Economic
Growth and Governance in Ethiopia: An Observation
Professor
Desta, Asayehgn,
Ph.D.
Over
the past decade (2003 to 2013), Ethiopia has shown
a dramatic increase in its economic growth. When
compared to the regional average of 5.3 percent,
Ethiopia’s Gross Domestic Product has grown at
the rate of 10.8 percent per year. In tandem,
Ethiopia’s extreme poverty line in both rural
and urban areas has also declined from 38.7
percent from 2004-2005 to 29.6 percent in
2009-2010. As planned by the United Nations,
Ethiopia has also achieved some of the Millennium
Development Goals (MDGs) in areas such as child
health services and safe water requirements.
Moreover, Ethiopia has also made encouraging
progress in gender parity mainly in primary
education, as well as in HIV/AIDS, and malaria
disease control (Ethiopia/Overview, April, 05,
2015). Given
these dramatic, noticeable improvements, the
cardinal question that stands to be answered is:
can Ethiopia’s economic growth be attributable
to market-enhancing strategies?
Market-enhancing
strategies
The
most important indicators that could used to
measure market-enhancement include: 1) government
effectiveness—measuring the competence of
the bureaucracy and the quality of public service
delivery; 2)
political stability—measuring the likelihood
of violent threats to, or changes in, government,
including terrorism 3) voice
and accountability—measuring political,
civil, and human rights; 4) regulatory
burden—measuring the incidence of
market-unfriendly policies; 5) rule
of law—measuring the quality of contracts
enforcement, the police, and the courts, as well
as the likelihood of crime and violence, and 6) control
of corruption—measuring the exercise of
public power for private gain, including both
petty and grand corruption and state capture (
Kauffmann et al, 2005).
Neo-Liberal
economists generally assert that market-enhancing
strategies are the most critical factors that
could explain the divergence in performance across
developing countries (Khan, August 2007).Though it
is possible to generalize, it would be extremely
difficult for developing countries to achieve
market-enhancing strategies because
market-endeavor activities require significant
expenditure of public resources and skilled human
capital to establish and monitor their
implementation effectively.
More particularly, in order to catch up
with developed countries, developing countries
that are at the early stage of development may not
completely satisfy most of the market-enhancing
criteria. To achieve these goals in the short run,
however, they might attempt to use a combination
of market and non-market techniques such as
transferring assets and public resources, creating
semi-public industries, allocating and
appropriating public land and resources for
development, direct subsidization, and they even
might be involved in prioritizing infrastructure
(Khan, August 2007).
Based on the criteria given by Kauffmann's
group, let us try to analyze Ethiopia’s
market-enhancing conditions.
Government
effectiveness:
Ethiopia’s
federalism was established in 1995 to maintain
unity and diversity and achieve stability. To
ensure the threat of disunity that prevailed
during the Military Regime, the
Ethiopian Peoples' Revolutionary Democratic
Front
(EPRDF), using Tigrai Region as a
model, vigorously
redefined the political landscape and restructured
the state into the contemporary Federal Democratic
Republic of Ethiopia. More specifically, Ethiopia’s polity was sub-divided into
nine asymmetrical
ethnic-based regional states and two cities that included Addis Ababa and Dire Dawa.
To further assure self-rule and ascertain
confidence in the nation and of the people of
Ethiopia, each
region was assured the unconditional right to
self-determination, including the right to
secession.
Thus
currently, Ethiopia’s Democratic Developmental
State is guided by the ruling party known as the
Ethiopian Peoples’ Revolutionary Democratic
Front (EPRDF). Controlling the government
bureaucracy, the EPRDF is entirely under a
plan-oriented developmental process. The
bureaucracy is managed by civil servant
functionaries that are primarily members of the
political system. Members of the bureaucracy that
are required to serve according to their ethnic
affiliation are mainly recruited under political
pressure, but are also influenced by the ruling
elites. Thus, while the EPRDF ruling party
constantly argues that it is applying democratic
rules and fair judicial practices, the various
opposition groups feel that all election processes
that have been conducted since 1995 have been
fraudulent and that the EPRDF is using the term
“good governance”
just for window dressing purposes.
Designing
financial
adjustment by federal states could be very viable
to ensure that more equal living standards are
maintained among its subunits. To
maintain the necessary foundation for fostering
economic competition and to enhance competitive
efficiency, however, local governments of the
federal system need to be endowed with adequate
resources in order to collect taxes and administer
fiscal policy. If the ability of the local
government is constrained, however, it is the duty
of the federal government to play cooperatively
toward bringing about fair allocation of resources
among the federal subunits. In short, democracy
and local governance should be strengthened with
fiscal decentralization without diminishing the
benefits that may arise from coordinated action at
the center. Therefore,
the lesson that needs to be learned by local
governments in Ethiopia is that it needs to maintain
equality between resource-endowed units and
resource-poor units. That is, local officials need
to support their constituents and
diligently deliver the required public services
instead of levying exuberant rental income tax to
prove to their superiors that their units are self
sufficient. Thus, it would be ethical for local
officials in Ethiopia to calculate rental income
not according to fictitious figures but instead
use the actual rental incomes, subject to random
auditing, acquired from both tenants and
landlords.
Political
stability: To rekindle Ethiopia, which was
on the brink of a colossal failure both during the
centrist feudal monarchy and the unitary military
dictatorship, the current Ethiopian federal
structure needs to grant some rights to all its
citizens. To
put it mildly, the Ethiopian environment now seems
to be reasonably stable except that some
Ethiopians in the diaspora are articulating their
dissatisfaction and concern that the EPRDF
government has denied its citizens free media,
freedom of expression, and are hoping that the
political space that has been constricted since
2005 be widely opened. As a result, some splintered
opposition groups and militants groups located
in some of the neighboring countries
are in the process of triggering some form
of violence.
Voice
and Accountability: At the local level, local
residents are hardly empowered and they have not
been able to participate meaningfully in selecting
their representatives.
Except being involved in a shameful form of
election, the local people are not given the right
to choose their leaders. Though in name they are
supposed to be autonomous, the zone governors,
mayors, and killel
leaders are carefully chosen from the hard core
cadres of the ruling party. A case in point is
this. During the last election in 2015, some of
the federal members of parliament never went to
their local areas to tell their agendas for the
future. To add insult to injury, some of the
nominal candidates never cared to listen to some
of the concerns that their constituents had. Being
faithful and accountable to their political party,
as the cadres got endorsed; a green signal was
given to the constituent units to elect them.
As persuasively argued by Araia, the EPRDF
does not demonstrate accountability to the
Ethiopian people. What we have in Ethiopia is a
mono-party rule that refused to reconcile
democracy and government (2013).
Regulatory
Quality: In
theory, non-partisan, professional public service
is a prerequisite to a developmental state. Given
this, the EPRDF has formulated various regulations
that permit and promote private sector development
in the country. But by any stretch of the
imagination, it could be said that there does not
seem to exist any interface between the ruling
party cadres and the private sector.
In short, the ruling bureaucracy seems to
be far removed from the corporate sector. Despite
the very lauded opinion that foreign investments
could be crowding out domestic investors, more
recently, the Ethiopian Government has been very
busy awarding virgin farmlands, and has been
giving special investment deals such as tax
holidays, tax relief on imported capital etc., to
attract foreign investors.
Rule
of Law: The
current Ethiopian constitution was enacted
in 1994 and was fully adopted in 1995. In tandem,
the Ethiopian justice system was overhauled to
allow citizens to seek and obtain an affirmation
of their rights as embodied in and guaranteed by
the new democratic constitution.
In addition, to adjust to the demands of
the changing world economy, the judicial system
has been re-tailored several times (Federal
Democratic Republic of Ethiopia, February, 2005).
Given this, it is sad to note that neither the
litigants nor the practicing attorneys seem to
have confidence in the Ethiopian justice system.
The judges are generally assigned to the court
bench not because of their training and experience
but in order to fulfill the country’s quota
system. Given this, the court systems in Ethiopia
are manned by inexperienced judges who have no
desire to stay for a long time, and are widely
known for being given court appointments that do
not last more than six months. Most of the current
judges seem to be using their experience to market
themselves when later they become private
attorneys or business consultants. No wonder why a
number of current attorneys are quick to note that
they have been judges.
Given
this, the justice system in Ethiopia can be
characterized by delays in dispensation and it
lacks institutional capacity in both enforcement
and the judiciary. In 2004, the Ethiopian
Government was supported by the World Bank to
enhance the effectiveness of law-making
organizations and improve the effective delivery
of justice. This could help achieve transparency
and accountability through increased access to
justice information so that court judgments and
proclamations could be published. However, despite
several revisions, the Ethiopian justice system
has turned from bad to worse. As illustrated by
the World Bank:
Some
of the most crucial problems in the justice system
included severe shortages of trained professionals
and qualified personnel; lack of essential
facilities in institutions of justice, the
inability of law schools to produce competent
lawyers in the desired number; outdated and
inefficient methods and procedures of the system
in delivering justice; court congestions and
delays…and inefficient system of law enforcement
(May, 3, 2010).
Control of corruption: From an ethical point of view, corruption is
an integral part of an ailing economy. It is
reprehensible and socially undesirable because it
fosters rewards for unproductive private and
government employees. In addition, powerful
interest groups use corruption to bribe government
officials into making decisions in their favor and
bypass their competitors. Though not visible,
there are open claims by government officials and
consultants that some government officials in
Ethiopia are utilizing public power to fatten
their pockets by capturing a large share of a
nation’s income.
Actually, a number of state-owned companies
in Ethiopia have been and are being auctioned
nowadays at below market prices (See Desta, 2014).
Though too late, the government of the
Federal Democratic Republic of Ethiopia (FDRE) is
using its command and control strategies to combat
this socially undesirable hideous acts which might
hinder development and the proclaimed “good
governance” endeavors. As a result, the FDRE has
established the Federal Ethics and Anti-Corruption
Commission of Ethiopia (FEACC) to investigate the
various forms of rent-seeking endeavors.
Let us pray that it works.
Conclusion:
Over
the last decade, Ethiopia’s economy has
flourished. From being labeled as a poor country
during the Derge’s era until the present,
Ethiopia has ascertained itself not only as a
political stable country in Africa but is also an
emerging powerhouse because it has undertaken
rekindling strategies to strengthen
export-performance through improved competition. A
number of Ethiopian youngsters who do not seem to
have a concern to pay 250 birr for a plate of
lunch are very optimistic about the future of
their country. This being observed, it is probable
impossible that the now flourishing economy is not
likely to be sustainable because it is resting on
an unmanageable and ineffective government
structural base.
In
actuality, Ethiopia is governed under a centralist
form of government though its adherents claim and
give the impression that Ethiopia is guided under
a democratic developmental state. The citizens of
the country are not allowed to democratically
elect their representatives. Some political cadres
who barely have allegiance to the country are
dragging the country into a bottomless grave. The
country’s court system is engulfed with
injustices and delays in dispensation and above
all, it is short in its capacity for fair law
enforcement and judicial process.
Thereby, it has created obstacles in the
promotion and protection of human rights. What is
more, though corruption or rent-seeking behavior
is reprehensible and socially undesirable, being
very rampant, it is ailing the country’s economy
by undermining the income of the country and
fostering rewards for unproductive private and
government employees. Therefore, if some serious,
innovative, economic ideas are not integrated into
the governance structure, the government’s call
for accountability and transparency is likely a
moot issue. In short, if the Ethiopian government
turns a deaf ear to the activities of the court
system and the rampant corruption that is ailing
its economy, the current flourishing economy is
likely to become passé. It is sad to forecast
that Ethiopia may not endure ethical, sustainable
development (economic, social, and environmental)
in the long run.
References:
Araia,
Ghelawdewos (2013). Ethiopia: Democracy, Devolution of Power, and The Developmental State. New
York: Institute of Development & Education for
Africa (IDEA).
Desta,
Asayehgn (2014). Economic Dependency and Stagnation to Developmental State. Essays on the
Socio-Political and Economic Perspectives of
Ethiopia. Trenton, New Jersey: The Red Sea
Press.
F
ederal Democratic Republic of Ethiopia (February
2005). Comprehensive
Justice System Reform Program
BASELINE STUDY REPORT: Ministry of
Capacity Building Justice System Reform Program
Office.
Kaufmann,
Daniel, Aart Kraay, and Nasimo Mastruzzi (2005).
Governance Matters IV: Governance
Indicators for 1996-2004. World Bank,
Washington, DC.
Khan,
Mushtaq H. (August
2007). Governance,
Economic Growth and Development since the 1960s, Economic &Social Affairs.
DESA Working Paper No. 54 ST/ESA/2007/DWP/54.
World
Bank, (April, 2015). Ethiopia Overview. http:/worldbank.org/en/country/Ethiopia.
Retrieved, August 10, 2015.
World
Bank, (May 3, 2010)
“Reforming Ethiopia’s Justice
System.” Retrieved, August 12, 2015.
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