| Behind the theory of the developmental state |
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| Saturday, 17 April 2010 | |
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By Asrat Seyoum
With respect to choosing the right development process and guiding economic paradigm the government, citizens and international commentator seems to reflect somewhat diverging ideas. The state, as it is expected, expresses its loyalty to the current economic paradigm, i.e. the theory of developmental state. On various occasions, the government had shown its disregard for the other theories, most importantly the neo-liberal economic principles, and, hence, adheres to the developmental status. With the agricultural sector at the forefront of the development agenda, the government continuously champions the idea of strong presence of the state in most parts of the economy. In this regard the Prime Minister himself, on various occasions, had made a compelling case for strong government presence in the economy to correct the pervasive market inefficiencies. The neo-liberal theory, among other things, advocates a minimal state influence in the market where, in effect, the government's role is restricted to a night watchman level. Few of the political parties from the opposition camps actually adopt this principle as their doctrine for defining their economic and social perspectives; the All Ethiopian Unity Party (AEUP) is one such party. As far as the theory of the neo-liberal school of thought goes, the premise of paramount importance, probably the point of difference with the developmentalist views, is that market forces operating by themselves are robust in correcting all inefficiencies and failures. Hence, further involvement of the state would, in fact, disable this process and gives rise to unwanted rent-seeking tendencies. The Prime Minister has been defending the teachings and principles of the developmental state against strong criticism mostly from international organization that are staunch supporters of such liberal views. Meles, most of time, cites the experience of Asian countries like Taiwan, China or Korea with the same growth strategy that they implemented a few decades back. With respect to macro-economic management, most importantly the inflation rate, he, almost single-handedly, stood up to criticism from international organizations. For instance, in line with the idea of neo-liberalism, the government was asked to curb infrastructural investment so that the inflation rate could be controlled. However, he continuously refused to do so and finally, according to official figures, he succeeds in achieving single digit rates. In this regard, the Prime Minister, while presenting a nine-month performance report to the House on Tuesday, announced that inflation rates had been pushed down to 3.9 percent for the period under consideration. However, given the recent favorable outcome, the developmental state (Ethiopia), the context of the developmental theory itself, still faces some severe criticism. Professor Sisay Assefa, a scholar, in his essay entitled 'Can Ethiopia Become a Developmental State?' outlined some severe challenges ahead even under the current strict developmentalist orientations. The greater portion of this essay is left for the assessment of the current political environment and the extent of good governance which are believed to be an integral part of a developmental state set-up. According to the writer, the political environment, at the moment, has along way to go to be an effective medium for achieving a prosperous developmental state. For the most part, the essay was devoted to shed light on the challenge that ethnic-federalism and the associated systems would pose for the development of democracy. The evolution of democratization, which is a critical part for the developmental state, is seriously hampered by an ethnic-based partisan and federal system in Ethiopia, the scholar says. Sisay says that civic based multi-ethnic political set-up both in the case of the ruling party and the opposition camps is vital for the advancement of the democratization process. In this regard, the essay cites countries where ethnic-based partisan and federalism systems caused long-lasting conflict among ethnic clans and tribes; and this is destructive for an emerging developmental state like Ethiopia. On the other hand, the land tenure systems and the agricultural productivity were also other policy areas entertained by the essay. In this regard as well, the writer feels that the current land tenure system policy of the government primarily deters extensive investment in the agricultural sector. This is to say that when land remains within the stronghold of the government the majority of the population in the sector would be unable to perform any type of land transaction at their will or the farmer cannot even use it (the land) as collateral to get loans and funds to improve production. Furthermore, the writer said that the farmer would be reluctant to use improved inputs and other necessities to ameliorate productivity of the farmland. Hence, the essay underscores the importance of a flexible land policy so that agricultural revolution, similar to what happened in the model East Asian countries, could pick up here. However such agricultural change is not feasible with the state monopolizing the most vital resource (the land). The essay also revisited some of the problems associated with the imposition of the local language on the curricula of regions specifically with respect to the education quality and labour mobility. Sisay stated that the opportunity for students to learn in their own mother tongue is desirable. However, at the same time, it deprives them of valuable exposure to other languages that could have been critical for their future careers. Furthermore, he fears that labour force that speaks only a specific language misses out on the opportunity to work elsewhere; and hence this seriously limits labour mobility. For instance, a student with an excellent academic record would face a great deal of challenge in finding a job in a region different from its native one, even when it's contrary to its personal interest. On another note, the essay also attaches a difficult task of and a greater responsibility in sustaining the current economic growth. And he notes that the only means through which growth rates could be sustainable is by ensuring equitable distribution of its results. The writer also warns that, based on empirical studies done on the subject, it is highly likely that even under adverse poverty and inequality conditions, economic growth could still occur. As a consequence, it is important to identify who benefited from and who participated in the growth process instead of feeling comfortable by the achievement. In conclusion, the writer did not refrain from stating that development is a process where all economic, social and political aspects should get a proportional attention and priority. However, the writer feels that without an immediate improvement to the culture of dialogue and the openness of the governments and the opposition the high hopes for developmental Ethiopia and the renaissance at large could just be a dream. |
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Statment by Girma WoldeGiorgis President of the Federal Democratic Republic of Ethiopia at The opening of the Joint Session of the House of the Federation and the House of peoples' Representatives. Monday 5th October 2009