Interview with Berahanu Nega, director of the Ethiopian Economic Association

Berahanu Nega is director of the Ethiopian Economic Association (EEA), an independent organisation which fosters information exchange on economic issues related to Ethiopia. Here he tells IRIN of the shortcomings of the aid operations in Ethiopia and why democratic reform is a key component, which, he argues is missing. QUESTION: What do you think aid has achieved in Ethiopia? ANSWER: If by aid we mean making a difference in the lives of people over the long term, helping people to live in a situation whereby they do not have to face those kinds of emergencies, then obviously aid has failed, because the number of people affected by emergencies has significantly increased over the years. If you look at the famine the country faced in the 1970s, some one million people were affected, in 84/85 about six million, and now you have 12 million to 14 million. It is getting worse through time despite all these policy interventions trying to improve production and rural life. Aid in the short term might have saved lives, but in the long run it seems things are getting worse. Q: Why haven't the aid agencies and experts been able to solve the problem? A: The problem with relying on international experts is the presumption that they know the specific problems of a particular country and can come up with the sort of strategy to solve that country’s problem. The IMF and the World Bank came up with a solution to the world’s problems - the idea of structural adjustment policies that the problems came from not following market-based polices was supposed to be a global solution to poverty. What we have seen is that these interventions were worse in terms of their results. I would allow local communities and individual countries to have a broad reflection on their own conditions and come up with what they consider a solution to their particular problem rather than taking a prescription from this or that international agency. Q: Is Ethiopia dependent on foreign aid now that it makes up some 15 percent of GDP? A: Unfortunately, the Ethiopian economy has become increasingly dependent on foreign aid for some of its economic activities. If you look at specific areas and sectors, you will find that foreign aid is much more felt. In [terms of] security and emergency relief, foreign aid is very significant. [On] the other [hand], in terms of overall development, the country’s capital budget to the tune of 70 percent is foreign aid. The unfortunate part of foreign aid is that it has been happening for so long that overall growth and development have not improved markedly despite this. When you look at the long-run development trajectory, you will find the contribution of foreign aid to overall economic growth was not significant. In fact, some economists say it was absolutely marginal over the last 40 years. Q: Do you think it has had a negative effect on the economy? A: No. There are specific kinds of foreign aid that have helped, like emergency relief has saved lives. But if one is looking at the long-term development of this country, and trying to pick up the degree to which foreign aid has contributed, unfortunately I must say the foreign aid contribution to long-term economic development of this country has not been positive. Is it negative? We can say a number of things of what foreign aid has done in terms of social psychology of the country, in terms of the operational attitude of governments in this country. In that sense I must say there has been, if not deliberate on the part of the donors, it has created an attitude of dependence that in the long run has contributed negatively towards both the potential for our development and our self-respect and attitude towards ourselves, which I think is an important part of the overall development process. Q: What would Ethiopia look like without foreign aid? A: I sometimes wonder what a country like Ethiopia would look like if there were no foreign aid. For sure, one of the things I think would happen is that government would be much more responsive to its own citizens than is currently the case. I presume that would be the case in many African countries. The link between state and society is seriously severed in countries like Ethiopia because of donors. That is one of the unfortunate, maybe collateral, damage of foreign aid. That is why I think, while donors should continue their support to societies such as ours, the modalities of this contribution, as much as possible it should not be in such a way that it would affect the organic development of a society - the relationship between state and citizens and people’s self respect and attitude towards themselves. I don’t have a formula on how to do that, but it has affected us negatively, because it has made our governments accountable to foreigners [rather] than to their own citizens. Q: So you believe donors dictate government policy? A: The fact of the matter is when you depend to a significant degree on foreign donors, indeed your very existence as a state depends on the support that you get from donors... When you are like that, you are losing the essence of what is being a nation. In that sense we are paying quite a lot for this dependence on foreign aid. I do not believe that any programme the Ethiopian government believes in will be implemented unless it gets a nod and a wink from the donor community. Q: How do you see the food crisis problem faced by Ethiopia in, say, 20 years? A: The six million that were starving in the last famine are now a permanent food insecure population in this country, even under good weather conditions. What used to be an emergency has become a permanent feature. Something must have gone seriously wrong, but unfortunately that discussion is not yet taking place. Here the issue is poverty, whether you can produce enough for a family to live decently, not just for one year, but also with extras in case of emergencies. The problem Ethiopian farmers face is the output they produce is not enough to keep them for more than a year, so if something happens, the number of people going into famine is automatic. This is an issue of poverty. Unless we reduce population pressure and create alternative employment to the rural population so that people come out of agriculture I don’t see how we can change this. Unless we have significant urbanisation and a movement away from agriculture I cannot see how we will avoid a Malthusian disaster. Q: Do you think aid makes unsustainable lives sustainable? A: You could say that. If people are left to their own devices they usually find solutions to their problems. We could not seriously think and find solutions to these problems because of all these noises from the outside, from all these kinds of interventions. I would say we would probably would have come up with - people might suffer and that would happen - but come up with a durable solution for this country. What are you doing when you make a starving population provide? Unless you provide for this community in the long run, you are adding to this burden. That is why the numbers are getting bigger. You don’t see the long-term thinking or commitment on the part of foreign aid. Unless you create a sustainable livelihood, you either have to commit yourself indefinitely at a larger and larger scale or at one point donor fatigue will come, and then we will face a disaster that is much bigger than this... Q: The donor community would argue they are committed to long-term development. A: I have no reason to doubt they have that intention. It is embarrassing for us as Ethiopians. At the end of the day, it is our crisis that we have failed to address, so as Ethiopians we should be deeply ashamed of what is going on and our inability to solve it. But the question is, while this goodwill exists, why have we failed to solve it? This has a lot to do with the development strategy we follow, ideology to which certain solutions are driven by ideology rather than concrete problems. This is not a complicated problem; it is one that can be solved. Famine is not a mystery. But we are still here because we don’t have the commitment of our convictions. The food crisis in Ethiopia is entirely our own. It is the way we handle our economy, our policies as a society, it is something we have to come to terms with... Q: Direct budget support appears to be a potential solution to the criticisms you raise? A: The minimum requirement is that government - if you are going to channel money through direct budget support - is a legitimate representative of the people. Without that there is no meaning in giving direct budget support. If the government is a legitimately elected government in a free and fair election, and if people have a right to change this government whenever they see this government not doing well - in other words, if there is genuine democratisation in a country, then direct budget support is legitimate. But one of the most fascinating things I have seen about foreign aid and donor engagement is the least of their concerns seems to be the legitimacy of the government, which is absolutely bizarre. One condition I would put is that the government I am going to give aid to is accountable to its public, that it is elected freely and fairly by its people. You will not hear that from a donor. Q: Donors argue that the country is democratic, or at least moving towards it? A: What I have been hearing from donors when this is raised is that the country is moving in the right direction. They acknowledge there were irregularities here and there, but by and large for a country like this it should be acceptable. Then you find yourself in a difficult position, because you don’t know what a country like Ethiopia deserves, what is our package of democracy - 20 percent, 30 percent? My assumption is, there is only one process: that the election is free or is not free. It doesn’t have to be perfect, but at least we shouldn’t see state functionaries making it difficult to have a free and fair election. Nobody in their right mind in Ethiopia can tell you that it is not perfect but not even acceptable when you have one party winning some 90, 95 percent of parliament. It just doesn’t happen. We should not fool ourselves. Q: So you are saying the donors authorise the government rather than the people? A: There is no mechanism for the actual population to give any approval. The dynamic link that ought to exist between state and citizens is broken, and in between are donors. We face a situation where the state is much more interested in pleasing donors and will tell them what they want to hear; and citizens, because they have no means of reaching their own government in an organic way, they put their complaints through donors. At the end of the day, development is what individuals do, not what the state or donors do. It is what individuals do to improve their lives that will improve long-term development. The issue of freedom and democracy is important. It always amazes me that donors are not interested it that aspect. Q: How responsible then are donors for undemocratic systems? A: The general cliché is if there is going to be democracy it has to come from our own efforts. But if that is to mean - would donors have a contribution to democratisation, they certainly would. Are they effectively using their partnership with the state to pursue a clear democratic agenda - then they haven’t shown it unfortunately. That is why the pressure for a genuine democratisation process in this country doesn’t seem to come from anywhere. Citizens are so docile and terrified that they wouldn’t do what is needed. Donors are not pressuring them to do it, because they have other interests: they are essentially comfortable with what is going on. If you want to be more radical, you can say to a certain degree they are racists, because they really don’t believe that Ethiopians deserve the kind of democracy they are enjoying in their own countries. They think that countries like Ethiopia are so backward they only need a small amount [of democracy]... I deserve and Ethiopians deserve as much rights, as much democratic government as anyone else. In fact, we need it more for our development. We need it desperately, because we need to liberate the individual, because the individual has to fight to improve his or her own lives. It is that feeling of freedom, to struggle to improve your own condition that is going to bring development in this world.