How to cite this journal: Author, Date of the post, WMO Conflict Insight, Title of the post, ISSN: 2628 6998, https://worldmediation.org/journal/
EDITORIAL NOTE *
This article addresses a contested political conflict. The historical account, the characterisation of the parties and the attribution of responsibility reflect the author’s own perspective; this journal’s editorial position is neutral as between the parties concerned.
ABSTRACT
As the African proverb has it, “when a household fights, the house burns”. Conflict and instability in the household will lead to the disruption and final demise of a household. In the same token, when conflict and instability rage in a country, development will be a distant dream and underdevelopment and poverty engulf the country. The prospect of sustainable development becomes disconsolate. This paper aims to show the role of conflict, particularly political instability, and its impact on sustainable economic development in Ethiopia.
Ethiopia has been in constant political instability due to endless wars with itself and neighboring countries in the last fifty years. The war in Eritrea lasted for 30 years, and the conflict in the Tigray region raged for years. Instability in Oromiya, Ethiopia’s biggest region, has been present for the last fifty years. Ethiopian history has also registered protests and uprisings. Ethiopia had never registered sustainable economic development in those years except the one decade between 2006 and 2014 when there was no major recorded war. Ethiopia is, in fact, one of the poorest countries in the world. The article tries to show that saving other factors constant, political instability is one of the major causes of Ethiopia’s lack of sustainable development.
The root causes of political instability and conflict began in the late 19th century when other independent regional forces were brought under the northern kings, notably Menelik II. The asymmetric relationship between those at the center of power and hitherto independent regional parties led to constant friction. The former wanted to maintain control, and the latter fought for autonomy or independence. Failure to resolve this conflict by the centralizing agency has made instability reign until today.
Political instability invariably contributed to the low level of economic development. Instability expressed in the forms of war, conflict, riots and protests caused damage to economic infrastructures, reduction in agricultural production, inflation, unfavorable exchange rate, suspension of foreign aid, the skewed balance of trade, rising military expenditure, human capital crisis through the death of the young and active labor force and brain drain, humanitarian disaster and damage to the social fabric. As such, Ethiopia seems to be far away from attaining lower-middle income by the year 2025. Unless the political issue is resolved and stability ensured, economic growth and sustainable development seem to be distant dreams in Ethiopia.
KEYWORDS *
Ethiopia, political instability, sustainable development, economic growth, Tigray war, Oromiya, state formation, military expenditure, inflation, internet shutdown, displacement, federalism
INTRODUCTION
Researchers have tried to define political instability in many ways. Some have referred to it as ‘cabinet changes’, that is, the ‘number of times in a year in which a new premier is named or 50 per cent or more of the cabinet posts are occupied by new ministers’. Some define political stability as a condition of the non-existence of internal conflict and violent events. Others define political stability as ‘the measure of the perceptions regarding the probability that the government will be destabilized or overthrown by unconstitutional or violent means, including domestic violence and terrorism’. Pehlivan categorizes political instability into three broad concepts: social irregularities, myopia and polarization, and weak government approaches. The former, namely social irregularities, according to Ahmet Diken et al., refers to the absence of a social order in which the connection between the parts of society and the social system is in disharmony. Myopia and polarization, on the other hand, refer to the instances of changes in the government. Weak government approaches manifest in the form of critical political problems that ‘threaten the existence of power and life’. Asteriou and Price have the opinion that political instability includes strikes, elections, regime change, and terror. Polachek and Sevastianova categorize war as another political instability indicator.
Ethiopian political history harbours all the elements of political instability mentioned by different writers above. However, due to unavailable data, space, and time limitations, this analysis is confined to violence and war, change of government, and riots and protests.
MAIN CORPUS
Political instability and economic channels
Different economic channels through which political instability plays its way in affecting economic growth have been studied by various researchers. Some studied physical and human capital accumulation. Roe and Siegel observed the financial sector. Aisen and Veiga studied the impact of political instability on GDP growth, inflation, and productivity. Landa and Kapstein observed the interaction between labour and the market on the one hand and political stability on the other. Others investigated investment and political instability. Alesina and Perotti have looked into property rights and political instability. Some researchers also studied the relationship between political stability and the monetary process.
Theoretical framework
Sustainable development has been defined and conceptualized by researchers in many ways. Yet the reference to its three key dimensions, namely economic, environmental, and social, seems indisputable. An economically sustainable system must produce goods and services on a continuing basis, maintain manageable levels of government and external debt, and avoid extreme sectoral imbalances that damage agricultural or industrial production. Yet research on determinants of sustainability has primarily been biased towards the quantitatively measurable environmental and economic aspects rather than the less quantifiable social aspects such as political instability. This paper will see sustainable economic growth as it is impacted by political unrest.
Neoclassical economic thinking has long tried to identify why some countries managed to grow while others did not. Fernando Tohmé noted that, in 2010, about five countries had an income per capita of fewer than 200 USD and eight countries had over 30,000 USD. Regarding growth rate, for 1960 to 2010, eight countries registered a negative growth rate, but four countries reported well over 1000 per cent. Can the issue fully be explained in terms of the lack of the accumulation of physical and human capital and technological advancement? Some further critical thinking entices one to ask again what Acemoglu first raised and Tohmé pondered again: ‘why is it that some societies do not improve their technologies, invest in physical capital, and accumulate human capital as much as others?’ According to Tohmé, it was Niger that registered a negative rate of development in the years 2006 to 2012, while Botswana scored a 1000 per cent growth rate between 1960 and 2010. The former was imbued with repetitive coups, social unrest, and war, in other words political instability and conflict, while the latter enjoyed a democratic establishment and a stable government since independence. Is that a coincidence or indicative of some relationship between political stability and economic growth? Is there any case in the Horn of Africa?
Research on the interaction between political stability and economic growth has identified the following primary directions in which political instability negatively impacts economic growth. First, it intrudes into the healthy relationship between market activities and labour relations, which has an undesirable effect on productivity. Secondly, the amount and rate of investment remarkably diminish during political turmoil and violence. Third, in a country where political instability and violence reign, or where attempted or successful revolutions, strikes, and civil disobedience are observed, established property rights will be severed, affecting economic development’s general performance. Fourth, wars, strikes, assassinations, and guerrilla warfare affect the economy since they consume resources and decrease predictability in economic performance. Fifth, violence diverts investors from a country where the violence is underway or is feared to happen to another more stable country such that it affects GDP growth. Sixth, coups d’état are also another form of political instability that impacts GDP growth, affecting the rate of employment, which again impinges on the quality of human capital. Polachek and Sevastianova argued that war affects economic growth, and the higher the intensity, the higher its impact on economic growth. Seventh, an unstable political system or executive turnover damages long-term economic growth since there is a great chance of corruption and also of myopia in fiscal policy decisions, leading governments to heavier borrowing.
Alesina and Perotti showed that socio-political instability produces an unpredictable politico-economic environment, raises risks, and diminishes investment confidence. In a similar vein, Jong-A-Pin also argues that political instability increases conditions of uncertainty, hurting investors’ confidence. Aisen and Veiga have also shown that political instability causes inflation, which affects the well-being of people. Changes in governments or cabinets cause inflation and interference in employment policy, which might be unfavourable for economic performance. Instability also limits the option of governments to produce effective long-term monetary policy as governments are forced to deal with short-term political instability. By the same token political instability impinges on the GDP by diminishing physical and human capital accumulation. One can then argue that stability predicates a predictable socio-political environment which creates suitable conditions for healthy economic growth. The question here is: how does this manifest in Ethiopia?
The political instability arguments and their relation to the economy and sustainable development alone, however, do not explain the root causes, dynamics, and needs that drive conflict or political instability. The theory of conflict analysis developed by different researchers, however, fills this gap. According to Wallensteen, the dynamic approach to conflict analysis provides the process that unfolds during conflict and instability. Thus in the following parts of the paper, I use these approaches in dealing with conflict and instability and its impact on sustainable development.
Empirical studies
Looking at the relationship between political stability and economic growth in Turkey, Diken et al. stated that political stability, which results from solid institutions and democracy, is directly linked to economic growth. This research showed that political instability negatively affects investment which is the main engine of development. Another macroeconomic variable that is directly affected by political instability in Turkey, according to these researchers, is inflation. The Turkish economy has exhibited a contraction during inflation since the value of the Turkish lira put downward pressure on the economy. Tang and Abosedra, in their panel data analysis of 24 countries in Africa and the Middle East, analyzed sectors such as energy consumption and tourism and their relationship with political instability and found similar trends. In his 19-country analysis covering a period of 18 years, Pehlivan also found a positive relationship between economic growth and political stability. A single-country case study on Pakistan on the relationship between political instability and economic growth using the GARCH model has revealed the existence of a negative impact leading to fluctuation and damage to the GDP.
A look at the impacts of political instability caused by the Arab Spring in five Arab countries showed the pervasiveness of a negative relationship between exchange rate and political instability. In their cross-country study, Levine and Renelt demonstrated the impacts of political instability on international trade and investment, which significantly influence long-term economic growth. Among the very few such studies on Africa and Sub-Saharan Africa is the study by Godwin Okafor on ECOWAS member states, which looked at the relationship between terrorism, poor governance, social unrest, youth unemployment, death rate, and natural resource rent as having a negative association with economic growth. In Romania, researchers found that political instability affects the level of economic growth by lowering the value of real GDP per capita.
Yet it must be stated that the large sum of case studies so far conducted on the interaction between political instability and economic growth is concentrated on non-African, notably non-Sub-Saharan African countries, and none is done on Ethiopia, a country which is inherently troubled by instability and conflict and whose economy has exhibited turbulence and unsustainability through the ages.
Political instability and conflict in Ethiopia
In this section, I will outline the significant instances of political instability in Ethiopia. Political instability in Ethiopia ranges from civil strife and protest, civil war, demonstrations, change of governments, terror attacks, attempted coups, and ethnic and religious conflicts. However, as stated above, due to the unavailability of corresponding economic data and time and space limitations, we will see violence and war, change of government, riots and protests, and their impact on the economy and sustainability.
The civil war and change of government, 1974 and 1991
There was a long history of conflict and instability in Ethiopia. Ethiopia came into its current shape in the later part of the 19th century through the conquest of independent regional states by the then powerful king Menelik II, supported by European imperial powers who vied over the sphere of influence in the Horn of Africa. Subsequent leaders, notably Haile Selassie I, worked hard to consolidate a newly formed empire but were themselves subjected to sporadic, yet at times fierce, opposition from different corners of the country. In 1974, a brewing internal conflict in the form of a student movement, a revolt of taxi drivers, and the military toppled the ancien régime. A military junta that came to power declared a socialist ideological stance and soon began to liquidate political opposition. The White Terror was launched by opposition parties such as the EPRP and the Red Terror by the Derg, which used brutal tactics such as executions, assassinations, torture, and imprisonment without trial. It consumed a considerable number of innocent lives and disrupted the social fabric. According to some estimates, from 10,000 to 700,000 people lost their lives, the majority of them civilians. Banned parties and subnational liberation organization fronts sprouted elsewhere in the country. The Ethio-Eritrean war that started in 1961, when the emperor revoked Eritrean autonomy, raged for thirty years until 1991 when the socialist regime collapsed. The war with Somalia in 1977 and 1978 cost human lives and national resources. As the civil war intensified in the north and southern part of the country, the national economy was diverted to serve the war under the banner of ‘everything to the war front’. After roughly two decades, in 1991, the Marxist regime of Mengistu Hailemariam was toppled by the rebel forces from Eritrea, Tigray, and Oromiya.
The human and material cost of the war, which took about two decades in the internal civil war and three decades in the Eritrean war of independence, was immense. Some reports indicate that in the civil war of 1974 to 1991, 1.4 million people died, of which 400,000 were by the famine of 1984 to 1986, which the government could not adequately respond to due partly to the civil war. More than one million died in combat. Agriculture was severely affected, with crop production declining by 12.2 per cent per year from 1982 to 1984. In general, famine and the war affected more than 10 million people, which was five times greater than the 1973 drought.
The military expenditure is staggering: “In the last years of the military regime, defense spending peaked at almost 1 billion dollars or nearly 14 percent of gross domestic product. In the mid-1990s, spending shrank significantly to about US$130 million or 2 percent of GDP. The onset of war with Eritrea in 1998, however, spurred massive spending to cover capital investments in new weapons systems, and by 2000 defense expenditures exceeded US$830 million or nearly 11 percent of GDP. Military spending during the war is thought to have averaged at least US$2 million per day.”
Thus, the war has consumed much physical and human capital, impeding the economy’s growth. Eleven percent of GDP as military expenditure is too much for a poor country such as Ethiopia.
The Ethio-Eritrean war, 1998 to 2000
The Ethio-Eritrean war of 1998 and 1999 was another indicator of political instability in Ethiopia and Eritrea. The war, on its facade, was framed by academics, international communities, and commentators as a border conflict over the bare strip of land called Badme and differences between the two states with regard to their economic and fiscal policies and the extent of government control over the economy. Others, however, argued that it was instead a similarity, notably in terms of identity, the conception of power, governance structures, economic policies and political orientation, and that such a social base conditioned them not to formalize their relationship but to leave it to assumptions. The latter argument holds that it is rather the manifestation of the political configuration within and between these states that led to the war, such that unless meaningful calibration is in place, sustainable peace and stability between and within the states is far from reality. The 2020 Tigray war, in which Eritrea played a significant role against their Tigrayan foe partly as revenge for the 1998 defeat, which is a manifestation of political culture, is a testimony to this argument. The war had in fact led to the fragmentation of the Ethiopian and Eritrean ruling parties, further fermenting instability and conflict within the heart of both countries’ body politic.
According to reports, the government of Ethiopia mobilized a huge army which increased from 60,000 to 350,000. Defence expenditure surged from 95 million USD in 1997 and 1998 to 777 million USD in 1999 and 2000, which implies an 800 per cent increase in nonproductive expenses. The military expenditure became 49.8 per cent of the nation’s total recurrent expenditure. In the short period of two and a half years, the war consumed more than 2.9 billion USD. External aid significantly decreased from 700 million USD to 500 million. Social transport and economic infrastructures were demolished and looted. National saving, private investment, and trade exhibited a substantial decline. The human cost of the war is nearly 100,000 on both sides. In terms of the cyclic nature of conflict, the 1998 Ethio-Eritrean war precipitated a two-decade ‘no war, no peace’ atmosphere between the two states. One invested a lot of material and human capital to destabilize the other through different proxies and opposition armed fighters. More importantly, the 1998 to 2000 war served as the source of vengeance for the Eritrean part when the Tigray war broke out in 2020.
Youth uprising, 2014 to 2019
The 1991 fall of the socialist regime and subsequent establishment of the Transitional Government of Ethiopia could not transition the country into a democratic social and political order. The Oromo Liberation Front, one of the opposition entities that contributed to the regime’s downfall and the formulation of the Transitional Charter, was forced to leave the coalition and resumed organizing protracted armed resistance and fomenting popular uprisings. Subsequent elections became contested, only installing a dominant party system amassing 99, 100, and 96 per cent of seats in the parliament and bent on human rights abuses and repression of alternative voices.
On November 9, 2005, organized by clandestine Oromo Liberation Front operatives, the Oromo youth and student movement broke the long silence. The movement was branded as Revolt Against Tyranny, referred to as Fincila Diddaa Gabrummaa in Afaan Oromoo. High school students in Ambo staged a massive demonstration. Security officers killed students named Jagama Badhane and Kabbada Badhasa and another female student. The uprising for the coming three months spread throughout Oromiya schools and universities, the biggest regional state in the Ethiopian federal arrangement. More than 52 schools closed. Some reports indicate that more than 105 students were killed and 232 wounded. In Eastern Oromiya, Hararge, at a place called Gara Sufi, 19 students were killed. In April 2011, the National Youth Movement for Freedom and Democracy, otherwise called Qeerroo Bilisummaa Oromo, was created by the OLF as a clandestine network that would shape the future of the youth movement that led to the change of government in 2018. The movement engulfed several universities across the country. But repression mounted. On April 7, 2011, 114 students were wounded at Mizan Tepi University. In 2014 the youth movement began to gather momentum. New resistance media, such as Radio Qeerroo Bilisummaa Oromoo, Oromo Media Network, and a musical band called Qeerroo Bilisummaa Oromoo Music Band, which galvanized the youth movement, came into being.
The government, amid this youth movement, launched what it referred to as the ‘Addis Ababa Integrated Master Plan’. The master plan was designed to engulf farmers and their lands within an almost 100 km radius of the city of Finfinnee, which was perceived to be detrimental to the lives of these farmers, but above all to usurp the ownership of the town from the Oromo. Resistance against the Master Plan became a symbol and a driving force for the youth movement. Opposition that went on through a whole week resulted in the killing of 78 youths in Ambo town on April 30, 2014. In subsequent years, 2016, 2017, and 2018, the revolution grew in depth and breadth. It drew prominent activists such as Jawar Mohammed to its circle. Inspired by the Oromo youth movement, a new strike also broke out in Amhara regional state. On 31 July 2016, a big demonstration took place in Gondar, which asserted its alliance with the movement in Oromiya. On October 2 2016, on the Oromo national thanksgiving day called Irreecha, at a gathering of an estimated five million participants, a vibrant youth chanted and called for the removal of the party in power. A helicopter gunship hovered over the crowd. Live bullets rained. Around 670 people died due to live bullets and stampede. The revolution reached a point of no return. The youth vowed to end the regime’s span of life. On 11 December 2017, security forces killed 19 civilians in Eastern Hararge at a place called Chalenqo. In March 2018, it forced the then Prime Minister, Haile Mariam Desalegn, to resign. On April 2, the House of People’s Representatives selected a new Prime Minister, Abiy Ahmed. As soon as he came to power, he promised to transition Ethiopia to a democratic order. However, the promise remained hollow, and Ethiopia continued to harbour intense political instability on a scale it had never seen before. Throughout the revolution, roadblocks, sit-ins, several market boycotts, brutal repression, detention, killings, and a state of emergency declared more than six times, curfews, and blockades of the internet and social media devastated the social fabric and the economy.
The government of the new Prime Minister did not embark on the promised transition. Opposition party leaders and activists were jailed en masse. Offices of opposition parties closed. In June 2021, the delayed general election was conducted in a solo run, especially in Oromiya, by the ruling party, which had already metamorphosed itself into a Prosperity Party.
The Oromo Revolt Against Tyranny has ended the ‘Ethiopia rising’ myth. Ethiopia has been nicknamed the ‘African Lion’ and Africa’s ‘golden boy’ due to its reported double-digit growth, especially from 2010 up to the onset of the widespread and intensive revolt in Oromiya. At the outset of the protest, one writer observed that ‘this would not only threaten the government’s authority but also undermine or even reverse its impressive development statistics. Having made such impressive socio-economic progress, the Ethiopian government’s automatically autocratic response to any kind of opposition risks reversing their gains. There’s got to be a better way’.
Only halfway into the span of the protest, in 2016, the then Ethiopian Communication Affairs Minister, Getachew Reda, said ‘more than 90 percent of flower farms in an important economic corridor between Ziway and Hawasa in the Oromiya region had been attacked, as well as textile and agro-processing plants. What Ethiopia achieved in the last 15 to 20 years is being destroyed in the Oromiya region. They tried to create an ungoverned space’. Dutch flower company Esmeralda Farms closed its operation. Africa Juice B.V., a fruit processing company employing 2000 people, was burned amidst the protest.
In the bid to control the protest, the government shut down the internet eight times, and in 2019 the Prime Minister said he would shut down the internet forever since it is ‘neither water nor air’. The impact was immense. NetBlocks, a civil society group that monitors global internet security, reported that Ethiopia lost 100 million USD after the massive protest following the murder of a prominent Oromo musician. The block lasted for 23 days. The group said that beyond the impact on fundamental rights, each day of an internet shutdown in Ethiopia runs up a bill of over 4.5 million in terms of the economic impact on the GDP. Tourism also suffered as many countries in Europe issued travel warnings. Ethiopia lost more than 400 million in the year 2016 alone, which is detrimental to that year’s government plan to generate 3 billion dollars.
The crux of the matter is the political domination of one group over the other beginning from the late 19th century and the ensuing instability that emanates from the lack of genuine remedy since then, and the ever increasing polarization due to lack of genuine representation, which is the major political instability that holds back the Ethiopian economy from flourishing. The then Prime Minister Haile Mariam Desalegn said 49 per cent of the population was not represented in the country. The author of this article thinks that lack of political representation was visible in a condition in which one party wins 100 per cent of the seats of the federal parliament, and political instability is inevitable when opposition parties are totally barred from any meaningful participation. The resultant economic unsustainability is thus clear.
It is evident that “an economic model which is built on denying democracy, denying people basic human rights, isn’t sustainable, and it will collapse.” An observer said, ‘If I am a foreign investor, I look for opportunities. I understand that there are risks, but in the face of this growing unrest where foreign companies have been targets, given all that has happened in terms of displacement of people and their lands given away to foreign investors, it would be astute to not go into a country like that’.
War in Oromiya
In the last month of 2022, PM Abiy Ahmed saw the Oromo Liberation Army grow in his own backyard. In November 2022, OLA staged a coordinated attack in many major cities in western Ethiopia, blocked strategic gateways into the west, and released several prisoners. In the last week of February 2023, the OLA staged a similar coordinated attack in the western part of the country. In the same year, a parliamentarian emphasized that the rebels had already taken 392 rural towns and villages. The response from the government was indiscriminate. Several drone attacks targeted rebel military bases and civilian areas. In a small village called Bila in Western Wollega, a drone strike killed more than 80 people, and a priest confirmed that he buried 11 unarmed civilians. In West Showa, a drone strike took 68 civilian lives. On 22 April, in West Shewa’s Abuna Gindeberet district, a government drone strike killed 20 civilians. In the Ada’a Berga district, there were extrajudicial killings of 46 civilians on 28 April 2022, and mass killings in the Warra Jarso district. Human suffering is immense. One report indicates that there were almost a million displaced persons in the region of Oromiya as early as 2018, where 77 per cent of the cause was conflict and instability. In 2022, human displacement in almost all regional states of Ethiopia engulfed more than 4.5 million people.
Similar to the Revolt Against Tyranny mentioned above, the armed conflict in Oromiya has its roots in the history of state-making in Ethiopia. In the 1970s, like other national fronts in Ethiopia, the OLF came into being. Since then, it continued armed resistance against the state unabated. As indicated above, the 1991 Transitional Government of Ethiopia and the subsequent political process failed to resolve the underlying causes of instability. In 2018, the Asmara Agreement between the government of Abiy Ahmed and the OLF was repudiated due to the lack of genuine resolution of the underlying political problems and appropriate demobilization, rehabilitation, and reintegration programmes in the Oromiya region. As a result, OLA, the armed wing of OLF, continued its military operation in Oromiya to date.
The war in Tigray, 2020 to 2022
The Tigray war that sparked in 2020 was another recent war that has shown the face of Ethiopia as a ‘war forever nation’. On November 4, 2020, the Ethiopian Prime Minister, dressed in a military uniform, called for an all-out military stance against what he framed as ‘the TPLF strike against the Northern Command’. The TPLF, on their part, argued that they made a preemptive strike against the federal government’s earlier military action, including an attempt by a commando unit to arrest the Tigrayan leadership. Whatever the reason from either side, the flare-up of the conflict had its roots in Ethiopia’s conflict-ridden and contested history of state formation, authoritarianism, and regional competition. The specific causes include the apprehension of the Tigrayan leadership towards Premier Abiy’s recentralization of the state structures pitted by his rhetoric of glorifying the Ethiopian imperial past and ‘Ethiopiawinet’ through his concept of ‘medemer’; the Ethio-Eritrean peace accord of 2018, which largely occurred without the meaningful participation of the TPLF leadership, which triggered suspicion from the Tigrayan side towards the concord between PM Abiy and Isaias for the latter to avenge earlier grudges; the formation of the Prosperity Party in 2019 by Prime Minister Abiy abolishing the earlier coalition party, EPRDF, which the Tigrayan leadership perceived as a ruse to marginalize them; and the postponement of the 2020 election by the federal government and the defiant regional election held in Tigray as a symbol of autonomy. It has gradually become clear that ‘the ideological contradictions between the new Prosperity Party policy of enhanced national unity and Ethiopiawinet and the TPLF’s insistence on the multinational federal order and emphasis on ethnic autonomy were too deep to bridge’. This ideological rift was not new. It was a systemic expression of Ethiopian endemic instability manifested in the form of armed conflict between regional forces fighting for autonomy or independence and a centralizing hegemonic Ethiopia at the centre.
Shortly after the November 4 military strike on Tigray, federal forces entered Mekelle and established an interim government, which only lasted a few months. In June 2021, the TPLF, after a few but decisive onslaughts on the federal army, recaptured Mekelle. On 28 June, the Ethiopian government declared a unilateral ceasefire which the TPLF declined, and continued their advances towards Addis Ababa. On August 24, 2021, the war mounted when the federal force, using aerial weapons, namely drones procured from Turkey, Iran, and China, launched a counter-offensive. The TPLF, only 160 km from the capital, retreated to the north. Eritrean National Defense Force, Amhara regional forces, and the Ethiopian National Defense Forces made a continuous attack from the north and south. Even if towns in northeastern Tigray began to fall into the hands of the coalition, they could not advance deeper into Mekelle. A peace deal led by the African Union sealed the cessation of hostilities in Pretoria on November 2, 2022.
In 2021, only some months after the war began in Tigray, Ethiopia’s Ministry of Trade and Industry estimated the closure of factories and mining sites in Tigray cost 20 million USD every month. Important European and Asian agribusiness, textile industries, and manufacturing closed operations. The biggest factory in Ethiopia’s industrial park in Hawassa, a global fashion giant, PVH Corp, closed its operation. Addis Pharmaceutical Factory, which provided 70 per cent of national demand, was looted and destroyed. Almeda Textile, Goda Bottle, and Glass Share Company were shattered. By late February 2021, almost all central and eastern Tigray factories were out of use. Before the war grew in width and breadth, the interim government estimated that infrastructure rehabilitation required at least 100 billion birr. The scenario put Ethiopia at a B2 credit rating, equivalent to ‘high risk’. The depressive environment led the IMF to estimate Ethiopia’s economic growth at 3.8 per cent. In March 2021, only five months after the outbreak of the war, Médecins Sans Frontières reported that 70 per cent of the health facilities in Tigray had already been made nonfunctional.
Even if official figures have not come out yet, the national budget was highly constrained as the war raged. In 2022, the Ministry of Finance declined to approve a budget for three industrial parks, Ethiopia’s China-like development, which is hoped to bring structural change to the economy, due to ‘budgetary pressure’. However, the parliament approved 1.7 billion USD in military expenses as an additional budget for 2022. Trading Economics foresees the growth of military expenditure hitting 502 million dollars by 2021, up from 460 million in 2020. In March 2021, Antonio Guterres, the UN Secretary General, said that the war ‘drained over a billion dollars from the country’s coffers’.
The exchange rate of local currency, the birr, was severely affected. In 2019, one USD was exchanged at 29.07 birr. In 2020, 2021, 2022, and 2023 one USD equalled 39.93, 43.73, 53.53 and 53.19 birr respectively. However, the parallel black market reached more than 100 birr for one USD at the end of 2022 and the beginning of 2023. The cause is attributed mainly to a plunge in production at the national level, coupled with tax revenues plummeting to less than 9 per cent of GDP, deterioration of export earnings, and diversion of foreign exchange to the purchase of military equipment. The official inflation rate skyrocketed to 33.6 per cent in 2022, the highest for the decade. Food price inflation reached 43 per cent in May 2022, which might also contribute to worsening poverty.
Data shows a substantial decrease in foreign aid and trade during the recent war. On January 1, 2022, the USA annulled Ethiopia’s access to duty-free export to the US market. In 2020, Ethiopia earned about 245 million USD, which amounts to half of its exports to the US. The European Union has withheld budget support of 88 million euros until humanitarian aid reaches northern Tigray. Since Ethiopia is a major aid recipient country, the impact is foreseeable.
The humanitarian situation as of October 2022 has also reached the severest state in recent decades. The major contributor is the conflict that has raged in the country, as it directly impacts humanitarian responses and also indirectly debilitates the government’s capacity to properly address climate impact. According to ACAPS, out of a total population of 124,574,000, about 4.7 million were displaced; 38.2 million are in need, while 11.2 million people are in severe humanitarian conditions. The record of humanitarian risk for Ethiopia toward the end of 2022 is alarming. INFORM ranks human disaster at very high, that is 7.3 out of 10, lack of capacity for coping at 6.7, and vulnerability at 7.1. ACAPS puts crisis severity at 4.3, impact at 4.2, humanitarian conditions at 4.5, complexity at 4.2, and access constraints at 5 points, where all the indicators are measured out of 5 points. The crux of the matter is that the war and instability put the country in a dire social and humanitarian situation, which impacts economic development. Such a prospect is not welcome for a country aspiring to reach lower-middle income by 2025.
SUMMARY *
The article’s contribution is to trace a single line from a question of state formation to a set of macroeconomic indicators. The constitutive dispute the author identifies, over whether Ethiopia is a unitary polity or a federation of nations, has never been settled, and each attempt to settle it by force has produced the next round. The economic consequences are then documented rather than asserted: defence expenditure reaching double digits as a share of GDP, an eight hundred per cent increase in military spending within two years, agricultural collapse, currency depreciation, food price inflation above forty per cent, the withdrawal of trade preferences and budget support, the closure of the industrial parks on which the growth narrative rested, and the cost of internet shutdowns measured in millions per day. The author’s conclusion follows directly: development targets set without resolving the political question are projections rather than plans.
CONCLUSION
The above unstable years are only the tip of the iceberg in the conflict-ridden political history of the country. As shown above, those instabilities manifest in the forms of conflict that involve war, popular uprising, and election violence. Ethiopia has been imbued with continuous and underlying instability since its formation in the 19th century. Ethiopia is again one of the poorest countries in the world. This is not accidental. The underlying cause of instability rests in the way Ethiopia was created and how those structures are maintained to date. The friction between the forces that try to keep it and the forces that try to change that political configuration creates permanent instability. Kjetil Tronvoll writes, “The perennial contested issue involves what ‘Ethiopia’ is and should contain, in other words, how the state should be configured, and what an Ethiopian identity should comprise and invoke.” That instability invariably contributed to the low level of economic development resulting from damage to economic infrastructures, plummeting agricultural production, inflation, blockage of foreign aid, the skewed balance of trade, humanitarian disaster, and resultant damage to the social fabric. Ethiopia seems to be far away from attaining lower-middle income by the year 2025. Unless the political issue is resolved and stability ensured, economic growth and sustainable development seem to be distant dreams for Ethiopia.
POTENTIAL SOLUTION *
The article’s diagnosis leads to a conclusion it states but does not develop: if the constitutive question is what Ethiopia is, then no economic programme, security operation or election can substitute for answering it. That is a proposition about process rather than about which answer is correct, and it is where a mediation journal can contribute.
The Pretoria agreement of November 2022 is instructive precisely because of what it did and did not do. It ended large scale fighting between two armies, which is a substantial achievement and should not be minimised. It was also negotiated between the federal government and one regional party, with Eritrea absent although its forces were engaged, with Amhara forces absent although the status of contested territories was central, and with no Oromo participation although armed conflict continued there throughout. An agreement that settles the war it names while leaving the question that produced it untouched is what the author’s own framework predicts, and the subsequent violence in Amhara and Oromiya is the consequence.
That points toward the instrument Ethiopia has established and not used. The National Dialogue Commission was created in 2021 with a mandate to address exactly the constitutive questions the article identifies. Its difficulties are well documented and they are the standard ones for such bodies: commissioners appointed by a parliament controlled by one party, the exclusion or withdrawal of major opposition and armed actors, and the absence of any agreement on whether the outcome binds anyone. The remedies are equally standard and are the ones this journal returns to repeatedly. Selection of commissioners through a process the parties jointly accept rather than one side appoints. Participation by armed actors, which requires security guarantees and a distinction between participation and legitimation that both sides can live with. A defined relationship between the dialogue’s outcome and constitutional amendment, so that participants know what they are producing. And enough time, since dialogues conducted to a political timetable produce documents rather than settlements.
Two substantive observations follow from the article’s own material. The federal arrangement of 1995 is the object of the dispute rather than its resolution, since one side regards it as the guarantee of self determination and the other as the source of fragmentation. That is not a technical disagreement about administrative design but a disagreement about what the state is for, and comparative experience suggests such questions are more tractable when unbundled: language, education, land administration, natural resource revenue, policing and identity documentation can each be settled at a different level, and the abstract question of unitary or federal need not be answered at all. And the identity question the author places at the centre is precisely the kind that resists distributive bargaining; it responds instead to recognition, to shared history projects and to constitutional acknowledgment, which cost the state little and are among the most durable concessions available to it.
Finally, the article’s economic argument deserves to be turned around once, because in that direction it is a mediator’s argument. If instability has cost what the author documents, then the peace dividend is calculable and is very large, and it is available to every party in the dispute. Establishing that figure credibly, and putting it in front of the people who would have to agree, is a modest analytical exercise that has shifted calculations elsewhere. It does not resolve a question of identity. It does change what the alternative to resolving it is understood to cost.
* Added by the WMO Editorial Team
REFERENCES
[Bibliography as in the original manuscript]
Supplementary references added by the WMO Editorial Team
Agreement for Lasting Peace through a Permanent Cessation of Hostilities between the Government of the Federal Democratic Republic of Ethiopia and the Tigray People’s Liberation Front, Pretoria, 2 November 2022, and the Nairobi Declaration on its implementation, 12 November 2022.
Constitution of the Federal Democratic Republic of Ethiopia, 1995, Articles 39 and 47.
Proclamation No. 1265/2021 establishing the Ethiopian National Dialogue Commission.
Report of the International Commission of Human Rights Experts on Ethiopia, Human Rights Council, Geneva.
Joint Investigation of the Ethiopian Human Rights Commission and the Office of the United Nations High Commissioner for Human Rights into alleged violations in the Tigray region, 3 November 2021.
Collier, P. (2007). The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford University Press, Oxford.
Tronvoll, K., & Hagmann, T. (Eds.) (2012). Contested Power in Ethiopia: Traditional Authorities and Multi Party Elections. Brill, Leiden.
Lyons, T. (2019). The Puzzle of Ethiopian Politics. Lynne Rienner, Boulder.
