A Few Points on Democracy vs. Development
Now I do not want to bombard you with all sorts of definition about democracy. I think, for the present purpose, we all agree that apart from the periodic elections and other rituals associated with them, democracies are generally supported by the triple-pillar of accountability, transparency and legitimacy, which together constitute the supremacy of the law. Where the rule of law is the highest authority, there can be no arbitrary violations of human and property rights, officials and bureaucrats will be held accountable in the event they misuse their positions and public resources, and the media will serve as a strong arm of the country’s justice system by investigating and exposing political scandals and corrupt practices. To the extent that these things are the main parts and components that make up a democratic society, I do not see why they shouldn’t comprise the precondition for development. After all, development is all about the effective utilization of a country’s available resources to generate the maximum possible benefits for its citizens. If the system in place prevents or discourages the active monitoring and supervision over how these resources are used, then the entire project about achieving all-round development will be an exercise in futility.
There is no doubt that the elite everywhere are the makers and breakers of their own societies. But they are more successful in discharging their social duties and responsibilities when they operate in democratic and transparent ways. So, in order to substantiate my case and convince you that democracy is a must for development, at least for Ethiopia, we will briefly look at the role of different elites in morphing their countries’ politics, economy, and social development through some comparative lens that guides us across China, Nigeria, Botswana, and Greece.
Most of the pro-developmental state argument will not, typically, wrap up its journey without showering lots of praises on the remarkable achievements of China, which is often upheld as the paragon of a successful state-directed capitalist society. It is true that China’s hands-on approach has delivered spectacular economic outcomes in terms of ensuring sustained economic growth for over three decades and lifting more than 250 million of its citizens out of poverty during the same period. But no matter how beautifully one portrays the miraculous economic performance China enjoyed since 1978, the hard facts remain that it is more the result of gradual erosion of the government’s role in directing the national economy and the subsequent rise of private capital and responsibility, not the other way around.
Reform, Reform and Reform
One widely dispersed, and often mistaken, assertion about China’s economic successes in particular and the attendant monomania with the “Beijing Consensus” in general is that people wrongly attribute this success to the authoritarian features of the Communist Part of China (CCP), which is often assumed to have controlled the magic wand that kept the country’s unprecedented economic expansion going for a long time now. The truth, however, is that China’s strong growth and prosperity are the result of continuous reform, opening of the economy to foreign capital and expertise, gradual decentralisation in the organization of production, and with it the increasing shrinkage of government presence in the economic scene.
China’s reform train began with the Household Responsibility System (HRS) in agriculture which dismantled the Maoist collective farms and allowed greater active participation of families in production and marketing decisions. Though the HRS still imposed quota requirements, it however empowered households to enjoy greater autonomy over the utilization of their surplus value, such as to dispose it at market determined prices at will. This new found relative freedom and autonomy combined with the prospect of making more money from selling their extra-quota produce encouraged farmers to spend more time and resources on their farms which further increased the quality and quantity of food production. Though the legal framework governing land use and ownership rights is far from complete, the there is no doubt that the HRS has played a pivotal role in transforming China’s agriculture for the better. China which lost over 30 million of its population to famine under Mao’s failed collectivization programmes became more than self-sufficient within five year period (1978-1983) and net food exporter (1983-2004).
The CCP is not just a self-selected group wishing to hold onto power at all costs. Besides the economic re-organization of production under the HRS, the Chinese political elite have made enormous efforts to modernize the country’s agricultural sector by deploying new technologies and innovative methods of production. When the reform programme was launched in 1978, less than 30% of China’s 13 million hectare of arable land had irrigation facilities; today more than 50% China’s agricultural land is irrigated. China is also among the top countries (after Japan, South Korea and Holland) in the world in terms of fertilizer application per unit of hectare, with fertilizer consumption level more than twice the world average. The government also actively promotes intensive agriculture by earmarking substantial funds for research, demonstration, capital investment, infrastructure and marketing support.
The Chinese reformers were far from being complacent. Having achieved remarkable productivity gains in agriculture and having made great strides in ensuring food security, they pushed similar radical reforms in other sectors of the economy albeit “with Chinese characteristics”—on gradual, piecemeal, incremental and cautious approaches.
On the industrial front, Chinese politicians followed even stronger decentralization measures by gradually privatizing state owned enterprises (SOEs) and further withdrawing state direction and guidance in economic life. Some of these former SOEs were transferred to individual Chinese investors; others—the so called Township and Village Enterprises (TVEs)–were restructured and put under the nominal responsibility of local governments (though in effect privately operated); still in other cases foreign participation was allowed in the form of joint venture, outright acquisition and portfolio investments. Today, after nearly three-decade-long rigorous implementation of market-oriented reforms, the private sector in China accounts for nearly 70 percent of the country’s total domestic production, which before 1978 was totally and completely micromanaged by central planners and coordinators.
Perhaps China’s most important achievement lies in the external sector. Exchange rate reforms, favourable taxation and regulatory incentives as well as stable social and political conditions combined with cheap but competent labour have enabled China to jump-start its export economy, especially by attracting foreign capital and technology in labour intensive manufacturing sector that produce electronic goods, textiles, electric gadgets, etc. for both domestic and export markets. Despite certain irregularities here and there, generally attractive and investor-friendly environment has made China the biggest destination for private capital among developing countries.
Still there are many problems that threaten to derail China from its market-oriented heydays. Increasing income inequality, corruption and environmental degradation spring to mind. The financial sector has been overwhelmingly controlled by the country’s four biggest state owned banks, which often make no hesitation to direct big loans to inefficient government owned enterprises often at the expense of innovative individuals and businesses. Its trading partners, and the US at large, are unhappy about Beijing’s deliberate manipulation of the value of renminbi, which has been artificially kept undervalued through massive foreign reserve accumulation, often by purchasing US government bonds. Property rights are far from secure and the Communist Party can sometimes bring down an entire village by brute force followed by the arrest or execution of anyone who questions such government actions or decisions.
As tough as these challenges are, Chinese economic and political elites will be determined to find solutions in their own ways and there is no reason to expect that China will reverse course and fall back to its unworkable, complex and failed communist past. Though the state still controls major industries in finance, energy and telecommunication, its role in organizing the Chinese economy is generally on the wane. Freedom of entry and exit for private players as well as increasing competition and mushrooming entrepreneurial culture are behind China’s astounding economic achievements. NOT increasing government guidance and interference.
Obviously, China is nowhere close to being a fully-fledged democratic country. But if despotism is the small price to pay for development, the Chinese elite have a lot to show for it. In less than three decades, they have built the second biggest economy in the world. What do you say about the current ruling elite in Ethiopia who have failed to achieve even national food security goals after twenty solid years?
Botswana and Nigeria
Consider Botswana and Nigeria, two African countries, with colonial past, endowed with rich mineral deposits, both inhabited by diverse cultural and religious groups. Their similarities end here.
Nigeria is notorious for its entrenched, institutionalised corruption and its politicians rank among the most ruthless professional thieves in the world. Both electoral and political corruption is rife and holding public office is a highly lucrative business in the country. Since the early 1980s, Nigeria has received over 300 BILLION US dollars mainly from petroleum extraction. This is an incredibly huge sum of money, at least by African standards. But Nigeria remains one of the poorest countries on our planet, with well over 60 percent of its citizens languishing below the national poverty line. The level of corruption in Nigeria is so deep-rooted that it has become part of the national way of life to the extent that in many parts of the world MONEY and NIGERIANS have come to be perceived as synonymous. Obviously, without all-round cultural and moral revolution, Nigeria as a nation has a gloomy future—it is simply a failed state no matter how you choose to define its failure.
On the other hand, Botswana has received lots of praise from international opinion leaders for its open and transparent dealings. In its November 6th-12th 2004 issue, The Economist Magazine lauded Botswana’s British educated presidents for their efficiency, moderate attitude, honesty and willingness to “leave office” when “the constitution says no.” In its 2009 Corruption Perception Index Report, Transparency International identified Botswana as the least corrupt country in Africa (ranking 37 out of 180 countries) with a score of 5.6 (10 being the best score). In this country, fiscal responsibility and social responsiveness go together. The government has effectively used the windfall from its diamond and other mineral resources by focusing on productive infrastructure and inclusive social spending schemes. As a result, Botswana has transformed itself from a poor post-colonial nation to a middle income country, with its citizens enjoying higher standard of living than most of their Sub-Saharan African counterparts.
If democracy—that is the legal and institutional foundations to hold public officials accountable—are not the necessary preconditions for economic development, how does one explain the divergence in the economic trajectories followed by Botswana and Nigeria?
Even if we accept the need for stronger government activism in guiding the country’s investment and production decisions, Ethiopia, or most of Africa for that matter, is far from the ideal candidate for such serious national endeavours. If by a developmental state we mean the ability and freedom of the state to mobilize national resources to achieve clearly defined social and economic objectives, this will hardly happen in a country markedly divided by ethnicity and riven by corruption. In an environment where people are deliberately encouraged to commit themselves to parochial and narrow nationalist pursuits, the local will always prevail over the national.
Of course, this does not mean that cultural homogeneity is the only ideal condition to execute developmental state programmes. Even though homogenous nations have certain comparative advantages that heterogeneous countries do not have, they are not insulated from moral, social and economic degeneration as demonstrated by the recent Jasmine contagion in the corrupt Arab world.
If anything the current popular crisis in Greece has shown us it is the fact that the past cannot guarantee the present or the future. For starters Greece is the cradle of much of the World’s civilization—most importantly it is the birth place of democracy. But unfortunately the country is deeply corrupt (ranking worse than Ghana in the Transparency International’s 2009 Corruption Perception Index) and one of the most difficult places to start business (it was ranked worse than Ethiopia in World Bank’s 2010 Ease of Doing Business Report). The shadow economy (which is based on unreported income) accounted for one-fourth of the gross domestic production in 2007, which, for instance, compared with 11.8% for France and 7.2% for the U.S. Tax evasion is so pervasive that the national treasury loses an estimated 20 BILLION dollars a year, a whopping sum which could have avoided any recourse to the IMF and the ECB for financial assistance to cushion its current sovereign debt crisis.
How could a nation that successfully exported democratic values to the rest of the world could suddenly find itself in a situation where national moral standards hit rock bottom? Of course, there is a multiplicity of causes that made the current Greek sovereign debt problem a veritable hot potato. The adoption of the euro and the forfeiture of its fiscal and monetary autonomy to a supranational authority (the ECB) is one of them. But I think no other factor would rival the existence of rampant corruption for the country’s current social and economic predicament. When the elite neglect or abandon their traditional role as social transformers and reduce themselves to mere parasites on their society, the entire nation will simply become cynical about the elite’s superficial rhetoric on patriotism and public spirited ness. Thus, naturally, unable to reign in the astray elite, ordinary people will choose to engage in their own tiny malpractices, which over time develop into major national puzzle. No wonder, in present day Greece, as of 2010, “nearly a third of Greek income was undeclared, with “fewer than 15,000 Greeks declar[ing] incomes of over €100,000, despite tens of thousands living in opulent wealth on the outskirts of the capital.”
Greece is at cross roads as a nation. Not because it will be unable to service its debt and fall pray to its domestic and European creditors. It will certainly overcome its current financial challenges with or without its EU members’ support, though ordinary people will have to endure some pain for sometime. Rather what is more worrisome about Greece is the gradual erosion of its critical social norms and institutions. A recent poll conducted to survey the confidence of the Greek people in various public institutions revealed a startling result. The proportion of respondents who said they have NO TRUST for political parties in general was a whopping 89%. Similarly, the have-no-trust response for governments was 90%, for parliament (85%), for trade unions (80%), for the media (72%), for banks (69%). The only two institutions that the people seemed to have some trust were social movements (42%) and fellow citizens (54%).
Though Greece seems to have been drifting helpmessly due to the elite’s loss of moral compass, it has still some introspective and vigilant children who are aware of its problems and who are making loud calls about the urgent need to, “redefine the public debate. Talk about public morality, a new political ethos, and the common good. Cultivate consensus, and try hard to win hearts and minds in the cause of remaking
Lessons for Ethiopia
1. Over all the elite are the makers and breakers of their society.
2. The experience of Greece shows that the past or the present is no guarantee for the future. Responsible elite like good school children are to be nurtured and cultivated to ensure their continuous existence in their societies. Where negligence and ignorance prevail, a single demagogue can intoxicate and poison an entire elite generation and turn them into forces of catastrophe. Think about the historical role of Hitler and his intellectual rear guard.
3. Cultural homogeneity is not a necessary and sufficient condition to create and develop a healthy society. And heterogeneous communities are not doomed to eternal rivalry and conflict. Altruistic, God-fearing and humane elites from a cross-section of their communities can and should defuse potentially mutually destructive tensions and create cooperative environments if they put their personal or clique interests over and above the interests of ordinary people.
4. The Chinese experience, contrary to widely held assertions, reveals that what is critical for achieving rapid and inclusive socio-economic advancement is not government’s heavy-handed, ubiquitous presence in national economic affairs rather it is sustained reforms towards opening up the national economy to the outside world, protecting and enforcing property rights and contracts, encouraging stronger private sector engagement, and above all limiting government intervention to correcting market failures, providing social safety net for the economically downtrodden, expanding infrastructure development, as well as promoting knowledge creation and dissemination. Even though China is nowhere close to being a democratic country, the role of its government in guiding national economic affairs cannot and should not be overrated.
5. Corruption is a big, and perhaps the biggest, obstacle against poverty reduction efforts in many developing countries. We were recently surprised to find out that some 8.4 billion dollars left Ethiopia illegally during the past twenty years of TPLF/EPRDF rule. But we should understand that the problem is not a new one and has its roots in the final years of the monarchy and became deeply entrenched during the chaotic Derg era. One insightful study by Léonce Ndikumana & James K. Boyce (2008) which examined capital flight in 40 Sub-Saharan African countries found that between 1970 and 2004 some 17 billion dollars were illegally smuggled out of Ethiopia, of which some 10.5 billion (60%) was stolen under TPLF/EPRDF. The reader can see that it would be extremely difficult, if not impossible, to eradicate abject poverty in our country before one can have the appropriate insecticide to fight and eliminate these bloodsucking ticks from the Ethiopian body politic.
6. The comparison between Botswana and Nigeria shows that even if two countries have abundant natural resources, strong rules and institutions that support transparency on government activities lead to superior economic and social outcomes (in Botswana) while a culture of endemic corruption inhibits a country’s political and economic progress (Nigeria).
7. Though one cannot rule out the practical relevance of developmental state for Ethiopia, it is quite impossible in the current political setting as created and advanced by the TPLF/EPRDF regime. This aspect of the problem is best captured by Dr.Berhanu Nega:
There is also another peril associated with EPRDF’s ethnically-oriented politics when viewed from the perspective of building a democratic system [in Ethiopia]. This problem arises from the distribution of state resources. Usually ethnic sentiment or identity politics is extremely intractable as it is driven by emotional rather than rational considerations. Ethnic nationalism is especially sensitive to feelings of subjugation or grievances. It is very easy to fan the flames of ethnic nationalism even based on sheer rumour or propaganda. Such developments, when coupled with conflicts of interest among the elite groups, will make recourse to nationalistic appeal even more attractive. This is clearly evident among the members that constitute the EPRDF coalition who usually engage in fierce confrontation over federal-to-regional budget subsidy allocation sessions–wrangling so common when parliament convenes every year to ratify annual budget proposals. But the problem is more severe than that. In a government structured along ethnic lines, if there is a dominant ethnic group in it, there will always be the perception that the dominant group is favouring its own ethnic enclave, regardless of the factual foundation of such claims. Even when the alleged relatively better economic activities are not based on explicit favouritism, others will use it as evidence of exploitation to agitate and mobilize their own resentful ethnic groups. In the case of Ethiopia, the all-around accusations directed at Tigray illustrate the severity of this problem. Regardless of whether or not such accusations are true, the mere existence of such perception kills any sense of solidarity among its citizens, who instead become preoccupied with bitter feelings of envy and rivalry. (Berhanu Nega in ‘Yenetsanet Goh Siqed’, my own free translation, pp.99-100)
It is true that Prime Minister Meles Zenawi has had plenty of opportunities to bring Ethiopians together for Grand National transformation mission. But sadly from the outset he chose to stick to counterproductive “Shoa Amhara” bashing campaign which later on would backfire on him earning him a bad name for leading “Wedi Adwa” robber barons. That is not all. Like his Marxist godfathers, instead of accepting criticisms for his government’s damaging actions and decisions, he preferred extreme reliance on propaganda. He was right in some sense. The Stalinists in Soviet Russia were such loud and determined propagandists that observers in the West had the tendency to speculate that life in Soviet Russia must have been superior compared with the US. This speculation could not have been more plausible especially when judged against the Soviet Union’s demonstrated achievements in cutting-edge space technology. All this propaganda, however, was exposed when Gorbachev “uncovered” Russia to the rest of the world.
In that sense, what we wait for right now is the Ethiopian Gorbachev, an Ethiopian leader who values honesty and self-examination more than his commitment to some askew ideological superstructure.
Certainly Meles Zenawi alone is not the root of all evils in Ethiopia. Far from it. We have plenty of them among other ethnic groups including the Amhara, the Oromo, the Somali, etc. An OLF activist who vows to stamp out the “children of invaders” from the “Oromo country” or an Amhara jingoist who dreams to impose his language on every other ethnic group are both as destructive as Meles Zenawi himself. It takes a simple principle to bring harmony in our nation: do not do unto others what you do not want others do unto you.
So, it must be understood that all-encompassing social transformation is brought about by people we look well beyond ethnic loyalty or even racial barriers (Mandela comes to mind) and who have profound commitment to the promotion and protection of human dignity regardless of their provincial, religious or linguistic background. Genuine transformers are those who lead their subjects by example. The elite can be the light or the darkness of their society depending on how they behave or act in accomplishing certain stated objectives and goals. When our leaders give a penny, we will donate a pound; when Meles Zenawi frequents in and around Gondar, we will make Adwa our home; when our politicians shake hands with respect and genuine smile, we will return to the true Ethiopian tradition where tolerance, love and mutual respect are the norm. You do not create a healthy society simply because you have an excellent constitution or simply because ethics is taught as a subject at schools and universities. In stressing the decisive influence of his predecessors on his great scientific achievements, Isaac Newton once said, “If I have seen further than others, it is by standing upon the shoulders of giants.” Where are our academic, political and religious giants on whose shoulders the current and future generations could stand with pride?
1. Amvona (2011), The Greek Restructuring Debate, available at http://www.amvona.com/latest-news/foreclosure/14627-the-greek-restructuring-debate.html
2. Eklogika (2011), Confidence in Greek public Institutions (in Greek) available at http://www.eklogika.gr/uploads/files/Dimoskopiseis/pi-skai-all-18-5-2011.pdf
3. Open Democracy (2011), Facing the Greek Crisis: it’s the Politics, Stupid, available at http://www.opendemocracy.net/takis-s-pappas/facing-greek-crisis-it%E2%80%99s-politics-stupid
4. Marangos, J. and Bitzenis, A. (2007), ‘Economies in Transition’, Stamouli Publishers, Athens, pp.397-441.
5. The Wall Street Journal (2011), Greece Grapples with Tax Evasion, available at