Ethiopia and Utopia in 2023
When Meles Zenawi officially announced the war on poverty in the early 1990s, patriotic Ethiopians had the immense confidence that he would achieve his goals at ease. After all, this announcement was made by a veteran warrior who had led a not-so-well-armed guerrilla faction to victory against one of the largest standing armies on the continent. It took less than seventeen years to bring the Derg regime to ashes.
Twenty years after that declaration, however, the war on poverty has not been won and even the spectre of famine has not disappeared. What happened to the veteran fighters? Who are to blame for the failure of this national crusade against poverty? Where are the much-trumpeted military feats of the highlander generals and strategists? If we cannot defeat poverty, why not call for a ceasefire?
I think the government has made a comprehensive evaluation of its twenty-year-long performance and there is no doubt that certain tactical and strategic changes are high on the agenda. Some of the changes are focused on strengthening the logistic and military-equipment bases of the combatants. Others aim at reviving the morale of the army members by purging more than 747 old-timer generals, colonels and commissioned officers. But most important of all is the recent proposed plan to purchase more than 200 T-72 second-hand tanks from Ukraine. By the time we get these tanks, government capacity will be strong enough to crush poverty at any battle. Thus, ceasefire is not an option.
On a more serious note though, I am not one of those naïve fellow citizens who entertain the illusion that Ethiopia would graduate into a major industrial economy or join the middle income countries’ group under Meles Zenawi’s leadership. Apart from its toxic ethnic politics, the economic illiteracy of the regime will not allow the country to achieve such grand social and economic goals.
To begin with, we have a regime that never hesitates to say that Ethiopia is too poor to afford farm subsidies to its impoverished peasants. But on average about half a billion dollar worth of badly needed capital slips out of the country every year. If the legal and institutional framework that monitors the movement of capital into and out of the country were strong, the country would not be dissipating such inordinate amount of foreign currency and a good portion of it could have been channelled towards developing the country’s ever fragile agriculture.
Moreover, on the one hand you hear the official oratory about the country’s financial potential to fund a five-billion-dollar mega power project on its own. On the other you have a government busy selling the country piece by piece to foreigners on the pretext that the country has no capacity to operate large commercial farms that cost a few dozens of million dollars. We are very generous when it comes to MNCs which enjoy numerous privileges including tax holidays, duty-free import status and access to vast expanses of land at knock-down prices. But in this country the poorest of the poor pay exorbitant rates of interest as high as 30% on small loans managed by microfinance organizations. Absurdity, like anything else, has a ceiling. In Ethiopia you find a glut of it.
But we should not also underestimate the power of the expertise rear guard that is equally responsible for Ethiopia’s endless woes. There are those intellectual Pharisees who make ridiculous “predictions” about the “middle income Ethiopia” in 2023. These economic oneiromancers have the audacity to tell us about the trillion-birr Ethiopian economy twelve years down the road. But they cannot persuade us how such would-be Utopia can have 15 million of its citizens currently in dire situation, some crying for emergency food assistance and others on regular food-for-work programme. Of course, if the “experts” are talking about the ruling elite, I think there is no need to worry about their future net worth. Some of them have already joined the global upper-class family, wealthy enough to go for a 1.2 million euro shopping binge in Europe.
Foretelling the economic future of a nation is by no means a local phenomenon. There were some self-styled economic shamans a couple of decades ago who had predicted that Japan would be the global economic taskmaster of the 21st century, dwarfing the United States through some fanciful Japanese economic karate. There were also some financial oracles in the early 1990s who said that the Dow Jones Industrial Average would reach 36, 000 within less than five years time. Today, Japan is a basket case of a deflationary economy and the Dow trades at about one third of the price the shamans had predicted. Instead, China has recently surpassed Japan and the Dow still teeters around 12, 645. As if this were not enough, much to your chagrin, there are many more guys who want to tell you the economic ranks between India, China, and the US some thirty or even fifty years down the line. Good Luck.
And coming home, like those in the Dow and Japanese failed saga, you have guys who declared their prophetic statistics in 2009 that Ethiopia’s GDP measured in Purchasing Power Parity will be half trillion dollars (472.152 billion dollars, to be as precise as the oracles) by 2023. Most will agree that twelve years is not a century, and if we are to judge them by current developments, time is not on their side. For some time these guys may have enjoyed talking drivel that Ethiopia is going to be the third biggest economy in Sub Saharan Africa within a decade. But the famished millions in Ogaden and much of Eastern Ethiopia are seeking explanation for that irresponsible baloney. In any decent society, tricksters who play with people’s lives should be ashamed of their misdeeds, at least when they are caught up red-handed.
Now all those forecasts about the “Ethiopia of 2023” are not just technical absurdities built upon shaky and unrealistic assumptions about the continuity of current trends in key macroeconomic fundamentals, whose reliability, as we know, is as hazy as the democratic credential of the very regime that cooks and publicizes them. In my opinion, economists and policy makers should be like police and security men, always vigilante, constantly patrolling areas of responsibilities under their jurisdictions, and invariably prepared to respond to unpredictable events and responsive to ongoing developments.
Of course, planning is important. Predicting the trajectory of the national income and other relevant macroeconomic policy variables in the short to medium run, say up to five years, may not spell excesses. However, even short run forecasts are fraught with numerous irregularities and uncertainties and they must be handled with great caution. You do not dream about a middle-income Utopia when a dozen million people are at the mercy of international humanitarian assistance.
To the business folks and bureaucrats who trumpet about the new prosperous Ethiopia in 2023, we say, the current famine, the gruelling poverty and difficult economic conditions apparent everywhere in the country, prove your prophesy to be false and misleading. We tell them, in the words of Franklin D. Roosevelt, that government by organized money is just as dangerous as government by organized mob. We tell them to heed the fears and concerns of the starving millions, not the self-proclaimed shamans, who, by the way, do not know what will happen to themselves in 2023, let alone what befalls Ethiopia.