BY ABEBE WOLDEGIORGIS
Forty years later after the victory of Adwa, Ethiopia gained against Italy in 1896; the Mussolini fascist regime invaded the country for the second time motivated by revenge.
The invading army used hazardous gas against the Ethiopian army which is internationally prohibited to be used. Though the Ethiopian army tried to defend its country until the last hour, withstanding the air bombardment was unbearable.
The invasion was launched from two fronts, one from the northern front by crossing the Ethio-Eritrea border and in the eastern front by crossing the Ethio-Somalia border.
Similar to the battle of Adwa, the Ethiopian army was poorly equipped, fed, dressed and utilized both human and animal labor for transportation. Contrary to these, the fascist invading army was well equipped including modern machine guns, war planes, tanks, transportation vehicles and sufficient logistics. Adding insult to the injury, some rifts created between the regional lords and emperor Haileselassie created conducive environment to the fascists to exploit the difference and easily destabilize the emperor’s army and in less than a month the Mussolini army captured to the capital, Addis Ababa.
Though the emperor went exile to Europe, the resistance movement by veterans inland was not halted. The veterans in several parts of the country particularly, in Shewa, Gojam, Gonder and the Southern part of the country gave the enemy hard time and five years later, the long fierce fighting against the fascist army ended with victory to Ethiopia.
In 1941, as the Second World War broke out in Europe, Mussolini made political blunder and announced his alliance with Nazi Germany the enemy of allied forces such as USA, Great Britain and France.
And hastily the British forces who already were existed in Sudan accompanied the emperor come back home from London. Following his arrival at the Capital, Addis Ababa, in 1941, they gave extensive support to restore his power. However, the emperor’s power had not been strengthened at that time to fully administer the country’s economic, political and social affairs. That is why he accepted the British support. Almost for the next five years, some economic sectors were under the command of the British Army commanders including the banking, the rail way transport, the custom and others.
They introduced the East African Shillings for monetizing the economy and the emperor had no full rights of making decision on the nation’s fiscal and monetary policies.
In the long run, however, emperor Haileselassie began to fully exercise his authority and controlled the aforementioned economic sectors.
During the fascist’s occupation for five years, though they imposed their ruthless rule in the country, they took the country one step forward regarding the construction of infrastructure. Most of the roads connected the regions were constructed that time.
When the emperor started to reinvigorate the economy, he faced various challenges and among others he had no sufficient trained human resources and finance and the economic bases were shattered by the sovereignty struggle. However, he tried his level best to establish institutions such as the executive, the legislative and judiciary which are vital to make the government functional.
He introduced new Ethiopian currency, Birr, to monetize the economy, enacted tax laws and mostly farmers paid tax in kind instead of paper money due to the shortage of the currency. He also reinstated the export and import trades. Most of the export items were agricultural products. Some industries had been established before the occupation such as the beer factories continued their production.
According to Documents of the National Bank of Ethiopia, during the late 1940s and 1950s, much of the economic sectors remained unchanged. The government exerted its development efforts on expanding the bureaucratic structure and ancillary services. Most farmers cultivated small plots of land or herded cattle. Traditional and primitive farming methods provided the population with a subsistence standard of living.
In addition, many nomadic peoples in drier areas raised livestock and led a life of seasonal movement. The agricultural sector grew slightly, and the industrial sector represented only a small part of the total economy.
Ethiopia needed an infrastructure to exploit its resources for improved living conditions, better health, education, communications, and other services.
A key element of the emperor’s new economic policy was centrally-administered development plans. In the meantime, the government could galvanize economic support from the western world particularly from the USA. However, as agriculture which is subsistence was the main stay of the economy, the majority of the population was living in abject poverty and many of them were simmering.
As a result, due to political discontent and the famine occurred in the northern part of the country, the regime was shocked and left to its fate which gave way for the emergence of new military government led by Derg.
The Derg regime pursued the socialist oriented economy. Right after its power assumption, it nationalized the land and liberated the tenants from the feudal land lords’ operation and exploitation to respond to the question raised by the students’ movement which was “land to the tiller”.
It also confiscated both local and foreign companies engaged in manufacturing and service sectors and many foreign businessmen left the country due to the regime’s socialistic attitude and negative outlook towards the westerners calling them exploiter and supporter of imperialism.
Ethiopia’s relation with the west was critically hampered. The Derg forged new alignment with the socialist countries particularly with the then Union of Soviet Socialist Republics (USSR). However, it did not secure foreign investment as much as that of the previous regime.
Nevertheless, with the support of some countries, it could construct infrastructures, expanded satellite communication and small scale factories. According to the World Bank report, in its last power tenure years, the Derg was registering negative economic growth.
As the regime was hostile to the west and busy in war in the northern part of Ethiopia it did not bring viable economic progress and both the internal political conflict and external pressure forced the regime to meet its demise in 1991.
Following the downfall of Derg, the EPRDF regime assumed power and announced that it run free market economy and repaired the country’s relation with the Western world which was plummeted to zero level during the Derg regime.
It partially opened the economy to foreign and local private investors and introduced new legal frameworks that encouraged the inflow of foreign investment. It relaxed the financial laws and opened the sector to the private competitors. It spent its finance, human resource and time for the expansion of infrastructure such as roads, air ports, hydropower dams, in which the nation ever had witnessed in its modern history. According to the World Bank report until 2018, in the past 15 years the nation registered a double digit economic growth.
However, some argue that though economic growth is witnessed, the income gap between the poor and the rich had been increasingly widening. In addition to that, the capital outflow due to illicit trade put the nation in its disadvantageous position.
According to the International Monetary Fund, the nation’s debt rose to 29 billion Dollars which is intolerable to the poor nation.
The reformist government introduced new home grown economic reform to reinvigorate the economy following its assumption of power five years ago. The objectives of the reform was among others, to bring macro-economic stability, to foster the nation’s debt payment ability, adjust the Dollar Birr exchange rate, address foreign currency crunch, mitigating inflation due to external and internal factors, reduce unemployment, boost export, import substitution so that promoting the nation currency reserve capacity. Moreover, it took various measures to accomplish the delayed mega projects and utilized the nation’s resources economically.
Nevertheless, the war erupted in the northern part of the country and lasted for two years incurred the nation huge financial toll. The nation spent significant amount of hard currency because of the war which in turn brought its own drawback on the economy. Fortunately, the war has ended and once again the nation enabled to make good relation with the west and the international financial institutions. They also promised to continue their economic support to Ethiopia.
Thus, while celebrating the victory day, all Ethiopians need to consider the value of freedom and translate the veteran spirit revealed in the battle field during the Italian occupation into the economic sector aiming to register modern victory over poverty the last enemy of the nation, it is underscored.
The Ethiopian herald May 5/2023
