Death of Ethiopian PM leaves the country’s future uncertain

The death of the 57 year old Ethiopian Prime Minister, Meles Zenawi, in a Belgian hospital last week heralded challenging times ahead for Ethiopia. Kofi Annan, former U.N. Secretary General, summed this up when he said, “I ardently hope that the transition period will be smooth and peaceful and that Ethiopia sees leadership that reflects the aspirations of its people and realises the potential of this extraordinary country.”

Ethiopian Prime Minister Meles Zenawi at the 2010 World Economic Forum on Africa

Conflict, which has for a long time hounded the horn of Africa, is of course one dreaded possibility, but for Ethiopia, Meles was not only the face behind its relative stability, but the driver behind the country’s transforming economic fortunes. His death thus leaves a humongous void which will be difficult to fill.

The IMF, as recent as June 2012, revised upwards their GDP growth forecasts for Ethiopia at a time that global growth forecast was contrarily reduced. Growth projection was hiked from 5.5% to 7% for the 2012/13 fiscal year, although this was below the 11.4% official estimates. Slowing inflation on the back of tight monetary and fiscal policies was cited as the key driver. For 2011/12, the mission projected real GDP growth at 7% and end-year inflation at about 22%. A similar growth rate and a single digit inflation are achievable in 2012/13 if the implementation of tight monetary and fiscal policies is maintained.

Meles, a former guerrilla leader turned economic reformer, presided over a seven-year run of double-digit economic growth, advocating a mixture of heavy state spending and private investment. Under his leadership, Ethiopia, a formerly closed and secretive country gradually opened to the outside world. Despite his own Marxist roots, he welcomed outside investment. Big foreign companies are coming in –  especially in the agricultural sector – and skyscrapers are rising above the capital. He was also widely applauded for ploughing money into infrastructure. Nevertheless, Ethiopia remains unchanged in many ways.

State or party-owned companies dominate the economy while land is still owned ‘by the people’, making it impossible for farmers to buy or sell their farms. The country is still a tightly controlled society, retaining the old system of Kebeles, local committees which oversee almost every aspect of daily life.

The late leader was not short of critics. For a time, Meles was an international favourite, the preferred face of a ‘New Africa’, praised for his emphasis on grassroots rural development and his government’s relative lack of corruption as well as being an able American ally in the fight against terrorism. His reputation, however, flagged as repression inside Ethiopia increased. Rights groups criticised him for cracking down hard on dissent and accused the west for generally turning a blind eye to the repression, as they were reluctant to pick a fight with a partner in the fight against Al-Qaeda-linked groups in Africa. Local critics point to the fact that Ethiopia still remains one of the poorest countries on earth, and his opponents say his suppression of dissent held the country back.

The African Union, which is headquartered in the Ethiopian capital Addis Ababa, stated that, “The death of Prime Minister Meles has robbed Africa of one of its greatest sons.” We believe this to be true when considering his efforts in fostering growth and poverty alleviation. Ethiopia today has an acting Prime Minister Hailemariam Desalegn, 47, who was an adviser to Meles in 2006 before being picked as his deputy in 2010. While he may lack Meles’ charisma, like the rest of the continent, we also hope that he will lead Ethiopia though a peaceful transition capable of buttressing the seeds of economic growth sown during Meles’ tenure.