One of Africa’s most promising economies is facing a fundamental problem by Business Insider

January 18th, 2016 Print Print Email Email

Ethiopia, which has averaged double-digit GDP growth over the past decade and enjoys a close strategic relationship with the US, is one of Africa’s emerging economic and political powers and an example of a country that’s improved its economic fortunes without opening its political space.

A January 11 Bloomberg News story hints at a huge problem the country might be facing moving forward.

According to Bloomberg, the Ethiopian government canceled a 2010 lease that Karuturi, an India-based agricultural company, had taken out on 100,000 acres of farmland.

Despite making an over $100 million investment in the country’s farming sector, Karuturi was accused of breaking its lease agreement in developing only 1,200 acres thus far. But the company claimed that it had received waivers from the Ethiopian government in the past, and said that it did not recognize the project’s cancellation.

According to Bloomberg, Karuturi had taken over land that the Ethiopian state had sold off as part of a controversial program in which the government leased 3.3 million acres of farmland to foreign investors after allegedly displacing some of that land’s original tenants.

It’s the kind of undertaking that would be substantially harder if Ethiopia were a multiparty democracy, rather than one of Africa’s most thoroughgoing dictatorships.

While Karuturi arguably stood to benefit from Ethiopia’s centralized single-party regime, it’s now learned the risk involved in pouring $100 million into an opaque authoritarian state.

And Ethiopia’s leaders, who want both economic prosperity and total political control, might soon find that these objectives aren’t nearly as mutually reinforcing as they’d hoped.

Women mourn during the funeral ceremony of Dinka Chala, a primary school teacher who family members said was shot dead by military forces during a recent demonstration, in Holonkomi town, in Oromiya region of Ethiopia on December 17, 2015.

Like Karuturi’s disappeared $100 million investment, the Addis Ababa expansion plan embodies the perils and contradictions of the Ethiopian regime’s long-term strategy of securing internal calm through economic growth and strong ties with foreign powers like the US and China.
As in past eras, the Ethiopian capital is being built up as a showpiece of the country’s modernity and development, and as a reflection of Ethiopia’s sense of its unique place in the world. Addis has one of Africa’s first light rails, a Chinese-built, 19.6-mile system that opened last year.

The city and the surrounding area are home to both of the country’s Chinese special economic zones, industrial parks where Chinese companies get tax breaks in exchange for operating in Ethiopia and hiring local employees. The Addis expansion plan would have incorporated neighboring areas into the capital district, enabling more holistic and centralized urban planning for a rapidly growing and economically vital capital city.

But the expansion plan also came at the expense of land in the Oromia Region — and it ended up exposing some of the deepest fractures in Ethiopian society.

The Oromo are Ethiopia’s largest ethnic group but have been historically excluded from centers of power. Because Ethiopia lacks an ethnic majority (and perhaps because it has a 1,500-year history rife with conflict between the country’s centers of power and it geographic and social periphery), the country’s regions are supposed to receive a certain degree of autonomy under Ethiopia’s 1995 Constitution, which actually gives the regions a right to secede under certain circumstances.

In practice, the center still holds all of the power.

The current Ethiopian government, which is entirely run by the Ethiopian People’s Revolutionary Democratic Front, which is descended from the militia that overthrew the ruling communist state in 1991 after a protracted civil war, is among the most oppressive in Africa.
The EPRDF regime is dominated largely by elites from the Tigrayan ethnic group. But its rule depends on a baseline of inter-communal harmony — just as it depends on the appearance of progress and economic growth.

The Addis plan is one instance in which these two objectives came into direct conflict. Protests over the plan, which Oromo viewed as a land grab undertaken by an oppressive and unrepresentative central government, broke out in late 2015. The government responded with a crackdown that killed 140 people, marking perhaps the deadliest outburst of political violence in the country since its civil war ended in 1991.

Even if the plan has been suspended, the Addis Ababa expansion push is an extension of aggressive growth policies that are fundamental to the regime’s self-image and possibly its survival, policies enabled by strong arm tactics that a country might not accept accept.

But the protests showed that economic growth and authoritarianism can’t paper over a general sense of frustration.

As Jeffrey Smith, head of the RFK Center’s sub-Saharan Africa-related advocacy programs explained to Business Insider, the suspension of the plan will do little to reduce popular discontent towards the regime.

“If the government is trying to head off larger protests and discontent in the country, then it’s much too little and much too late,” Smith wrote in an email. “During the protests, an estimated 140 people were killed and thousands were injured, opposition leaders and journalists were jailed, and the constitution was shredded … there has been no accountability for the deaths of protesters and dissent continues to be criminalized and violently suppressed.”

As with Karuturi’s apparent ejection from the country, the contradictions of trying to build a robust economy without genuine political freedom or basic transparency are manifesting themselves. But with the Addis plan, the stakes are much higher for the regime.

The Oromo protests are “engendering an intensified ethnic awareness that has also revitalized calls for genuine self-rule in the region,” Smith writes.

That’s a huge threat to a government that’s itself came to power following an ethnically fractious civil war. “I think leaders in Addis Ababa has gotten much more than they bargained for,” says Smith.

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