The Ethiopian Economy: Big Numbers and Empty Bellies

By Fekade Shewakena.
Poverty is Ethiopia’s persistent reality and has long been the country’s definer. The country’s mainstay, agriculture, is predominantly subsistence and is still only one drought season away from a multimillion killer famine unless we beg in time. Meles Zenawi often talks of poverty as being the number one problem of the country. I have yet to meet any Ethiopian who disagrees with this. But there are disagreements on the kinds of approaches, economic and political governance and accountability and the kind of policy tools we must use to fight poverty. Had we been a lucky, vibrant and freely debating country, these disagreements and debates should have been considered healthy and encouraged.
There are a number of people outside of the government, including myself, who doubt the double digit growth claim and the validity of the coming five year plan that promises ‘cows in the sky’. Many including non-Ethiopians believe it is exaggerated at best or fabricated at worst for political purposes. Obviously, the regime and its cronies have the motive of justifying their proposed authoritarian nanny-state solution, the so called developmental state, which is to be led by a vanguard party – the EPRDF with Mr. Zenawi at the helm. Mr. Zenawi’s recent argument against the neoliberal and market fundamentalist boogeyman which he created out of thin air may be laughable but indicates how much he failed to wrench himself off of his long held but debunked Marxian authoritarian methods. I haven’t heard any Ethiopian politician who argues the state should not intervene in the country’s economic development or anyone who argues to leave the economy to market forces. There may be argument in the level and kind of intervention. This has even ceased to be an argument in developed democracies anymore let alone in Ethiopia. But as increases in accusations about human rights violations and closure of democratic space become intensified, Mr. Zenawi, his officials and supporters seem to keep clinging to non existing challenges and phantom statistics as a means of offsetting that.
In my view, there is no more disgusting sin than playing politics with Ethiopia’s massive and obscene poverty. Ethiopia’s poverty is too grim, too widespread, too sad and tragic to play political propaganda games with it. The exaggeration and in many instances the fabrication of the growth statistics is not making any dent on the lives of the millions of Ethiopians - as much as 90% of them who are absolutely poor as some recent estimates put it. Nor is it creating any hope for the mass of young people who concluded that their best bets for improving their lives is to leave the country in droves by taking risky journeys to foreign lands. A recent survey by Gallup shows nearly half the adult population of Ethiopia wants to leave the country. This doesn’t sound like coming from a country that is growing at the rate claimed by the government, fool of hope and great promise. We have enough to suffer from real poverty, we will only add to our misery if we pile lies on to that.

There are some striking independent evaluations that shade light into the amount of data manipulation and exaggeration by the government. Some are expatriate independent scholars who cannot be accused of having any Ethiopian political axe to grind. If you want an illustration of how the Ethiopian authorities play games with statistics to create an illusion of stratospheric economic growth, read this study by experts Stefan Dercon and Ruth Vegas Hill from Oxford University who collaborated with DFID of the UK to evaluate the performance of Ethiopia’s agriculture and checked the official numbers. The experts who made the study concluded that:

“The scale of output expansion in Ethiopia in the last 10 years is unprecedented. According to the data, it involved dramatic increases in areas cultivated with cereals, up 44 percent in the last 10 years, without any clear record or reporting on the process by which more land was obtained. Yields increased by 40 percent in the same period, with most of this growth in the last 5 years, but without any sign of intensification via fertilizer, improved seeds or irrigation and limited increases in land under the extension program. As yield growth has fast outpaced the experience elsewhere in Africa or during the Green Revolution in Asia but without input intensification, the sources of yield growth should be understood to restore trust in the current data. In general, more effort should be expanded to ensure the auditing of these key data sources on the Ethiopian economy”.

One of the major recommendations of the authors of this study states, “New, targeted data collection, and independent verification and auditing procedures are required to allow the necessary confidence in the current data”. In fact, they sound even more puzzled as to how these exaggerations were made since the crop- cutting method using a statistical sampling design that often generate superior data to other methods was used. The ferenjis seem to have been so polite not to use the word lie.

Using the official data and comparing it to international experience, the authors have found out that the Ethiopian government claimed to achieve in 10 years far more than what countries in East Asia achieved in longer years of the Green Revolution. At the end of the Green Revolution in the case of the Asians, we know that they overcame their food insecurity and started to fund their industrialization. On the contrary in Ethiopia’s case, the number of people on food handouts has grown to one in ten, the number of the absolute poor has increased and the structure of the economy remains basically unchanged. No official or expert of the Ethiopian government has so far attempted to explain these discrepancies. As the authoritarians that they are, they have the luxury of unaccountability and never feel responsible to explain it. In tragic Ethiopia, often it is the critic that gets in trouble than those who do the blunder. When you catch them with their hands in the cookie jar, they get angry and accuse you of some malicious intent. Some years ago Meles promised that he will shortly create an economy where all Ethiopians will have three meals a day. He never told us why that prediction failed miserably. With this propensity for exaggeration and unaccountability, I am surprised why they promised us only a 15% GDP growth during the next five-year plan that they just announced.

An Ethiopian economist who lives in Ethiopia whose comments I often value told me recently that anyone who would come up with a finding of 9.9% growth would be in trouble in Ethiopia today. It has to be double digit to sound mouthful and of propaganda value for the donors to like it. Most objective experts I talked to say the growth is anywhere near five or six percent which, of course, doesn’t mean it is not remarkable. I am sure any World Bank and IMF expert will not give you more than a 6% rate, if they talk to you in private and promise them you will not disclose their name. (By the way the IMF and the World Bank do not collect their own data or replicate the official survey, but Meles keeps claiming they agree with him). It is simply a pity.

The truth of the matter is that Ethiopia is still a predominantly subsistence farming agricultural country that depends heavily on rainfall. Good old coffee and other agricultural products are still the products that fetch hard currency as they did during the Emperor’s time. Thanks to our dispersal around the world we in the Diaspora send a lot of money home every year. Yes, a lot construction of roads and buildings has taken place and a few people have stricken it filthy rich in the service and construction sectors. Most of them, we are told, are the well connected and the powerful. Yet, we have more poor people than at any time in our history. Little of this growth is trickling down to the tragically destitute.
Meaningful economic development and ending or reducing poverty requires looking at and affecting a web of interacting variables and factors. It is not as easy as making some linear extrapolation. True, there has been growth in the economy over the past several years. But we also know that this growth has made little dent on the lives of the mass of the suffering people. We also know that none of this increase is due to any innovative work or advance in technology or structural changes in the economy as the government wants us to blindly believe. We know exactly which sectors of the economy have shown growth and why. It is also important to note that Ethiopia is not the only country in Africa that has achieved considerable increase in GDP. Many African countries, most of our neighbors to the south and west, recorded considerable growth numbers during the same period. It is a result of part good weather, part foreign aid, part local effort. You can apply enough chemical fertilizer and grow the yield per unit area if the rains are good. Or you can play nice with donors and be their darling and get billions of dollars in aid, as the Ethiopian authorities successfully did, and can register considerable quantitative increase in GDP. But then again this is not a sustainable way of fighting endemic poverty or basing your future forecasts on.
The only way out of Ethiopia’s poverty is the prevalence of the rule of law and democracy. It is the making of a confident people in the institutions of the country and the accountability of the government. There is no country that has prospered without resolving outstanding political and other conflicts within themselves through a democratic and lawful way. The models Meles often loves to cite have done that. They have reduced their conflicts to manageable levels through tolerance and the rule of law and not by trying to crush them through the use of force. Even China couldn’t have done it without allowing a level of diversity of views and dissent inside the communist party. All emerging economies are those that have liberalized themselves and achieved at least a patriotic unity of their people.
Some supporter of the government recently told me boastfully that the number of universities in the country has grown more than ten times. I asked him if he knows that the research output from these universities is less than when we had only two, and if he knows more than 50% of the instructors are first degree holders and in some cases undergraduate senior students and asked him to define a university for me. My friend, who was happy to play the numbers game could not say a word about any of the substance.
Let me leave you with an example of how people play games with numbers and statistics that my Indian professor once told me. He told me about a 100 people who were trying to cross a river. They all couldn’t swim and were afraid of drowning as they did not know the depth of the river. Finally there was some mathematically endowed person among them who set out to measure the depth of the river and the height of all hundred of them. He made the necessary calculations and found that the average height of the people was above the river’s depth. He then told all of them that everybody can cross on the average. Unfortunately the 25 of them who were very tall have influenced the average. Seventy five of them drowned. There wasn’t even a mistake on the mathematical computation. It was a failure of thinking.
Ethiopia has a herculean challenge of getting out of poverty. Its rapidly growing population, the environmental degradation, and the challenges of plugging in to a globalized world, to mention just a few, are not easy. Yes, poverty is the number one problem of the country that all of us seem to agree on. But you cannot solve a number one problem by making it secondary to absolute political control. Those who tried that it in the past have failed miserably. I pray for my country and for wisdom.
FekadeS@gmail.com

Mubarak pledges to keep Nile water in Egypt

While inaugurating the new Saft el-Laban corridor in Giza, President Mubarak assured that Nile water “will not extend beyond Egyptian borders."

Mubarak further called for making optimal use of Nile water, carrying out seawater desalination projects, and using modern technology to develop new types of crops that can be irrigated with salt water in order to satisfy the growing demand for food.

Diaa Eddin al-Qoussi, former advisor to the minister of irrigation, told Al-Masry Al-Youm that Mubarak’s statements clearly demonstrate that Egypt will not give up its Nile water quota in order to satisfy Israel. He added that Mubarak’s statements further emphasize that Egypt rejects any negotiations which aim to bring Nile water to Israel.

Maghawri Shehata Diab, former president of Minufiya University and a water expert, said Mubarak's statements reflect a clear understanding of the geographical nature of the Nile Basin, as well as of the political and legal dimensions governing the distribution of water.

In related news, Kenya has announced that it is carrying out an assessment of the impact of Ethiopia's Gibe III Dam. The dam, intended to generate hydroelectric power, would become the second largest dam in Africa after Egypt’s High Dam in Aswan.

The massive dam is scheduled to be completed by 2012 at an estimated cost of US$1.76 billion. Construction of the dam is mainly financed by the African Development Bank. The World Bank withdrew funding for the project under pressure from non-governmental organizations.

The dam will generate 1,800 megawatts of electricity, according to the Ethiopian government, which also says that Kenya has pledged to purchase some of the energy produced by the dam. As a result, Kenyan environmental groups have accused their government of taking greater interest in the well-being of Ethiopians.

The Ethiopian government says that environmental impact studies have shown that the dam will not negatively impact life in any local communities.

The Kenyan Minister of Power said that the Kenyan government and the European Investment Bank will both study the impact of the dam. The results of both studies will be submitted to the Kenyan government in December.

The Kenyan government’s decision to examine the potential impact of building the dam came in response to local and international pressure from rights groups. These groups cited Egypt's threat of military intervention if Ethiopia carried out any projects that would intervene with the flow of the Blue Nile.

Translated from the Arabic Edition.
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Ethiopia, 25 years later

The image most of us retain of Ethiopia is one of mass starvation and a glittery rock concert intended to ease the suffering. That famine and concert was 25 years ago, and Ethiopia has tried to move on. But just as the world at first overlooked the famine, it is now not aware of progress in the country. Economic and political strides have been made, but still many Ethiopians struggle just a bad drought or flood away from disaster. Peter Gill, who covered the famine and wrote “A Year in the Death of Africa,” now looks at Ethiopia over the past 25 years in “Famine and Foreigners: Ethiopia Since Live Aid,” out this month from Oxford University Press.

By Peter Gill

Ethiopia is desperate to live down its past – but not the story of an ancient empire founded in a union between King Solomon and the Queen of Sheba; nor the tale of a Christian culture established before the conversion of much of Europe; nor the country’s crushing defeat of European colonizers. Rather Ethiopia is trying to get past its more recent history of famine and suffering.

The world has an image of Ethiopia based on the terrible events of 1984-5 when up to one million died of starvation and when rock stars in the United States and Britain sang ‘We are the World’ and ‘Do they know it’s Christmas?’ to raise money for famine relief.

All that has now changed, say the Ethiopians. But Western commentators are out of touch with the new reality. The former famine lands of the North have been at peace for the past 20 years and a stable government with a commitment to agricultural development has brought about real improvements. Overall the Ethiopian economy has boomed over recent years, with only a temporary check brought about by rocketing international commodity prices in 2008.

The big problem with the old image, officials complain, is that it is an active obstruction to Ethiopian progress. Every time a starvation story gets into on to television, potential investors think again about where they putting their money.

The West’s relentless focus on the aid relationship and how best to help relieve hunger and poverty dominates the official relationship and those same old tales of suffering discourage tourists from discovering the treasures of one of the world’s greatest cultures.

Friends of Ethiopia can sympathize with this impatience to shrug off the old and get on with the new. But in the memorable words of the Nigerian writer Chinua Achebe (he was actually referring to ‘tribe,’ not ‘famine’) ‘a word will stay around as long as there is work for it to do.’

For all Ethiopia’s determination to live down the recent past, the unfortunate truth is that far too many of its people live on the margins of existence, that just one shock such as a drought or a flood tip them into destitution and the risk of death from starvation, and that upwards of ten million of them are dependent on an almost annual basis on foreign food aid.

A quarter of a century on from the rock star mobilization of the mid-1980s, the twin problems of backward agricultural practices and galloping population growth remain the same. At the time of the great famine Ethiopia had a population of 40 million. It now has 80 million people and that figure could double again in the next 25 to 30 years.

Yet Ethiopia’s own efforts in family planning and agricultural development have not always been endorsed by the aid-givers. The fashion-conscious rich world moved away from these development fundamentals to concentrate instead on the showier provision of education and health, and then more recently on democracy and ‘good governance.’

In the 20 years after the famine, western agricultural aid to Africa fell by almost two thirds, and in the past decade, thanks largely to Washington’s distaste for contraception, aid expenditure on family planning in Africa has also fallen. According to the United Nations, it now amounts to just one fortieth of spending on HIV/AIDS.

Not everyone rails against the injustice of Ethiopia’s characterization as the land of famine. Often in my discussions with him, Prime Minister Meles Zenawi took me by surprise. When I asked him about the western image of his country, I expected a politician’s defensiveness.

The answer I received was this: “Humiliation can be a very powerful motivation for action and therefore I don’t hate the fact that we get humiliated every day provided it’s based on facts ... if we feel we deserve to be treated like honourable citizens of the world, then we have to remove the source of that shame. There is no way round it.”

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