Verbatim | Mar 23,2019
Sep 14 , 2019
By Asseged G. Medhin
Economic policy and policy reform over the last few decades have been motivated by the need to accelerate growth. The result it has brought so far is at least acceptable by any standard.
However, the ideology of the leading party and its twin, the Revolutionary Democracy and Developmental State models, have not succeeded in cascading real democracy to the people.
On the other hand, in the economic literature or economic theories, the debates and disagreements about the determinants of growth have burgeoned. There is no consensus on the policy prescriptions for growth. But this much is clear; there is no country that has a non-developmental policy regardless of their position on the nationalisation to the liberalisation spectrum.
Ethiopia’s position is unique in that its economic policy is constitutionally depicted as the free market variety and yet almost every sector is purely dominated by governmental entities that are activated against their establishment proclamations. It resembles nationalisation more than it does a free market.
It can be argued that the two decades of growth is a result of state dominance, not one gained through diversified economic interactions, dynamism and proper competitive markets. The kind of free market that was being demanded by numerous investors since the days of the downfall of the Derguehas not been established.
Some argue that the developmental model is the fastest way to growth and cite the examples of Singapore, South Korea and China. The question is, how about UAE, Ghana, South Africa, India and Brazil?
Sometimes the disagreement between the revolutionists and the neoliberals is exaggerated by the titans of economic sciences way beyond the interests of the general public. Each of them tried to distinguish themselves from those constituting the conventional wisdom on economic growth.
Ethiopia, having concluded that liberalism has come to a dead-end, designed the state-dominated developmental state model. Even though this has initially benefited a lot of people by lifting them from the abject poverty of the early 80s and 90s, it has turned out to be more of a curse than a blessing, because the economy is dying of the lack of dynamism and free competition. All the current macroeconomic problems are emanating out of the inherent processes of the model itself.
By limiting the exercise of the constitutional right of private participation in the economy, the model creates a corruption loop between the party and state apparatus and their cronies. Following these critical perils of the model, there has to be a shift to an economic reform agenda that follows a different growth model, which is a liberal economic model.
I would argue that there should be an iterative discourse that shifts the perspective of professionals from debating the most trivial details to discussing macro ideas. Debating real issues of policy formulation and policy change and exploring the links between policy and institutions in the context of economic reforms is essential.
This dialogue should be clearly framed and mapped out until every citizen meaningfully understands what is going on in economic reform. That also means an extended debate cascading through institutions.
The successful introduction of economic reforms in the last year (Abiynomics) require strengthening institutions and the degree of success in changing policies may depend on the degree to which existing institutions are modified to accommodate the change.
We have seen many motivating issues recently that clearly indicate where the reform is directed. These include privatisation of governmental enterprises, readiness to join WTO, signing of the African Continental Free Trade Agreement, actively participating in regional integration, pooling out of state borrowing, bilateral agreements with countries and regional organisations. All in all, a very liberal direction.
The change in the political landscape is leaning toward liberalism. The economic reform should also aggressively lean toward a globalised, liberal and hi-tech economic model. That is the only way it will catapult the Ethiopian economy upwards.
PUBLISHED ON Sep 14,2019 [ VOL 20 , NO 1011]
Verbatim | Mar 23,2019
Radar | Oct 02,2021
Commentaries | Sep 04,2021
Agenda | Apr 06,2019
Commentaries | Feb 06,2021
Fortune News | May 31,2020
Commentaries | Jul 06,2019
Advertorials | May 29,2023
Viewpoints | Dec 04,2020
Viewpoints | Apr 02,2022
Photo Gallery | 83041 Views | May 06,2019
Photo Gallery | 75197 Views | Apr 26,2019
Fineline | 58717 Views | Oct 03,2020
Fortune News | 58481 Views | Jul 18,2020
Commentaries | Dec 02,2023
Life Matters |
My Opinion | Dec 02,2023
Sunday with Eden | Dec 02,2023
Agenda | Dec 02,2023
Editorial | Dec 02,2023
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Dec 2 , 2023
The symphony of traffic noise in Addis Abeba is not just a sign of life, but a siren...
Nov 25 , 2023
Ethiopia's quest to develop a functioning capital market is a demanding yet not unach...
Nov 18 , 2023
Prime Minister Abiy Ahmed (PhD) has made a fervent call for landlocked Ethiopia to ga...
Nov 11 , 2023
In November last year, a ray of hope pierced the gloomy skies of Ethiopia as the Pret...
I have a love-hate relationship with my phone. It is my go to source for information. I enjoy interacting with text messages and browsing t...
Over the weekend, I attended a wedding where my husband was one of the protocols. Despite the typical joy...
Dec 2 , 2023 . By MUNIR SHEMSU
Mamo Mihretu, the governor of the National Bank of Ethiopia (NBE), has outlined a com...
Dec 2 , 2023 . By AKSAH ITALO
BGI Ethiopia, one of the largest brewing companies, is in the throes of a major trans...
Minister of Agriculture, Girma Amentie (PhD), is leading a charge to overhaul the fer...
Dec 2 , 2023 . By AKSAH ITALO
Amidst accession to a cross-regional trade, one of the oldest industries is strugglin...
Or see contact page