Why ethnic-federalism deters equitable, integrated development

Why ethnic-federalism deters equitable, integrated development

Hunger is actually the worst of all weapons of mass destruction, claiming millions of victims every year. Fighting hunger and poverty and promoting development are the truly sustainable way to achieve world peace. There will be no peace without development, and there will be neither peace nor development without justice.” – Brazilian President Luiz Inacio Lula da Silva

“In a country well governed, poverty is something to be ashamed of. In a country badly governed wealth is something to be ashamed of.” – Confucius, Chinese Philosopher

Whether it is a country that is well governed such as the United States where the middle class is squeezed by the one percent rich in whose hands incomes and wealth are concentrated; or in a poorly governed country such as Ethiopia, where corruption and illicit outflow from one of the two poorest countries in Africa, is now endemic, the impacts are the same. Repressive and corrupt governance entails injustice and shame for those who are left out. Poverty and injustice are sources of shame and agony, especially when these are induced by minority ethnic elite that extract billions of dollars each year from the poor, the society and country. Economic plunder is injustice; and where it exists, peace is inconceivable in the long-run. The Oxford University Multidimensional Index identifies Ethiopia as among the two poorest countries in Africa. If one gauges poverty using the African Development measurement of US$2 dollars per capita per day, ninety percent of the Ethiopian people are poor. Poverty affects all segments of society. It is perhaps the one shame that all ethnic and religious groups have in common.

Over the past several months, I offered compelling reasons backed by concrete evidence why Ethiopians must unite; and why they can indeed unite if they are willing. I admit that it is easier to diagnose problems from all sides and suggest alternatives going forward. There must be social forces on the ground and support outside that are bold enough to implement alternatives that would embolden ordinary people to free themselves from the shame of injustice, poverty and destitution. It is within the realm of possibilities.

In my 2010 book Waves; I analyzed the evolution of ethno-nationalism, and the socioeconomic and political architecture of the current government. I strengthened the arguments of its pitfalls and the vulnerabilities it poses to national cohesion, stability, democratic interactions, equitable and inclusive growth and development, and the threats ethno-nationalism poses to the country and to its diverse population. The single most worrisome source of these vulnerabilities that the vast majority of Ethiopians share is endemic poverty. Another is continuous exodus out of the country to escape injustice and poverty. Wide spread and recurring hunger is a glaring example of injustice. Increasingly, poverty is compounded by rising inequality. This emanates from the plunder of national incomes and resources and its concentration in a few at the top of the policy, decision making and resource allocation process. It is a pyramid. Corruption, illicit outflow, gross human rights violations, nepotism and discrimination are a consequence of a system; and the system happens to be ethnic, repressive and corrupt.

For this reason, I concur with President Lula of Brazil that hunger is “actually the worst of all weapons of mass destruction.” I agree that “there will be no peace” without resolving Ethiopia’s endemic corruption and hunger crises. Regardless of one’s political stand with regard to Ethiopia’s future, the urgent need for social justice is embedded in this vicious cycle that is akin to a national tragedy. When a governing party uses humanitarian aid to punish opponents and reward supporters, you know that the governance is not only unjust; but cruel. Those who are left out, unemployed and hungry have no stake in the stability a system that denies them a chance to eat and earn decent living. I share the notion that overcoming hunger is a collective, and not solely, a government responsibility. However, lead accountability and responsibility for destitution, hopelessness and hunger reside with the top leadership of the governing party. It is this leadership that created the ethnic federal political and socioeconomic system that serves it and its allies well while keeping the poor where they are.

No matter how one diagnoses it, ethno-nationalism and ethnic-federalism now contribute to the lack of a level playing field in social and economic life. It is legitimate for the reader to ask a simple question and try to answer it honesty. How did the current income and wealth concentration arise? Why are billions of dollars stolen each year and not recycled within the country to build factories, schools and hospitals and to boost agricultural productivity? Stolen wealth was not inherited or granted by forces from the heavens. It is manmade; and it is only humans who can reverse this corrosive and corrupt economic system that makes poor people even poorer. I keep suggesting that, if things persist as they are, a person born poor in Ethiopia has a higher chance of dying poor. Poor parents cannot transfer real assets; they transfer poverty to their children and the cycle continues. They have no assets that will free them from this vicious cycle.

Capital accumulation and concentration in a few is never accidental. It is systemic and arises from a system that allows it. In their provocative and well researched paper, “Rethinking business and politics in Ethiopia: the role of EFFORT, the Endowment Fund for the Rehabilitation of Tigray,” Mesfin Gebremichael and Sarah Vaughan make a direct correlation between Tigrean elite political capture at the top and capture and plunder of economic and financial resources throughout the country. They show public “frustration at persistence of a non-competitive, moribund and oligopolistic market, based on low levels of productivity, and regularly delivering high levels of opportunistic rents.” These “opportunistic rents” emanate from procurement deals and commissions; government sponsored and financed construction of roads, bridges, schools, health facilities, dams, offices; dominant roles in the transport and export and import business; generous and non-collateralized access to and provision of urban and rural lands, credits and loans; biased permits; accesses to foreign exchange and so on. Keep asking what type of system allows this to happen? You will be in a position to unravel the mystery of capital in Ethiopia and the success of EFFORT and other monopolies.

So what is wrong with the EFFORT monopoly story? This monopoly has a specific ethnic designation and conveys the perception that its lead and primary role is the “rehabilitation” of the Tigray region. Instead, it more than rehabs a selected few party officials and their extended families. It is owned by and benefits a specific ethnic elite group, Tigrean. I have consistently made the distinction between Tigrean elite at the top and the rest of the population. Let us be fair and objective.

As much as one cannot associate ‘past ills and mistakes’ on the entire Amhara or any specific group of people that the TPLF ethnic core designates by ethnicity rather than citizenship, it is not justified to attribute the horrendous injustice, plunder, repression, genocide, crimes against humanity, corruption, illicit outflow, transfer of real resources to domestic ethnic elite allies, foreign governments and firms on the entire Tigrean population. Similar to previous regimes, this repressive and plunder-prone system draws support from members of other ethnic elites. It is a ‘Scratch my back and I will scratch yours’ model. The system would not survive for long without providing material and financial incentives to individuals and elites from other ethnic groups. This gives a semblance of shared benefit and shared stake in the future. It is done without devolving real policy and decision making authority from a core Tigrean ethnic elite at the top. In my view, it is among the weakest links in the system.

As one anonymous author put it, the other weakest links in the system are embodied in the personification of social, political and economic ills identified earlier in the top leadership, especially “the Prime Minister and the security and defense establishment” that ethnic Tigrean officers lead and command. In light of this, the vast majority of Tigrean people on whose name and on whose behalf these ills are perpetrated need to wake-up in unison with the rest of the population. By the same token, the rest of the population that wishes to advance justice and political pluralism must reach out and join forces with them. As the African proverb says, “It takes a village to raise a child.” It takes all of the Ethiopian people to restore justice and establish a genuine and lasting foundation of democratic governance.

The extraction of rents is national and the beneficiaries are principally Tigrean elites and persons. The bulk of the sources of internal riches and illicit outflow of funds is either funded largely by a central or federal government that is dominated by the same ethnic elite or condoned by it. This unjust system punishes the vast majority of the population while amassing incomes and wealth assets that are simply grotesque and unjust. One should not dismiss the public perception that the Tigrean population as a whole benefits from the largesse of the federal state dominated by the TPLF core. Tigrean nationals who oppose the system must recognize this unfortunate perception and the collateral damage the minority ethnic elite has caused in the short run and will cause in the medium and long term. This collateral damage by association without gaining benefits compels them to side solidly with the rest of the Ethiopian population and abandon the divide and rule strategy of the TPLF core and its allies.

Income redistribution to “us” from “them” through narrow ethnic-based political power has the effect of limiting economic and social opportunities for the rest, including ordinary Tigrean. There is no legitimate or valid argument that any Ethiopian could make that the socioeconomic and political system should result in a zero-sum game. If ethno-nationalism and ethnic-federalism prove to be impediments to shared growth and development, it behooves all political and social leaders to reexamine the model of crony capitalism itself. In the medium and long-term, Ethiopia cannot afford an economic and social model which rewards those with political power and punishes those without one. The system keeps the entire society on a low productivity path. This is why it is labeled as “moribund” and the lead reason why I wanted to tie the hunger issue with ethno-nationalism, and ethnic-federalism. Both are impediments to equitable, inclusive and rapid growth and development for all Ethiopians.

If the current ethnic federal system is a barrier to equitable growth and development; and if it is the lead source of repression and corruption (double whammy), is it at all sensible to propagate ethnic politics as a virtue and a corner stone for democratization? I am afraid to report that there is overwhelming evidence to the contrary. Studies show that ethnic politics, organization and leadership will not advance justice, equitable accesses to economic and social opportunities. It will not advance political pluralism and the rule of law. It is conflict and instability ridden. Ethnic politics will not lead to the sovereignty of the people. Sovereignty is gained when each person has the right to voice her/his opinion and has the chance to participate in the political, policy and decision-making process freely.

In light of this, I welcomed the recent monumental decision by one wing of the Oromo Liberation Front to abandon narrow ethnic politics and secession and to join other Pan-Ethiopian democratic forces in the quest for political and social justice for all Ethiopians. This is a most welcome development and should encourage others who believe in the independence and territorial integrity of the country and in the unity and sovereignty of the Ethiopian people to coalesce, collaborate and struggle for the same cause. Dissidents must seize the opportunity now. It is among the prime reasons why I am writing this series.

This latest positive development notwithstanding, I am not entirely convinced that, as yet, Ethiopian political and social elites appreciate the economic, social and political forces that are shaping the new world of this century. This unfolding world places enormous emphasis on educated workforces and national cohesion on the one hand and flexibility to manage the risks and harness the benefits from an increasingly integrated world. Globalization is mean unless one has a nationalist government that places singular emphasis on national ownership of assets and on productivity and equity. Globalization is mean for the weak and for those countries whose leaders are not nationalistic. Globalization identifies and exploits opportunistic leaders who place a premium on their wealth and power. The recent recommendation to the Ethiopian government by Access Capital to sell some of the most profitable and national icons such as Ethiopian Airlines to the private sector is not an isolated phenomenon. Access Capital did not say anything about the US$12 billion that was stolen and taken out of the country; and the billions of Birr squandered and diverted internally. Ethiopia does not suffer from shortage of financial capital. It suffers from poor, repressive and corrupt governance. This, Access Capital, the World Bank or IMF do not say. Why?

The next decades call on a new generation of educated people who use science and technology to create and recreate their own societies. The old way of organizing and managing is increasingly out of place. This new and demanding world requires fresh and outside the box rethinking of how Ethiopian society ought to be organized and governed in meeting new challenges. Ethnic governance is not it. The TPLF/EPRDF model of ethnic governance is not suited to respond to this demanding world of change. A few examples from past practice will illustrate this point. The leadership conspired and turned over Eritrea in general and the port of Assab in particular and made the country landlocked. A landlocked economy is a dependent economy. Import and export costs are astronomical because of the regime’s unforgettable and deliberate policy mistake. It offered 1,600 square km of some of the country’s fertile lands, waters, flora and fauna to the North Sudanese government as dividend for Sudanese support when the TPLF was a liberation front. Having failed to achieve food self-sufficiency and security for the Ethiopian people, it embarked on one of the most disastrous policies of any government. It offered millions of ha of the most fertile farmlands and water basins to companies and persons from 36 countries; and to Tigrean elites that are loyal to the TPLF. It is therefore not equipped to deal with the intricacies of managing a society in the 21st century that calls for national cohesion.

Without going much further than the later part of the 20th and the early part of the 21st century, governance in Ethiopia has been based on the principle of political and economic capture by narrow ethnic and ideological elite. This was done through non-peaceful and non-democratic means. Political and economic capture has been about punishments and rewards. In coming to power, successive regimes had to inflict sufficient pain on their enemies so that they will never resurrect. Since the gains realized from continued political capture are substantial, the ruling group must reward itself and its supporters in order to solidify its power base. Correspondingly, it had to deprive its competitors of political and economic roles. In a poor country, financial, budgetary and other economic resources are very limited and are thus strategic tools. The TPLF core is a master at marrying ethnic governance, including ethnic federalism with economic capture.

Traditionally, an ethnic-based regime does not see the duration of its governance as finite and as subject to public consent. Political capture has always been a win-lose strategy. The biggest losers in this strategy are the poor, the society and succeeding generations. Political leaders do not wish to lose with grace through free, fair, open, transparent and competitive elections. The political tradition is for the ruling group to win big by any means necessary, including electoral fraud, intimidation, killings, imprisonment or persecution of adversaries. The TPLF/EPRDF top leadership has perfected this instrument of control at substantial costs for the country, and the vast majority of the population, including the vast majority of Tigrean.

Ethnic-governance and ethnic-federalism embed drawbacks in social, economic and political terms. Elections are always contested and are directly affected by them. Accesses to social and economic opportunities are influenced and directed deliberately. Land leases and allocations are decided through ethnic elite lenses. The concentration and uncontested nature of political and economic power at the executive level has offered the ruling-party the institutional and material means to hold on to power and to refrain from initiating needed socioeconomic and political reforms. Reform would mean sharing power and resources with the rest.

In an effort to appease nations, nationalities and people, the system allows the minimum required. It promotes and allows cultural, linguistic and other forms of freedoms while exercising monopoly over institutions, policies, decision-making and capture of their natural resources. Regional ethnic elites and personalities act as modern vassals and ‘lords’ and are often blamed and sacrificed when things go astray. The succession of Regional Presidents in the Gambella region who have been sucked is a case in point. Their primary role is not to serve the people and region they represent. It is to be loyal to and serve the party in power. Regional ethnic officials are never free or independent to enjoy freedom of choice. I do not underestimate the perceived emotional and real benefits associated with ethnic federalism. I contest its democratic content. Ordinary people on whose behalf pretensions of ethnic amity and freedom are exercised are paying a huge price now; and their children will bear the brunt of exploitation and plunder at play. The system will not initiate radical reforms that will make them masters of their own national resources.

In my assessment, radical reforms are needed urgently to empower Ethiopian society as a whole and to feed the millions who depend on international emergency food aid, hundreds of thousands who leave the country, and millions who are unemployed. Even if one were to ignore the developmental reasons, this back drop is vital for humanitarian causes. To ignore this injustice of recurrent and massive hunger is to deny justice to the affected millions. I do not know of a single Ethiopian who is not ashamed and saddened by the level of destitution, hunger and recurring famine in Ethiopia. While leaders of donor institutions and non-governmental organizations empathize with the hungry or send food or money or both and feed millions, it is a matter of dignity and honor for Ethiopians regardless of ethnic affiliation to reject the system that allows these to occur in the first place.

Ethiopians cannot go on depending on food aid for ever. For those in the Diaspora, it is about a recurrent human tragedy of a country with which they identify and they love. For them, and for millions of concerned people around the globe, the hunger of a child, a mother or a father waiting for emergency food aid is an affront to conscience and human dignity. It is a lead indicator of failed leadership. This failed leadership is fundamentally flawed because it is based on ethnic domination and divide and rule.

For government officials who live in what an Indian economist, Khanna, calls “mansion villas,” destitution has become a normal and acceptable part of life. Someone just wrote a note and told me that this person must have visited Mekele. I said yes; he has. He also visited Gondar, Bahir Dar, and Awassa, Addis Ababa and other cities and towns where ‘villas and mansions’ dot slums. For this reason alone, I will highlight critical policy issues, as a prelude to this series on the devastating impacts of ethnic political and economic capture.

While children, girls, boys, mothers and fathers are starving and dying, the ruling-party continues business as usual. It is more concerned about regime continuity, and less about the bigger and most immediate issues of hunger, famine, starvation, unemployment, slum-like shelters, dependency and endemic poverty. In this sense too, the ruling party’s values are worrisome to most Ethiopians across the ideological and ethnic spectrum. They feel that the regime focuses much more on rewards and punishments to keep itself in power and to extract more wealth and incomes from a broken system. It inflicts punishments on those who dissent and disagree with or oppose its policies and programs. Many Ethiopians say that the ruling-party rewards its members, affiliates and supporters handsomely. In doing this the leadership has elevated the punishment and reward equation to a new and dangerous level. This has the unsettling ingredients of collapse and civil unrest that is unpredictable. In light of this, I conclude that the TPLF/EPRDF socioeconomic and political conception, design, policies and programs have proven to be totally ethnic political elite-based, self-serving, dictatorial, corrupt and dangerous. The executive branch has replaced all institutions with regard to policies and decisions.

The conception of ‘victories I win or defeats me lose’ formula has strengthened the proclivity to hold on to power by all means necessary. Historically, political power in Ethiopia was characterized by a macho culture of defeating enemies. Battling out policies and programs through peaceful and democratic means, with the intent of letting voters decide, has never been the norm. Devaluing and limiting the formation of political pluralism and advancements toward a democratic culture of voter preferences and choices, the ruling-party uses public funds to recruit and mobilize members. It incentivizes and guides voter patterns to its own advantage. It punishes those who challenge the system in any way. It rewards those who support it. Affiliated ethnic parties and elites who lead them facilitate this phenomenon. This way, the political culture of exclusion continues indefinitely regardless of social injustice.

The reader would say that such a punishment and reward route to political power is not unique to Ethiopia. It has been a pattern throughout post-colonial Africa. I agree. My lead argument is that the primary motivating factor in this century as in the past behind the same model continues to be acquisition of wealth assets. On October 16, 2009, the Financial Times (FT) put this succinctly in an article entitled “Affluent Africa: The most reliable route to riches in Africa once lay via politics and “public” service.” No surprise, since “the state in many of Sub-Saharan Africa’s 48 countries controlled the principal levers (pillars) of the economy in the decades following independence.” The article cited numerous examples of extraction of riches by and for political elites using “absolute power.” Most African government leaders and elites were famous–many still are–not so much for public trust or public services but for extracting wealth at the cost of the vast majority. While there have been changes in a number of Sub-Saharan African countries, Ethiopia remains among the exceptions in not expanding opportunities and tackling endemic poverty. Many African intellectuals rightly ask why the country is unable to feed itself.

Ethiopia is also among the exceptions in prolonging and sustaining direct links between the party in power, the state and ethnicity. I shall show that these links promote and show corrupt practices and allow massive illicit outflow of funds. Similar to other Sub-Saharan African regimes that have not yet changed, those in power are not sole gainers from political and economic capture. They create foreign and domestic alliances and partners to justify their grip. The Ethiopian case mimics such partnerships in globalization as well.

One example might illustrate the point. In the same FT article quoted above, Mohammed Hussein Al-Amoudi, one of Africa’s wealthiest men is identified as one of the movers and shakers of Ethiopia’s political economy. An Ethiopian newspaper had identified the relationships between Al-Amoudi’s large business empire and monopoly and the ruling-party as a “state within a state”. A capitalist has found a lucrative alliance in a country where there are hardly any large scale domestic or national competitors. “Al-Amoudi is close to the ruling regime and partly funded Ethiopia’s millennium celebrations in September 2000. Al-Amoudi’s business empire centers on the Midroc Global Group, a conglomerate that owns more than 30 enterprises; and employs 24,000 people in four continents. Having leased vast tracts of land for commercial farming, the Sheikh also owns the Legadembi gold mine, which produces roughly 3.5 tons of fine gold a year.” I do not know of many governments that turn over a precious source of foreign exchange for the country to a foreign monopoly. The TPLF does.

The point of the quotation from the FT article is to suggest that the ruling-party allows unrestricted investments and operations, including leases of “vast tracts of land for commercial farming” to foreigners and domestic allies as long as such investments and partnerships pay dividends financially, politically and diplomatically. “Absolute” state political and economic power allows virtual centrally driven investments and economic monopolies to thrive. They crowd-out and undermine national firms and domestic entrepreneurs. In short, the system perpetuates dependency; and suffocates domestic private sector development. How can deserving Ethiopian nationals enter and sustain businesses if monopolies are given special privileges? The gold mine owned and run by Al-Amoudi was once state owned and profitable. Privatization proved to be lucrative for ethnic folks and ethnic endowments that are close to the ruling-party. Massive asset transfers associated with privatization show the dilemma. Among other factors, privatization has not expanded domestic and nationally owned and managed and merit based enterprises. It has not generated large employment. It has not produced a vigorous middle class. There is little benefit for Ethiopian youth, especially girls. Contrast and compare this condition with the Asian Miracle where privatization and indigenous development took advantage of globalization in general and Foreign Direct Investment (FDI) in particular; and offered enormous employment and incomes opportunities for millions.

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