Economic Sovereignty or Neo-Colonial Tethering?

Aug 12 , 2023
By Hintsa Andebrhan

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As Ajaypal Singh Banga, the new president of the World Bank Group, touched down in Addis Abeba two weeks ago, the political and media landscape was abuzz with anticipation. It was not merely the ceremonious arrival of a significant international figure. The visit bore heavy economic undertones for Ethiopia, grappling with a crunch in foreign currency.

Addis Abeba revelled in the attention, almost reminiscent of a rejuvenated calf revelling in newfound freedom. The domestic media, predominantly the Ethiopian Broadcasting Corporation (EBC), choreographed an orchestrated symphony, exalting Banga and the institution he represents.

Yet, amidst this pomp and grandeur, an asymmetry in diplomatic receptions was evident. The visit of Naledi Pandor (PhD), South Africa’s foreign minister and a weighty voice in international diplomacy, was overshadowed. Why such an august figure, representing one of Africa's most influential countries, did not command equal attention raises questions about Ethiopia's priorities or, perhaps, its predicaments.

The World Bank signing a cheque worth 400 million dollars for Ethiopia was not without strings attached. While the specifics remain under wraps, the Bank could set a myriad of preconditions.

This casts a spotlight on the dynamics between the borrower and the lender, reflecting a shift in the balance of power and the silent politics at play. Western entities, especially the White House, wielding over international financial institutions, significantly influence the Bank's engagement with Ethiopia.

It brings to mind the views of USAID Administrator Samantha Power, who once asserted that aid is America's soft power, subtly influencing global politics. If aid is the soft power, institutions like the World Bank might be considered the "hard" economic weapons in America's arsenal.

Another example, the African Growth & Opportunity Act (AGOA), lures African countries with the promise of non-taxable benefits, yet subtly influences their political and economic decisions.

Engaging with global financial behemoths requires meticulous strategy. To perceive the World Bank as a benevolent entity is naïve. I wonder if Prime Minister Abiy Ahmed (PhD) still harbours the sentiment he had that "Borrowing from the IMF and the World Bank is like borrowing from your mother."

I hope Ethiopia carves out robust economic policies that safeguard its sovereignty and fortify national security.

Historically, Ethiopia holds the distinction of never having been colonised. Yet, with its overt dependence on external entities, the present economic hardships hint at a neo-colonial tethering. The ruling Prosperity Party (PP) seems caught in a quagmire, struggling to free the economy from this dependency.

High inflation rates gnaw at the daily lives of Ethiopians while discontent brews, exacerbated by a perceived culture of corruption and a weakening Birr. Navigating dealings with the World Bank amidst this tumultuous backdrop is no mean feat. Yet, the Ethiopian authorities need to devise robust policies that not only interact gains with external entities but also shield its sovereignty.

However, a pertinent question looms: How can a country like Ethiopia, with a population reaching 120 million and a vast majority of its populace of working age, remain tethered to an external policy-driven economy for over a quarter of a century?

A significant proportion of this population, gifted with abundant natural resources, remains under-utilised.

The Prime Minister's declaration four years ago, revealing his economic model as capitalism, offers a hint. Perhaps it is time he delves deeper into the annals of capitalist thought.

In his seminal work, "The Wealth of Nations," Adam Smith underscores the importance of human capital. He posits that the "acquired and useful abilities of individuals" are crucial for a nation's wealth and progress. Here, Ethiopia's golden goose might lie: investing in its people.

As Ethiopia treads the delicate tightrope of international finance and diplomacy, it would do well to remember its storied past and immense potential. While the global stage presents its set of challenges and temptations, Ethiopia's true strength might lie within its people's spirit and skills.

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PUBLISHED ON Aug 12,2023 [ VOL 24 , NO 1215]

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