Friday, April 19, 2024
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A pragmatic way out of the abyss: Ethiopia’s path to stability and renewed influence

Ethiopia, a country known for its remarkable diplomatic engagements worldwide, has consistently held a prominent position in various spheres of influence. Its economic prowess has earned it the distinction of being one of the fastest-growing nations in the Horn of Africa.

One of the key factors contributing to Ethiopia’s success is its unique history of never being colonized, which has fostered a strong sense of unity among its people. This unity has not only resonated domestically but has also attracted the attention and support of other African nations, forging alliances to counter the divisive policies of the past.

The country’s impressive economic growth can be attributed to its adoption of the developmental state policy, championed by the EPRDF-led government since 2006. This model aimed to bolster the regime’s legitimacy by delivering essential infrastructure, educational institutions, and achieving remarkable rates of gross domestic product (GDP) growth. While some international actors have cast a skeptical eye on this policy, perceiving it as promoting an authoritarian style of governance, it undeniably yielded positive economic reforms during its initial implementation.

However, critics argue that the lack of acceptance towards Ethiopia is rooted in its political landscape and the existing regime, casting doubt on the sustainability of its progress. The nation has weathered periods of political instability, with recent events highlighting the conflict with the Tigrayan People’s Liberation Front as a prime example. Unprecedentedly, a politically influential region took up arms against the federal government, resulting in a protracted two-year conflict that inflicted significant loss of life and widespread destruction.

Though the signing of the Permanent Cessation of Hostilities (COH) agreement in Pretoria on November 2, 2022, marked a turning point, unresolved issues continue to pose challenges. The presence of Eritrean forces in conflict-ridden regions and the conflict in the country’s second-largest region, Amhara, remain matters that demand effective resolution.

Presently, Ethiopia grapples with the economic repercussions of the prolonged conflict and the scarcity of foreign currency. To navigate these hardships, it is crucial to prioritize stability.

Skyrocketing inflation rates have rendered basic commodities prohibitively expensive, necessitating cautious spending decisions among the populace. Encouragingly, international financial institutions are working towards revitalizing their relationship with Ethiopia, offering a glimmer of hope for much-needed debt relief and foreign currency support.

Notably, the country recently announced its inability to pay USD 33 million interest due on December 11. Consequently, securing a relief deal with the International Monetary Fund and pursuing external debt restructuring under the Group of 20 (G-20) becomes imperative to safeguard against an extended and arduous economic recovery period.

Despite these challenges, international financial institutions, including the optimistic forecasts of the IMF, project favorable growth for Ethiopia. Real GDP is expected to surge by 6.1 percent in 2023, offering a ray of hope for the nation. As the second most populous country in Africa and a regional leader, improved growth rates will empower Ethiopia to engage more robustly in international trade, effectively managing its foreign exchange reserves.

In light of these developments, Ethiopia must forge stronger political frameworks to address issues with political underpinnings. It is clear that the era of resolving conflicts through armed confrontation has run its course. The time has come to embrace a new culture of dialogue and understanding, paving the way for stability and enabling Ethiopia to reassume its rightful leading role in the continent.

(Eden Tafesework (PhD) is a project officer for EID-Women Steering Committee)

Contributed by Eden Tafesework (PhD)

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