ECONOMICS OR MENEMEN – “WHATEVER AND WHATEVER”

From a high enough vantage point, the city of Addis Ababa, Ethiopia probably resembles a freshly disturbed anthill, and in such an environment it makes sense that the question of whether development or democracy should come first can feel valid. Staunch supporters of the late Meles Zenawi make the case for development, and in espousing the merits of benevolent autocracy, experts such as Dambisa Moyo are sympathetic to this view. Clearly I’ve not spent enough time here to fully grasp the situation, but this question strikes me as false. One implication of current development in Ethiopia, recently repeated to me by a government-affiliated policy analyst, is that the government “picks winners and losers”. Land and human capital remain Ethiopia’s two most abundant resources, yet private land ownership is forbidden. The state retains its ability to pursue large-scale resettlement campaigns at the cost of basic human rights. Furthermore, by controlling land the government denies private entrepreneurs the ability to collateralize what would otherwise be their key assets.

International companies, and China in particular has embraced the “enabling environment” for direct investment, building massive infrastructure projects such as the formidable Ring Road highway that partially circles Addis Ababa’s city limits, as well as the attractive-looking rail lines whose opening day, a driver told me in jest, is “secret to us”. As these disruptive projects commence and stall, Ethiopian citizens remain limited in their own economic opportunities by arcane bureaucratic procedures. One woman I interviewed pushed for more than seven months to obtain a simple vending license, a process that began in the local kabilah office, and was processed through the next level woreda administration before finally terminating at the sub-city level. She explained that citizens are allowed exactly one type of business license per individual, which in the case of the interviewee meant her husband needed to obtain a complementary license in his name to run their adjacent café. Like many small-scale entrepreneurs in Addis Ababa, this family saves a mandated portion of income each month as part of a government program to become eligible for a storefront in a not-yet-constructed commercial center. When the lease on their current space comes up in three years, nothing will be guaranteed.

Yesterday, the headline on Ethiopia’s Business Weekly read, “Ethiopia lost $3.55 billion to illicit outflow,” or 1,355 percent of foreign direct investment, between 2008 and 2012, according to a report from Global Financial Integrity. Earlier today our truck entered a lane on Ring Road heading the wrong direction, a mistake that at least ten other vehicles in close proximity likewise scrambled to resolve in the absence of arrows and street signs. The highway effectively divides tight communities with multiple lanes and a jersey barrier, but lacks pedestrian bridges. In theory, the idea that development should be accelerated and tolerated for the sake of efficiency may sound appealing when considering the magnitude of issues such as poverty and sanitation that it proposes to address. But, in practice it is not clear that such policies produce sustainable and efficient outcomes for the population. The question of whether or not development should be pursued at the expense of democracy is not real when people are denied the benefits of both.

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