Historical records show that the feudal economic system that reigned in Ethiopia for centuries hampered economic progress and left farmers to lead a subsistence life. Exploitation and oppression left the society simmering waited for change.
The abolition of the imperial system in 1974 by popular revolution had brought hope for political development and economic progress but it was derailed by the military junta and later the nation plunged into chaos for 17 years. Though the downfall of the Dergue regime in 1991 brought hope the defunct EPRDF regime governed the nation undemocratically by iron fist for 27 years until it was dethroned by public resentment in 2018.
Yared Hailemeskel is an economist working in several organizations based in London and recently talked to local media about various issues of the nation’s economy.
As to him, Ethiopians remained entrenched in a monarchical system for a long period, with decision-making and enforcement consistently concentrated in the hands of authoritarian rulers. Consequently, an inherent power dynamics detached from public needs and aspirations became culturally normalized in Ethiopian politics.
Despite its controversial policies under the EPRDF administration, it had witnessed notable economic improvement through some beneficial measures. Particularly from 1991-1995, the party embarked on liberalizing the financial sector and privatizing state assets and reversed the previous socialist economic doctrines.
However, these policies lacked public consent. Similar to any system, limitations existed. Ethiopia has reached a point where challenges now overshadow economic gains, calling the system’s sustainability into question.
In this context, the lack of political plurality and the repression of opposition parties can be seen as an obstacle contributing to the downfall of the EPRDF. Finally its total collapse was accelerated by the ethno-nationalistic governance model, influenced by revolutionary democracy which is socialist ideology imported from the Soviet Union, he elaborated.
The inability of this ideology to engage in meaningful dialogue to respond to the fundamental concerns of the Ethiopian people played a significant role in the systems downfall.
He also said that regardless of the philosophical framework a government adheres to, it should always evolve, address the needs of the general population and be responsive to the changing times.
According to Yared, in the early years of the EPRDF’s rule, its political ideology enjoyed widespread acceptance. However, the political system started losing recognition since it has lost integrity, left the people longing for change.
The dissatisfaction stems from the ruling government’s policies and philosophies, bear resemblance to both the monarchical era and the Derg dictatorship. The policies have shown resistance to considering diverse perspectives, while political repression and economic control had become concentrated within the government and its affiliated groups.
The situation began to deteriorate following the announcement of the 2018 election results, in which the EPRDF secured nearly all seats in the parliament. This led to the emergence of resentment from various parts of the country, triggering massive demonstrations that ultimately resulted in the downfall of the government.
Seizing this opportunity, an internal political transition took place, instilling newfound hope among the public. As a result, Ethiopia underwent significant political reforms. While these reforms brought about positive changes and expanded political freedoms, they also brought long-suppressed ethnic tensions to the surface.
However, following Abiy’s coming to power there were expectations for the cessation of both political repression and excessive economic control. These hopes were grounded in two specific aspirations. Firstly, there was a strong desire to put an end to divisive ethnic policies that had plagued the nation. Secondly, there was hopeful anticipation for a reduction in the government’s influence over the economy. At the very least, these were reforms that the incoming administration intended to prioritize and implement.
While notable developments have taken place in terms of political reforms and the opening up of political spaces, it can be argued that significant economic reforms have yet to be implemented, particularly when compared to the extensive legislative measures undertaken by the EPRDF during its tenure.
According to Yared, During the Derg regime, Ethiopians were prohibited from establishing banks or owning private organizations, and public-owned entities were entirely controlled by the government. However, under EPRDF’s reign, significant reforms were introduced, leading to the abolition of these restrictions.
As a result, Ethiopians were given the opportunity to participate in the private banking sector, and government-owned entities were privatized. Substantial reforms implemented by the previous government also resumed.
However, it is reasonable to assume that the current government may have a different approach when it comes to liberalizing or privatizing the telecom service and opening up the financial sector.
The country was compelled to adopt the World Bank’s structural adjustment policy, which includes liberalization as one of its pillars. It is important to note that privatization was already on the agenda of the previous government, and the incumbent acknowledges the necessity of implementing the adjustment policy as a means to initiate the process of opening up these sectors.
As to Yared, Ethiopia’s socioeconomic woes are deep rooted, decades of authoritarian rule and the historical legacy of ethnic divisions and grievances, along with issues such as land disputes, marginalization and perceived inequalities, have significantly contributed to the prevailing tensions in Ethiopia.
In addition, the reforms on the economic front have been limited or nonexistent in certain areas, particularly regarding land rights.
In Ethiopia, farmers without secure land rights find themselves in uncertain circumstances and left in disadvantaged position perpetuating a cycle of inequality. This persistent issue has played a prominent role in perpetuating the recurring challenges faced by the country.
Based on his observations in England, Yared forwarded various investment groups and investors initially showed interest in Ethiopia following the political transition, assuming that the country was open for business. However, they encountered significant barriers in the bureaucratic process, ultimately leading them to withdraw their investment plans. This bureaucratic hurdle has become a deterrent, impeding the potential inflow of investment into the country.
While the previous government had an operational system in place despite its bureaucratic policies, favored investment, the current government inherited various political economic woes which require time and resolve.
It tried its level best to address the past mistakes and attain economic progress and to that end took various measures. But the war broke out in the northern part of Ethiopia brought a deterrent effect on the witnessed economic achievements.
Currently the nation has faced various challenges in the economic front and among others, negative trade balance, shortage of foreign currency, illegal trade, inflation and corruption. In addition, conflicts that flared up in various parts of the country hamper trade and business.
Dilapidated roads critically hamper speedy logistic system. The inconvenience of road system negatively affects value chains of supplying of agricultural inputs to farmers.
According to the recent study findings, the absence of peace and security in the remote areas of the country created good opportunity to the illegal traders to smuggle cattle and agricultural products to the neighboring countries which again put pressure on the economy.
As to him, Ethiopia has a potential to register economic growth through exploiting its abundant natural resources such as arable lands, productive labor force, water, mine, energy and tourism.
Many countries all over the world passed through political upside downs, upheavals and war but through time they could be able to stabilize their countries and resolve conflicts through dialogue. Therefore, through drawing lessons from other countries, Ethiopia could attain peace and stability. The ongoing efforts exerted by the National Dialogue Commission to prepare plat form for conducting dialogue among various political and interest groups should be supported by all stakeholders.
As mentioned above, Ethiopia missed various opportunities in the past and now it is time to embark to the path of peace and stability through reconciliation and pardon to really come up with meaningful change in all aspects.
The appalling poverty witnessed in the country is worrisome and it is time to stop conflicting and exerting energy to achieving economic progress and true opulence.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD FRIDAY 4 APRIL 2025
