By: Abis Getachew Makuria - Head of Foreign Relations of EDP
Tigrai Onlne - April 11, 2014
After most African countries obtained their independence in 1960’s, their primary task was to aleviet poverty and bring their economy in the appropriate development path. On the debate of which way development and prosperity can be achieved, the leading role of the government in the economy was at the centre of the stage. This thinking was popular because of the then famous Keynesian thinking that government led expansionary fiscal policies could make a positive change in the development process of the country. However, this thinking was under counter attack by Neoliberals in 1980’s and 90’s suggesting a very limited role of the government in the working of the markets. Most African countries have shifted to this neoliberal thinking through Structural Adjustment Programs (SAPs) of Bretton Woods Institutions. The final result of these policies had left a sever disaster to the economic development of the continent.
During the first years after the fall of the military regime, Ethiopia has also implemented the SAPs in certain aspects. Since these policies became out of fashion by the end of 1990’s, the government has officially announced in the year 2001 that it is following the Developmental State path that took the South East Asian Tigers to the growth success. The Ethiopian government promotes this thinking to other African countries pointing out the average double digit growth of the country since it became “developmental”. The main aim of this article is on how far we can go as a nation with the developmental state thinking. It also attempts to address if sustainable development can be achieved in the developmental state path.
The developmental state has two approaches: the economic approach and the political approach. The political approach focuses mainly on the nature and capacity of the state. Regarding the nature of the state it has to be autonomous and independent and regarding the capacity it requires a high quality bureaucracy. To achieve this it suggests attracting educated and independent man-power to governmental offices. The economic approach, on the other hand, mainly depends on market failure and its suggestion of the government intervention. Though these developmental suggestions are still in question in their practice in Ethiopia the main concern is still on how far we can go with the developmental state thinking.
The main target of the developmental state focuses on the early stage of growth and industrial transformation which makes it difficult to have long-term planning unless supported by the right centred or left centred political stand. In order to have an intergenerational long term institutional planning there has to be a political principle that has to guide future planning as well. Johnson Chalmers who first coined the term “developmental state” wanted to represent the countries of South East Asia who had an economic growth miracle and not regarded it as an ideology to be governed with. All developed countries in the world, even the very liberal ones had a growth history of government intervention but they could made long term planning that has enabled them to have a sustained development. A country such as United States that is at the peak of development has right wing ideology while China that is at the peak of economic growth has a leftist ideology. No matter what kind of ideological stand they have, these countries can build their institutions that dreams for the next generation. But when we come to the case of Ethiopia, we are twin hearted that is neither right centred nor left centred that made us, as a nation, failed to build strong political and economic institutions. Such failure may not end on this generation but may have an impact on the coming generation since it transfers ill suited institutions that could not reconcile the conflicts between: autonomy and accountability; growth and distribution; consensus and inclusiveness.
The other concern of the practicability of developmental state in Ethiopia is whether it can bring sustained development in the country. The term development itself has social, economic and political characteristics and hence advancement of each character is required for a development to be categorized as successful and sustainable. As a nation starts to develop economically and when the middle income class society starts to emerge it is natural that the society questions for democratic rights. The common, if not the universal, feature of the developmental state is its authoritarianism. Such a pressure may limit the life of the ruling party as a government becoming its own grave-digger. Due to this authoritarian behaviour of developmental state model, it raises a question whether the party on power has devotion for a persistent and flourishing development in the country.
Our concern is strengthen when we see figures of employment transfer from agricultural to the industrial sector, which shows the industrialization process and uphold of development. The transfer is insignificant though fast and rapid economic growth is underway for the last decade, showing how the policies have failed to bring structural changes in the country. From the world experience, for a late catch-up country there is high opportunity for such radical transformation which is absent in the case of Ethiopia. Focus is on place for the industry and manufacturing sector in the Growth and Transformation Plan (GTP) but within the last four years compared to our neighbouring countries Kenya and Uganda the attraction of Foreign Direct Investment (FDI) is again insignificant. This is mainly attributed again to the poor institutional setup of the country and poor quality of man power in the bureaucracy.
As discussed above, it is very difficult for the developmental state to be democratic and if it becomes it will be at the cost of its own legitimacy. Such a development to become true it requires sacrifice for the benefit of a country, people and generation at the cost of personal or partisan interest. Though the assumption of maximizing self interest is rejected theoretically in the developmental state model, the world eyes are on Ethiopia on whether the benevolent government assumption works practically.
It is without a shred of doubt that the developmental state model has achieved a huge success in the academic arena, like communism and neoliberalism. However, it has numerous problems in its implementation. This is the time, for the stakeholders and citizens to rethink the pros and cons of this model and to make the adjustments and shifts.