Business
Ethiopia’s Farms and Finance
It requires tight discipline in the leadership. The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) is closely modelled on the Communist Party of China, right down to ‘criticism and self-criticism’ sessions, where senior cadres can be dressed down by hundreds of colleagues.
Henok Teferra, vice-president of Ethiopian Airlines, says Ethiopia needs a plan tailored to local realities, but also the capacity to execute plans, including the government’s 2010-2015 Growth and Transformation Plan (GTP): “Action without vision is a nightmare, and vision without action is a daydream, isn’t that what they say?”
Will Ethiopia be successful in its developmental state? And can it avoid the crony-capitalism pitfalls of other countries that have taken the same path? Within Ethiopia there is a passionate debate about it, and not just in the ranks of the EPRDF, whose former prime minister, Meles Zenawi, articulated the vision of an Ethiopian developmental state most clearly.
Scholars like Merkeb Negash at Jimma University argue, for example, that while Ethiopia may not have a sophisticated technocratic elite and strong autonomous institutions as do Japan and China, it does not necessarily follow that the state will be captured by rent-seeking business elites.
Just as the South Korean government relied on, but never fully trusted, advisers from Japan and the United States, Addis Ababa is importing expertise. There is a strong level of cooperation between ministries, too. One of the international advisers, requesting anonymity, says he was impressed that the customs department allowed the ministry of industry the latitude to draft legislation and procedures for bonded warehousing for the special industrial parks. He went on to say, “It was incredible. Customs people worldwide normally protect their fiefdoms.”
This sort of facilitation is also noticeable at the Agricultural Transformation Agency, modeled on the development agencies of South Korea and Malaysia. This may appear rosy, but the pitfalls are legion. Bellwethers include the health of state-linked conglomerates, such as the Endowment Fund for Rehabilitation of Tigray, linked to the political elite of the Tigrayan ethnic group, involved in logistics and manufacturing, and the Metals and Engineering Corporation.
The latter is run by the top brass of the military and is set to build sections of the country’s dams and 10 sugar factories. The sacking of the top three officials in the customs department for corruption in May 2013 suggests the current leadership is aware of the importance of oversight.
