Sunday, December 4, 2022
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A new dawn in Ethiopia

The long awaited election to fill the vacancy created by the resignation of Prime Minister Hailemariam Dessalegn is finally over with the election of Abiy Ahmed (PhD) to the chairmanship of the EPRDF party, at the end of the day ushering him as the next Prime Minister of the Federal Democratic Republic of Ethiopia. 

Abiy’s ascension to the premiership of Ethiopia is a historic milestone for the country, not least because of his ethnicity as an Oromo, a majority ethnic group historically marginalized from the corridors of power, but more significantly, because his election is the direct result of people power.  For over a year, the people of Ethiopia, led primarily by a sustained protest in the Oromia region, have withstood police brutality and imprisonment in challenging the ruling party’s political, economic and social policies that have stymied political dissent, marginalized millions from economic empowerment and fractured the nation along ethnic lines. Abiy’s election, therefore, is a vindication for millions of people who simply had enough and wanted real change.

The challenges for the new prime minister are immense.  He inherits a nation under a state-of-emergency, a stagnant economy, skewed wealth distribution favoring the ruling party’s ethnic base, ethnic tensions, ineffective and highly bureaucratic institutions, rampant corruption, a frustrated population, including the private sector, high unemployment of youth, regional demands (spearheaded by the Oromia Regional State) that demand readjustment of the delegation of political and economic powers and rights between the federal government and states. If the protracted election process and the strong resistance to Abiy’s election within the ruling party is any indication, strong resistance to his initiatives could be expected in an effort to undermine his leadership and effectiveness until the 2020 election.  That said concrete policy reforms are like steering a large cargo ship – slow, meticulous and time consuming – and time is one thing Abiy may not have. 

So where to begin?

I believe the first business of the new premier should be lifting the state-of-emergency.  The SoE, for starters is a legacy of the previous government. Period. This reason alone should suffice for lifting it.  The SoE, notwithstanding the justifications provided by the previous government, is also the result of a decades long systematic dismantling of dissent and civil societies, effectively cutting off the means of communication between the ruler and the ruled.  How else then can millions of law abiding citizens whose lives have been politically and economically marginalized voice their frustration?  Hand in hand with lifting of the SoE must come political reforms that recognize the value in a vibrant political discourse, be it through opposition political parties, civil societies or the media.  The nation needs to decide, once and for all, whether it truly is democratic or not.  The invitation of opposition parties to the official swearing ceremony of Abiy on April 2, as reported by The Reporter, is an indication that Abiy’s administration has true political reform in its eye site.

The legacy of the previous government has also weakened the cohesion of the nation’s ethnic diversity.  At the core of such ethnic tensions are economic and political questions.  True economic reform needs to accompany political reforms. The country’s institutions tasked with creating a vibrant, competitive and fair business environment are broken.  Arbitrary and archaic policies are stifling and frustrating the business environment. Protracted, redundant and in most cases opaque administrative, legal and regulatory processes and procedural requirements on small and large enterprises alike, has increased the cost of transaction and time for the private sector in its effort to produce capital.  Capital, argues the economist Hernando De Soto, in his ground breaking book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere, “is the force that raises the productivity of labor and creates the wealth of nations. It is the lifeblood of the capitalist system, the foundation of progress, and the one thing that the poor countries of the world cannot seem to produce for themselves, no matter how eagerly their people engage in all the other activities that characterize a capitalist economy.”

One of the stumbling blocks or the mysteries for lack of growth in the developing world, as is the case in Ethiopia, is the disconnect between the need for growth and the achievement of economic milestones (Ethiopia’s Growth and Transformation Plan aims for the country to reach a middle income country by 2025), versus the myriad of archaic administrative, legal and regulatory processes and procedures businesses have to go through in their effort to produce capital.  This is detrimental to a nation’s aspiration for growth.

The new administration needs to confront this challenge head on.  Start by replacing the old guard with a merit based appointments from a large pool of young, vibrant and educated group of Ethiopians.  There are many! Embrace the younger generations’ thirst for change, their impatience for inefficiency, their common sense approach to problem solving, and eagerness to be part of the legacy of change in the country.  Institute a merit based appointment system the likes of China’s Organization Department, a powerful political institution that functions like a giant human resource engine and provides a highly competitive career paths for civil servants in all aspects of political, social and economic spears – with upward mobility based on outstanding performance and key deliverables.  Not only this ensures efficiency within the institutions, it will also bring respectability and professionalism to career civil servants.

Abiy’s election is the beginning of a long process of reform the country so needs desperately, but he cannot do it alone.  The nation needs to come together to support the new government. 

And to the Prime Minister, this nation, particularly the young generation, has carried you on their backs to the halls of power with the hopes of bringing meaningful change to their lives.  Embrace them.  Listen to them and most importantly, work with them.

They will make you proud.

Godspeed.

Alula Iyasu

Managing Director, Bridge International, an international investment advisory firm, based in Addis Ababa, Ethiopia.

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