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Ethiopia: an alternative view.

I read with interest John Solomon's spotlight on Ethiopia article (Top African Companies, African Business April 2005 issue) and wish to make the following 'mise au point' for the benefit of your readers.


In writing an upbeat article on Ethiopia's economy, Solomon has failed to grasp the current reality and the undeniable failure of the economic policies of Prime Minister Meles Zenawi.

Zenawi's government is not moving towards a free market but being dragged to it. Privatisation has not created positive changes but has mainly enabled the state to sell state-owned enterprises to a group of companies under the EFFORT umbrella owned by the ruling party--the Tigrean People's Liberation Front (TPLF).

Many of the TPLF's senior leaders sit as company directors on these firms which are now being called 'endowments' to dampen popular protest. The current regime continues to put obstacles in the path of foreign investors--a fact that has raised bitter complaints from potential investors and been criticised by the IMF and World Bank.

It is certainly true, as Solomon comments, that some 80% of the population depend on subsistence farming. It is also true that many of them live in poverty and that more than seven million citizens need food aid each year. Why they need food is not simply due to regular periods of drought.

Just a few years ago Meles was boasting that Ethiopia had produced surplus maize and would export some of it to Kenya and other countries. What went wrong?

The answer is that UN advisers and a Harvard 'expert' argued that the Meles' agricultural policy should be duplicated in other countries! The situation in Ethiopia's rural areas, and overall agricultural production, has been badly affected by government misrule, but the state still insists on a continuation of the policies of the military regime and refuses farmers the right to own the land they work.

The state owns all land and state firms under EFFORT are engaged in agro industrial activity to the detriment of the ordinary farmer. The state also holds a monopoly over the sale of fertilizers; and peasants that are heavily indebted are required to show political loyalty to the ruling party or face punishment for non-payment of their debts.

Reality behind statistics

The reality of Ethiopia belies jovial statistics. For example, Meles says that by 2007 Ethiopia will be food sufficient--as empty a claim as his recent declaration that in three years Ethiopians living in rural areas will have access to the internet!

Compounding Ethiopia's malaise is ethnic federalism, a federation that exists only in name but negatively affects coherent economic activity. The country is divided into nine kilils (regions or Bantustans as Ethiopians call them) not for reasons of decentralisation and self-determination but the supremacy of the TPLF.

The US State Department's 2004 Human Rights report has exposed the failing of the current ruling party's system and confirmed that TPLF loyalists hold more than 95% of government posts.

Any comparison with other African countries shows the problems that Ethiopia is facing. In Ethiopia, only 13% of the population has access to safe drinking water (43% in Ghana and 25% in Kenya); access to sanitation facilities in rural Ethiopia is the lowest in Africa at 15%; there is only one doctor for every 33,000 Ethiopians; 10 of the 70m population is infected by HIV; in 2002, there were just three telephone lines for every 1,000 Ethiopians, and just six TV sets, etc. etc..

Government regulations, monopolistic tendencies by TPLF controlled companies, bad credit policies and heavy taxes have all stunted the growth of the private sector.

If, amongst the despair there is some good news like that of the Ethiopian Airlines, let that news be qualified with reports that draw attention to the situation in previously well run public sector institutions.

These institutions such as the Commercial Bank and the National University have lost competent personnel to overseas posts, fundamentally reducing their capacity.

Had John Solomon truly focused on the Ethiopian situation he could have taken the opportunity to analyse the country's privatisation policies, their content and the impact on Ethiopia's economy.

Furthermore, the system that goes under the name of ethnic politics and ethnic federalism (in Ethiopia the majority ethnic groups like the Oromos and Amaras number close to 20m each), the problems caused by an inability to pursue a comprehensive economic and social development policy, the dependence on foreign aid, and the tragic flaws of state ownership of land that has prevailed in Ethiopia since the seventies, should all be addressed.

Beyond the claims of annual economic growth, the Ethiopian reality presents a more alarming picture than the one suggested by Solomon. Meles and his spin doctors might try to convince us otherwise, but Ethiopia's reality is plain for all who truly wish to see it.

H. Baroda

Address withheld by request
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Author:Baroda, H.
Publication:African Business
Article Type:Letter to the Editor
Date:May 1, 2005
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