Monday, April 22, 2013

NEVIS Review No 15, Section III, Ref # 15.3

NEVIS Review No 15
Section III
Ref # 15.3
 April 22, 2013
Meles’s Political Dilemma and the Developmental State: Dead-Ends and Exit

By Messay Kebede (PhD)

(Excerpts from the article)


The whole question is to know whether Meles’s new strategy can be successful in the conditions of Ethiopia. Since success entirely depends on the ability to furnish appreciable economic growth to the Ethiopian masses, we need to say a few words about the basic characteristics of the developmental state. According to many scholars, some crucial and commonly held features define the developmental state or the Asian mode of development.

MARKET ECONOMY: The commitment to free market must be unwavering even if the state is called upon to play a leading role both in terms of planning, investments, and directives. The economic role of the state, though decisive and extensive, is not tantamount to running the economic machine, as was the case with the socialist policy; rather, it is to render a helping hand for the establishment of vibrant private enterprises and a capitalist class. Besides actual economic functions, the developmental state supports capitalism by providing a lasting political and social stability together with the rule of law and the protection of property rights.
The fact that the state assumes a supporting role significantly reduces rent-seeking activities, such as government extracting revenues by the control of land and natural resources, the imposition of exorbitant tax and restrictive regulations affecting free enterprise, or government agents demanding bribes and other payments from individuals or firms in exchange for preferential treatments. The net outcome of such rent-seeking activities is, of course, the prevention of economic growth through the falsification of market economy and fair distribution. The national wealth cannot grow in a country where rent-seeking behaviors prevail, since the imposition of restrictive controls hampers economic activity and an important part of the wealth goes to a sector that makes no contribution to productivity. Clearly, in light of most underdeveloped countries being held back by states that have grown into rent-seeking systems, the supportive role of the developmental state to market economy constitutes a major shift.
That the state limits its role to supporting private business does not mean that we are dealing with a weak state, in the liberal sense of the state confined to providing law and order. The developmental state requires a strong and authoritarian state, that is, a state that enjoys financial autonomy, is free of internal cleavages and frictions, and faces a disabled opposition. It is also endowed with effective institutions so that it is able to soar above particular social forces. Only thus can it direct economic forces toward national development and have enough leverage to prevail over adverse forces.
BUREAUCRATIC AUTONOMY: The strength of the state is actually a condition for the other defining character of the developmental state, namely, the autonomy of the bureaucracy. Indeed, bureaucrats rather than the political elite supervise and direct the economy, with the consequence that, unlike the ruling political elite, the bureaucracy is established on the basis of merit, efficiency, and high skills. What is required of the bureaucrats is less political allegiance than efficiency in exchange for handsome remunerations. The advantages enjoyed by the bureaucrats are, therefore, not due to rent-seeking activities but to their contribution to economic growth.
DEVELOPMENT-ORIENTED ELITE: What makes the autonomy of bureaucracy possible is the control of state power by development-oriented political elites. Instead of using the state to sideline rival elites, as is often the case in underdeveloped countries, such elites are motivated by the desire to increase the national wealth. As they make political legitimacy conditional on economic achievement, they allow an autonomous functioning of the bureaucracy, given that autonomy is how bureaucracy can function efficiently. Such is not the case in rent-seeking states: government is used to undermine rival elites for the simple reason that the dearth of economic growth entails the extraction of revenues through political exclusion and illegal means.
NATIONALIST AND ELITE EDUCATION: The strategy of using skill and merit to perpetuate the rule of a political elite fosters the other necessary component of the developmental state, to wit, the centrality of education. Not only does the strategy advocate the expansion of education so as to increase human resources in all areas of social life, but also insists on providing a quality education, especially an elite education at the higher level of university. The provision of highly trained people is a component part of the policy of rapid economic growth and hence of direct interest to the ruling elite.
Needless to say, education is also geared toward nation-building: in conjunction with the values of meritocracy, it promotes national consciousness and unity. Obviously, the promotion of nationalism is necessary to justify the prerogatives of a strong state and inculcate discipline, just as it is necessary to galvanize and mobilize people around the national goal of development. Without the inculcation of the values of loyalty, unity, dutifulness, meritocracy, and the drive to learn, the developmental state cannot achieve the mobilizing power it needs to lead the country into the road of rapid development.

In thus exposing the main characteristics of the developmental state, we secure the ability to see whether Ethiopia under Meles has the required attributes for a successful move. It must be admitted that, once again, we find a repeat of the mistake of Ethiopia’s previous modernizing regimes, namely, the attempt to copy a model of development and apply it in a country lacking the necessary prerequisites.
Most observers acknowledge that market economy in Ethiopia not only operates under unfriendly conditions, but has also taken a skewed form. For instance, despite the primacy given to improving agricultural production, the entire agricultural activity is hampered by the state’s control of land. The absence of private ownership of land does not allow peasants to use their allotted land for transaction purposes. Nor does it encourage them to invest so as to improve productivity. The state’s ownership of land and its subsequent disincentive effect on agricultural production represent a major disparity with East Asian countries that is not likely to be removed any time soon. State ownership of land is necessary to keep control over the peasantry and protect the ethnic boundaries. If land becomes a commodity that peasants can sell and buy at will, the confinement of people to ethnically defined areas would be seriously jeopardized.
The ethnic borders add further restrictions on economic activity in that they prevent the free mobility of labor and capital. People isolated behind ethnic borders and increasingly turned into alien groups by a denationalized education, the nurture of animosity over past treatments, and a separatist language policy, are understandably little inclined to move from region to region in search of opportunity. The hampering effect of internal borders is no less true for capital owners: their ethnicity can restrict their freedom to invest wherever they like or can cost them heavy losses in the form of bribes to local agents to get the necessary permission.
Another major distortion to market economy is the fact that the Ethiopian economy is increasingly dominated by conglomerates that have close ethnic and political ties with those controlling state power. Directly owned and managed by senior members of the TPLF, the conglomerates extend their activities in numerous and crucial agricultural and industrial productions as well as in service areas, such as banking, insurance, import/ export, etc. There is no denying that the provision of political support to these TPLF-controlled businesses structurally distorts the operation of free market. The distortion encourages the wide practice of corruption and embezzlement, given that enterprises owned by businessmen non-ethnically related to the ruling elite cannot hope to operate without bribing officials of the regime.
The weight of political intervention undermines efficiency and quality in all spheres of business and bureaucratic activities. Not only does political protection foster the wide practice of corruption, but it also erases free competition, the result of which is that merit and the norms of efficiency and quality are set aside. Likewise, it creates insecurity since the lack of the rule of law, basically manifested by the complete subordination of the judicial system to the ruling elite as well as by the ethnically charged social atmosphere, gives property rights a precarious status, to say the least. Insecurity, wide corruption, and the absence of free competition, all conspire to discourage investment and block the improvement of productivity. In short, the characteristics of the Ethiopian economy are at the antipode of what is needed to launch a process of development that could be branded as an application of the Asian model of development.
Another crucial disparity is that the cumbersome weight of political intervention does not allow the autonomy of the bureaucratic sphere which, as we saw, is a defining feature of the Asian model of development. Far from allowing autonomy, Meles and his cronies are using the bureaucracy as an extended organ of the political machinery, thereby undermining impartiality and professionalism, and distributing favorable treatments on the basis of political patronage, ethnic affiliation, and bribes. What must be emphasized here is that the ethnic basis of the Ethiopian state, as fashioned by the TPLF, is structurally adamant to the autonomy of the bureaucracy. In order to build a competent and professional bureaucracy, recruitment and promotion must be based on merit rather than on ethnic affiliation and political patronage. The whole ideology and political goal of Meles and his followers are thus directly opposed to the establishment of a professional bureaucracy.
One necessary condition for creating a competent bureaucracy and improving the human capital in terms of skills, knowledge, and expertise is, of course, education. In this regard, the records of the Meles regime show some improvement, but alas an improvement that is only quantitative. We can even say that the quantitative improvement is obtained to the detriment of quality. The tense relationship of the regime with students and teachers further weighs on the regime’s inability to raise the standard of education. Also, the lack of political accommodation and material improvement cause a systematic brain drain that further impoverishes the country of skilled people. If the regime cannot find incentives by which it retains the services of the people it educates, then it can never attain the level of human capital needed to launch a developmental state.
Another obstacle disabling the educational policy is the lack of nationalist themes extolling Ethiopia. Civic education is polarizing in that it is not directed toward national integration and the development of national consciousness; rather, it exalts ethnic identity and fragmentation. It reiterates past grudges, but does little to create a new national consciousness based on the inheritance of the past. Whatever nationalism the educational system or the regime is propagating, it is an exhortation to a clean slate, start-from-zero nationalism. This futuristic nationalism answers every question except the most important one, which is: Why an Oromo person, for instance, would prefer the construction of a new Ethiopia to the creation of an independent Oromia? The futuristic nationalism lacks the excitement and commitment flowing from continuity, from the sense of belonging to a historical and transcendental community. The future generates excitement when it connects with the past so that it tells a story, a saga by assuming the mission of looking after and moving forward a legacy.
Interestingly, Meles knows that the developmental state needs a nationalist theme, that popular mobilization around national goals is one of its strengths. That is why he is now fanning the theme of “war on poverty” and the Abay dam project. Especially, the latter project is highly nationalist: (1) it enables Meles to blame Western countries for their reluctance to support the project; (2) it revives a longstanding grudge against Egypt over the control of the Nile; (3) it appeals to the contribution of each Ethiopian, thereby supplying a common national goal, regardless of ethnic belonging, and allegedly able to pull Ethiopia out of poverty.
In his address during the 20th anniversary of the victory of the TPLF, Meles made a short speech about the Abay dam project that was saturated with nationalist slogans and boastings. The themes of unity, common goal, and eradication of poverty promised the renaissance of Ethiopia, the restoration of the eminent place it had in the past. Not once was the ethnic issue mentioned, rather, the historical identity of Ethiopia was back to the forefront.
One would be tempted to shout “Alleluia” were it not for the fact that this tardy nationalist discourse does not agree with the actual ideology, political structure, and economic policy of the regime. This brings us back to the fundamental issue, to wit, the question of knowing whether the Ethiopian ruling elite has the characteristics of a development-oriented elite, as forcefully required by the theory of the developmental state. As we saw, the non-predatory character of the ruling elite is the sine qua non of the whole theory: in addition to being nationalist, the ruling elite must draw its legitimacy and its retention of state power from its ability to deliver economic growth rather than through the use of repression.
To the question of whether Meles and his cronies are anywhere close to being a developmental elite, the answer is, of course, no. This negative answer does not, however, mean that they are unable to become developmental. I am not saying that some such transformation will occur or that it is inevitable. As a strong skeptic of determinism in history, I am simply referring to the possibility inherent in the human person to finally make the right choice and laying some conditions necessary to effect the transformation. Since my position will certainly cause an array of objections, even angry attacks, it is necessary that I set out the arguments liable to back it up.

Serious studies on the rise of developmental states agree that threat to power is the reason why authoritarian elites decide to initiate reforms promoting economic growth. The reforms are meant, not to satisfy any sudden democratic aspiration, but essentially to preserve power. The threat can be internal or external or both; the point is that it is clearly perceived that the ruling elite will soon lose everything unless it initiates reforms. Such was the case with Japan, which adopted drastic reforms toward modernization in order to counter the threat of colonization. Such countries as Taiwan, Hong-Kong, Singapore, and South Korea undertook reforms to weaken the menace of communism. If we take the case of some Latin American countries, we find that their modernization is a response to the danger of internal insurrections led by Marxist groups inspired by the Cuban Revolution. In the face of serious threats, ruling elites adopt either a repressive policy as the right response or opt for reforms as the best way to ensure their long-term interests. History testifies that, of the two methods, the avenue of reform has best served ruling elites.
Additionally, the wise policy of reforms is perceived as a way of getting out of the political stalemate caused by authoritarian regimes. When traditional elites engage in the process of modernization, they initiate the formation of a modernizing elite, especially through Western education, whose interests and outlooks clash with the traditional system of power legitimacy. This conflict is easily translated into a competition for the control of political power. Authoritarianism is then used as a repressive power to maintain rising elites in a subordinate position. All the same, the assessment of the ruling elite could also be that a policy of repression brings about neither economic development nor ensures peace and political stability. The expectation of an indefinite and inconclusive political conflict creates a rapprochement between the authoritarian elite and aspiring modernizing elites. Stated otherwise, both parties realize the existence of a political stalemate and take the decision to engage in negotiations. The decision means the renunciation of repression on the part of the ruling elite and the withdrawal of the call for the overthrow of the regime on the part of aspiring elites. These decisions show their respective readiness to compromise on reforms to the system.
My contention is that the Ethiopian situation precisely exhibits a political stalemate, itself fraught with dangerous possibilities. The tangible repressive tendency of the regime after the 2005 election has forced opposition forces and leaders to opt either for an armed conflict, with all the uncertainties that are attached to this form of struggle, or pursue a peaceful struggle whose success depends on Meles’s guarantee of democratic rights, which, I believe, is no longer likely. The third possibility is the path of popular uprising of the kind shaking up the Arab world. The likelihood of a popular uprising in Ethiopia cannot be underestimated even if no one can tell when and how it is going to materialize. One thing is sure, though: unless something is done, it will occur and, given the political structure established by the TPLF, it is not set to be peaceful and probably will invite dangerous confrontations. What is likely is not the Egyptian situation of the army refusing to shoot demonstrators, but the Libyan or Syrian scenario of bloody confrontation and civil war.
Redoubtable though Meles’s repressive power may be, he is not likely to marginalize the opposition and achieve a final victory. The fact that the state becomes a repressive power blocks the economic progress that he needs to sideline the opposition. On the other side, the challenge of the opposition is bound to grow but without endangering Meles’s hold on power, that is, so long as it sticks to a peaceful form of struggle. This stalemate can implant nothing else but the seeds of an angry popular insurrection that no one can seriously claim to control. In other words, the present situation is deepening the political stalemate, which can only develop into a dangerous state of affairs for everybody unless a mood for compromise soon emanates from all parties concerned….
(Ed’s note. For reasons of space (page limit), only some sections of the full article has been taken, that is, the parts dealing with characteristics of “development state” and the analysis of Ethiopian situation based on that characteristics of development state. The article was partly reproduced from website, June 13th, 2011)