Koki Abesolome
The Ethiopian revolution as engineered, decreed, and glorified by the late Prime Minister Meles Zenawi rested on three pillars. Politically, it was anchored in tribal federalism. Economically, its principles revolved around the axis of revolutionary democracy. Judicially, it drew its legitimacy from the barrel of the gun.
In several earlier blogs, I have shown inherent flaws in his brand of tribal federalism, using computational geometry and political judo as deconstruction tools (see references below).
The purpose of this blog is to show that the primary drivers of Ethiopia’s GDP growth during Prime Minister Meles’ era were external factors, not the so-called revolutionary democracy economic policy.
I hope that the Abiy Administration that is currently considering alternative economic philosophy will use the information presented herewith as a coffin to rest eternally the long expired ideology of revolutionary democracy.
NUMBERS DO NOT LIE
Prime Minister Zenawi’s supporters still glorify revolutionary democracy as the best thing that has happened to Ethiopia’s economy and tout its architect as the best leader Ethiopia has ever seen. I will use some stylized facts (simplified empirical presentation) to challenge this baseless notion.
Let us compare the Prime Minister’s economic performance with that of President Mengistu Hailemariam.
I will use World Bank data for consistency. My analysis will be based on GDP growth during the two eras.
I will also use Net Official Development Assistance (foreign Aid) as percentage of Gross National Income (GNI) and Military (war) Expenditures as percentage of Gross Domestic Product (GDP) to account for costs of Mengistu’s protracted war against EPLF and TPLF.
My analysis will cover from 1982 to 2016. It was limited to this time span because World Bank GDP growth data is not available for prior years.I looked at IMF data base and the same is true.
Between 1982 and 1990, the Mengistu regime registered 2.39 percent average GDP Growth. For the years 1991 to 2016, the Meles regime documented 6.77 percent average GDP growth.
Three factors explain the difference in the growth rates. When we account for them, the revolutionary democracy ሆያ ሆየ (hoopla) goes silent rather rapidly as an old radio whose battery has died.
First, Net Official Development Assistance during the Mengistu era accounted for 6 percent of the country’s Gross National Income. The corresponding figure for Meles’ era was nearly double at 11 percent.
Second, during Mengistu’s era, military (war) expenditure as percentage of GDP was 7.94 percent, compared to 2.97 percent during Meles’ time. The war is Mengistu’s political problem. My interest here is to show the difference in economic policies and their impact on the country’s growth. Obviously Mengistu’s economic performance will be better if he was not burdened by the noted-protracted war. Remember part of EPLF’s and TPLF’s war involved sabotaging the economy, including robbing banks, disrupting the movement of goods by blowing or hijacking trucks.
There is a third and important factor. The year 1991 marked a watershed in the world economic order after Russian communism was buried six feet under the earth. For example, before the collapse of the Soviet Union, the AVERAGE Direct Foreign Investment inflow to the entire Sub Saharan Africa between 1982 and 1990 was $1.3 billion. The corresponding figure for the period between 1991 and 2016 was $20 billion.
In general developing countries performed much better after the collapse of communism. As a proxy for the difference in external global economic environment, I used the average GDP growth of all Sub Saharan African countries during the two periods under consideration. My interest was to see how Ethiopia’s economy fared vis a vis the rest of African countries.
Between 1982 and 1990, the average growth for Sub Saharan African Countries was 1.44 percent. This means Ethiopia’s growth during Mengistu’s era was 66 percent higher than the rest of Sub Saharan Africa.
Between 1991 and 2016, the average growth for Sub Saharan African Countries was 3.90 percent. They grew nearly three times more than the previous period. Ethiopia did not grow three times as much. Ethiopia’s growth during Meles’ era was 73 percent higher than the rest of Sub Saharan Africa.
Let us go even deeper. During 1984 and 1985 Ethiopia suffered from the worst famine in its history. The famine was primarily caused by nature. Let us remove these two years from our analysis. This was the time Ethiopia registered negative growth.
Let us also remove 1991 and 1992 from the analysis. This was the time the Meles Administration registered its worst performance, growth of negative 7.14 and negative 8.67. Let us be generous and write off these years as a grace period for Prime Minister Meles to put his administration in order.
When the years 1984 and 1985 were removed from the analysis Ethiopia’s GDP growth was 5.08 percent, compared to 8.00 percent during the Meles administration, excluding 1991 and 1992.
The foreign aid remains the same at 6 and 11 percent of GDP, respectively. The difference in military expenditures gets worse. During the Mengistu administration it was 8.10 percent of GDP, compared to 2.84 percent during Meles’ era.
Let us compare how Ethiopia fared when compared with the rest of Africa. Ethiopia’s 5.08 growth rate was more than 4 times the average growth rate for Sub Saharan African countries. In comparison, during the Meles administration Ethiopia grew less than twice the rest of Sub Saharan Africa.
Ethiopia’s GDP growth differences between Mengistu’s and Meles’ era are explained by differences in foreign aid, war expenditures, and a conducive global economic environment (after the death of communism).
There is one important factor that I was not able to include, namely total debt (domestic and foreign) as percentage of GDP. We have witnessed impressive infrastructure development during EPRDF era, but they came with heavy national debt. I was not able to include it in my analysis for lack of data during Mengisut’s time.
One can argue that under similar circumstances the Mengistu regime would have registered a better performance record than the Meles regime.
For example, during Mengistu’s era Ethiopia was getting 1.4 times more foreign aid than the average for Sub Saharan Africa. Yet, it registered 4.24 times the average growth of Sub Saharan African countries.
During the EPRDF era, Ethiopia received 2.6 times more foreign aid than the average for Sub Saharan Africa and registered 1.87 times the average growth of Sub Saharan African Countries.
Ethiopians are both resourceful and hardworking people. During Mengistu’s and Meles’ eras they were shackled with a socialist and so-called revolutionary democracy policies, respectively. Their ability to develop their country was negatively impacted if not altogether stunted.
The Abiy administration should be credited for proposing to liberalize the economy. Ethiopia will register far more impressive growth if it follows a free market system.
May Revolutionary Democracy Rest in Eternal Peace!
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References to my blogs on tribal federalism
- Small Tribes Must Use Political Judo to Render Viagra Hardened Tribal Elites Impotent – https://www.facebook.com/koki.abesolome.3/posts/185973015638506
- EPRDF Puts Minority Tribes on Practice Session Before They Become Equal With Large Tribes – https://www.facebook.com/koki.abesolome.3/posts/187511218818019
- An Open Letter to PM Abiy Ahmed: Give US Constitutional Right as Citizens or as Tribal Groups – https://www.facebook.com/koki.abesolome.3/posts/184753325760475\
- The Impunity of Stupidity: The Futility in Constitutional Ethnicity (Using Computational Geometry) https://www.facebook.com/koki.abesolome.3/posts/144116823157459