Ethiopian Business Review

Caught: Between the Legacy of Meles, His Own Featured

For many, the untimely death of Meles Zenawi, Ethiopia’s long-serving and able prime minister, on August 20, 2012 was considered as a serious threat to the country’s unity. This was because; the premier had been too powerful as he had drawn overwhelming political and military control particularly after 2001. His sudden death after 21 years of firm control was anticipated to create vacuum and power struggle within the ruling Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) and the four parties that constitute it.

Nevertheless 10 months later, his successor Hailemariam Desalegn has managed a peaceful transition and maintains the same economic growth like his antecedent.

Hailemariam, who is a handpicked successor by Meles, chose to emulate the strategy of his predecessor to run the country. He in fact reiterated time after time that he will stick to his predecessor’s policy and way of governing the nation. As a result, no visible change was seen in the state administration for several months. The Premier kept for months without even changing a single minister of the cabinet he inherited. For observers and political analysts, the situation was an attention-grabbing development.

René Lefort, author of the book, “Ethiopia: an heretical revolution” and who has been writing about Ethiopia and sub-saharan Africa since 1970s published an article headlined, Ethiopia: Meles rules from beyond the grave, but for how long? The article, which narrates Hailemariam’s determination of continuing the policy and legacy of Meles, was published on the opendemocracy.com on 26 November 2012. The article triggered a great deal of discussion among political analysts for weeks.

For those who have been considering Hailemariam as the perfect clone of the deceased Meles, it had only taken less than a year to prove them otherwise. During the past 10 months he got used to the essential elements of the tricks that are pretty much necessary to run the country. A sign of a new era is already floating on the air. It seemed Hailemariam was waiting the 9th Organizational Assembly of EPRDF Council Congress that convened in Bahir Dar, Amhara National Regional State, from March 23-24, 2013 to review the mid-term performance of the Growth and Transformation Plan (GTP) and at the same time elect the party’s chairman and deputy chairman. As the party confirmed his chairmanship for two years, Hailemariam seemed to have taken a gearshift in his administration.

Hailemariam did not have the common facet like the long time EPRDF elite politicians share – the long time struggle fighting against the Derg, the military junta ousted in 1991 by EPRDF. He joined the ruling coalition through its southern limb Southern Ethiopia Peoples Democratic Movement (SEPDM) in the 1990s. For this and other reasons many do not believe that the new prime minister will have real power to make very significant decisions and run the country in his own way as his antecedent did.

Lately, the Prime Minister seemed to disprove that. He has already started smearing impressions among those who follow the politics of the country and the general public. He is holding his weight and has started to influence the political decisions of the nation in his own way.

A testimony to this and his mastery of the tricks of leading the nation, whose cultural, historical and political making has been diverse, is his recent and unprecedented cabinet reshuffles and opening of new structures within the executive. That is not all; he has also taken initiatives to bring regional state lords to the federal executive state machinery and appoint new bloods in regional administrations. Some of the regions have been accused of mistreating investors, particularly investors engaged in the agriculture sector. This has hampered the growth rate of the sector.

Hailemariam’s move of installing new leaders and introducing new structures has been seen as a pinnacle of his growing influence and mastery of administration of the federal government. Perhaps, this would be the beginning of charting his legacy.

Although the government reflected the country’s ethnic diversity in the parliament, the house have, since 1995, failed to reflect the diversity of views in the country. It also failed to check the executive power. Under Hailemariam’s premiership, that same parliament has started to have a strong vibe. No matter what caused this, the parliament has now started doing its job fairly.

The establishment of new structures within the executive such as the National Planning Commission and Ministry of Environment and Forestry are new initiatives that Hailemariam should further push in other areas, particularly in taking fresh initiatives that would keep the interest of the private sector in the country.

The Prime Minister has a long way to go to maintain his imprint in the history of the country. Though he needs to build on the success of the administration of Meles and draw valuable lessons from it, rectifying some of the misdeeds of Meles should also be an important component of his new way.

One area of improvement that Hailemariam could start to chart a new way is to ease the policy bottlenecks surrounding the private sector. The sector which flourished as a result of EPRDF’s introduction of market economy in 1991 has started to shrink as a result of the policy barriers introduced by the party in recent years, i.e. the introduction of the developmental state practice since 2003/04. Since then, huge public spending has been the nascent feature of the government.

Ethiopia’s huge public spending has created one of Africa’s fastest-growing economies, but volatile inflation, balance of payments pressures and a stifled private sector raise questions over its sustainability, the International Monetary Fund said in its recent assessment of the macro economic situation in the country.

The public spending on various development projects is so massive that it is already crowding out activity of the private sector. And there is no sign that the government will compromise on that.

In present day Ethiopia, businesses struggle to access credit and foreign exchange. This curbs private sector growth and sustain an imbalance between the private and public sectors. That imbalance will weaken growth over time. It will also make it difficult to attract much needed investment from abroad and domestic sources.

Under Meles’s leadership Ethiopia has witnessed boom of private higher education institutions, numbering over 300 at times. The situation has given a rare chance of pursuing higher education for tens of thousands of citizens. That scenario has triggered the government to hugely invest to expand higher education. As a result, Ethiopia today has over 30 public universities and hundreds of technical and vocational colleges. The country had two universities until 1995. This huge public investment in the higher education sector was made without considering the already existing capacity of private colleges. No matter how frustrating the quality of their graduates are, reports indicate that public universities admit students bellow their capacities, making it too difficult for the private colleges to get students. This happened; on top of the stringent regulatory measures taken by the government which, ultimately, contributed to the gradual closure of several private colleges. It is only those that started kindergarten, elementary and high schools and also launched post graduate programs in business studies that survived.

A similar problem has been happening in the health sector. Today, if a general practitioner has to pursue a specialization, then he should work at public hospitals. And the government is also constructing private health centers inside the premises of public hospitals for the medical doctors to work overtime and share a considerable sum of the revenue. This has limited the number of medical staff going to the private hospitals for part time works. Besides, the government is hugely expanding health centers throughout the country. The effect has been that, many private health institutions are being crowed out. This is on top of the very strict regulatory measures taken to renew their business and professional licenses. The future of private health institutions in Ethiopia seems rough and precarious.

Hailemariam along with his predecessor at one of the African Union Summits in 2011
Photo: Ministry of Foreign Affairs

The same thing is happening in the financial sector; today, the state owned Commercial Bank of Ethiopia (CBE) opens branches almost every other day. Several of the financial regulatory laws such the requirement to use 27 pct the loan advancement to buy bond , doesn’t apply on CBE. The government has recently instructed all government institutions that have deposits in private banks to withdraw their cash and keep it with CBE. This has created confusion and frustration in the financial sector.

The same thing is happening in the financial sector; today, the state owned Commercial Bank of Ethiopia (CBE) opens branches almost every other day. Several of the financial regulatory laws such the requirement to use 27 pct the loan advancement to buy bond , doesn’t apply on CBE. The government has recently instructed all government institutions that have deposits in private banks to withdraw their cash and keep it with CBE. This has created confusion and frustration in the financial sector.

The same thing is happening in the construction sector; the national housing development project which earlier targeted low and middle income earners is now turning its face towards higher income earners, the 40/60 project being an example. The government’s position that it would give priority to those who will settle full payment at ones has created a sense that the project will be hijacked from achieving its intended goals. The haves are already getting ready for it. Real estate developers usually target higher income earners. So the new government project is anticipated to crowd out private developers.

The emerging automotive assembly industries have also been facing the same kind of situation due to the ever growing role of the Metal and Engineering Corporation. The corporation which assembles from agricultural machineries to four-wheel drive pick ups is providing its vehicles to public institutions without tender.

These are some of the problems that Hailemariam inherited from the administration of Meles. In fact he has inherited much more problems in the areas of press freedom, handling matters with civil societies and opposition parties. These have hampered the path for inclusive development. It seems the government or better to say the ruling party, has opted to ensure the renaissance of the country on its own. These are in part, some of the legacies that Hailemariam inherited from Meles. These legacies will continue posing serious challenge to his administration unless rectified soon.

No matter how their contributions could vary, all Ethiopians have a stake in the affairs of their country. Exerting maximum effort so that whoever wants to participate in the development of the country in whatsoever way get the chance is what the government should be busy to realize. This should not be conditional upon anything. Such inclusiveness will enable the government to ultimately ensure that the people own the development; the grand renaissance dam could be an example.

In the immediate aftermath of the death of Meles, it was right for Hailemariam to make his actions in congruence with the legacy and policy of Meles. That was necessary for the nation to remain united and avoid a possible leadership crisis.

But now, it is time for him to take a different path or his own path. EBR

Berihun Mekonnen has contributed to this article.

Amanyehun R. Sisay

EBR Staff Writter

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