Ugandan Columnist Gives High Praise to Meles Zenawi and Ethiopia’s Economic Policy

Meles Zenawi Ethiopia's Foreign Policy
Ethiopia’s late Prime Minister Meles Zenawi

AFRICANGLOBE – Meles Zenawi, Ethiopia’s leader from 1991 until his death in August 2012, was arguably the most intellectually-astute contemporary African leader.

He had an unusual grasp of the political foundations of development and the economic bases of politics.

At the height of the push for neoliberal policy-reforms of economic liberalisation, privatisation and deregulation across the African continent, Meles resisted policy dictates of Western donors and international financial institutions.

In challenging International Monetary Fund and World Bank economists, Meles was readily armed with a clear command of economics theory and a firm understanding of the actual historical record of growth and development around the world.

For example, in many of his writings, he persuasively reasoned that the IMF and World Bank trumpeted approach of leaving everything to the workings of the “free market” was theoretically wrong and empirically nonexistent.

He further argued that the idea that the state must be confined to the role of a night watchman, with no role in influencing economic activities, was theoretically unjustifiable and practically untenable.

Unlike most of his contemporaries, including our own President Yoweri Museveni, Meles went beyond the loaded rhetoric of castigating Western donors and lenders for being ignorant about Africa yet arrogantly imposing policies.

In highly-robust intellectual debates, he took on the self-declared experts on African underdevelopment and challenged them on their misguided policy prescriptions.

But he did more. He insisted that reform policies would be adopted and tailored to reflect the peculiar needs of Ethiopia instead of embracing a one-model-fit-all, crafted from the distant corridors of Washington or Geneva.

In the end, Ethiopia is among the very few African countries that rejected sweeping privatisation and avoided haphazard economic liberalisation. The current outlook of Ethiopia’s economy reflects Meles’ unwavering stance: foreign capital is unwelcome in the banking and insurance sectors, the telecom sector remains state-owned, very high public investment, etc.

The capital Addis Ababa is a “construction site,” as one Ethiopia friend put it. Soon Addis will have something hard to find in African cities: a mass transit train service. With a cautious liberalisation approach and a measured privatisation policy, Ethiopia does not suffer from the ills of fake and petty “investors” that we are grumbling about in Uganda.

The reports of foreign investors abusing and humiliating Ugandan employees that have become legion are a consequence of the rushed policy-reforms of the 1990s. What’s more, the current debate, focusing on the need for skills training or what advocates have dubbed “Skilling Uganda” versus prioritizing physical infrastructure, especially roads, misses something to which I return below.

Recently, President Museveni was categorical in telling off striking teachers and lecturers that his government’s priorities were roads and electricity and not salary increments, which he rightly characterises as funding consumption (never mind that no one beats him in consumption).

Critics reminded the president about the necessity of a literate and skilled population for the roads and electricity to be optimally utilised. It’s not either or, it’s both. The president is singularly focused on attracting the ever-elusive foreign investors, thus his commitment to removing impediments to doing business, including our poor roads and low electricity supply.

But something is amiss in this debate. It’s not enough to have a skilled population, a well-developed road network and adequate electricity supply. These stand hanging without a proper institutional framework and value system that harnesses skills and optimises physical infrastructure.

Without a merit-based system that rewards skilled labour, there is no incentive to acquire skills. Without a change in thinking and attitude towards productivity, skills or no skills could mean the same thing. And in the absence of institutions that facilitate adoption and diffusion of technology, physical infrastructure will be underutilised if not misused.

It’s not enough to have a road. You can have one that is used to sun-dry corn and cassava for domestic consumption as evident along the Mbale-Tirinyi road. You may have electricity but without the requisite technology to propel productivity; economic stagnation will reign.

The highly-profit-driven private sector and self-interested individual entrepreneurs cannot bring about the kind of technology that can easily diffuse and spread across the economy. From the point of view of a business enterprise, it doesn’t make business sense to acquire new technology which quickly spreads out and benefits others including direct competitors.

Yet this is precisely what a poor country like Uganda needs. We need technology to be a public good just like a road, such that all producers can access it to enable increased production and productivity. For this to be possible, we need the strong presence of an activist state, not a night watchman state contrary to the neoliberal articles of faith.

We also need the institutional apparatus to filter through investors that bring value to the economy. We need more and not less regulation.

The foreign owned vehicle-bonds, one of whose staff attracted public outrage for sexually abusing a young Ugandan woman, do not bring much to a country that desperately needs to concentrate resources in real production and value addition.

 

By: Moses Khisa