed country such as Ethiopia where corruption
and illicit outflow from one of the two poorest countries in Africa, is now
endemic, the impacts are the same. Repressive and corrupt governance entails
injustice and shame for those who are left out. Poverty and injustice are sources
of shame and agony, especially when these are induced by minority ethnic elite
that extract billions of dollars each year from the poor, the society and
country. Economic plunder is injustice; and where it exists, peace is
inconceivable in the long-run. The Oxford University Multidimensional Index
identifies Ethiopia as among the two poorest countries in Africa. If one gauges
poverty using the African Development measurement of US$2 dollars per capita
per day, ninety percent of the Ethiopian people are poor. Poverty affects all
segments of society. It is perhaps the one shame that all ethnic and religious
groups have in common.

Over the
past several months, I offered compelling reasons backed by concrete evidence
why Ethiopians must unite; and why they can indeed unite if they are willing. I
admit that it is easier to diagnose problems from all sides and suggest alternatives
going forward. There must be social forces on the ground and support outside that
are bold enough to implement alternatives that would embolden ordinary people
to free themselves from the shame of injustice, poverty and destitution. It is
within the realm of possibilities.

In my 2010
book Waves; I analyzed the evolution of ethno-nationalism, and the
socioeconomic and political architecture of the current government. I
strengthened the arguments of its pitfalls and the vulnerabilities it poses to
national cohesion, stability, democratic interactions, equitable and inclusive
growth and development, and the threats ethno-nationalism poses to the country
and to its diverse population.  The
single most worrisome source of these vulnerabilities that the vast majority of
Ethiopians share is endemic poverty. Another is continuous exodus out of the
country to escape injustice and poverty. Wide spread and recurring hunger is a
glaring example of injustice. Increasingly, poverty is compounded by rising
inequality. This emanates from the plunder of national incomes and resources and
its concentration in a few at the top of the policy, decision making and
resource allocation process. It is a pyramid. Corruption, illicit outflow,
nepotism and discrimination are a consequence of a system; and the system
happens to be ethnic, repressive and corrupt.

For this
reason, I concur with President Lula of Brazil that hunger is “actually the
worst of all weapons of mass destruction.” 
I agree that “there will be no peace” without resolving Ethiopia’s
endemic corruption and hunger crises. Regardless of one’s political stand with
regard to Ethiopia’s future, the urgent need for social justice is embedded in
this vicious cycle that is akin to a national tragedy. When a governing party
uses humanitarian aid to punish opponents and reward supporters, you know that
the governance is not only unjust; but cruel. Those who are left out,
unemployed and hungry have no stake in the stability a system that denies them
a chance to eat and earn decent living. I share the notion that overcoming
hunger is a collective, and not solely, a government responsibility. However,
lead accountability and responsibility for destitution, hopelessness and hunger
reside with the top leadership of the governing party. It is this leadership
that created the ethnic federal political and socioeconomic system that serves
it and its allies well while keeping the poor where they are.  

No matter
how one diagnoses it, ethno-nationalism and ethnic-federalism now contribute to
the lack of a level playing field in social and economic life. It is legitimate
for the reader to ask a simple question and try to answer it honesty. How did
the current income and wealth concentration arise? Why are billions of dollars
stolen each year and not recycled within the country to build factories,
schools and hospitals and to boost agricultural productivity? Stolen wealth was
not inherited or granted by forces from the heavens. It is manmade; and it is
only humans who can reverse this corrosive and corrupt economic system that
makes poor people even poorer. I keep suggesting that, if things persist as they
are, a person born poor in Ethiopia has a higher chance of dying poor. Poor
parents transfer poverty to their children and the cycle continues. They have
no assets that will free them from this vicious cycle.

Capital
accumulation and concentration in a few is never accidental. It is systemic and
arises from a system that allows it. In their provocative and well researched
paper, “Rethinking business and politics in Ethiopia: the role of EFFORT, the
Endowment Fund for the Rehabilitation of Tigray,” Mesfin Gebremichael and Sarah
Vaughan make a direct correlation between Tigrean elite political capture at
the top and capture and plunder of economic and financial resources throughout
the country. They show public “frustration at persistence of a non-competitive,
moribund and oligopolistic market, based on low levels of productivity, and
regularly delivering high levels of opportunistic rents.” These “opportunistic
rents” emanate from procurement deals and commissions; government sponsored and
financed construction of roads, bridges, schools, health facilities, dams,
offices; dominant roles in the transport and export and import business;
generous and non-collateralized access to and provision of urban and rural
lands, credits and loans; biased permits; accesses to foreign exchange and so
on.  Keep asking what type of system
allows this to happen? You will be in a position to unravel the mystery of
capital in Ethiopia and the success of EFFORT and other monopolies.

So what is
wrong with the EFFORT monopoly story? It is owned by and benefits a specific
ethnic group, Tigrean. The extraction is national and the beneficiaries are
Tigrean elites and persons. It is funded largely by a central or federal
government that is dominated by the same ethnic elite. It punishes the vast
majority of the population while amassing incomes and wealth assets that are
simply grotesque and unjust. Income redistribution to “us” from “them” through
narrow ethnic-based political power has the effect of limiting economic and
social opportunities for the rest. There is no legitimate or valid argument
that any Ethiopian could make that the socioeconomic and political system
should result in a zero-sum game. If ethno-nationalism and ethnic-federalism
prove to be impediments to shared growth and development, it behooves political
and social leaders to reexamine the model of crony capitalism itself. In the
medium and long-term, Ethiopia cannot afford an economic and social model which
rewards those with political power and punishes those without one. The system
keeps the entire society on a low productivity path. This is why it is labeled
as “moribund” and the lead reason why I wanted to tie the hunger issue with
ethno-nationalism, and ethnic-federalism. Both are impediments to equitable, inclusive
and rapid growth and development for all Ethiopians.

If the
current ethnic federal system is a barrier to equitable growth and development;
and if it is the lead source of repression and corruption (the double whammy),
is it at all sensible to propagate ethnic politics as a virtue and a corner
stone for democratization? I am afraid to report that there is overwhelming
evidence to the contrary. Studies show that ethnic politics, organization and
leadership will not advance justice, equitable accesses to economic and social
opportunities. It will not advance political pluralism and the rule of law. Ethnic
politics will not lead to the sovereignty of the people. Sovereignty is gained
when each person has the right to voice her/his opinion and has the chance to
participate in the political, policy and decision-making process freely.  

In light
of this, I welcomed the recent monumental decision by one wing of the Oromo
Liberation Front to abandon narrow ethnic politics and secession and to join
other Pan-Ethiopian democratic forces in the quest for political and social
justice for all Ethiopians. This is a most welcome development and should
encourage others who believe in the independence and territorial integrity of
the country and in the unity and sovereignty of the Ethiopian people to
coalesce, collaborate and struggle for the same cause. Dissidents must seize
the opportunity now. It is among the prime reasons why I am writing this
series.

This
latest positive development notwithstanding, I am not entirely convinced that,
as yet, Ethiopian political and social elites appreciate the economic, social
and political forces that are shaping the new world of this century. This
unfolding world places enormous emphasis on educated workforces and national
cohesion on the one hand and flexibility to manage the risks and harness the
benefits from an increasingly integrated world. Globalization is mean unless
one has a nationalist government that places singular emphasis on national
ownership of assets and on productivity and equity. It calls on a new
generation of educated people who use science and technology to create and
recreate their own societies. The old way of organizing and managing is
increasingly out of place. This new and demanding world requires fresh and
outside the box rethinking of how Ethiopian society ought to be organized and
governed in meeting new challenges.

The
TPLF/EPRDF model of ethnic governance is not suited to respond to this
demanding world of change. A few examples from past practice will illustrate
this point. The leadership conspired and turned over Eritrea in general and
port of Assab in particular and made the country landlocked. A landlocked
economy is a dependent economy. Import and export costs are astronomical because
of the regime’s unforgettable and deliberate policy mistake. It offered 1,600
square km of some of the country’s fertile lands, waters, flora and fauna to the
North Sudanese government as dividend for support Sudanese support when the
TPLF was a liberation front. Having failed to achieve food self-sufficiency and
security for the Ethiopian people, it embarked on one of the most disastrous
policies of any government. It offered millions of ha of the most fertile
farmlands and water basins to companies and persons from 36 countries; and to
Tigrean elites that are loyal to the TPLF. It is therefore not equipped to deal
with the intricacies of managing a society in the 21^st century.

Without
going much further than the later part of the 20th and the early part of the
21st century, governance in Ethiopia has been based on the principle of
political and economic capture by narrow ethnic and ideological elite. This was
done through non-peaceful and non-democratic means. Political and economic
capture has been about punishments and rewards. In coming to power, successive
regimes had to inflict sufficient pain on their enemies so that they will never
resurrect. Since the gains realized from continued political capture are
substantial, the ruling group must reward itself and its supporters in order to
solidify its power base. Correspondingly, it had to deprive its competitors of
political and economic roles. In a poor country, financial, budgetary and other
economic resources are very limited and are thus strategic tools. The TPLF core
is a master at marrying ethnic governance, including ethnic federalism with
economic capture.

Traditionally,
a regime does not see the duration of its governance as finite and as subject
to public consent. Political capture has always been a win-lose strategy. The
biggest losers in this strategy are the poor, the society and succeeding
generations. Political leaders do not wish to lose with grace through free,
fair, open, transparent and competitive elections. The political tradition is
for the ruling group to win big by any means necessary, including electoral
fraud, intimidation, killings, imprisonment or persecution of adversaries. The
TPLF/EPRDF top leadership has perfected this instrument of control at
substantial costs for the country, and the vast majority of the population,
including the vast majority of Tigrean.

Ethnic-governance
and ethnic-federalism embed drawbacks in social, economic and political terms.
Elections are always contested and are directly affected by them. Accesses to
social and economic opportunities are influenced and directed deliberately.
Land leases and allocations are decided through ethnic elite lenses. The
concentration and uncontested nature of political and economic power at the
executive level has offered the ruling-party the institutional and material
means to hold on to power and to refrain from initiating needed socioeconomic
and political reforms. Reform would mean sharing power and resources with the
rest. In an effort to appease nations, nationalities and people, the system
allows the minimum required. It promotes and allows cultural, linguistic and
other forms of freedoms while exercising monopoly over institutions, policies
and decision-making. Regional ethnic elites and personalities act as modern
vassals and ‘lords’ and are often blamed and sacrificed when things go astray.
The succession of Regional Presidents in the Gambella region who have been
sucked is a case in point. Their primary role is not to serve the people and
region they represent. It is to be loyal to and serve the party in power. Regional
ethnic officials are never free or independent to enjoy freedom of choice. I do
not underestimate the perceived emotional and real benefits associated with
ethnic federalism. I contest its democratic content.

In my
assessment, radical reforms are needed urgently to empower Ethiopian society as
a whole and to feed the millions who depend on international emergency food
aid, hundreds of thousands who live the country, and millions who are
unemployed.  Even if one were to ignore
the developmental reasons, this back drop is vital for humanitarian causes. To
ignore this injustice of recurrent and massive hunger is to deny justice to the
affected millions. I do not know of a single Ethiopian who is not ashamed and
saddened by the level of destitution, hunger and recurring famine in Ethiopia.
While leaders of donor institutions and non-governmental organizations
empathize with the hungry or send food or money or both and feed millions, it
is a matter of dignity and honor for Ethiopians to reject the system that
allows these to occur in the first place. Ethiopians cannot go on depending on
food aid for ever.  For those in the
Diaspora, it is about a recurrent human tragedy of a country with which they
identify and they love. For them, and for millions of concerned people around
the globe, the hunger of a child, a mother or a father waiting for emergency
food aid is an affront to conscience and human dignity. It is a lead indicator
of failed leadership.

For
government officials who live in what an Indian economist, Khanna, calls
“mansion villas,” destitution has become a normal and acceptable part of life.
For this reason alone, I will highlight critical policy issues, as a prelude to
this series on the devastating impacts of ethnic political and economic
capture.

While
children, girls, boys, mothers and fathers are starving and dying, the
ruling-party continues business as usual. It is more concerned about regime
continuity, and less about the bigger and most immediate issues of hunger,
famine, starvation, unemployment, slum-like shelters, dependency and endemic
poverty. In this sense too, the ruling party’s values are worrisome to most
Ethiopians across the ideological and ethnic spectrum. They feel that the
regime focuses much more on rewards and punishments to keep itself in power and
to extract more wealth and incomes from a broken system. It inflicts
punishments on those who dissent and disagree with or oppose its policies and
programs. Many Ethiopians say that the ruling-party rewards its members,
affiliates and supporters handsomely. In doing this the leadership has elevated
the punishment and reward equation to a new and dangerous level. This has the
unsettling ingredients of collapse and civil unrest that is unpredictable. In
light of this, I conclude that the TPLF/EPRDF socioeconomic and political
conception, design, policies and programs have proven to be totally ethnic
political elite-based, self-serving, dictatorial, corrupt and dangerous. The
executive branch has replaced all institutions with regard to policies and
decisions. 

The
conception of ‘victory I win or defeat I lose’ has
strengthened the proclivity to hold on to power by all means necessary.
Historically, political power in Ethiopia was characterized by a macho culture
of defeating enemies. Battling out policies and programs through peaceful and
democratic means, with the intent of letting voters decide, has never been the
norm. Devaluing and limiting the formation of political pluralism and
advancements toward a democratic culture of voter preferences and choices, the
ruling-party uses public funds to recruit and mobilize members. It incentivizes
and guides voter patterns to its own advantage. It punishes those who challenge
the system in any way. It rewards those who support it. Affiliated ethnic
parties and elites who lead them facilitate this phenomenon. This way, the
political culture of exclusion continues indefinitely regardless of social
injustice.

The reader
would say that such a punishment and reward route to political power is not
unique to Ethiopia. It has been a pattern throughout post-colonial Africa. I
agree. My lead argument is that the primary motivating factor in this century
as in the past behind the same model continues to be acquisition of wealth
assets. On October 16, 2009, the Financial Times (FT) put this succinctly in an
article entitled “Affluent Africa: The most reliable route to riches in Africa
once lay via politics and “public” service.” No surprise, since “the state in
many of Sub-Saharan Africa’s 48 countries controlled the principal levers (pillars)
of the economy in the decades following independence.” The articles cited
numerous examples of extraction of riches by and for political elites using
“absolute power.” Most African government leaders and elites were famous–many
still are–not so much for public trust or public services but for extracting
wealth at the cost of the vast majority. While there have been changes in a number
of Sub-Saharan African countries, Ethiopia remains among the exceptions in not
expanding opportunities and tackling endemic poverty. Many African
intellectuals rightly ask why the country is unable to feed itself.

Ethiopia
is also among the exceptions in prolonging and sustaining direct links between
the party in power, the state and ethnicity. I shall show that these links
promote and show corrupt practices and allow massive illicit outflow of funds.
Similar to other Sub-Saharan African regimes that have not yet changed, those
in power are not sole gainers from political and economic capture. They create foreign
and domestic alliances and partners to justify their grip. The Ethiopian case
mimics such partnerships in globalization as well.

One example
might illustrate the point. In the same FT article quoted above, Mohammed
Hussein Al-Amoudi, one of Africa’s wealthiest men is identified as one of the
movers and shakers of Ethiopia’s political economy. An Ethiopian newspaper had
identified the relationships between Al-Amoudi’s large business empire and
monopoly and the ruling-party as a “state within a state”. A capitalist has
found a lucrative alliance in a country where there are hardly any large scale
domestic or national competitors. “Al-Amoudi is close to the ruling regime and
partly funded Ethiopia’s millennium celebrations in September 2000. Al-Amoudi’s
business empire centers on the Midroc Global Group, a conglomerate that owns
more than 30 enterprises; and employs 24,000 people in four continents. Having
leased vast tracts of land for commercial farming, the Sheikh also owns the
Legadembi gold mine, which produces roughly 3.5 tons of fine gold a year.” I do
not know of many governments that turn over a precious source of foreign
exchange for the country to a foreign monopoly.

The point
of the quotation from the FT article is to suggest that the ruling-party allows
unrestricted investments and operations, including the lease of “vast tracts of
land for commercial farming” to foreigners and domestic allies as long as such
investments and partnerships pay dividends financially, politically and
diplomatically. “Absolute” state political and economic power allows virtual
centrally driven investments and economic monopolies to thrive. They crowd-out
and undermine national firms and domestic entrepreneurs. In short, the system
perpetuates dependency; and suffocates domestic private sector development. How
can deserving Ethiopian nationals enter and sustain businesses if monopolies
are given special privileges? The gold mine owned and run by Al-Amoudi was once
state owned and profitable. Privatization proved to be lucrative for ethnic
folks and ethnic endowments that are close to the ruling-party. Massive asset
transfers associated with privatization show the dilemma. Among other factors,
privatization has not expanded domestic and nationally owned and managed and
merit based enterprises. It has not generated large employment. It has not
produced a vigorous middle class. There is little benefit for Ethiopian youth,
especially girls. Contrast and compare this condition with the Asian Miracle
where privatization and indigenous development took advantage of globalization
in general and Foreign Direct Investment in particular and offered enormous
employment and incomes opportunities for millions.