GREEN VOICES SILENT AS ETHIOPIANS RALLY TO OUTDATED CAUSE

A LETTER TO THE FINANCIAL TIMES (PUBLISHED)

This year so far the Financial Times has given unprecedented coverage to Africa. In June the paper turned its attention towards Ethiopia in a series of three articles.

(Note: although the FT website is open to subscribers only, non-subscribers wishing access are allowed 10 free articles a month by clicking on the links and following instructions.)

The first article, “Ethiopia’s boom runs into limits on finance” (June 10), discusses the difficulties facing private investors in Ethiopia as the government maintains a firm grip on development strategies and key sectors in the national economy. The government’s current five-year Growth and Transformation Plan (GTP), masterminded by the late prime minister, Meles Zenawi, is absorbing the equivalent of 15 per cent of the country’s $33bn annual GDP this year which the IMF warns is “crowding out” the private sector. Banks are drained of capital by being obliged to buy government bonds to the value of 27 per cent of all private loans. This causes 'financial repression' when bond yields are lower than inflation which, according to IMF country head, Jan Mikkelsen, "puts a large burden on private banks in Ethiopia and prevents [them] increasing banking services.” Heavy government spending in Ethiopia has reduced foreign exchange reserves to two months' worth of imports, hard currency takes 4 months to process and investors fear delays in repatriating profits. 

The second article, “Egypt raises stakes over Ethiopia’s dam on Nile” (June 11), focuses on the Ethiopian government’s most expensive and controversial public project, the $4.8 billion Grand Ethiopian Renaissance Dam on the Nile, which Ethiopians say is essential for their development and Egyptians “fear will reduce the country’s water supply, damage its fragile agrarian sector and ignite more social unrest in a country that has already undergone a tumultuous revolution.” According to the FT, Egypt's debate on the dam has reached fever pitch, with the US and Israel accused of being behind the project being built by the Italian engineering company Salini. Egyptian officials accuse Ethiopia of not carrying out enough studies and the lack of consultation. With the Middle East already in turmoil the stakes could hardly be higher.

These two articles gave me a sense of deja vu. This was like history repeating itself. During the 1970s and 1980s African governments adopted the centralised 'post-colonial' planning model characterised by large-scale public infrastructure programs designed for export dominated economics. This resulted in the gross misallocation of public funds for politically inspired projects using untested and, as it happened, highly inefficient technologies with multiple hidden costs.

By the end of the 1980s', Africa's 'lost decade', the continent was littered with billions of dollars' worth of failed or failing projects, billions of dollars of debt and millions of destitute people. In Ethiopia most of the Revolutionary government's large-scale developments in the Awash Valley had failed by 1980 because the hidden costs were overlooked (Winid 1981). At the June 1992 Lem Conference in Addis Ababa, Ethiopia's new leader Meles Zenawi acknowledged the grave mistakes of the past and captured the thinking of the day by calling for 'conservation-based, people-centred and people-led' sustainable development requiring 'a multi-discipline, broad spectrum approach for there is no piecemeal solution to the problems at hand.'

With this in mind and in response to the FT articles I wrote a letter to the paper which was not published:

"Egypt, Ethiopia and the Grand Ethiopian Renaissance Dam"

Sir, Ethiopians seem determined to fulfil their ancient dream of controlling the Nile regardless of the enormous “hidden costs”, one of which could be conflict with Egypt and Sudan downstream, “Egypt raises stakes over Ethiopia’s dam on the Nile” (June 11). The hidden costs of mega dams, especially in tropical, climate-vulnerable countries, are now well known, there are more of them and they are increasing as the planet heats up, populations rise, biodiversity disappears and ecosystems break down. On the financial side alone the IMF and World Bank have repeatedly warned Ethiopia of the dangers of “crowding out” the private sector with such expensive public projects. On June 9 the FT demonstrated this in an article, “Ethiopia’s boom runs into limits on finance.”

But perhaps the greatest long-term cost of projects like the Grand Ethiopian Renaissance Dam is that of locking Ethiopians and their investment partners into 20^th century development thinking, the type of thinking that failed Africa so dramatically in the post-colonial era (the GERD was designed in the 1960s by the same Italian company building it today). The recent surge in Ethiopia’s growth puts this ancient land on the verge of a 21^st century Renaissance, yet it seems ironic that the country is reverting to a 20^th century development strategy to achieve this.

The $4.8 billion dam is the most ambitious and most expensive element in Ethiopia’s current five-year Growth and Transformation Plan, masterminded by the late Prime Minister Meles Zenawi who died last August. The GTP is a critical step on the way to realising his other brainchild, the Climate-Resilient Green Economy strategy, aimed to transform Ethiopia into a sustainable, low carbon economy by 2025.

The CRGE is arguably Meles's most important legacy for Ethiopia’s future, yet in most reports and deliberations on Ethiopia it is the GTP that gets most of the publicity. As the hidden costs of the Grand Ethiopian Renaissance Dam rise inexorably, it is therefore a double and historic irony that Meles’s 21st century Climate-Resilient Green Economy risks being derailed by a 20th century climate-vulnerable project.

Finding a balance between public and private investment in Ethiopia is crucial. As the government encourages Ethiopians to buy GERD bonds and, as you report, “lend a month of their wages each year”, they might like to consider encouraging them to support Meles’s dream of creating a green economy in Ethiopia that would be good for Africa and good for the world.

End of unpublished letter.

The third FT report, “Water: Battle of the Nile” (Analysis, June 20), looked more closely at the controversy. Ethiopia supplies 86 per cent of the Nile running through Egypt, yet the latter’s claim to the lion's share of the water are based on colonial-era treaties which the ten Upper-Nile states providing the water, led by Ethiopia, insist must be changed to reflect 21st century realities and development needs. According to the FT “Ethiopian officials from the prime minister to the lowliest bureaucrat repeat the mantra that the project is ‘win-win’. But Egyptians vehemently disagree. Several politicians were caught on live television in Cairo this month saying it might be better to bomb the dam or to arm Ethiopian guerrillas to pressure the government in Addis Ababa. Mohamed Morsi, [now deposed] president of Egypt, said in a later television appearance that “all options are open”.

With all options open and the stakes rising higher than ever I wrote a second letter to the FT which was published on July 1.

(Note: according to the FT’s copyright rules any Letters to the Editor are owned by the writer and can therefore be published elsewhere.)

“Green voices silent as Ethiopians rally to outdated cause”

Sir, Your three recent reports on Ethiopia paint a disturbing picture of an ancient land on the verge of a historic renaissance – “Water: Battle of the Nile” (Analysis, June 20), “Egypt raises stakes over Ethiopia’s dam on Nile” (June 11) and “Ethiopia’s boom runs into limits on finance” (June 10). 

The $4.8bn Grand Ethiopian Renaissance Dam on the Nile, while being the centrepiece of current discussions, is only one of a series of gigantic and controversial projects – dams, farms and sugar enterprises – encircling the Ethiopian plateau. These are the so-called “mega” projects of Ethiopia’s 2010-15 Growth and Transformation Plan (GTP), the brainchild of Meles Zenawi, the late prime minister.

Although countless scientists and specialists, from the International Monetary Fund to International Rivers, have urged Ethiopia to “rethink” some elements of the GTP, the new government is adamantly “committed to the vision” of Meles seemingly regardless of the social, environmental, economic and geopolitical costs. The Ethiopian people have rallied around the GERD as a symbol of national pride and power believing it will give them a cultural renaissance. How quickly people forget the past.

At the Lem (or Green) conference in Addis Ababa in June 1992, held in conjunction with the UN’s first Rio 'Earth Summit', Meles, as Ethiopia’s new leader, blamed the country’s “suffering”, “hardship” and “senseless” natural resource destruction on the “top down” and “irresponsible” development strategies of the former regimes. How paradoxical, 20 years later, that his vision for a 21st-century Ethiopian renaissance should depend on the same 20th-century development strategies he previously condemned.

Many of Ethiopia’s current mega-schemes are based on decades-old plans (the GERD was designed in the 1960s by the same Italian company building it today) and some are even on the sites of projects that had failed because the “hidden costs” were ignored. All of these schemes are water-intensive and, therefore, in this part of the world, extremely climate-vulnerable. One long drought, like the one that raged across the Sahel, including Ethiopia, between 1968 and 1974 will play havoc with these plans. The suffering, hardship and natural resource destruction, all the way to the Middle East and beyond, are unthinkable.

It is a further and potentially tragic irony that Meles’s other brainchild, his Climate-Resilient Green Economy strategy, designed to transform Ethiopia into a low-carbon economy by 2025, seems to have been sidelined by the GTP. This strategy is arguably Meles’s greatest long-term contribution to Ethiopia yet it hardly gets a mention in discussions on the country. It is as if Meles’s green voice, first heard in 1992, has fallen silent. Instead, Hailemariam Desalegn, the new prime minister, is committed to an outdated vision. The Ethiopian people are rallying around (and paying for) an obsolete cause.     

End of letter.

Since this letter was published Egypt’s President Morsi has been deposed and an interim government installed. The new government in Cairo is seeking to take the tension out of the situation by urging the Upper-Nile states, particularly Ethiopia, to reach a compromise over the Nile waters. However, as Al Monitor – "The Pulse of the Middle East" – pointed out in an article on 24 July the tension is far from defused:  “Egypt's New Rulers Face Crisis With Ethiopia Over Nile”.

What happens next is anybody's guess. Egypt's new government might try to use the Nile dispute to bring the nation together as the Ethiopian government is doing. The traditional revolutionary slogan from Tigray in northern Ethiopia could become more relevant today than ever for both Ethiopia and Egypt: arriena gerreb  – ‘we have united around our rivers’ (Tronvoll). Whatever happens, it seems unlikely that the stakes will be lowered without a serious "rethink" in Ethiopia. Egypt must also plays its part. Water misuse and waste in Egypt are notorious. Rethinking there is also essential. Perhaps this is the time for both these ancient lands to step out of the past and start thinking about water for the 21st century and begin working together in ways that can teach us all.

Related posts:

Africa's 'green voice' falls silent: London memorial to Meles Zenawi (30.06.13) 

Rethinking Ethiopia's growth and transformation (05.11.12)

Ethiopian ahead of the curve: the green legacy of Meles Zenawi - part II (07.09.12) 

The green legacy of Meles Zenawi - Part I (23.08.12)

The paradox of Meles Zenawi (22.08.12)