September 2019 – Ethiopian Business Review

Is it the Right Model for Ethiopia?

When Ethiopia adopted the developmental state as its growth model almost two decades ago, many did not expect the East African nation would reap massive economic gains. However, the country was able to register one of the fastest economic growths in the world for more than a decade. This contributed to the increase in per capita income and significant reduction of poverty.

Many, on the other hand, discredit the achievements because of gross human rights violations, narrowing political space, and a stifling private sector. The development model has also been criticized for making the state a dominant economic actor in the economy by hugely investing in infrastructure development projects. To finance its huge development plans, the government has excessively borrowed from local and foreign sources. This led the national debt to more than USD50 billion as of June 2019. More than half of the loans were acquired from foreign sources.
As the government was pumping huge supply of money in the economy, the situation created a surge in demand amid a huge supply constraint. The supply was poor because equal volume of investment was not made in the productive sector of the economy, agriculture and manufacturing. The result has been a bulge in the trade deficit because of mounting imports while exports remained stagnant or declining in those years. Now, aiming to address these macroeconomic woes, the administration of Prime Minister Abiy Ahmed has been trying to deviate from the past trends of development. EBR’s Samson Berhane investigates.

Francis Fukuyama, born in Chicago, USA in 1952, is an American Author and Political Scientist. He received his B.A. from Cornell University in Classics, and his Ph.D. from Harvard in Political Science. Even if, Fukuyama has extensively written on political development and international political economies, he is more known for authoring the book entitled ‘the End of History and the Last Man’, on which he argued that the worldwide spread of liberal democracies and the free-market capitalism and the lifestyle of the West, may signal the endpoint of humanity’s socio-cultural evolution and become the final form of human government.
His other famous publication, ‘Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy’, is considered a masterful study of political development.
Fukuyama is currently a senior fellow at Stanford University in California. He is the Director of the Center on Democracy, Development and the Rule of Law.
In his latest book dubbed ‘Identity: the Demand for Dignity and the Politics of Resentment’, he asserts that the demand for recognition of one’s identity, which he deems a fundamental human instinct, is a master concept that defines much of the world politics today. In the book, the Japanese-American stated that the universal recognition on which liberal democracy is predicated has been increasingly challenged by narrower forms of recognition based on nation, religion, sect, race, ethnicity, or gender. If people no longer vote according to their values, such as an attachment to liberty, but by their identities, such as their faith or ethnicity, Fukuyama argues that democracy would cease to function. Indeed, identity is gaining centre stage in politics in many parts of the world today. Ethiopia is no exception.
Two months ago, the 67-year old distinguished professor, on his first trip to Ethiopia, met with Prime Minister Abiy Ahmed (PhD) and discussed on different matters. He gave his latest book on identity politics to the premiere.
Earlier this month, Fukuyama returned to Ethiopia again to train private sector developers. He also gave a public lecture at the American centre in Addis Ababa on “Populism and the State of Global Democracy”. In the sideline of the training, EBR’s Haimanot Ashenafi sat down with the global thinker to discuss about Ethiopia’s economic and political situations.

Rice has already become a major staple food in many parts of Ethiopia. This is because of the population growth and urbanization. However, the local rice production does not meet the growing demand due to low yields. As a result, the demand is currently being met by imported rice where in 2018, Ethiopia imported four million quintals of rice worth USD170.69 million. EBR’s Ashenafi Endale spoke with farmers, investors, experts and government officials to shed light on the matter

Lately, more and more people have been waking up to the fact that YouTube can be considered a serious channel for making a living. Many are seizing the opportunities in the digital media industry, inspired by the growing interest of a large audience to video content. The growth of internet users and smartphone ownership in the country, has also led to a considerable growth in the number of people who use YouTube as a source of news and information. This, in turn, enables many YouTubers with content focused on Ethiopia to earn revenues from views, subscriptions and Advertisments. EBR’s Samson Berhane probes into the matter.

With the growth of the informal market, retailers who sell used clothes are rising in number. A glimpse of this is displayed at the biggest used clothing market in Asko near Atena Tera, in Addis Ababa. The second-hand clothes, which are discarded as worthless at charity warehouses or thrift stores in Europe and the USA, are sold off at a very cheap price to developing countries. This makes them preferable to a large portion of the society, chiefly because of the rise in prices of new clothes. The Secondhand clothes market is also becoming a source of revenue for businesses engaged in the illegal trading. EBR’s Ashenafi Endale visited the biggest used clothing market in the city and spoke with traders, contraband smugglers, custom officials, and experts for this report.

Construction has boomed in Addis Ababa over the past decade. Shiny new high-rise blocks and shopping centers mushroomed all over the city, and the cranes dotting the skyline hint that more are on the way. Meanwhile, parks and green spaces became victim to urbanization, as private landowners and the state continuously look for space to build. Now, there are only 20 parks in the capital, which has more than four million residents and additional hundreds of thousands who go in and out of the city every day. Only 0.18Pct of Addis Ababa’s land mass is covered by parks and gardens. To improve the situation, the city administration embarked on various projects that targeted building of parks and green spaces. EBR’s Kiya Ali reports.

Excise tax contribution to the total tax revenues has been decreasing in the past decade, but this will be reversed very soon. The government is planning to increase excise tax levied on items including tobacco, alcoholic products, and vehicles. Many worry that this would bring unintended consequences, including paving a way for the illegal market to thrive, on top of exposing consumers to higher prices. EBR’s Kiya Ali delves into the subject to offer this report.

The tendency of physical inactivity leading to obesity or overweight is on the rise in Ethiopia. The problem is quite severe in urban areas, especially in Addis Ababa. While regular exercise means that adults have a lower likelihood of dying from; coronary heart diseases, high blood pressure, and stroke, it has long been a neglected healthcare routine amongst the society. Citizens of late seem to understand its importance. An encouraging factor that has led to the opening of many GYMs. The government introduced different initiatives, such as the car-free days and mass sports days, in a bid to encourage its citizens to become more active. EBR adjunct writer Abiy Wendifraw reports.

Domestic violence is a global pandemic and a form of human rights violation. One in three women experiences violence from an intimate partner worldwide. This is more common in developing countries in general and Ethiopia in particular. With the rising level of reported abuses against women by their intimate partners, the problem has become a cross-cutting issue interlinked with everyday routines. EBR’s Kiya Ali spoke with victims, psychologists, government officials and legal experts to shed light on the matter.

Antique Theatre House, Desperate for Change

Established in 1935, Hager Fikir Theatre is the oldest indigenous theatre in Africa. Known for its immense contribution during the patriotic resistance against the Italian aggression, the Theatre passed through many challenges while producing hundreds of plays largely aimed at uniting the citizens of the country. Being a place where many Ethiopian renowned artists were nurtured, the Theatre contributed greatly in the growth of modern music and drama. In connection with its 84th year anniversary, EBR’s Kiya Ali profiles the Historical Theatre.

Older Posts

Developmental State Under the Radar

Is it the Right Model for Ethiopia?

“Ethiopia Does not Qualify as a Developmental State”

Harnessing Ethiopia’s Rice Potential

YouTube for Media: A Sustainable form of Income?

Secondhand Clothing Market Booms

Green Areas Expanding in Addis

Gains, Pitfalls of Raising Excise Tax

Ethiopia Endorsing Physical Exercise?

Domestic Violence No End in Sight?

Hager Fikir

Antique Theatre House, Desperate for Change

Arki Homes Expo being held at Millennium Hall

Tulu Kapi Signs Umbrella Agreement

Local company Wins Fintech Innovation Award