Stand Still Movement

The Dilemma of conflict and Economic Growth in Ethiopia

Although I have some reservations if indeed the official growth rates of Ethiopia are realistic, the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) and of course the government has made an important stride and appreciable task in building major infrastructure in power, road, and rail sectors and attracting foreign investment. That has helped the country achieve better economic growth than during the time of the two preceding governments, the Dergue and the Imperial regimes. It has also positively changed the image of the country using economic and pan-African diplomacy until the political violence and crisis erupted in 2016 followed by the declaration of a six-month State of Emergency, which is extended by another four months now.As admitted by the government as one of the root causes of last year’s violence, corruption is in the course of snatching this hard won economic growth and infrastructure success of EPRDF. This is because, I believe, the government failed to maintain an optimal balance among economic growth, distribution of wealth and corruption management.
In fact, the violence and the State of Emergency that we witnessed last year are placing Ethiopia among the group of fragile states where 60Pct of the countries in Africa that are homes to 500 million people (nearly half the continent’s population) are categorised.
To be resilient and transit from the state of fragility, a given country should avoid conflict at least for 10 years and our last conflict year should have been the year 2005. The important lesson here for the EPRDF government is that it takes about 10 to 15 years to bring an economy back to normal once it is engulfed in conflict while destroying that does not take a month as has been witnessed recently. Thus, for EPRDF, its hard-won growth and an image of “a rising Ethiopia” could easily disappear. It might take another 10 to 15 years to get it back.
According to a study published by African Development Bank in 2013 it took the 20 fastest reforming countries in the 20th century between 15 and 30 years—a generation—to raise their institutional performance from very fragile to more resilient level. Specifically, it took 17 years on average to reduce military interference in politics and 27 years to reduce corruption and for rule-based controls against corruption to be institutionalized. In comparative terms, what is much more important and needs priority is conflict and corruption management, not growth as such. Unfortunately the two are not separate issues. The nature of growth could also be the main reason for the conflict in question. This seems to be the case in Ethiopia.
There are various angels to look at the quality of growth. One of the best attributes that makes a particular growth good quality growth is if it is a shared growth and achieved in a stable (non-inflationary and healthy fiscal and external balance) macroeconomic environment. This means the growth in Ethiopia should be pro-poor.
It does not make a difference for the Ethiopian poor if the economy is growing by 10Pct and at the same time the food price is also growing by 10Pct, assuming very generously that the poor’s income will grow by the growth rate of the economy, a heroic assumption in Africa.
Thus, one of the root causes of the current conflict and the fundamental problem of Ethiopia’s recent growth is the nature of growth which is characterized by unequal distribution of income or evident inequalities. One good indicator of this is the urban youth unemployment which is about 65Pct for the age group 15-25. Leaving aside the official data, multi-dimensional poverty measure puts 80Pct of our population (assuming the population of Ethiopia 100 million) below poverty line. Even the official income poverty rate of about 28Pct is based on a poverty line of having ETB10 a day per adult (or ETB300 per month salary) both for food and non-food expenditures. Thus, in official statistics if somebody gets below ETB300 per month he/she is defined as poor. It is obvious for everyone in Ethiopia that it is difficult to live with this money in today’s environment.
So, to make it realistic, if we raise this official government poverty line with internationally accepted USD1.25 or ETB30 per day (ETB900 per month), we found over 75Pct of our population (about 75 million people) being below poverty line. This is not only big, it is actually scary! This level of poverty clearly shows how bad the income inequality is and one needs not to look for any inequality index to know the extent of the problem.
Inequality has two dimensions: vertical (across all individuals) and horizontal (across groups or communities). Although both are a recipe for conflict and social unrest, horizontal inequality is notable for putting countries to the highest level of political crisis and state fragility. It is this type of inequality that the government needs to primarily focus on and address immediately.
Horizontal inequality refers to the socio-economic and political differentiations based on socio-cultural identities such as ethnicity, religion or race. Studies that seek to understand how group affiliations determine socio-political and economic benefits indicate that horizontal inequality is concerned with those aspects of disproportionate allocation of social, economic and political resources that confer advantages to one group at the expense of others.
Cultural factors are found to be important for group mobilization. Combined with existing geographic and economic conditions in society, they provide the potential for construction of a group identity as a source of political mobilization. For horizontal inequalities to rise to the level where they induce conflict, elite political leaders have to be involved in the process of grievance formation and group mobilization. Economic inequality is embedded in a social and historical milieu that determines the choices that the political class makes in relation to outside groups. Thus economic inequality is hugely important, but it must be viewed as a subset of the socio-political, cultural, and historical dimensions of a country in question.
In general, in situations where economic and political power is shared among groups, the likelihood of conflict is reduced. However, researcher in the area shows, where the group that controls economic power also controls political power, the chance of violent conflict is increased. The importance of ethno-regional basis of political power for conflict in such situation is also demonstrated by the pattern of political conflict in many countries in recent years.
For instance, a six year conflict between the government and northern secessionists in Mali was caused by economic and political horizontal inequalities between northern and southern populations while the 1994 genocide that eliminated 800,000 Tutsis in Rwanda was caused by deep, systemic horizontal inequalities within the political, economic and military in the country. In addition, horizontal inequalities remain the single most important determinant of political contests in Kenya, fuelling much of the sometimes violent contests during elections.
It is time that the Ethiopian government learns from these experiences and addresses both vertical and, in particular, horizontal inequalities to create a politically sustainable development in Ethiopia and perhaps address the evident existential threat the country faces. Otherwise, other competing ethno-linguistic elites as many horizontal inequality literatures noted, will continue to express their grievance in various forms, including the option of violent conflict. In short, the political structure and institutional set up needs to be reformed to squarely address these issues to avoid the cycles of conflict.
What does this concretely mean?
It means now the country is at a cross road. It is a high time for both the government and all the opposition groups to put aside their party (and their personal) interest for a while and stand for the good of the whole population. The political elites need to have a common social project that goes beyond party and group interest and instead focus on having a country where its party or personal interest could be realized. At the end of the day, a government needs a willing population to govern and the people deserve a government who will create conducive environment to ensure existence and economic livelihood.
I donot think silence is peace and silencing will bring about peace in a sustainable manner. It will be a tragedy, as a society and human beings, if we squander the material and non-material wealth that we have achieved so far; and in so doing deny the next generation and our children a peaceful and livable country because we failed to institute the minimum rule of the game that everyone need to abide by. The latter is indispensible to govern the people without endangering the country’s survival or plunge it in another round of conflict.

What is the way ahead?
There is a need for political consensus among the Ethiopian political elites. The elite may have different ideology and background. However, they need to have a common social project – a project where these elite could peacefully and democratically compete to govern the country. The EPRDF government has a historic responsibility to spearhead this social project. In fact, having such social project and popular legitimacy is a pre-requisite to be a developmental state.
The EPRDF government could do this, for instance, by setting up an all inclusive “council of elders” to take the country out of the current political quagmire. This is important because an impasse could also thwart growth; development as well as the positive image of the country built so far.
If we indulge further in another round of conflict, EPRDF’s 25 years of effort and hard won success of building a rising economy and a very positive image of the country could be lost. It will also take another 10 to 15 years to get back where the country finds itself at the moment.


5th Year • July 2017 • No. 52

Alemayehu Geda (Prof.)

is a professor of economics at Addis Ababa University. He can be reached via ag11226@gmail.com


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