Ethiopia - mending fractures in rapid growth

Europe's World

Asia, Africa & Emerging Economies

Picture of Hiroyuki Hino
Hiroyuki Hino

Visiting Research Scholar at the Duke University Center for International and Global Studies (DUCIGS)

Picture of Kalkidan Lakew Yihun
Kalkidan Lakew Yihun

Graduate of Public Policy at Duke University

Abiy Ahmed, Ethiopia’s new Prime Minister and the 2019 Nobel Laureate for Peace, has been hailed by the international community as the long-awaited embodiment of a new generation of African leaders. People around the world pinned their hopes on Abiy Ahmed as a possible harbinger of a truly democratic transformation to the country and peace to this troubled sub-region.

Yet the story of Ethiopia’s development and of Abiy Ahmed is not as simple as first appears. Ethnic divisions that had largely been suppressed appear to be intensifying under this administration. Inter- and intra-ethnic violence continues to escalate with growing ethnonationalism, which could possibly affect future development of the country.

Was the international donor community blinded by the glittering pace of economic growth that Ethiopia continuously achieved over the last two decades? Has Ethiopia really been a shining example of inclusive development after all?

It is true that Ethiopia has achieved a truly impressive economic growth – averaging 9.9% per year from 2007/08 to 2017/18. Moreover, the government’s policies have substantially reduced poverty.  Large donor assistance, together with foreign direct investment, likely contributed to these impressive records.

To be sure, climate and geography are unkind to Ethiopia

However, reports and news in Ethiopia for the last decade show a mixed picture, which is seemingly at odds, in some ways, with the image of a country praised for maintaining the fastest growth rates in Africa. Amid high economic growth, Ethiopia remains one of the poorest in the world. Ethiopians are likely to endure hunger at least as much as citizens of some of the most food-insecure countries in the world.

Ethiopia is in the bottom 10% of 189 countries in the world in UN’s Human Development Indicator. The multidimensional poverty index, that captures deprivations in health, education and standard of living, shows that 88.2% of the population is multidimensional poor.

To be sure, climate and geography are unkind to Ethiopia. Large parts of the country are arid. As a result of climate change, droughts have become more severe and recur at ever shorter intervals. Nevertheless, with long-term planning and adequate preparation, hunger and catastrophic losses of livestock can be avoided.

A large number of Ethiopians have been internally displaced over the past decade, and the number has risen to over 3mn recently. Harsh and worsening climate is partly to blame, but internal displacement has largely been a result of intensifying ethnic conflicts, motivated by historical, political and socioeconomic grievances.

The ethnic-based administration under EPRDF appears to have undermined national unity

Ethiopia is home to more than 80 ethnic groups, with a handful of ethnicities comprising most of the population. History shows that a country with such ethnic configuration is more prone to ethnic competition and political manipulation.

When the Ethiopian People’s Revolutionary Democratic Front (EPRDF) took power in 1993, it made ethnicity the ideological pillar of its political organisation. Political power was ethnocentric and was controlled largely by the minority Tigray ethnic group.

The two largest ethnic groups, the Oromo and the Amhara, were increasingly disfranchised while other smaller ethnic groups were to a large extent marginalised. The ethnic-based administration under EPRDF appears to have undermined national unity by creating a fertile ground for ethnic rivalries.

The 1993 Constitution sought to protect national unity through ethnic federalism. It established nine ethnic-based regional states, each having the right to self-determination and maintaining autonomy over many fiscal functions. However, the capacities to raise their own revenues and deliver public services were inherently weaker in less developed regional states.

The struggle for greater power and autonomy has remained serious at the regional level

Thus, despite sizable federal grants that are allocated among regional states to ameliorate disparities, the feeling of deprivation remained entrenched in less privileged regions and among more impoverished ethnic groups. Moreover, high dependency on budget transfers from central government – and the one-party rule – helped maintain the centrality of decision-making at the federal government level.

The struggle for greater power and autonomy has therefore remained serious at the regional level. In the recent referendum, the Sidama people voted overwhelmingly for autonomy for a future Sidama regional state. In fact, the quest for its own state is common among ethnic groups.

Literature and evidence from elsewhere suggest that inter-ethnic political and economic inequalities could be a cause of ethnic conflicts. In Ethiopia, although poverty is widespread, in some regions it is more severe than others. For instance, Oromia has the largest number of poor people, followed by Amhara and SNNPR regional states. More generally, pastoral regions of the country have the lowest economic outcomes, especially in educational attainment.

Land is ‘publicly owned’ in Ethiopia and as such has been a major source of dispute and discontent between and within ethnic groups. EPRDF has undertaken massive ‘land-grabbing’ – one of the largest in the world – in the name of promoting economic development. Land-grabbing has been directed at a few regions, most notably in Oromia and Gambella, and millions of Ethiopians have been evicted and resettled. Understandably, those actions have heightened feelings of marginalisation among the local population and has led to well-publicised violence.

Looking forward, Ethiopia and its prime minister are at a historical crossroads

Water is an equally critical and emotive issue. Available data show that relatively safe water is hardly available in large areas within the Oromia and Somali regions and in pockets in several other regions, while it is much more readily accessible in most of areas in the Tigray and Amhara regions.

Looking forward, Ethiopia and its prime minister are at a historical crossroads. With growing ethnic division and ethnic nationalism and slowing economic performance, restoring social stability will be challenging, to say the least.

Embedded into the political structure, ethnic discontent cannot be fundamentally resolved without addressing the political and economic inequalities across and within ethnic groups. Studying such inequalities comprehensively and identifying ‘inequality hotspots’ is a prerequisite for formulating effective and focused remedial measures.

Ethiopia is among the top recipients of foreign development assistance. With €715mn for 2014-2020, the European Union’s development cooperation in Ethiopia is one of the largest in Africa and the world. From the EU, Ethiopia receives not only development assistance but also substantial humanitarian assistance to refugees and internally displaced people.  Addressing inequalities has been part of EU’s development cooperation in Ethiopia. Such efforts must boldly continue.

The EU has a special role to play in assisting Ethiopia in charting a path to a more cohesive future. With a new European Commission and Parliament taking office, now is the time for further reflection.

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