Wax, gold and accountability in Ethiopia


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The exchange between Helen Epstein and my colleague Ken Ohashi about the role of aid donors in “subsidizing” what Epstein calls a politically repressive regime highlights the difficulty in linking politics at the top with poverty alleviation on the ground. 

Even politically open regimes, such as India, have difficulty delivering basic services to poor people—the absence rate for teachers in Indian public primary schools is 25 percent; the rate for doctors in public primary clinics is 40 percent.   Conversely, as Epstein points out in her reply to Ken’s letter, “poverty and disease have fallen sharply in some repressive societies, from Cuba to China…”


The reason it is difficult to develop a clear link is that the delivery of basic services such as health or education requires that the service provider be accountable, either to the policymaker at the next highest level or, if the latter is not well-intentioned, to the beneficiary of the service, typically a poor person. 

Ethiopia has done well in reducing poverty and child mortality, and increasing primary completion rates because their system of delivering basic services has various elements of this accountability built in.  Local districts receive resources based on clear, data-driven formulae that can be independently verified (by third-party civil society groups).  The allocation of these resources within the district is decided in community meetings, with the final budget posted on a central bulletin board for the community to see.  These service delivery innovations were supported by the donors precisely because they have been shown to work in other countries, a point that seems to have eluded Aid Watch.
Needless to say, the accountability mechanisms in Ethiopia’s “Protecting Basic Services” program are not perfect, and much more needs to be done.  When visiting one of the districts, I asked to see the bulletin board where the district’s budget had been posted.  It was a piece of wood nailed to a tree, and the budget had been washed out by the rain.


Shanta Devarajan

Senior Director, DEC and Acting World Bank Group Chief Economist

Join the Conversation

Jared Osoro
June 22, 2010

Let me see whether I understand your argument, Shanta:
"Even politically open regimes, such as India, have difficulty delivering basic services to poor people" ... implying that a politically open and accountable regime is neither necessary nor sufficient inthe delivery of developmental 'goodies'.
This inference is confirmed by your further argument that the implicitly repressive Ethiopian regime "has done well in reducing poverty and child mortality, and increasing primary completion rates".
If my understanding is correct, then I have have one question:
Do you think the private sector will find it attractive to complement government/development partners' efforts in promoting the country's developmental aspirations under such political environment?

If your answer is not an emphatic "Yes", then you seem to be arguing for a case of perpertual aid dependency in development delivery.

June 26, 2010

Dear Shanta,

How about asking the Ethiopian people? Not the Ruling Party... the Ethiopian people through a real elections maybe?

June 22, 2010

Jared, thanks for your question. First, you are absolutely right: I'm saying that a politically open and accountable regime (at the central level) is neither necessary nor sufficient for development results on the ground at the local level. Second, the private sector will always find it attractive to promote development because that's what generates gains to the private sector. Poor farmers are private entrepreneurs. They have to promote development (i.e., produce crops) because that's how they survive. They will do so whether government or development partners' efforts help or hurt these efforts. We would all prefer that governments and development partners help these farmers' efforts, but the private sector (in this case, farmers) will persevere no matter what.

June 23, 2010

Hi Dear Shanta!

Thank you for blogging on the issue. I wonder why the WB want to try to project itself as proponent of democracy and human right when its prime objective was to help Europe's destroyed economy back on its foot after WWII. When that was done, the WB turned its experiments on sustaining a money-production and loyal regime (loyal to the west) systems around the world. The question should be: if the WB believes Ethiopia has well managed the "Aid", we call it "AIDS" back home to refer to its eventual detrimental effect, it received over the past 20 years, why is it in need of more now? Did the WB aided its original subjects for such extended period? I think the answer is absolute no. You can argue with J 'differential diagnosis' of the countries in question but 20 years is the time Korea escaped from abject poverty to become one of the world leading economies.

The reason we need democracy and freedom of speech and deed in Ethiopia is for two reasons: firstly, it is our inalienable right to have and secondly and practically they are the the essential elements for development of private entrepreneurship as it was amply demonstrated all over the world. Moreover, don't be duped with the idea that there are self-monitoring system in Ethiopia. The so called third party independent civil societies are extensions of the ruling party's political machineries. The real and honest once are now buried under the new Civil Society law. So brother, wake up! You know what happened in the Indian sub-continent in mid 20 century. If people say enough is enough no one can stop them. Speak your mind not the talking points.
Anyways thank you.

June 23, 2010

Ethiopia is reducing poverty, but at what cost. If I am not mistaken higher education isn't free anymore, and not only it is expensive the quality of state university degrees is getting a very bad reputation. In fact from primary all the way to secondary the quality is highly questionable. Secondary education from grade 7 is in English, while teachers can barely make a correct sentence themselves, tests are sometimes wrongly marked as I found out recently during my daughter's exam.
As for the World Bank, let's be honest. Does the institution cares about the regime that strives in this country or anywhere else: of course not. The WB has it's own interest to defend, and development of our poor countries is not on top of your agenda as books such as Lords of poverty or Bad samaritans (rich nations, poor policies), have proved. For those who can the epitomy of a disastrous World Bank and IMF policy was best illustrated in a documentary called Life and Debt, made by Stephanie Black a few years back. It tells how Jamaica ended up owing 7 billion dollars to both institutions while only borrowing a few millions back in the early seventies.

June 23, 2010

" Local districts receive resources based on clear, data-driven formulae that can be independently verified (by third-party civil society groups)." Shanta: I am sure you are fully aware there are no "thrid-party civil society groups" in Ethiopia.

Anyway, there is no question that the corrupt and dictatorial regime in Addis can improve the "material" life of the average Ethiopian AS LONG AS the World Bank, EU, USA and even China continue to provide the billions a year. As noted above, others like Cuba has done the same with NO western support, let alone with the amount that has been pouring into Ethiopia for the last 19 years. The west is helping the regime in Addis build and strengthen a stalinist, centralized, top-down, dictatorial system.

This system stifels the average farmers incentive to improve his lot since he does not own the land and is at the mercy of the local cadre to get any of the inputs for his farming. The private sector in Ethiopia is crippled by the, mafia style, government "party" owned businesses in just about every sector of the economy.

The Ethiopian people want a democratic system. They want liberty, and yes, they want to be able to feed themselves. This paternalistic and racist attitude displayed by the west that this government is better than the last one and therfore lets provide it billions and beg it to not kill it's own people has to end. It is simply immoral. In a pervers way I see world bank econmists in D. C. like the pentagon bureaucrats during Vietnam showing their statistics on how successful the war effort was. The Ethiopian regime has learned to effectively play the numbers game. However, the reality is those numbers don't mean squat for the 13 million Ethiopians that are starving.

Shanta: Please stop and imagine what a democratic Ethiopia can do with the support this regime is getting.

BTW, nice blog.


Debre Zeit
June 23, 2010

I fully agree with the W. Bank approach however big reservations I have on the political situation or the development of democratic instit. in Ethiopia or the political leadersip (notice I didn't say economic management) of P.M. Meles. Critiques of Meles like Helen Epstein have a very myopic view of politics and econ. development, which is not just short sighted and elitist but inhuman and full of ignorance.

As long as the $$ is well spent responsibily to lift the poor people from abject poverty, let it be. After all, most poor people in the world who live a precariious life with their families prefer bread than so called "free speech". In Ethiopia, where a large section of the population suffers from chronic hunger, poverty and insecurity, there is no exception. Democracy, after all is a middle class issue, worse in countries like Ethiopia, it has turned out to be an elitist issue for decades. The masses have paid in their lives caught in the middle of cross fire among the elite and under a brutal and merciless military regime.

Compared to Dergue, the Melese regime is like a heaven. For the first time in about 50 years, the country is seeing the light of hope, stability and progress. The country needs that stability and growth at any cost (as long as it is not an outright merciless authoritarian regime like the Derg).

In fact, economic progress will most likely be the best road to democracy (with the rise of a strong middle class) than the end less ritual of civil war and strife perpetrated by the so called Ethiopian opposition or "intellegentia" in the West, which is striving to take power and making noises for so called "democracy". They could be much worse if they take power!

Lastly, I wonder why organizations like Human Rights Watch don't make aggressive noises on countries like China, and instead create barriers and obstacles on poor countries like Ethiopia, to subject them to perpetual poverty!

W. Bank keep up the great job! For the first time in the history of the institution, you are making a real difference in the lives of millions of poor people like in Ethiopia, and this is because of determined leaders like Meles! Africa needs leaders like Meles to alleviate itself once and for all from its 3nd class status and march on progress!


June 24, 2010

Dear Shanta,
First of all thank you so much for your best wishes to our Country! But you are far from the truth or do not realize what is going on the ground. It seems to me that you are trying to keep up your position by telling unrealistic stories. Sorry to say this! Our country ruled by very small group of mafias lead by Meles. I am working in the government office (bureau of agriculture). At the end of all fiscal years (June) we are expected to report fake results of agricultural productivity. So all over the country such reports are merged together and submitted, then the PM say our agricultural sector brought about 10% increment in GDP etc etc. A similar report submitted by other sectors as well. I know this because I have colleagues from other sectors and even we met occasionally in some meetings. If you really interested or have a better vision for Ethiopia, please advocate the existence of real democracy and political fair play in the county! Another thing that surprised me, one of the guy (W) posted ``For the first time in about 50 years, the country is seeing the light of hope, stability and progress.`` Everybody knows the situation in Ethiopia! Please please at least be loyal to yourself. God bless Ethiopia!

Has been...
June 24, 2010

Protecting Basic Services was designed in an emergency situation with a clear objective : how to deliver WB aid to Ethiopia even if serious doubts were emerging from Meles policy and budget expenditures/reporting.... To avoid a major disruption in the budget support program and aid delivery to Ethiopia, PBS was created to deliver WB money "directly" to the 600 woreda-local districts to support what was supposed to be supported anyway by the budget support program.
So let's be clear, the objective is to deliver money, not democracy.

About accountability, I participated in many round table to follow the Budget support program, most of the indicators -at least in my sector- were not "trackable" or not linked at all with any expenditure -even the opposite sometimes. Any honnest person recognised that the mechanism in place to track development/policy progress was too combersome, impossible to verify, and not recorded properly even from the government official point of view. From one Budget support, PBS created 600 district budget supports to monitor.... HOW can you seriously say that it is an accountable program? IN YOUR dream and communication or you are seriously out of the Ethiopian reality...

The peasant
June 24, 2010

To me development is a combination of good governance and socioeconomic improvements. In Ethiopian case the IMF,WB and other bigfish donor agencies report that the food security situations are improving and the economy is booming in Ethiopia while practically the number of food aid dependant population are ever increasing and more food insecured rural House holds produced. At the same time Good governance situtaion is getting the worst. I think WB and IMF are almost entirely involved in producing more dectatorial regime like the ethiopian government which tells the world that they won election 2010 by 96.4 %. where are the standard by which IMF and WB are evaluated and who is incharge of this task ? to me they endup like they are benefiting from the ever increasing construction boom and ever deterioration of social asset and the worst socio-economic problems.
They let crises happen,cost life and displacment and comeup with restoration projects to sell the good and services of thier affiliates. let's the Rape in Congo, The constant annualpoverty in East Africa and the killings in Darfur. None of these problems were existing 40-60 years ago at to this extent. But have a bunch of Monitary and Aid organization who are entirely involved in after conflict and disaster task than mitingation and prevention duties.

June 24, 2010

It is all about priorities and where we look these issues from. If we are speaking on behalf of the poor, i am sure that survival and progress becomes a higher priority ahead of democratic processes. many currently mature democracies have all passed through tough but delivering governance systems and we can't expect a swift turn around in Ethiopia. It is a process that comes with civilization, development of the middle calss and fulfilment of basic needs.
I want to particularly focus on the role of infrastructure on over all economic development. Honestly, that is one area where the Government of Ethiopia is doing very well. Despite similar forms of funding mechanisms, not many African coutnries succesfully implement such projects. I strongly belive that this will contribute a lot to econmic development. Progress in key sectors like health and education are exemplary and with a tremendous potential for sustanibale development.
My only plea, if the government can move more towards national interest and priorities in spending these funds rather than short lived government only or political interest. The current progress can be boosted by good coordination and creating an enabling environment for the many partners involved in development initiatives.
I am in favor of what the WB is doing with some additions of checkes and balances for propoer utilization of resurces and transparency so that tax payers are aware of what is going on. I am sure we will all be paying back one way or another.

Megan Lloyd-Laney
June 24, 2010

More than a decade of DFID-funded research into The Politics of Poverty reveals many issues pertinent to this discussion. See Synthesis Document http://www.dfid.gov.uk/politicsofpoverty and follow twitter discussion hashtag #politicsofpoverty

June 24, 2010

• Thanks Susan Epstein for exposing BareKnuckle Elections
• Last post 05-17-2010 7:06 PM by Britopia. 0 replies.

The Modus-vivendi of the Front ruling Ethiopia since May 1991 has morphed to an extraordinary degree that the most recognisable feature is that it is `still a Front` after 20yrs.in power. In no way can it be described as a political party in shape or form,as Its initial genesis testified to that.However,that proper descriptive term is & will be its hinderance to itself,but worringly,for that country.These days the ruling-front tries to don a `magic overcoat` called revolutionary-democracy,a cobbled up,topdown garment of an acrobatic political philosophy manufactured to be its guiding principles to supposedly usher in a bright&prosperous future to Ethiopia.Firstly though,it was used to purge&stem widespread dissent in the identity crisis that developed within the nuclei of this ethnically based Front a few years ago. Now,if this magic-overcoat is just an accesory,a means to be incumbent in power,forever;it would be a hopeless mass deception,misconstrued as a hope-giving spectacle.
Where Ethiopia needs level headed statesmen,we have learn as you go accidental heroes & yes-men of the highest order masticated by tales of centuries old false victimhood empowered by this so called rev-dem zeal.On the other though,and more dangerously,if this ruling Front `believes` in this `magic-overcoat as its raisond`etre,then clearly we are seeing the symptoms of delusions of grandeur at hand and no doubt soon we will be getting a short-thrifted, "little red/green books"called development through rev-dem,onwards,forwards,...etc.,extalling the wonders,virtues,thoughts for the modus-operandi of a developmental ruling Front!
Dear,oh dear,Why this ersatz of marxism-leninism,when world history has binned the original?Hey,but what is a Front to do?DNA is heavy stuff.The Fronts building-blocks are such,that it has to create a `magic overcoat` by any means necessary,albeit obsolete,to hold on to its old beliefs.This should be one of many,but the most unacceptable choice for the future of that country.There is no doubt Ethiopia has managed to produce some young,capable&vigorous political parties to steer it through an arduous future than relying on a retro`70`s outfit(sorry Front) that has long passed its sell-by-date but has frog-marched a proud & patient people to wear an overcoat of absurdity called revolutionary-democracy through another BareKnuckle election held on by a dubious & shaky clay-pegg.

June 24, 2010

Continued aid is neither sustainable nor wise. Regardless of the type of regime they have in Ethiopia or elsewhere in Africa, what is needed to move the country in the right direction is genuine and real customized Economic Development and a truly educated workforce.
Africans are innovative, relentless and positive enough to find their own solutions to their challenges. However, they do need to see an economic improvement in their lives, at all levels, to keep going and stop relying on aid.

June 24, 2010

I want to thank you for raising this debate. I think seeing every argument makes sense when it is based from facts. And the facts clearly show that the current Ethiopian government is making lots of progress. One can see that health care and education specially have shown tremendous growth during the last ten years. I also believe that our democracy is fledging to the better even though the current government dominated the past election. Our opposition forces need to understand that politics is a full time job and they should not take a four year absence and come back only when there is an election. There are lots of works to be done and they need to roll up their sleeves and get back to work.
Thank you,
Toronto, CA

June 24, 2010

Dear Shanta,

Thank you for taking up this issue, and here are my two cents. The Bank, we should all remember, peddles “ideas plus money” under the straitjacket mandate of Bank-to-Government aid. This effectively leaves out the model the exercise of “power” and the non-government sector. And so, we are continually subjected to debates between development bankers who pragmatically do not mind feeding the greedy to reach the needy, and their more idealistic critics who rightly note that feeding the greedy is often the surest way of entrenching structural obstacles to development. The long-term economic costs may very well exceed the benefits of reversible, policy-induced poverty alleviation. Why? It has become increasingly clear that (endogenous) mis-governance is the most binding constraint on African development as the continent’s brightest young men/women seek to capture that state because ‘political’ rent seeking is more rewarding than wealth creation in the underdeveloped private sector.

Viewed in this light, PBS1 was the Bank’s realistic answer to the political crisis produced by the rigged 2005 parliamentary elections. Unwilling to suspend aid to a regime with a good record in providing aid-funded basic services, not to mention the role of a valuable political ally to the Bank’s biggest vote holders, it chose to go around the singly-party controlled central government and channel most of the money to districts (woredas). PBS 2 presumably continues this approach. Unfortunately for the donors, the ruling party overreacted to the apparently massive loss in 2005 by savaging civic organizations as well as ensuring a 99% victory in the 2008 district elections and the 2010 national elections. Even the most casual observer should now know that there are no such things as autonomous local governments and independent civic organizations in Ethiopia today. The state had already captured civil society in the 1970s by eliminating the political space for traditional/informal institutions of governance.

So, what should the litmus test be: poverty reduction or a threshold of political accountability (forget democracy for now)? This is a Faustian bargain indeed. If you want to help the poor, as the Bank defines its mission, then all that matters is selectivity based on a country’s need for and effectiveness in poverty reduction. The reason the Ethiopian Government has done a decent job in providing basic services a pragmatic one (rather than resulting from Bank-mandated transparency, as Shanta seems to believe): delivering growth earns the party a modicum of legitimacy. Unlike the Chinese Communist Party it purports to imitate, though, aid-dependent poverty reduction has yet to morph into productivity-enhancing capacity building. PBS seems too feeble a foundation to support sustained growth mainly for political-economy reasons: the same aid (being fungible) also strengthens political rent seeking (party-owned companies, patronage-based private sector, privatization of the state apparatus, etc.).

Is it then too much to expect Bank economists to be more courageous in spelling out more fully the negative externalities (unintended consequences?) of aid programs at least in their analytical reports?!


June 24, 2010

I found this article down-to-earth. I wonder how some people are obsessed with negative mentality. They don't want to see any positive thing to happen. After all there are people in the USA who likened Obama with Nazi. It is true that there are some problems in the country but the country is progressing and marches to build a democratic society on solid ground. Thank you Shanta; your courage to speak out the truth is remarkable.

June 24, 2010

"...Local districts receive resources based on clear, data-driven formulae that can be independently verified (by third-party civil society groups)..." When one faced with such statement it is difficult to argue.
There are no independent civil society groups in then country. Even those that were there were completely wiped out in the last 10 years campaign. time again independent observers (epsten being one) have balked with discrepancy between the numbers from the government and the facts in the ground. A random sampling of any section of the society comes up with a very large difference from the numbers from the statistic agency which is usually quoted by those who are defending the regime. The government has never allowed any independent investigation or allowed access to the people to any one except it's cadres. Many believe the numbers are simply fabricated.

The country is essentially run by a kind of Ethnic apartheid. The entire security forces, the church, all civil and government posts are filled by people from the prime minsters ethnic groups. Any post that is filled by members of other ethnic groups is supervised by a tigrean ethnic group member. More over those who are from other ethnic groups selected not for their competency but for being corrupt and ruthlessness and their willingness to accept and serve the tigrean lords. For example in a district (woreda) in southern Ethiopia (which i will not mention for security reason) there were firing and hiring of officials about 19 times in as many years. The only constant fixture in the district administration is the Tigrean member of the district administration who has a modest official portfolio. Of course every one knows who really is in charge of the district though there has been stage managed elections year after year.

Oner can clearly see this difference on the status of the tigrean and the rest of the population growing wide apart year after year. Tigreans do not associate with other ethnic groups and usually their businesses run gets heavy government security protection as well as preferential treatment getting government contracts.

But most of what is troubling is the level of development work being carried out in tigrai state is disproportional higher than the rest of the country. Basically most of the resources the country is used to finance the projects in state of tigrai (paid fully by government of Ethiopia like the Tekeze Dam) while the projects run in other states are mostly financed by loan from china or other countries. Most people people in Ethiopia suspect that this projects outside of Tigrai are in fact a front to siphon money meant for this projects.

All this puts the future of the country in a precarious situation. Again most Ethiopians believe the Tigrean lords of Ethiopia today are planning for their exit to their state which will have superior economy and military might when the time come where they can not rule any more. And the rest of the country will descend in to chaos like somalia.

And this belief by the rest of Ethiopians did not come from thin air. The manifestos of TPLF and MLLT which is the core group of the ruling party ad headed by Meles Zenawi has envisioned such future and it is on the record. Meles Zenawi and the ruling party core members may not have even a choice. There are credible evidences that they have committed war crimes and crimes against humanity and once they leave power they will by wanted men. Their only guarantee for their freedom is by staying on power at any cost. that includes driving the country in to chaos.

And the world bank and IMF and the west in general is financing such a regime not because it brings economic development or improves the lives of the people but as stated by many analysts it is because Meles Zenawi is willing to do what they asks him to do as long as they let him do what ever he wants to the nation and the people.

And this is not the first time. Sadam Husein was supported by the west and Taliban and Alquida owe their existance to the west. Mobutu seseseco of congo who is responsible for DRC becoming what it is today. Chili, Elsalvador Haiti testify to this misguided and inhuman western policies and Ethiopia today and in the future will be the victim of it.

Ethiopians are dying to day and their future looks bleak because the west wants to feel safe. That is the simple truth.

June 25, 2010

Dear Shanta,
Thanks for the blog. I was a little bit nervous when I read comments given above because why it became so difficult acknowledging the truth and condoning the wrong. I think most of the discussion above were written by our brother who have sitting in the bar and talk without evidence.
In my opinion the country has recorded immense growth in all aspects-economic, governance as well as democracy. The data from many international organizations has proved that the Ethiopian economy become one of the fastest growing economy in sub-Saharan countries. The country investing a lot in improving the food security condition through expansion irrigation scheme, developing R&D, by opening different farmer training center and adoption new proved technology. For instance, each year more than 250,000 farmers will be trained in new technology, and the link between farmers, FIF, research centers and universities has been created to speed up the dissemination of new technology from research centers to farmers.
As any Ethiopian person can whiteness now the service delivery in the county has become more transparent, efficient and effective. In each kebele/pa the people are more empowered through DLDP (DISTRICT LEVEL DECENTRALIZTION PROGRAM) program that each person to know how much budget allotted, for what purpose and the corresponding output.- (please visit any government office in keble or peasant association) so that monitoring will be so easy.
To be continued

June 25, 2010

Thanks for raising this issue Shanta
I read both the articles clearly and professionally written by Helen Epstein and the respond from Ken Ohashi. Thanks both for your contribution.
Ethiopia has been one of the major recipients of international aid in recent times. According to OECD-DAC statistics, net ODA to Ethiopia amounted to US$1.94 billion in 2006, making it the 7th largest recipient among 169 aid receiving developing countries. In absolute terms, the amount of ODA has risen sharply from an average of $881 million per annum in the second half of the 1990s to over $1574 million per annum for the first half of the 2000s. Over the last seven years (2000-2006), ODA has averaged at $1683 million per year. This means that on average one Ethiopian receives around $ 20 aid per year.
What I really surprised in Ethiopia is that as aid is increasing from time to time, the quality of life in Ethiopia for the average Ethiopian are coming worsen and worsen. The economist published today, as “DEBT is as powerful a drug as alcohol and nicotine”. It may help to forget the problem for a very short periods but not a long run solution, as Ethiopia has enjoyed a significance amount of aid since 1992/93.
Leaving in Ethiopia for one average Ethiopian is a magic today than many years before. Inflation is worse than in any African country except Zimbabwe and beyond the break-even point. Instead of stimulating economic growth, inflationary pressure seems to be on the verge of distorting the allocation of resources and is likely to be a deterrent to undertaking productive investments. Shortage of foreign currency in the country is getting more severe and has already started hampering most of businesses.
The World Bank has been in Ethiopia since 1945 with a primary objective of tackling poverty bad-governance. In Ethiopia, and in many other developing countries, the World Bank supports governments in the development and implementation of programs geared towards accelerated pro-poor growth. Despite its constant pumping of capital, for the last 63 years, the World Bank could not shield Ethiopia from being the symbol of poverty and bad-governance in the world, i.e. the World Bank did not meet its dual objective in Ethiopia for 63 years.
Evidently, the injection of a large dose of aid fund, loan, transfer capital, and domestic capital formation has induced uninterrupted GDP growth in Ethiopia between 2001 and 2007. In the last five years, the government of Meles Zenawi, the World Bank, and the IMF have produced voluminous documents that highlight the growth of the Ethiopian economy. As poor as Ethiopians are, such a claim would have been valid only if the heralded growth had a positive impact on the daily life of poor Ethiopians. Economic growth has no meaning to the majority of Ethiopians unless its benefit trickles down to them.

So if the economy is booming why do many Ethiopians suffer in poverty? Why does the UN Misery Index report show Ethiopia at the bottom list?
(Misery Index is a measure of economic well-being for a specified economy, computed by taking the sum of the unemployment rate and the inflation rate for a given period, the availability of schools, clean water and medical care, and whether people can play a role in politics)
What can I say at the end is that, if aid would not bring the expected targets to the “real” donors and for the Ethiopian people, then giving aid becomes a threat than opportunity.

June 27, 2010

quoted from John Perkins book entitled "The Secret History of the American Empire" sub-title Modern Conquistadors - "If you ever intend to have children, and want them to live prosperous lives, you damn well better make sure that we control the African Continent".
Ethiopia in now indebted and next they have to give up their independence, resources and become a colony. What is going in Ethiopia is confusing/cheating even to the Ethiopians themselves on one side you see roads, buildings, universities built and on the other hand you see the number of beggars increasing while the Tigreans and their collaborators are becoming millioniares like during the time of JELZIN Russia. What is going on in Ethiopia is not going development but looting.

June 27, 2010

If you want to know what the World Bank, Internationary Monetary Fund and all the "Experts/agents" are dong in Ethiopia read the books of John Perkins books

June 27, 2010

I have been visiting Ethiopia since 2005. Personally, from the point of view of a foreigner, I think Ethiopia is making steady progress. Repression or no repression, Addis Ababa is one of the safest towns in Africa. Repression or no repression new roads are opening up around Addis. Repression or no repression, new businesses are springing up daily. As I say, may be I see it differently because I am not Ethiopian, but many Ethiopians I have spoken to agree that the government is doing well- they just don't like the individual persons running the system.

Now on democracy, rights and development. It is an established fact the democracy does not guarantee development. If anything, the countries that have made any progress in the third world, especially with the late developers or those known as the developmental states in east Asia, were not necessarily democracies. It is also proven that rather than democracy leading to development, it should be the other way around, that is development leading to democracy. Improved lives, better education, better health and nutrition standards etc, lead to a more participatory society. Hungry people do not really care about the system of government, they just need a better life! The discussion about rights is very interesting. What rights? Whose rights? Where does one's right start and stop? There are lots of unanswered questions!

Lastly, I will say that I am no fan of aid. I will say stop all the aid to any government in Africa. Repressive or no repressive. Democratic or autocratic. African governments seem to find the resources to do all things, except to invest in their people. Aid is in itself a problem as many government's don't think of raising resources internally or investing in research and development of viable economic goods, they just wait for a western government or development institution to bring the money. This is not helping anyone the donor, the government, and the people on the ground all loose out.

June 29, 2010

Hello all,

I read all the postings.... I think when arguing on such issues, there is always one key mistake. And that is -- most of us would like to talk about a 'before-after' kind of analysis. In doing so, we simply compare the current situation with a situation in the previous regime, which was there two decades ago..... I think this need to be replaced by a 'with-and-without' analysis (following the World Bank!). This would require us to compare the current situation with what 'would have happened' in the absence of this regime. For example, could living conditions be better or worse. And we can arrive at a fair conclusion.

The other thing is that we do not have common indicators? Some talk about only roads, some about schools, some about ..... I think we need to have common (holistic!) indicators, and build consensus. I think the World Bank has this -- could those in the 'World Development Report 2000/1: Attacking Poverty' serve here? There are four key issues there: creating opportunities, improving capabilities, reducing vulnerability, and enhancing empowerment (including democratization).

So, the question should be -- is the current regime doing well on these (or other indicators!) compared to what 'could have happened' in the absence of it. Then we could arrive a really fair conclusion.


June 29, 2010

Hello Shanta: Thank you very much for this.

The description and argument is very nice but it simply is not there.
It is very difficult for you to accept but you are dealing with mafias. They are teaching generation how to lie. Experts are asked to fabricate numbers to WB and IMF consumption. Please try a liitle more to talk to experts at national bank and ordinary people. you can easily sense how they manipulate lending institutions. In reality power is in the hands of one man.Regionl governments are there to serve one man.

June 30, 2010

The topic is interesting.
If the money is reaching to the poor and invested in the development work and development is visible it must be a sign of democracy. If there was corruption if there was no development if there was no progress then that was dictatorship.
Of course there could be problem in election or other things but WB and IMF at this moment should focus on the development activity because if there is development there will be education if there is education there would be a competent generation who can change the political situation. so strengthening the economy and development is the other (smart) form of supporting democracy and punishing the bad guys. Eg. supporting development in Afghanistan is found to be the best solution for counter-terrorism activity that fighting. so the same works to Ethiopia.

Adem Indris
June 30, 2010

The World bank and IMF are meant to promote and protect western interests in the so called developing countries. A pro-western or neo-colonial regime like that of the ethnical fascist Meles Zenawi is the prerequisite to get loans from these western financial institutions. Independent, accountable and transparent regimes which do not serve the geo-political interests of the west are not eligible for loans from these institutions. The ethnical fascist regime of Meles Zenawi is one of the most loyal servants of the west and will continue to receive support from these fianancial institutions and bilateral donors irrespective of its atrocities against humanity. So to justify their support to the regime of Meles Zenawi and mislead the international community, these financial institutions are painting and presenting rosy picture of the gloomy situation in Ethiopia.This is what mr. Shanta as the employee of the World Bank is doing and his arguments for contnously supporting the ethnical fascist regime do not hold ground. The real motives for the increasing involvement of the World Bank and other western aid agencies is the maintenance of the pro-western ethnical fascist regime of Meles Zenawi in power.

July 01, 2010

As I see it the help of WB and IMF should be strengthen, but it should be in a very tactical way that will at end make the country be independent of aid. The fact remains what ever report has been made by the government WB and IMF do their own research on the progress of the country,they don't take data from the government and advocate it as theirs.
As to Democracy let us first feed our selves and then it is natural that the people inside the country[not some power mongers diaspora] will begin to challenge what ever is the system. I say let the people be educated and then we will witness when they stand for their right.
As to the oppositions residing abroad you are proving to whole wide world the incapability of your self by barking here and there despite the reality. First identify what is really changing in the country then accept the reality. You then identify the limitations and advocate them, otherwise you will be of no use. That is why you have not come up with change yet, because you are denying even the simple realities.


July 01, 2010

Anonymous is right in suggesting that a counterfactual analysis would be more enlightening (but much harder) than selective comparisons. Let me give you a couple examples to ponder:

1. The Bank's road sector and education sector reviews show that both the mileage of paved roads and enrollments in primary schools doubled between the beginning and the end points of each of the three postwar regimes: Imperial, Derg, and EPRDF.

2. The evolution of per capita income during 1960-2005 shows that the peak reached in 1972 (Imperial) was regained only in 2005 (EPRDF).

Note that Imperial benefitted from a stable global climate and pro-market policies, the Derg had to grapple with inherited civil wars, and the EPRDF benefitted from peace, massive aid flows and market-oriented reforms. Growth in per cap income has increased markedly in the past five years--led by demand in the public/service sectors.

What such trends suggest is that (a) there is no robust growth engine in Ethiopia that is anchored in rising productivity in agriculture and industry; and (b) successive regimes had to deal with the legacies of the monumental structural bottlenecks and policy failures of previou governments. Given the centuries-old Malthusian trap for initial condition, they had to leverage policy to build up capacity, expand opportunities and, most importantly, flexibly sync the two.

This challenge makes it hard to undertake objective counterfactuals since policymakers do not have enough autonomy to deserve full blame or credit for economic performance while in office. Until the country produces a development-committed leadership that enjoys the trust of all fundmantal interests of society, state elites will continue to engage in redistributive contests over the meager agricultural surplus (as in the past millenium) and foreign aid collected in the name of the very people they have pauperized.

BTW, why do donors insist that "pro-poor" policies automatically translate into long-term development? One can eliminate poverty (say, $2/day) via massive transfers, but without building up the capacity of the economy for sustained and shared growth.


Dr. Fekadu Bekele
July 01, 2010

One should not be surprised if some economists from certain international organisations misread the economic situation in Ethiopia. We have been told that the present regime in Ethiopia is doing its best to reduce poverty. While the opposite is true, some staff members of the World Bank have been trying to make us believe that Ethiopia shows a remarkable economic growth under the present regime. If on one side the building of well decorated high scrapers, and on the other side slum buildings are equivalent to economic growth, economic theory, and hence economic policy must be rewritten.
In 1993, the EPRDF regime had introduced the so-called Structural Adjustment Program(SAP) to bring Ethiopia in line of the market economic policy of the Washington Consensus. The main intention of the Structural Adjustment Program which has been going over the last 10 years before Ethiopia adopted the policy is not as such to bring genuine economic development from within, but to make the African economies more dependent on the global capitalist market. By neglecting the home market African governments should take every effort to make their economies more export oriented. They should not mobilize internal resources to build a science and technology driven economic structure. With the Experts from foreign countries, African countries will experience better results, and hence the people in the various African countries will see a bright future. This was what we were told. As many studies prove that many Sub-Saharan African countries are far away from a coherent market economic structure. They become more dependent on few exportable raw materials. The market economic reforms in many African countries had widened the gap between the rich and the poor.
The case in Ethiopia is not different. The Structural Adjustment Program has benefited some who have good relations with the government. The government by using its power could control the vital resources of the country. Through the privatization agency, few could become rich within 5 years where as the majority of the people are thrown into abject poverty. The new economic and political elite could not become innovative, and is not in a position to create job opportunities for those people who are coming from the rural areas. Instead of concentrating on investments whose multiplier effects are greater, the new economic elite invests its money on economic activities which can not create true wealth for the country as a whole. Addis Abeba and the surrounding areas are the places where chaotic economic activities are taking place. Under these circumstances, it is not possible to reduce poverty. As economic history teaches us, no country can be successful if it applies such kind of a market economic policy that benefits few. Genuine economic policy must be consciously applied, and must have the power to mobilize all the available resources. The aim of a genuine economic policy is not as such to reduce poverty, but to develop a coherent economic structure through which poverty can be alleviated. The economic policy of the IMF and the World Bank puts every thing on its head, and from that it tries to draw economic policies which ultimately fail. The main agenda of the IMF and the World Bank is not to help those backward economies like that of Ethiopia, but to create confusion. Now we have ample evidences which unmask the true mission of these two sister organisations, and all neo-liberal economists.
If I come to the assertion of Mr. Shanta, he has completely misread the situation on the ground. The Ethiopian people know better what poverty is, and how they are suffering under the present economic regime which is prevailing in Ethiopia. Statistical manipulations do not tell us any thing. The situation on the ground is clear evidence that the country is not on the right path. Mr. Shanta should live with those ordinary people for a couple of days if he wants to understand what poverty is. If one reads the economic situation of Ethiopia by sitting in five Star Hotel like Sheraton, one come to a completely different conclusion.

Thank you very much

July 02, 2010

I really admired Helen Epstein for her effort and commitment to show the true face of repressive regime in Ethiopia. This fact clearly analyzed by Human Rights Watch Report: “One Hundred Ways of Putting Pressure”. Rather than encouraging the regime to widen up the political space in Ethiopia, what the World Bank and Others foreign actors doing is helping the ruling class to repress the people. For donors and EPRDF, if they can bring “development” in Ethiopia that is more than enough for the people. For some of the employees in the donor community, it is a matter of job security.

Any government should be engaged in development activities and improve the livelihood of their citizen. However, this effort can only be sustainable in democratic country, at least in the case of Ethiopia.

Belai Jesus
June 27, 2010

Dear Global Citizens, Friends of African Union and Greater Ethiopia without Borders!

I read with interest Shanta's blog on Wax and Gold the classical Ethiopian Cultural Communication tool in the classical Geeze (Ethiopic) and its modern prodigy, the Amharic language.

We say, Enqoqilesh? I have a challenge? a treasure for you to dig, or questions for you to answer?

You either say, bring it on, or say Min Awkilish? What do I know you tell me!

The question will be posed and if you know the answer, you have stood the ground for the day, if not, you have to give a country of your choice to get the answer.

The idea is to encourage intellectual communication about current affairs both at individual and collective life as you see it.

The Sem is the Wax which is the obvious, and Work, or Gold is the hidden message in answering the question.

So, here is the question for Shanta, World Bank or the Neo Liberals?

Question: What is the notion of poverty reduction for a country in abject poverty whereas you have stimulus package and recovery package for rich countries like the US and big international corporations which are so big to fail, who have managed to sink the global economy and they get trillions from the public funds to help them sink the global economy more. What is the role of IMF and World band in being made accountable to the global economy which they have been sinking for generations with their elusive derivates and hedge fund like, Structural Adjustments and series of conditionality's. Africans, and Asians as well as Latin Americans have been their target for over 50 years and look at their behavior to their pay masters, who have been sinking the Global Economy? The US stimulus package Vs the European punitive package?

How can you reduce property, is this a new derivatives like statistical gimmick or a real quantifiable construct where you can reduce a negative. Just imagine reducing poverty a negative i.e abject poverty, why not promote prosperity by investing with stimulus package in small Micro and Macro Enterprises by investing in Ethiopia to harness its 14 rivers for hydro electric power. The Egyptian executive at the IMF has done so much damage against Ethiopian hydro power development by refusing loan, not stilumuls package Ethiopia deserves for so long? When does Shanta and his colleagues become accountable first for the damage they caused for so long and perpetuated porverty to the Global 6 Billion Poor for so long?

Wax: They will never be accountable as they are busy providing reducing a the negative, i.e poverty reduction while they create prosperity for the rich incompetent corporations in the West

Gold: The Hidden message: President Obama's letter at G8/G20 demands not to follow the poverty reduction and incentive busing European Budget and follow his stimulus package for the whole world. Will the Banks and IMF listen and create a stimulus package like Obama? Time will tell. No, Let us make them accountable, but how? vote them out of the World Bank and IMF, No result no jobs!

[email protected]

from abject property and yet you stimulate with more public money criminals like

July 09, 2010

Dear Berhanu,

Thank you for this great input. Yes, the 'counterfactual' is hard. But you have already indicated some (partial!) indications. But, I think we can NOT afford to base our conclusions on such partial or as you called it 'selective' comparisons, though important. Indeed, towards the end of your argument, you have touched upon the other important dimension of 'development' topic -- related to democratization, empowerment, etc ( -- leadership that enjoys the trust of all fundamental interests of society). That is why I still insist (see my second point in my previous comment) that we need to have a common, holistic (at least a 'broader') measure of the so-called 'development' on which we can judge quality of different leadership.

There are ways. For example, I indicated the World Bank's 2000/1 'Attacking Poverty' indicators, or other similar ones. BTW, this is a result of a most comprehensive research (also involving 'participatory' data collection from 60,000 poor people globally, including from Ethiopia, Dessalegn Rahmato, etc.). You can see the relevance of these (holistic!) indicators -- 1) creating opportunities, 2) improving capabilities, 3) reducing vulnerability, and 4) enhancing empowerment (including democratization). While measuring each one of them is a difficult one, perhaps counting changes relating to the first two or three indicators (e.g phisical roads, schools, clinics, etc) may be 'relatively' easier than the last measure, which is much more illusive. This indicator -- empowerment, including the democratization process, is perhaps what ensures the 'sustainability' of whatever development that is achieved. This brings us to the issue of political development. Can we set some measures to politics (defined as -- 'the distribution of power in terms of both resources and influence' AfDB (2001))? Perhaps we can observe the kind of people in power (and influence!) at federal, regional, zonal, woreda, kebele level. Do the community trust these people or not, etc.

So including these kind of indicators can make our evaluation holistic. But the other question that remains after all these efforts would be the 'weighting' task. Simply put, how much weight can we attach, for example, to measures such as growth, poverty reduction, empowerment (political development), etc. Perhaps there is a trade-off between economic development/poverty reduction on the one side and 'empowerment'? Can we afford to welcome economic development/poverty reduction, and forget the empowerment issue (or the vise versa).

May be these would raise still more issues. Again, thank you for such an important, thought-provoking input.


June 28, 2010

Lots to say but briefly, Most relevant to the argument and Jared/Shanta discussion; My observation after working 4 years in a major donor coffee development program at the Min Ag: Efficacy of Aid is jeopardised in the absence of effective meaningful institutional infrastructure to create a 'business' enabling environment for the private sector (including farmers) and somehow trained or 'educated' poor recipients. Of course the private sector has to continue the best way they can and do so. Take it further: if the Aid money (€15m in 'my' porgram) is ''invested'' with a business like strategy to maximise returns (in development as well as money terms for the farmers and country) it would be far more effective. For this to happen we need appropriate policies. I agree with another comment in the Min Ag that most decisions are politicised for government control rather than good open governance for sustainable development; exaggerating and choosing to publicise only the statistics that suit. BIGGER PICTURE: Suggest continue persevering with more emphasis on practical effectiveness and outreach to poor + farmers (bearing in mind excessive emphasis on accountability negates & creates bureaucracy) rather than allow greater infiltration of Chinese style ''aid'' without concern for societal and environmental matters.

August 09, 2010

After the collapse of the Soviet Union, we know that multiparty system implemented in Africa were against the spirit of true democracy, which helped the formation of one party state in various Africa countries. We have seen what happened in May Ethiopian ‘election’, we know what will happen in Today’s Rwanda ‘election’, and in Uganda, etc.

Here in Ethiopia, we know that the people deprived of their rights and many of the citizens “resigned from expressing their feelings”. Foreign aid is the major driver of Ethiopian economy. Government expenditure is crowding out the private sector. In this country, it is only possible to be successful economically if you attached yourself to Government. The EPDRF party membership increased by more than 500 % (currently there are 5 million members) and there is no difference between ruling party and government.

Personally, I don’t believe the economic growth success claimed by government is true. Though there are some sectors that have experienced growth through foreign aid and massive government expenditure (which were mainly inflationary), not due to the improvement of productivity and competiveness of the private sector. Can any country sustain economy growth with such kind of ill advised policies, divided citizen, narrow elite base support?

Therefore, my worry is, even though it might be possible to bring economic growth in the short run, the possibility of sustaining and stabilizing it will be too difficult, if not impossible.

July 27, 2010

Well Said!

August 09, 2010

Pleased to comment here,
Dear all I think it is a global fact that there is a fast development in this country, as to me this nation had never developed at this pace in any regime ever in it's history. This is because this leadership represents all the nation not those from one tribe or religion, You see every one have equal say and power in Ethiopia be it Amhara or Gambella, no matter what no one can deside the fate of this nation except the collective consences of all our representative! that is the reason why every one is feeling oneself I am Ethiopianit is not as previous our frinds from showa used to tellus that we are Ethiopians and they are our leaders no that is a dead politics but I understand some of you are looking for that dead era which have lead this great nation to chaos. Now no matter who say what Ethiopia is the fifthe fastest growing nation in the world, thisis a global report.
For me the reason is one and one POWER thirst, the drive not to see Ethiopia advancing under Meles whom you tought is not from your tribe. but if you know Ethiopian history Meles is Tigrean where you have the kingdom of AXUM where our history starts, God willing Meles will lead this nation to economic prosperity.