The concept of a developmental state by itself has no predefined
rules and procedures that can guide leaders in making decisions about a
country’s economic future. Even so the EPRDF by the blind arrogance of its
leaders has decided that a developmental state is the best solution to transform
Ethiopia to a middle income country, not because this option was proposed by the
country’s respected economists but because its deceased leader said so.
The sad truth is that even when
the proposer and sole executioner of this theory Meles was alive, the idea of a
developmental state is a challenging proposal to be implemented in Ethiopia, but
in his absence the current leaders have decided without completely understanding
the concept of a developmental state and how it can be derived to best fit
Ethiopia’s situation to follow through with this potentially lethal ideology
which is rapidly squeezing the country and its citizens to absolute vacuum.
Ethiopia’s economy is in no position to support a government that sucks all
the capital it can from the private sector and borrow more from the national
bank in order to fund its so called mega projects that supposedly will transform
the it to a middle income country.
First of all, the private sector should be encouraged to support the
country’s economy not by imposing excessive taxes that are forcing most to shut
down and leave, but by minimizing their taxes that will in turn increase their
capital and lead them to invest even further in the country. This is how the
private sector should be leading the country’s economy from an agricultural
dependence to the industry based economy. Meanwhile the government is doing the
exact opposite by collecting the major part of the profits generated by the
private sector to invest it in what it believes to be right. It is not up to the
government to decide how the country’s economy should behave as long as it
claims to be a free market economy.
Secondly, when the government borrows money from the national bank it is not
actually borrowing money that exists, rather forcing the bank to print out new
money that should not exist. This will substantially decrease the value of money
in the market or in other words, the buying power of the country’s currency will
decrease. Therefore the items that one could buy with 1 birr today will maybe
cost 5birr tomorrow.
This is what the economists describe as inflation. And it is more than
evident that our country Ethiopia is drowning in the ocean of inflation faster
than the Titanic with inflation reaching up to 45% at times. In all this chaos
the poor citizens of the country who are mostly dependent on a fixed income are
suffering the hardest. They are not able to afford the ever increasing price of
living and so are forced to lose their homes, skip meals, stop their children’s
education and so on.
Although the government is undertaking major projects that will play a
pivotal role in the country’s development, the way this projects are being
carried out is essentially wrong because the private sector that this
infrastructure is being built for, is rapidly being exploited of its profits,
hence discouraged to further invest in the country.
Therefore upon completion of this mega project, Ethiopia will have unlimited
supply of electricity, long stretching roads, and other attractive
infrastructures along with a depleted private sector and an inflation beyond
control, immersing the country in an ocean of problems that I fear will prove
even harder to overcome.
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The writer can be reached for comments at
tameru.jonas@gmail.com
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