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Someone is surely upset everyday when trying to make a call
to someone known to be only a few blocks
away because the automated voice says she is
out of the calling zone. Another person
sneaks into the backroom of an internet café
to make an illegal international call as the
official rates are grossly exaggerated.
In another part of town, an investor is seeking land from
the local government office, but is
frustrated as the bureaucrats delay carrying
out their duties due to fear of a
commission's wrath that sends waves of fear
among many, if not extorting him or her for
kickbacks.
There is a clumsy financial industry, which appears to be
repulsive by the very idea of innovation and
modernity that could give it efficiency and
reliability in serving deserving customers.
Incongruously, the state continues to be the largest source
of housing to millions of urban dwellers,
unable to muster the courage to move out
from the sector, contrary to its declared
intentions earlier and the high expectations
created thereof. There are alarming desires
remerging within the establishment,
following a bill tabled by the executive to
Parliament that will empower a federal
housing agency to play the role of a
plaintiff and an arbitrator.
Everywhere and everyday citizens are forced to go to the
government to procure goods and services
that should be, as in many other more
quickly developing countries, left to the
private sector. These separate anecdotes
connected show the saddening reluctance of
the Revolutionary Democrats in power, who
seem unwilling to recognise, or at least do
anything to change, the gross inefficiencies
stemming from the unenviable title as one of
the most state-controlled economies in the
world.
To get land for a house or to make investments, the
government is the sole authority to seek
assistance from. To access any modern form
of communications, it is big brother's
corporation that must be sought.
Of course, the current regime has not created this
troubling system. It rather perpetuates a
philosophy of centralised control,
propagated for hundreds of years by an
absolute monarchical system hastily
interrupted by an authoritarian military
regime suspicious of anything that smelled
private. Unfortunately, citizens have become
accustomed - possibly to the point of
harmful complacency - to a state-dominated
society.
The state in Ethiopia is almost everything in citizens'
lives: a protector, guardian, provider, and
as good as a parent. To get anything done in
the economic realm, for instance, the
central authority's tentacles have been
sticking to the instruments that grant
progress. But it has been this way for too
long.
Currently, fault is rather found in the government's
programmes for adhering to this unfortunate
historical trend. The state is not even
playing its justified role, as minimal but
efficient regulator of the economy, to the
extent it is evidenced in the World Bank's
latest report on "Doing Business". Far from
being included in the list of champions of
reformers, where neighbouring Kenya and
Egypt up in the north are stars, Ethiopia
has slipped spots in the 175-country survey
due to hindrances in conducting business
caused by inefficient bureaucracy.
It is also puzzling how this government plans to navigate
the intense process of joining the World
Trade Organisation (WTO) as full member,
with its gauche performance of changing its
archaic state machinery. Many painful steps
will need to be taken in order to accomplish
this. These no doubt include opening up the
telecom sector, currently monopolised by the
state, and the heavily regulated finance
industry to an international competition; it
is a matter of time.
It is always difficult to let go of those privileges that
have become custom. This seems especially
true in the current regime's process of
liberalising the economy that is supposedly
underway. For all the rhetoric of
privatisation and modernisation in the mid
1990s, the Revolutionary Democrats are quite
hesitant to loosen its grips on the reigns
of the economy.
As The Economist bluntly described it in its latest issue,
flatteringly dedicating three pages to
report on Ethiopia for the first time, the
administration of Prime Minister Meles
Zenawi is simply afraid to let it go. Sadly,
it is this same Prime Minister that is proud
of having control of the expensive land
allocation regime, inefficient banks and
pathetic communications infrastructure.
It is obvious why those who hold onto the state power would
wish to be the guardian certain sectors they
see reap huge revenues and maintain a
patriarchal status. To be less cynical,
there are potential arguments for involving
in a fledgling economy attempting to take
the giant leap into the often cruel
globalising world.
Protecting infant industries from brutal foreign
competition may eventually turn out
efficient factories that will have achieved
economies of scale. After passing the rough
beginning stages where companies hover in
the red, it is possible for the state to
lift the guards and allow the free market
forces to challenge the exposed institution.
However, as seems to be the existing case, what is meant to
be an initial boost can turn into permanent
security from confronting the necessary
reforms to maintain competitiveness.
Complacency often overtakes the companies
that become attached to the privileges they
enjoy.
Take the case of the over 100-year-old state monopoly in
the telecom sector, the Ethiopian
Telecommunications Corporation (ETC).
Services provided by this giant are almost
unarguably poor by any standard. Lack of
voicemail, network coverage and modern
services, not to mention the difficulties in
the most basic provision of the capacity for
even a five-minute call to remain connected
without interruption, are symptoms of a
deep-seated philosophical problem within the
government.
It is painfully clear to subscribers with no alternative
choice that ETC is immune from the
modernising pressures that have brought
efficient services all over the world.
Subscribers are benefiting from the stiff
competition capitalism has brought to this
sector advancing by leaps and bounds every
year.
Some of these markets, though, suffer from asymmetries of
technological access. Here is where those
more pragmatic members of the government not
constrained by dangerous philosophical
conservatism see a rationale to protect the
telecom sector.
By directly controlling ETC the government can ensure, at
least in theory, that cell phones and
telephone lines are not only found in the
big cities but may trickle into the
countryside where they can bring dramatic
improvements to quality of life. It is true
many private firms may not see profitability
in the thin rural markets and thus not enter
on their own initiative.
However, direct control is not the only way to reach the
goal. Indirect control through regulation in
attaching ratio of distribution to
licensing, taxation and incentive provisions
can be used to induce these private entities
to undertake the same operations the
government is now attempting itself, if not
far more better and diversified services.
It is clear that the consumer is the one that benefits from
the choices afforded by competitive markets.
The possibilities of switching service
providers if displeased empowers people and
keeps the companies on their toes as well as
on the forefront of technological
innovation.
While it may be easy to say that the government is simply
gripping the economy too tightly to maintain
authority, it could be that they have good
intentions but are just misled in their
theoretical leanings. Prime Minister Meles
Zenawi's words last Saturday at the Export
Day event in the Millennium Hall support
such a theory.
Meles cited control of land and strict regulation of the
financial sector if not outright ownership
of banks as reasons why the investment
atmosphere is more conducive to the growth
of the flower sector here than in
neighbouring countries.
While it is true that direct control of the inputs to
horticulture production may be a temporary
boost and advantage to those investors
managing to be granted high level officials'
ears, the ramifications of maintaining state
control go much further and are, on the
balance, negative. He simply admitted that
these businesses under the state's domain
are making decisions less on business sense
and more on political pressure that suits
the government's agenda. This has a much
more implication far beyond development
talks and affects the ideological market
place were voters pick the party they want
to be governed under. It has the potential
in upsetting the electoral competition,
where the group in power claims success
simply because it has used state owned
resources whether or not they make economic
rational in the long term.
For too much of Ethiopia's past, citizens have remained
powerless to change a regime's policy
direction with unelected leaders crowding
the history books' pages. As the country's
democracy evolves, at a debateable speed,
hopefully more pressure for a liberalised
statehood will challenge the governance
philosophies of the Revolutionary Democrats
that are in power today.
There is no doubt that the impetus for change is buried
deep somewhere. The proposed liberalisation
platform of certain opposition parties and
discontent felt amongst a populace forced to
try to pull themselves out of poverty
through state-dominated channels will no
doubt add up some day. Currently, however,
the opposition appears in disarray and
organised movements are lacking in the
political landscape. For now, it will be
wishful thinking to imagine a country where
political and economic liberalism plays a
bigger role in the Ethiopian society, which
is rather inclined to social democracy.
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