Name : Fantu Cheru
Occupation : Economist, researcher
Educational level : Professor
Fantu Cheru is emeritus professor of international political economy, American University (Washington, DC) and a senior researcher at the African Studies Centre, Leiden University (The Netherlands). He was a research director at the Nordic Africa Institute in Uppsala, Sweden (2007-2012), a member of UN Secretary- General Kofi Annan’s Panel on Mobilizing International Support for the New Partnership for African Development; and associate Senior Fellow at the Stockholm International Peace Research Institute (SIPRI).
Among Professor Cheru’s publication are: Oxford Handbook of the Ethiopian Economy (with Chris Cramer and Arkebe Oqubay, 2018); Agricultural Development and Food Security in Africa: The Impact of Chinese, Indian and Brazilian Investments (with Renu Modi, 2013); Africa and International Relations in the 21st Century, (with Scarlett Cornelissen and Timothy M. Shaw (2011); The Rise of China and India in Africa (2010 with Cyril Obi); The Silent Revolution in Africa (1989). Dr Cheru serves on the editorial board of several scholarly journals. Just recently The Ethiopian Herald has a moment of while with him.Excerpts
The Ethiopian Herald: How did you find Ethiopia’s economic development?
Professor Fantu Cheru: Ethiopia’s economic performance since 2005 has been more than spectacular, with double digit economic growth. This growth has been driven by massive investment in infrastructure, and investment in human capital development. Agriculture and services led the way while the performance of the manufacturing sector has been less than satisfactory. All in all, progress in poverty reduction has been positive although the economy has failed to generate jobs for a youthful population.
Overall, the picture is mixed. Export performance has been very disappointing, and the government now must deal with the consequences of debt-financed development. It is not the volume of debt that is the problem; it is the poor performance of the export sector that has aggravated the economic crisis today.
Herald: Why does Ethiopia need financial assistance or intellectual support?
Professor Fantu: Given the underdeveloped nature of the export sector, external financial support as well as FDI flow is critical for Ethiopia to move away from subsistence agriculture dependent development to manufacturing and high value-adding agricultural production. The formidable problem I see is that backward linkage to the agricultural sector is poorly developed. No country has made the transition to industrialization without first developing the agricultural sector. One cannot leapfrog to industrialization without first modernizing the agricultural sector.
It is remarkable how underdeveloped and neglected the Ethiopian agriculture has been. The two oxen and plough system that I knew 50 years ago before I left the country is still the predominant form of production. Therefore, the new attempt at manufacturing (leather, textile) is not working because backward linkage to input providers has not been sufficiently developed. Therefore, we import leather and cotton, using scarce foreign currency, to feed these manufacturing industries. This is insane.
Herald: How could Ethiopia tackle the challenge of unemployment?
Professor Fantu: The unemployment problem is very complex and there is no silver bullet to solve it. It is a structural problem and requires new thinking in economic development strategy. Almost 70% of Ethiopia’s 110 million people are under the age of 24. Millions of young people come out of universities each year, but the capacity of the economy to generate enough jobs is limited.
Even if the jobs are available, the skills levels are too low or incompatible with the skills employers are looking for. Therefore, fundamental reforms are required in education, skill formation, raising the productivity of many sectors, etc. I consider our universities as warehouses rather than a place of learning. The private sector is underdeveloped and faces many challenges. It is the private sector that creates the jobs, not government. Laws and regulations tend to suffocate the creativity and entrepreneurship of individuals. How to replace ‘disabling’ laws with ‘enabling’ ones is a critical political challenge.
Herald: The geopolitics as a backdrop, how do you asses the economic potential and challenges in the horn?
Professor Fantu: The Horn of Africa is a terrible neighborhood. While there is great potential for a sub-regional economic integration, the political climate is not conducive for such an idea. Look around-none of the governments that make up IGAD are capable states who care about their citizens. Moreover, the Horn has become a battle ground for competing foreign powers.
I particularly do not like the penetration of Arab politics in the Horn. Ethiopia is being sucked into the treacherous politics of the Middle East, and that is very dangerous. I have no idea, for example, what kind of cooperative arrangements that our current PM has reached with the Saudi’s, Qatar, and the UAE. As for me, we should stay away from Arab politics as much as possible.
The Ethiopian Herald Sunday Edition 3 November 2019
BY AMBO MEKASA
