Why Ethiopians Must Unite, Part Five (a) of Five

Aklog Birara, PhD

“Give a man a fish and he will eat it for a day. Teach a man to fish and he will eat for a life time.”

Confucius

In the previous five commentaries, I provided compelling evidence that Ethiopia’s governance is repressive, exclusionary, discriminatory and essentially rent-seeking. The system reinforces itself and keeps most Ethiopians among the poorest people on the planet. Their country possesses natural endowments such as mighty rivers and streams, ample rainfall, irrigable and other arable lands and a huge hardworking population that only seeks opportunities to thrive and not just to survive.

The Chinese have lived up to their creeds, history and cultures and have transformed their national economy, especially agriculture, so that no Chinese national suffers from the humiliation of needing food to eat and a decent place to live. They have regained their national pride as people and gone further. Nothing is more dehumanizing and degrading to a person than the lack of food to eat. Lack of food has become so ingrained in our culture that we take hunger among millions as a natural phenomenon in this century. The minority-ethnic governing party explains it away in a variety of ways: population explosion, part of the process of rapid growth, no starvation but just hunger and so on. It justifies the unjustifiable. Access to adequate food is a fundamental human right. The vast majority of the Ethiopian people are deprived of this fundamental human right in a country that now feeds Indian and Middle Eastern consumers.

Ethiopia’s hunger and poverty statistics are staggering and defy the imagination. They illustrate disempowerment, marginalization and destitution at their worst. The heart-wrenching story of an estimated 100,000 hungry and homeless children in Addis Ababa is a disgrace not only for the governing party and to its apologists; but for all of us. It is an acid test of our collective and individual humanity as Ethiopians and persons of Ethiopian origin wherever we live. The life of a hungry child or mother or elderly person should inform the global community that poverty is deep and takes a human toll each and every day. As one of these children put it, a hungry child “cannot even talk to anyone” about his or her condition. It is not just shame that constrains normal conversation. The individual is almost emaciated to the point of being just a “skeleton.” An Ethiopian expert on the subject noted with sadness that the environment in the country’s capital of 10 million people where these children live “is like a zoo” where the strongest prey on the weakest. This is the reason why I call the Ethiopian developmental state’s claim of high growth sheer glitz that harbors misery. Glitz serves members of the governing elite and allies.

The BBC and others portrayed the ugly face of poverty with the intent of raising global and domestic awareness. While domestic and international Non-governmental and humanitarian agencies, spiritual leaders and individuals have responded with passion and dedication to improve the lives of these children and adults, it is clear that the problem is bigger and national. It requires the attention of a caring and empathetic government leadership that is bold enough to tackle the fundamental roots of poverty that lead children into this form of destitution. Most of these children come from rural families where conditions are as bad as in urban areas.

Documentary evidence shows that Addis Ababa is a world of two societies: the superrich elites who are cordoned off from the poor and live lavish lives on the back of the poor; and an estimated one million Ethiopians who are hungry and homeless. The rich and super rich do not see that they shame is theirs. The BBC documentary calls the environment in which the one million live and die “filthy, a no man’s land on the banks of Addis Ababa’s rivers.” These Ethiopians are at the bottom of humanity in the sixth dirtiest city in the world. They die from filth and water borne disease, with no end in sight. How do they survive while elites thrive?

Thousands of children, mothers and the elderly survive by accessing anything edible from trash dumps. An untold number die from disease in addition to hunger. This is the reason why the documentary noted that the eyes of hungry children “show emptiness” in the same way that victims of famine do. Hunger is hunger whether caused by drought and famine or by government neglect and poverty. The environment in which these children and the rest of the one million live resembles “A tale of two cities” that is ignored completely by those who control the instruments of power and command the national economy. It is not enough to report on the conditions of the 100,000 so called “street children” and the one million at the bottom of humanity, most of whom are “children, women and the elderly.” Far more important is to understand and diagnose the causes that drive them there in the first place. On this, we all have a moral obligation not just to talk but to act.

What is the first priority of any government?

I suggest that the first priority of any government is to create favorable economic, social and political conditions and to ensure that no citizen goes hungry. I find no substitute to this development paradigm that has transformed poor and famine stricken societies into prosperous ones. The one million in Addis Ababa and the millions across the country who either go hungry each day or rely on international emergency food aid to survive deserve to demand accountability from their government. Ethiopia has been and continues to be the world’s laboratory in poverty alleviation and hunger management, more so under the current regime than previous ones. This is so because, population increase aside (source of excuses for the regime and the donor community), the current government is the biggest beneficiary of humanitarian and development assistance in the country’s history. It has received tens of billions of dollars and is currently the largest aid recipient in Africa and among four or five in the world. If aid alone could help move a country from abject hunger and poverty, millions of Ethiopians would not go hungry; millions would not be homeless or live under conditions that defy human conscience; and hundreds of thousands would not die of malnutrition and hunger each year.

I opine that no Ethiopian should die of hunger and no Ethiopian child should grow stunted due to malnutrition. The country possesses rivers and can scale-up irrigated farming. It has ample arable lands for crop and animal farming. Almost 87 percent of the country’s population relies on farming and related agricultural activities to sustain their lives and to support millions. Only 17 percent of the country is urbanized. Dwindling supplies of farm land, soil erosion and environmental degradation and deforestation drive about 2 million Ethiopians from rural to urban areas with no prospect of finding alternative employment or shelter. By the government’s own estimation, 21 percent of Ethiopians are unemployed and some will never hold a job in their life time. Increasingly, elementary, high school and college graduates find it virtually impossible to find jobs. The limited jobs are handed to those who belong and are loyal to the governing party. The small middle class is getting poorer because of hyperinflation and low incomes. Given dismal prospects, Ethiopia’s youth and the educated immigrate to all corners of the world in search of opportunities. This is the reason why human capital is the largest Ethiopian export today.

The economy is unable to cope with the needs of the population, especially the employment requirements of the country’s growing youth. Ethiopia is still poor and its population hungry and unhealthy for a reason. Some experts argue that Ethiopia’s poverty can be explained by the persistence of subsistence agriculture and recurring drought. Subsistence agriculture may explain part of the problem. Other countries were in the same situation but transformed their “biblical” like mode of production to a high level of productivity and produced enough food and in some cases generated surplus for export in our lifetime. They did this through deliberate government policies and structural changes. Natural phenomenon did not deter them in achieving food-sufficiency and security for their citizens. The Indian government mobilized all of its financial, technical and intellectual resources; and used global aid effectively to initiate the “Green Revolution” and; made famine but all history. Among other changes, it boosted the capabilities of smallholder commercial farmers; empowered them to be owners of assets; and transformed their lives. They became owners, producers and consumers at the same time. Many were persuaded to produce foods rather than cash crops. The agriculture sector was increasingly monetized and produce was marketed domestically to meet demand.

Vietnam offers a most recent example in agriculture transformation under a socialist market economy. After the devastating war with the United States, the Vietnamese leadership focused singularly on the growth and transformation of the entire society for the better. My intent in this commentary is not so much to make laudatory remarks about the Vietnamese nationalist oriented developmental state but to identify and share features that reduce poverty and create a solid foundation for sustainable and equitable development for the entire population. I recall when I was with the World Bank the remarkable expansion and intensification of coffee production that took off in a short time in Vietnam and was surprised about the emphasis on cash rather than food crops, livestock and other consumables. The system was led by flexible and imaginative leadership that recognized domestic needs as well as the need to integrate the Vietnamese economy with a competitive global economy.

Former President Bill Clinton visited Vietnam in 1995 and opened economic and cultural relations between the former protagonists as the late President Nixon did with China, always keeping American interests in mind. The Vietnamese government knew that it needed to open-up its economy but with Vietnamese interests in mind. This is where I make a distinction between the TPLF core led ethnic oriented government that rules Ethiopia and that of Vietnam that is nationalist and keeps national interest always in mind. In Ethiopia, Foreign Direct Investment (FDI) is free to do what it wishes. In Vietnam, it must contribute to national or domestic capacity. Here is a concrete example of how FDI operates in Vietnam and boosts domestic capabilities while making profits. Subsequently, I will discuss how it operates in Ethiopia as I have done extensively in my newly released book, “The Great Land Giveaway: yemeret neteka ena kirimit.”

The conglomerate, Cargill, is “today Vietnam’s largest domestic producer of livestock feed and a central player in Vietnam’s fast-moving shift from a state-controlled agricultural economy to one where small farmers (smallholders) are encouraged to work private plots for private gain.” These smallholders own the plots and receive consistent government support and encouragement to market their produce competitively, in some cases to Cargill. Here is what astounds me and will astound you. There is no substitute to domestic capacity building.

A few years ago, Vietnam was a net importer of rice, the staple crop or grain for the population as teff or other grain might be for Ethiopians. It imported one million tons of rice each year to feed its population. Last year, Ethiopia imported or received food aid at a cost of over US$1 billion to feed its population. In 2010, Vietnam became the second largest exporter or rice in the world. It met domestic demand by encouraging its own small and large farmers to produce; and it began to export. Here is what a Vietnamese official said that should give you food for thought. It is the “Same people, same land.” What changed then? It is not Saudi, Pakistani or Indian or other foreign investors that transformed Vietnamese agriculture. It is Vietnamese farmers. Where FDI is allowed, it is obliged to transfer know-how directly to Vietnamese farmers and others. Vietnamese producers are encouraged to produce and sell to domestic consumers and to multinationals such Cargill at competitive prices. FDI makes economic and social sense for any country when it strengthens domestic or national capabilities. Otherwise, it serves only political elites and foreign investors.

This is the essence of shared benefit from FDI that distinguishes the Ethiopian developmental state which does not encourage let alone insist that FDI must promote shared prosperity or is not welcome. Private and FDI partnership can work if government leadership is dedicated to citizens whether they are peasant and subsistence farmers or small entrepreneurs in small towns and large cities. This is why Vietnam is different, “The same people and the same land.” Why should Ethiopia and Ethiopian farmers be any different?

One distinguishing factor that makes FDI in Vietnam different from Ethiopia is transparency. In Vietnam, the population knows why Cargill is in the country and what it does. In Ethiopia, citizens do not have a clue why Saudi Star owns hundreds of thousands of ha of fertile farmlands and water basins and whose interests it serves. The people of Gambella do not know why Karuturi is granted lands the size of Luxemburg and what the value added is for the local population or for the country. Unlike Ethiopia where Saudi Star and Karuturi operate insulated from the rest of the community and the country and produce food and other produce for export while Ethiopians starve, Cargill does something entirely different. It “built a network of more than 100 demonstration farms” where local growers can learn. This is genuine technological and knowledge transfer to the population. Can you imagine Karuturi that is importing Indian farmers and workers from Punjab or Saudi Star doing the same in Ethiopia? They do not and they will not. The government does not force them to do so; there is nothing in the agreement that obliges them.

The Ethiopian government tells the world that FDI will build schools, hospitals, community centers and will stimulate agriculture-based factories. I have reviewed several agreements and find no evidence whatsoever that forces foreign investors to do so. They are free to produce what they can sell and sell where they could get the highest prices. They are free to use as much water as they want and clear as many forests and trees as they want. FDI in Ethiopia is therefore bad for the hungry and poor; bad for the economy and bad for the environment. It does not meet any of the criteria announced by the governing party. The typical Saudi Star and Karuturi commercial farm employs 0.005 persons per ha. Imagine what 300,000 ha given to Karuturi can do for the local population and for the country. The average farmer owns half ha of land and supports an average family of 6. Three hundred thousand ha can potentially support 1.8 million Ethiopians. The government accepts the fact that it has, so far granted 3 million ha to foreign investors. My own estimate is double this number. Three million ha will support 18 million Ethiopians.

Just imagine what would happen if the Ethiopian government provides 18 million Ethiopians with the requisite technical, professional and management support they need and empowers them to own their small plots or large farms; and or motive them to form producer cooperatives and produce and market foods for the domestic and surplus for the global market? Imagine too if the Ethiopian government encouraged public and FDI and private FDI joint ventures and scale-up sustainable commercial farming? What would happen? It will modernize and transform the rural economy in a short time; eliminate hunger altogether; reduce poverty; and create sustainable and equitable development. Ethiopian farmers will be in a position to sell to Karuturi and Saudi Star instead of the other way around.

Vietnam illustrates the fundamental principle that FDI can be persuaded to boost the capabilities of smallholders by making them partners instead of laborers. Smallholders become wealthier when they are in a position to own their plots and are able to sell their produce to Karuturi not when they forced to give up their land and work as day laborers for less than poverty wages. In Vietnam, a peasant farmer who now owns four acres of land is now in a position to send his daughters to school.

Capacity building is not the same as political education and loyalty building, a phenomenon endemic as an instrument of control. The Vietnamese government provides extensive quality extension programs to boost the capabilities of smallholders and others in the rural economy. It does not politicize the rural or urban economy to be dependent on the governing party or foreign aid. It is realistic enough to appreciate that FDI does good only if a government does good.

For this reason, the single most important variable that explains hunger and poverty is not nature or subsistence agriculture. It is unrepresentative, unaccountable, repressive, exclusionary and discriminatory governance. The minority-ethnic based single party state decided to maintain state (and increasingly, single party) ownership of natural resources, including waters, lands and mines for strategic reasons: command and control of the pillars of the economy.

The agriculture sector is a case in mind. A poor and vulnerable peasantry that depends on the dominant party to secure critical inputs such as better seeds, fertilizers, credits and lands is easier to control and subordinate than a land owning, independent, self-reliant and well-to-do smallholder community. This is the reason why the wise saying “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a life time” is so powerful and meaningful.

State (party) ownership of all urban and rural lands is a major hurdle not only for peasant farmers but also aspiring national entrepreneurs who wish to pursue private commercial farming, and for the Diaspora. The irony in government policy is the fact that the governing party has literally given up on smallholders and considers pastoralists and others as “primitive.” Instead of empowering them and providing them with all the requisite support, it invites and grants foreign investors from 36 countries and domestic allies millions of ha and water basins for periods ranging from 50 to 99 years. This amounts to effective transfer of natural resource assets from Ethiopians to foreigners. There is no evidence anywhere in the world that FDI would do the altruistic thing of providing good jobs and raising incomes or of enabling the hungry to eat or of paving the way for Ethiopia to be food secure or of safeguarding the environment for sustainability. In fact, these transfers undermine the very essence of citizenship and ownership. This is why the Guardian called these transfers the “Deal of the century.” Investors are free to produce and market all or a substantial portion to foreign consumers. This is what Karuturi of India; one of the new land lords is doing. This is what Saudi Star is doing.

The governing party has effectively privatized farmlands by selling or leasing them for decades at the lowest rents possible. It does this while denying Ethiopians the same privileges and rights. Its developmental argument that foreign investors in large-scale commercial agriculture will jump start the rural economy is a mirage; because the population is not involved in the growth and development process. It propagates the incredible notion that the country’s agriculture is growing at a rapid pace and has kept with population growth. In a research paper, “In Search of a Strategy: re-thinking agriculture-led growth in Ethiopia,” Dercon, Vargas and Zeitin of the World Bank inform us that “Some economists note that the country’s reported increase in cereal production during the past decade are not plausible unless Ethiopia has seen the “fastest green revolution in history.” I leave it to the reader to conclude the integrity of the regime. The Ethiopian government failed to pursue a balanced land reform program that will accelerate agricultural intensification and diversification while keeping the priority of feeding the hungry and food self-sufficiency in mind, as India, China, Vietnam and others have done and are doing. Commercial agriculture that is owned by Ethiopian entrepreneurs and by smallholders does not seem to be its priority. Its emphasis on control rather than empowerment leads to the high probability of a country where a person born poor will be condemned to die poor.

In conclusion, Ethiopia’s double digit growth has not materially changed the lives of the majority. The beneficiaries of growth are elites associated with the governing party. Uneven development and income inequality are more pronounced today than ever before in Ethiopian history. I showed in previous articles that party owned, endowed and favored domestic and foreign firms dominate the national economy and crowd-out and squeeze the tiny domestic private sector. Access to land, credit, permits, information and foreign exchange depends solely on loyalty to the governing party. The government uses development and humanitarian aid as an instrument to reward supporters and to punish opponents. This dysfunction in the management of the national economy and natural resources prompted even conservative and market oriented institutions such as the IMF to conclude recently that the “macroeconomic situation will remain under stress for the foreseeable future.” The World Bank, another donor that has lent billions of dollars, notes this. “Even if donor support is increased, using aid effectively will require Ethiopia to improve governance.” It is easy for the Fund and the Bank to state the obvious; but harder for them to impose conditions on the governing party. Only Ethiopians can do that.

Whether rural or urban, capitalization of assets cannot take national roots without radical reform. The entire system and its intricate linkages need to be overhauled for Ethiopia to alleviate hunger and poverty and to create a solid foundation for sustainable and equitable growth and development. In light of this, I suggest that the lead cause of hunger and poverty is poor, repressive and discriminatory socioeconomic and political governance. Voice, participation and empowerment offer people, including rural smallholders and others, the ability to hold their government officials at all levels accountable for results. Without freedom and participation, economic and social opportunity is closed.

In light of these glaring gaps in good governance, civic and political groups as well as individuals need to recognize that they cannot do anything as solo players. If they wish to be credible and make a difference, they must cooperate, collaborate and partner with one another today. The Ethiopian people will take us more seriously if and only if we strengthen our own capacity by leveraging our talents, monies and diplomatic skills together to serve a common good. My last article in this series will identify and present key areas of opportunity that I believe are practical and doable.