Ethiopia: The road from poverty to an island of stability
Report by Viktor Marsai
Ethiopia used to be mentioned as an example of starvation and poverty, but today this East-African country is considered the island of stability and predictability in the middle of a seething region. Multi-ethnic Ethiopia started off with a difficult past, but now turns to the future with grand plans for its 100 million people. Our report from Ethiopia.
Even though the average people still associate Ethiopia with starving children and a never-ending civil war, this perception of the 80’s has been completely superseded by the developments of the last three decades. An associate from the National University of Public Service and the Migration Research Institute has personally experienced that malnourished inhabitants are becoming more and more scarce in the country, while Toyotas and skyscrapers become more and more common.
Slow but persistent revolution
In 1983-84, a great famine broke out in Ethiopia. The civil war, the relocations forced by the Mengistu regime, in which they tried to tame the “virgin land” (meaning the deserts) with ethnic groups they considered unreliable, and the drought that came with it brought about a terrible destruction in the Ethiopian highlands.
400 thousand people died between 1983 and 1985, even according to the most moderate estimates.
Thanks to the media’s development, this catastrophe got much more publicity than former similar cataclysms. The developed – and developing – world was shocked by pictures about children on the verge of starving to death, and both state and civil organizations came to the country’s relief, even though it was a devoted ally of Moscow.
The most spectacular element of this was the two Live Aid concerts organized by Bob Geldof, watched by 1.9 billion people in 150 countries according to the estimates – 40% of the Earth’s population. The initiative generated 140 million American dollars – though some researches indicate that part of the money was used by local revolting groups for buying weapons. Still, Live Aid and assisting Ethiopia became a great common cause for mankind in the shadow of star wars plans, saving tens of thousands, if not millions from starving to death, mobilizing people across the blocks. At the same time, evidently the initiative played a significant role in creating a picture about “starving Ethiopia”, which stubbornly remains not only in the Hungarian, but at times in the Western public opinion as well.
The past is still hunting – in the Museum of Red Terror
Ethiopia moved along a path of substantial development after the regime change of 1991. The party coalition coming to power at the end of the civil war, the Ethiopian People’s Revolutionary Democratic Front (EPRDF) – also Marxist, by the way – envisioned the future of the country along two marked concepts.
One was ethnic federalism to allow the 80 different ethnic groups of Highland live together in peace within the framework of nine federal member states, their organization founded – inasmuch as possible – on ethnic groups, after decades of conflicts.
The other pillar –somewhat in contradiction with the first – was the idea of the state as a developer, the central leadership modernizing the country, almost fully controlling the economy within the framework of five-year plans, primarily consisting of huge infrastructural projects. This was greatly assisted by Ethiopia – as a crucial country of not only the East-African region, but the whole continent – receiving substantial political and economic support even during the cold war period from both the Western (USA, Great Britain, Italy) and the developing (China) countries. In addition, Addis Ababa showed talent in taking advantage of the changing geopolitical environment: it became one of the main opponents of a jihadist organization operating in Somalia, the Al-Shabaab, and became a major African ally of the United States in the war against terrorism, securing the ongoing flux of resources into the Highlands, first for an open invasion, and then for a peacekeeping operation.
Headquarters of the African Union
The country – as opposed to other African countries – did not open its markets to external investors completely, but protected its weak domestic sectors (textile-, shoe- and leather industry), consistently making sure to adopt a sustainable economic policy that strengthened the producers. For this reason, infrastructure development was of key importance: the establishment of road and rail networks, along with electricity, which is the basis of all earnest developments in the one million square kilometers large (11 times the size of Hungary), mostly hillside country, where only 25% (!) of the population had access to electricity as recently as 2010.
Due to its geography, Ethiopia is often called the water tower of Africa, as several large rivers – including the eastern line of Nile, the Blue Nile – originate from the Highlands. Therefore, Addis Ababa envisages to supply the country with energy by building hydroelectric power plants. Parts of the project – such as Gibe I-II – are already completed, while other parts – such as the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile, and Gibe III – are still under construction. The size and the speed is indicated by the fact that GERD will have 6500 MW capacity, while the country’s total capacity was barely 3200 MW in 2015.
The increasing demand of the population somewhere between 100 and 110 million people – and their available income – continues to raise the consumption, along with the GDP-growth, which stayed around 10% each year during the last decades. Ethiopia thus became one of the 10 fastest growing economies of the world (at times taking first place). This is an outstanding accomplishment, even when considering the inaccuracy of statistics, the low base values, and the extent of incoming external development assistance, amounting to 3-5% of the GDP. Even more importantly, the social gaps are much smaller in Ethiopia than in the neighboring Kenya, for example, with its open market economy. Segregation between the middle class and the poorer strata, for example, is much less spectacular here than in Nairobi.
Even in a few years’ perspective, dynamic modernization is easy to observe in the expansion of the capital’s vehicle stock and constructions springing up everywhere. More and more western type malls and restaurants indicate the appearance of a yet narrow, but constantly expanding middle class that can afford these products and services.
All kinds of new construction
Naturally, we can expect no miracles. The rural areas are still greatly lagging behind, 80% of the population living off of agriculture still, using centuries old technology. Due to its essentially one-party setup, corruption and nepotism intensified – especially on the level of local leadership – on occasion hindering the development. While the EPRDF management includes excellent professionals, the lower levels often employ functionaries that can barely read and write, and either cannot carry out the decisions of the management, or downright sabotage them.
The case of the 2015-16 riots is a good example of this. Even though increasing ethnic conflicts also played a role there, some sources claim that corruption on the local level was just as important: the population had enough of the bureaucrats simply stealing part of the harvest.
In this context, the state of emergency introduced in 2016 had to be extended in 2017 in order for the army – the most organized and disciplined force of the country – to oversee the past-harvest appropriations and avert the local bureaucrats from feeding people’s discontent by their abuses.
In terms of the country’s future, the sustainability of ethnic federalism and the problem of power sharing raises fundamental questions. Apart from the heretofore dominant Habesha, Amhara and Tigrayan ethnic groups, the marginalized Oromos that make up a substantial part (40%) of the population also seek their place in the sun. As a result of protests, the prime minister – in an unprecedented way – resigned in February of 2018, and the new head of the government, Abiy Ahmed, made it to the top of the country from among the Oromos.
Abiy promised reforms both in the political system and in the economy. Several politicians of the oppositions were released from their imprisonment, negotiations were started with heretofore marginalized groups, and promises were made to create jobs and curtail corruption. At the same time, it is hard to tell whether the new prime minister will be able to fight off the – primarily Tigrayan – members of the old regime that still control several key positions, and how much the old elite will hear the signs of times and allow for the reallocation of power.
Underground passage in the newly constructed Addis Ababa – Djibouti railway line
It is especially problematic that the new cabinet announced serious concessions to the northern neighbor, Eritrea on the still unsettled borderline after the 1998-2000 war between Ethiopia and Eritrea, harming the interests of Tigrayan groups living in that area in the first place, and alienating them from the new government.
The overall picture, however, is still rather positive. With Ethiopia getting stronger, state capacities also increase, and Addis Ababa does not abandon the peripheries, as the drought treatment going on for three years now clearly indicates. New droughts afflict the area since 2015, making close to 10 million people dependent on sustenance. However, thanks to the Ethiopian government programs and the external support, it is no more a mass famine.
Inhabitants of the affected areas receive a modest but honorable sustenance, with which they can weather the hard times, while the country’s population has grown to two and a half times more than what it was in 1984. Getting involved in the crises of South Sudan and Somalia, the weight of Addis Ababa grew considerably as a regional power, which comes handy in the water-debate with Egypt for example.
Ancient Coptic Christian church in Lalibela
The country – as opposed to Kenya, Djibouti or Somalia – succeeded to ban the spread of radical Islamist groups, even though the population of the Highlands is almost half Muslim and half Christian.
Although many leave for Europe and the Middle East in hope of a better life, Ethiopia accommodated almost a million refugees from South Sudan, Sudan, Somalia and Eritrea, which makes it more of an insulating and hindering country in the East-African migration than a source one. Therefore, the country is – in spite of its internal challenges – the island of stability in an unstable region. Trusting in the success of the reforms of the new leadership, it is Hungary’s elementary interest to keep it that way.
The analysis was originally published on: Mandiner
Date: June 22 2018
 https://hu.tradingeconomics.com/ethiopia/gdp-growth annual?utm_source=mandiner&utm_medium=link&utm_campaign=mandiner_201806
 https://svkk.uni-nke.hu/document/svkk-uni-nke-hu-1506332684763/svkk-elemzesek-2017-17-etiopia-es-a-szelsoseges-iszlamistak-marsai v.original.pdf utm_source=mandiner&utm_medium=link&utm_campaign=mandiner_201806