What to do next


The narrative is changing… Here in Addis, no longer travelers’ are required to be confined for fourteen days to save lives. Now, there are more lives to be saved… elsewhere.
Suddenly our leaders recognized something should change. They realized that they had made it impossible for people to earn their daily bread. How couldn’t they know business cannot remain in hang for long. Already those that are opening (many will not) are reorganizing and economizing; they will get rid of their weakest products and services… and the employees who go with them.
What is sad is life today is not as amusing as it once was. It’s hard to laugh; too many people are insecure and so they retreat into more exclusive identities rooted in conception of blood and territory, when we in fact should be able to gain great strength from celebrating an Ethiopian identity, which is bigger than the sum of its parts. So, what to do?
Let me start off this note with a long ramble. Many readers will surely drop out along the way; but for the rest let’s go over the five issues I picked for discussion.
Restoring legitimacy in the government
The upcoming campaign will be a contest between two parties, the first is vowing to bring prosperity to the country, and the latter (a chorus of many other parties) is vowing to bring back democracy. Part referendum on the past, part hopeful anticipation of a better future, this election offers a choice between the old EPRDF, now labeled Prosperity, and the mostly old ragtag parties with frequent breakups and mergers.
Whether the elections will restore legitimate authority and reunite the country remains to be seen. But all concerned agree, it’s important to hold elections to reduce conflict and legitimize the incoming regime. Will the coming 2021 election be the most corrupt or the cleanest of all to date? Who knows? But let’s not kid ourselves: Expect a rise in violence in the country come 2021, unless federal and regional political leaders work together to strengthen legitimate civil authority and tackle the economic crisis; short of that the country might again fall into violent chaos with potentially dangerous regional repercussions.
Addressing unemployment
There are close to 65 million persons aged 15–54 in Ethiopia, since the Covid-19 slowdown, an overwhelming share of them have remained unemployed. The prospect of getting a job for those who are unemployed is an important issue today. It doesn’t take too much imagination to see that an explosive head of steam is not far away.
The reasons for the continuing rise in unemployment are many. One of the main reasons is that the Ethiopian economy is mostly based on rent seeking, in other terms on gaining wealth without reciprocal contribution of productivity. The second is the manufacturing sector, which creates the maximum jobs, is growing at a snail’s pace. In the agricultural sector, young people wanting to leave farming and work in towns and cities lack the skills to be employed in jobs that would provide a decent living wage. But they still flock to cities in search of employment
What to do?
Throughout most of their history, countries had used employment on public works projects as a way of directly helping the unemployed during especially hard times. The federal government for now can devise policies and programs to fund a wide range of public works projects like the construction or rehabilitation of roads, small dams, schools etc. as long as these work create real wealth and real jobs. As for funding for all these goodies, a little bit of Modern Monetary Theory or MMT (a sort of painless free stuff from government) may suffice as a macroeconomic strategy for jumpstarting the stalled economy.
Of course addressing long term unemployment will succeed if factors such as population growth, education attainment, technological change and other issues are also addressed comprehensively.
Enhancing the federal system
By almost any measure you choose, the federal government has lost ground over the regional administrations. Ethiopia’s federal system as a whole is either unstable or quite simply unsustainable. The response to the challenge of managing Ethiopia’s federal system in current turbulent environment is to place increased emphasis on decentralization. The core idea is that certain of the key issues confronting Ethiopia can best be addressed by shifting decision making responsibilities to the regions but also down to zonal, wereda, and Kebele levels, as opposed to federal unilateralism or independent or uncoordinated regional action. Some of these issues will have to be treated by amending the constitution, but many can be implemented quickly by executive fiat.
Ending (at least reducing) corruption
In a real, honest economy, what you get depends on what you give. People have to earn their money. In a corrupt economy, the wealth goes to those who are connected to power. For quite some time the federal and regional governments have been deciding who gets what. A corrupt economy favors connivers, insiders, predators, cronies, gamblers, and scoundrels. It disfavors savers, workers, innovators, long-term investors, and the patient, disciplined entrepreneurs that tomorrow’s economy depends on.
The key objective should be to work toward a goal of zero corruption; today the country is regularly ranked in the bottom half of corrupt countries in the world, according to Transparency International’s Corruption Perceptions Index. Most notably, in 2019, Ethiopia ranked 96th out of 180 countries on this list.
Ethiopia’s abysmal performance on such corruption indexes can be largely attributed to its feeble laws and flexible (you know what I mean) enforcement by regulatory bodies such as the Ethics and Anti-corruption Commission.
One worrying trend is an accompanying shift in attitudes about corruption and business indiscretions, particularly among the young generations. Obviously continuous education and targeted awareness is key in constantly reminding the public that individual corruption and acts of bribery are serious crimes, regardless of the value of the assets involved. Further it’s clear Ethiopia’s present legal and regulatory framework is inadequate for deterring and ending bribery and corruption. There is much that needs to be done in this area.
Instilling a sense of community
This is mainly directed to city officials and residents who have yet to start building better communities and instill the sense of community involvement in our cities. Take Addis Ababa today, it’s being transformed by the Mayor with parks, new buildings and avenues. But what is a city if those without power (the overwhelming majority) are unable to assert “We are here”, “this is also our city. Or as the legendary statement by the fighting poor in Latin American cities puts it “Estamos Presentes”: We are present, we are not asking for money, we are just letting you know that this is also our city.
It’s therefore crucial to getting it right, and bring citizens to create ‘neighborhood cooperative’s or ‘community councils’ or ‘land use review boards’ or other mechanisms to reshape their neighborhood. The future of our cities will be secured if, and only if, we empower neighborhood groups to take charge of their environment. This will help stimulate the economy, create jobs, and act as a neighborhood booster. Anything less will letting our cities down.
Finally, a quick warning: we are what we are (i.e. poor), because we are badly organized to create wealth and dynamism. We are organized in ways that block people’s incentives and opportunities; we are organized to perpetuate poverty. We cannot continue on this path!
Keep the virus out!