In part three of this series, I indicated that there are major social and economic hurdles ordinary Ethiopians face each day that should compel Ethiopian opposition groups within and outside the country and the rest of us to make is their singular business to advance the cause of unity and stop bickering among themselves ad infinitum. More than any single factor, it is their quarrelsome behaviors and actions and their divisions that prolong the agony of the Ethiopian people. The lives and wellbeing of ordinary Ethiopians are not improving at all. In some critical areas such as incomes, inequality, graft and corruption, concentration of wealth, education, health, shelter, sanitation and employment things are getting worse. Hyperinflation continues unabated; and the governing party is in no position to contain this havoc. It is its own creation and some folks actually benefit from substantial rises in the cost of living and from shortages. There is a growing perception among ordinary Ethiopians that the Diaspora aggravates the problem.
My argument for unity is straight forward. It is the moral obligation of anyone and everyone who believes in Ethiopia and in the Ethiopian people to do the opposite of what the TPLF/EPRDF regime does so effectively to the Ethiopian people: divide and rule. All indicators show that there a huge disconnect between what top officials of the governing party say and what they do to alleviate the problems ordinary Ethiopians face. So, those who believe that Ethiopians are not being served by their government have no excuse not to close ranks and work for the same goals. For example, high ethnic officials show greater dedication for and commitment to their ethnic bases than they do to the entire country and its diverse population. When and if it suits them, they show affinity to Ethiopia and tend to appeal to the Ethiopian people as a whole, for example with regard to the financing of the Renaissance Dam. This duality is calculated to serve a strategic and not a national purpose. It is part of divide and rule and part of keeping the society in permanent suspense.
The strategy of divide and rule and keeping the society in permanent suspense operate together because political and social actors who oppose the system have yet to wake up from their slumber and work relentlessly and consistently in support of the vast majority of the Ethiopian people who seek justice, fair play, equality and opportunity now and not decades from now. Division within the opposition camp is a major source of strength for the governing party. Those who want political pluralism must recognize that Ethiopia is theirs to save and the Ethiopian people are their responsibilities to defend. They must accept the notion that Ethiopia belongs to all of them; and that its shame is equally their shame. I refer to continued poverty, hunger, illiteracy and disease that afflict millions. Ethiopia is still identified as one of the hungriest and unhealthiest nations on this planet. It is still poor and technologically backward despite US billions of dollars of aid that continues to pour into the pockets of a few. Aid is now contributing not only to the acquisition of higher incomes and wealth for the few; but is also to regional disparities and repression. More billions of foreign aid will not transform the Ethiopian economy. Only empowered Ethiopians can improve their lives and the status of the country.
Why is Ethiopia still poor?
Ethiopia has been and continues to be the worlds experimental laboratory in development in general and poverty alleviation in particular. For the aid business, this experimentation will continue because donors serve their own national interests first, and would not care if Ethiopias poverty persists for decades to come. A weak, dependent and hungry Ethiopia generates business for many in the aid community. There is no altruism. The Ethiopian Peoples Revolutionary Democratic Front (EPRDF) that assumed political power in 1991 has benefitted substantially from increase aid that now exceeds more than US$3 billion a year, US$ 1 billion coming from the United States, the largest bilateral donor. Today, Ethiopia is the largest aid recipient in Sub-Saharan Africa and the fourth largest in the world, after Afghanistan, Iraq and Indonesia. If aid would move a country from abject poverty to sustainable and equitable development, Ethiopia would have achieved it by now. Donors pump in billions without measuring impact on the ground; and without a sense of who ultimately benefits from Western taxpayer dollars. There is no accountability to the Ethiopian people. The case of agricultural production tells the disastrous and ineffective nature of aid in the country. Donors ignore prerequisites such land tenure reform, a pro-poor and private sector regulatory framework, voice and participation, the rule of law and so on that will make aid at least more effective.
There is no reason for Ethiopians to go hungry. The country possesses ample natural and human resources including arable land for crop and animal farming, and water resources that are the envy of many countries such as Egypt and the Sudan. Ethiopia is the water tower of Africa. Yet, irrigated agriculture is among the least developed and accounts for only 1 percent of farming. Massive aid, substantial remittances estimated by an internal World Bank study at US$3.5 billion per annum, millions of hectares of fertile and irrigable lands and huge human capital have not made a dent on the countrys intractable poverty. Opponents of the regime have immense data in their hands to shame the regime now and not a decade from now. But, they need to speak with one voice and pull in the same direction.
The UNDP estimates that illicit outflow of funds under the current regime is in excess of US$8.345 billion. Last year, Global Financial Integrity estimated that illicit outflow from Ethiopia amount to US$11 billion. The Prime Minister conceded that a few privileged Ethiopians have US$2 billion in foreign banks. Aid contributes these forms of plunder and scandalous activities. Most of Ethiopias pervasive aid comes from Western sources. Those in the Diaspora can and should challenge whether or not these donors live up to their own values of freedom, empowerment, free enterprise and the evolution of a robust domestic private sector in granting generous monies to a repressive, discriminatory and corrupt governing elite. Massive corruption and illicit outflow from one of the poorest and aid dependent countries in the world can be challenged using available and credible data.
Although estimates vary from country to country, experts say that more than 30 percent of foreign aid is stolen through a variety of contractual and other schemes. Where does the money go is a legitimate question to pose. More than 87 percent of Ethiopians rely heavily on agriculture and related activities to sustain life. Yet, only an estimated 17 percent of agricultural produce is marketed properly. Only 17 percent of the country is urbanized. There are more than 7 million orphans. Unemployment among youth is among the highest in the world. Ethiopias largest export is labor, with hundreds of thousands immigrating to all corners of the world, especially to the Middle East.
In countries that are nationalistic and all inclusive, education serves as a ticket out of poverty. In Ethiopia today, education does not necessarily lead to jobs. In development, the lead and primary responsibility of any government is to feed and shelter its population. In Ethiopia, this is not the case. The East Asian and Pacific region miracle countries such as Korea, Taiwan, Singapore, Thailand, and increasingly emerging economies such as Bangladesh, China, India, and successful economies in Africa such as Botswana, Mauritius, Cape Verde, Ghana and others invested and still invest heavily in agriculture. Most recently, the government of Ghana secured US$100 million in soft loans from the World Bank to invest into agriculture in the North. This investment will offer job and income generating opportunities to thousands of Ghanaian youth.
A hungry and unhealthy population cannot produce. It is for the same reason that these and other successful economies invest heavily into quality primary, secondary and tertiary education and into comprehensive and quality health care. The Ethiopian government tells donors that it has trained thousands of health extension personnel. It says the same thing about agricultural services. Indicators show that health services are among the least developed in the world. The small island nation of Seychelles avails quality health services to the remotest village. India overcame recurring famine by investing heavily in agriculture (the Green Revolution) to which aid contributed. The government made substantial investments in the fertilizer industry so that farmers would have adequate access to nationally produced fertilizers.
Chinas agriculture and rural sectors were transformed by the Chinese themselves without much aid from outside. This structural transformation eliminated recurring famine and hunger and improved wellbeing substantially. It is for this reason that I continue to suggest that a Green type of smallholder based revolution is the single most important transformer of economic and social life in Ethiopia. It will have the greatest impact on the greatest number of people and would remove one of the sources of shame for all of us. Would the TPLF/EPRDF regime invest heavily into a smallholder revolution and release the productive potential of Ethiopian farmers and others in the rural sector? Would the aid community insist that the Ethiopian government changes policies to advance the cause of sustainable and equitable development? I doubt it. The poor are easier to control and to manipulate that the well to do. There is no evidence that it is either willing or capable of introducing radical reforms that will make poor people owners of assets such as lands. Believe it or not, high officials of the government argue that Ethiopia will achieve food self-sufficiency and security by farming out millions of hectares of its most fertile lands and water basins to foreign governments, firms and individuals from 36 countries, and to a few domestic allies all affiliated to the TPLF. As the Prime Minister noted a few months ago, gradually foreign firms are taking hold of the pillars of the national economy and Ethiopians face the risk of losing these pillars and losing their country. The systemic causes and linkages emanate from single party and endowment dominance of the pillars of the economy. The TPLF created and sponsored conglomerate EFFORT that controls at least 30 diverse enterprises, and the Saudi and Gulf States sponsored and financed conglomerate MEDROC group managed by Sheikh Al Amoudi controls 30 other large and diverse enterprises. Combine these monopolies and deduct the implications. They literally crowd-out the rest of Ethiopians. This is among the reasons why the national domestic private sector is among the weakest in Africa. There is nothing on the horizon to change the roles of these monopolies.
In a recent Al-Jazeera sponsored debate on land grab, a prominent Indian economist said that foreigners have more power and influence than Ethiopians in their own home country. Granting Ethiopian waters and fertile farmlands to foreign interests instead of raising the capabilities of Ethiopian smallholders and encouraging nationals to invest in commercial agriculture takes away the key sources of comparative advantage the country and its population possess. Foreign owned large scale commercial farms will not transform Ethiopian society for the better. As designed, they will make Ethiopian society more dependent and more vulnerable than ever before. For details, I urge the reader to read my latest book, The Great Land Giveaway: yemeret neteka ena kirimit in Ethiopia.
Contradicting Ethiopian government officials, including the Ethiopian Deputy Prime Ministerwho pronounced, on a visit to India, that smallholder farming is inefficient, and ineffectivemost foreign experts and multilateral agencies such as the World Bank argue that:
i) Smallholder farms are more productive than large-scale commercial farms;
ii) 400 million farms around the globe, with less than one ha of land, are in a position to double or triple their harvest. In Punjab, India, smallholders raised their output from one ton per ha to 4-5 tons per ha after the introduction and wide-spread use of Green revolution that transformed Indian agriculture forever. Indian firms are among the new farmland colonizers in Ethiopia at the invitation of the government. They want to secure foods for Indian consumers and are planning ahead to secure food security. Who is thinking of future generations of Ethiopians and their food security?
iii) Next door in Kenya where smallholder based farming is developed, 27 tractors are deployed per 100 SQ km of arable land; in Ethiopia, only 2 tractors per 100 SQ km. The governing party is only interested in securing wealth for its core and allies and in maintaining power. Just reflect on what top officials, including the Prime Minister tell the world. Inflation is common in growth economies. There is no famine; only hunger and so on. They justify that which cannot be defended statistically. Inflation will be minimal if productivity increases. Hunger will be history if agricultural productivity was the norm and not the exception. The Ethiopian governments priority is to meet the basic needs of the population and not to enrich itself and its supporters.
Smallholder-based productivity growth is the most leveraged pathway by which we can address poverty reduction, says Prabhu Pingali, a leading agricultural expert who also criticizes land grab. In its seminal report on food aid and dependency in Ethiopia, Oxfam noted that Food aid is not the best way to alleviate poverty. Rather, the best way is to boost the capabilities of Ethiopian smallholders. Heavy investment in a smallholder revolution in Ethiopia is therefore a smart policy for any government that is dedicated to the country and its diverse population. The benefits are two-fold: it reduces poverty and increases incomes; and eliminates under-nutrition or malnutrition from which millions suffer. Consumers will have access to cheaper food. Farmers with more incomes will afford to send their children to school. Mothers will afford to seek medical treatment. Instability and insecurity will ease.
The government will generate more revenues. Eliminating or at least mitigating the sources of droughtthat India and others have done successfullyis smart public policy for another reason. According to Oxfam, drought costs Ethiopia US$1.1 billion per year, an amount that exceeds government investments in agriculture, and USAID to Ethiopia. Investments in smallholder farming by removing the policy, structural and input hurdles that keep the poor in their place and the country on a low level agricultural productivity track is responsible governance. The cause to the tragedy is not nature but poor and repressive governance that alienates the population from their government and its institutions.
Take a look at global surveys and conclusions. In recent surveys by the Gallop Poll, the Legatum Prosperity Index, Freedom House and the Wall Street Journal as well as assessments by the World Bank and the IMF, it is clear that the governing party is totally detached from the population: it does not serve them at all. The vast majority do not trust their government, its leaders and institutions. Only 30 percent of those surveyed approve what the government is doing. Only 21 percent are convinced or are satisfied that the government is doing anything and everything meaningful to address their problems. Only 19 percent believe that the governing party respects free and fair elections. This is why the country is ranked 101st in the administration of the rule of law without which sustainable and equitable development is unthinkable. Application of the rule is fundamental in advancing opportunity.
In the 21st century, no country can achieve sustainable and equitable development without quality education that leads to jobs and business creating opportunities. In the 2011 UN Human Development Index, Ethiopia ranks 107th, an absolute failure for a poor country that the regime claims is growing by leaps and bounds each year for several years. No single country can aspire to join middle income status without allowing the power of information technology such as mobile phones, the Internet, television and other media that unleash the productive potential of its population, especially girls and other youth. There are 5 mobile phones for 100 people. Only 29 percent of the population has access to sanitation and only 7.5 percent to safe drinking water. At only 0.4 percent, access to electricity is a luxury in Ethiopia as is access to good shelter. Access to financial and banking institutions is only a dream for most. Thirty-three percent have to walk 20 km to access the closet bank. Chronic unemployment is taken as a way of life. Twenty-one percent of the population is unemployed. Some people will never dream to hold a job in their lifetime. They may be born poor and may die poor.
More than 5 million people depend on remittances to survive and to perhaps to enjoy luxuries such as mobile phones that they would obtain otherwise. What about the rest who have no relatives abroad or are not connected to the ruling party for sheer survival?
The structure of the economy is stuck. Small enterprises are the largest employers in the so-called modern private sector, with an estimated 29,083 enterprises according to government statistics. Of these, 93 percent are grain-mills. Can you imagine transforming the structure of the economy with grain-mills? Indigenous production of traditional clothes, metal based supplies, medicines and others are shunned instead of coveted, protected, further developed and modernized as national resources, Most are forced to give way to imported substitutes. It is as if products and services of Ethiopian origin have little or no value at all. Nationally oriented governments give attention to and protect indigenous products and give them prominence. The government of Namibia is a prime example in protecting indigenous culture, products, natural resources and peoples. It has gone further than any by incorporating environmental laws in its national constitution. Namibia consists of different nationality or ethnic groups who have decided to live with one another as Namibians. They interact with one another as Namibians and accept Namibia as their common country. They protect their environment for future generations. There is no evidence whatsoever that the Ethiopian government does this. Remember, Namibia is one the newest African countries; and Ethiopia the oldest. Can the governing party explain why it allows foreign governments and businesses to destroy the remaining forests and misuse scarce and precious water resources, for example, to produce flowers for export while Ethiopians go hungry each day? Deforestation continues at alarming rate of 88,000 ha per year. One of the hungriest and unhealthiest countries in the world is at the same time one of the few countries in the world whose government is not protecting the environment.
In the 2011 Legatum Prosperity Index, Ethiopia is in the bottom 3 of 110 countries surveyed in terms of per capita income and wellbeing along with the Central African Republic (CAR) and Zimbabwe. Citizens with low incomes cannot buy what they need to survive. They cannot afford to buy medicine or to build homes. Despite its huge population, Ethiopia ranks 76th in market size because there is no broad economic participation in the economy. Wealth and incomes are highly skewed and concentrated. In a country that heavily ethnicized through the kilil system, the domestic market and economy are fractured. Lack of market integration associated with lack of national cohesion is costly to the economy and to entrepreneurs. The cost of doing business is among the highest in the world because of ethnic division, market fragmentation, collusion, administrative and state capture corruption. This is why someone in Addis Ababa characterizes Ethiopia as a country that resembles a person who travels in the darkness of night not knowing where he is going.
All foreign visitors to Ethiopia are alarmed by the gaping differences in incomes, wealth and wellbeing between the small political, economic and social elite that wield political power and the vast majority of the population that is poor. Ethiopia ranks 20th out of 110 countries surveyed. Similar to this Legatum finding, Mo Ibrahim places the country 35th out of 53 African countries. The 2011 UN Human Development Index that ranks Ethiopia 174th out of 187 countries is consistent with other surveys. This survey is more significant in that it covers wealth and incomes, education, life expectancy, health and sanitation, shelter and other basic needs. A key element in this multidimensional survey is gross inequality between those who have and those who do not; between who can eat and those who cannot; between those who are employed and those who have no access to opportunities; between those who benefit from growth and those who are left out. Ethiopias HDI is 0.363 which gives the country a rank of 174 out of 187 countries with comparable data. Human development index for Sub-Saharan African countries increased from 0.365 in 1980 to 0.463 in 2011 while it declined in Ethiopia, placing it below the regional average. In other words, Ethiopians are worse off than the rest of Africans.
This begs the question: where is the evidence that growth has benefitted most Ethiopians? There is no evidence and the UN Human Development Index is the best evidence one can offer to prove the point.
Part four is divided into two sections for ease of reading a technical piece. Part four (b) of five will discuss the relationships and distinctions between growth and development, the perceptions of the Diaspora who travel back and forth to Ethiopia; and seven critical hurdles Ethiopian society faces today.