Changes to British aid to Ethiopia

Hilary Benn, the UK’s International Development Secretary, has anounced that the UK will be suspending all its direct budgetary aid to the Government of Ethiopia.

I confess that I have been proven completely wrong about Ethiopia’s Prime Minister, Meles Zenawi.  A few years ago, I believed he would be one of Africa’s great leaders. He is a former freedom fighter turned democrat. He was a former communist (a follower of Enver Hoxa no less) turned free market liberal.  I was impressed by the peaceful secession of Eritrea (which entailed Ethiopia giving up its access to the sea); and his decision not to invade Eritrea when Ethiopia defeated its neighbour in June 2000.  Under Meles Zenawi, Ethiopia has moved to greater democracy, federal decentralisation, and economic liberalisation.  Aid flows increased, in recognition of the fact that Ethiopia is one of the poorest large nations on the planet.

Over the last year, Ethiopia has suffered an ugly period of repression. In the elections in May last year the opposition won over a hundred seats in Parliament.  But the opposition parties believe that the election was rigged, and that they should have been won.  There were violent clashes in Addis Ababa in November, which spread to other towns. About 40 people were killed and many others
injured. Opposition leaders, civil society leaders and journalists have also been arrested. Many thousands of young people were detained.

Britain currently gives about £90 million a year in aid to Ethiopia.  Under the terms of the ten year agreement with the Government,

in exceptional cases where it has not been possible to resolve differences of view, and which are deemed by the UK seriously to undermine progress on poverty reduction, the UK reserves the right to suspend disbursements of development assistance

If I am correctly interpreting the UK announcement, we will continue to provide aid, but in a different form.  The money will be used instead to support non-governmental
organisations and to tackle the major food crisis that is now emerging
in East Africa.

This is a very interesting announcement.

  • This demonstrates a welcome determination not to use aid to support undemocratic and repressive regimes.  Critics of aid often claim that aid is given without regard to the quality of government.  This shows that they are wrong.
  • We should not ignore the very signficant costs to withdrawing budget support.  Aid pays for more than a third of government spending in Ethiopia. Any government reform with long term expenditure consequences – such as public sector pay reform, tariff liberalisation or increased commercial freedom and competiton for state enterprises – can only be implemented if the government (and the IMF) have confidence that aid will continue to flow to the government not just this year and next, but for for the three or five years needed to see them through. (That is why we have a ten year agreement).  If aid to government is switched on and off, then those long term reforms can not be started. The effect of lack of predictability of government aid is therefore that aid will not be used for long term reforms, and has to be used instead to cope with the consequences of weak institutions and unreformed policies. Using aid this way is significantly less productive than supporting long term reforms, so the effect of lack of predictability is a significant reduction in the effectiveness of aid.  We are rightly very reluctant to use this kind of threat.
  • I doubt if this will have a noticeable impact on the Government of Ethiopia.  My guess is that Meles Zenawi feels genuinely threatened by the opposition movement, and is perhaps alarmed at the prospect of significant internal conflict within Ethiopia. He is not going to change his mind because aid is no longer flowing through the budget.  So we should recognise that will probably be a gesture which will have little effect on political developments in Ethiopia.
  • It is surprising that this decision has not been made and announced as part of the group of budget support donors in Ethiopia.  I hope this does not reflect a decline in the effective coordination between donors, who are more powerful and effective when they act together.
  • It is characteristic of the decency, openness and courtesy of Hilary Benn that he flew to Addis Ababa and met Prime Minister Meles Zenawi to inform him of the decision and explain the reasons for it.  Less honourable Ministers would have issued a press release from the comfort of their offices in London.

Update: Check out the thread at Meskel Square on this.

3 thoughts on “Changes to British aid to Ethiopia”

  1. I have never met Meles Zenawi although I have been impressed by the strongly favourable view of him formed by virtually everyone who has worked with him, anyway from outside Ethiopia.  But I have always harboured doubts about him, based on two worries: first, his insistence, after the overthrow of the appalling Mengistu Hailemariam, on a constitutional arrangement which in effect forces political parties to be ethnically based, in other words based on a membership principally or wholly consisting of one of Ethiopia’s many ‘nationalities’ — whereas Ethiopia’s perennial problems of conflict among the nationalities seems to me to require the exact opposite (a constitutional requiement that political parties must include at least x per cent members of nationalities other than that of the majority of that party’s members);  and, secondly, the repeated kangaroo court trials and prolonged imprisonment of Professor Dr Asrat Woldeyes, then Ethiopia’s foremost surgeon and a respected patriot who, after the fall of Mengistu, became chairman of the party representing the Amharas, the group that had been defeated by the rebellion of the Eritreans and Tigreans (the latter being the rebel group among whose leaders Dr Meles was the most prominent).  This brutal treatment of one of Ethiopia’s most respected sons (by no means a unique blot on the Meles régime’s human rights record) was not only a disgraceful breach of his fundamental human rights:  it was also an ugly indication of Dr Meles’s propensity for taking revenge on his political and nationality opponents.  

    But in judging Ethiopia one always has to take into account the fact that (like Russia and Iraq) the country has never had any experience of being a liberal democracy, with the partial exception of the decade after the Italian war-time occupation.  It is one thing to re-establish democracy and respect for human rights in a country which has a democratic history and experience, however brief — e.g. Germany after the second world war, Poland and most of the other central and eastern European countries after the fall of communism in Europe): it is quite another thing to eradicate authoritarian instincts and traditions from a country which has in effect never known anything else (Iraq, Russia — and Ethiopia). 

    Meles deserves respect for the progress he has undeniably made up the democratic mountain since gaining power through the military victory of the Tigrean/Eritrean rebellion against the Mengistu dictatorship and predominantly Amhara rule:  but there’s still a long, hard way before he or his country reaches the top.

    Brian

    http://www.barder.com/ephems/

  2. Here’s what someone wrote in the comments section of another blog about aid to Ethiopia:

    On the issue of aid, let me state right off the bat that wanting to
    cancel all aid, even humanitarian aid, is, from a purely ethical point
    of view, a perfectly reasonable position. (Put away your emotions for a
    moment!) If we truly believe in freedom and in the rights of people to
    determine their own destiny, then we ought to let them. Giving aid to a
    government reduces the level of democracy in that country. In essense,
    the donors become citizens of the aid recipient country, diluting the
    citizenship rights of the recipient’s citizens. The government becomes
    less accountable to its own citizens and more accountable to the donors.This is part of the reason behind the current trends in aid towards good governance, blah, blah, … But
    if you think about it, using aid to promote good governance is clearly,
    no bones about it, neo-colonialism. Rather than let y’all sort out how
    you’d like to live, we’ll give you money and make you live the way we
    tell you to. The donor community is coming full circle, having realized
    that Africans don’t know what’s good for themselves (not my words!).But,
    there’s no other way to go. If you’re going to give money and mess up a
    country’s power balances, then you’d better make sure things don’t get
    messy.This is why we insist that the donors, if they are going
    to give money to the Ethiopian government at all, should then force it
    to do what’s right. Yes, be a viceroy. Otherwise, just get out!

    And I agree entirely.  There has been a marked evolution in aid theory and practice over the last few decades. Today, oddly enough, donors are ever-increasing their level of intervention in recipient countries. What was heresy yesterday is today gospel, what was thought impossible yesterday is thought possible today.In this vein, I believe donors should remove the artificial constraints they have placed upon themselves and think ‘outside the box’. They should have quickly, in the summer, before things even got to this stage, forced the Ethiopian government into accommodating the opposition benign demands. Donors have the leverage. In a country where well over a third of the federal budget is aid, and where the support base of the ruling party is relatively tiny, aid is excellent leverage.So it’s still not too late. Bring Meles to heel. Unless we want another fourteen years of development experts fauning over Meles, while Ethiopia makes little or no progress in poverty and development (Finance & Development, September 2005 – Ethiopia: Scaling Up).

  3. owen, it is very decent to confess publicly "to have been completely wrong" about Meles’ greatness… and because we can all be wrong -even development officials from donor countries- perhaps democratic performance (freedom house, etc) should be chosen as a fundamental criteria for allocating foreign aid.     

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