Zitto na Demokrasia

Zitto na Demokrasia

Posts Tagged ‘Developmental State Model

Developmental Ethiopia surges forward. ‘Democratic’ Tanzania lags behind. Rethinking @jmkikwete @PMMelesZenawi @PaulKagame

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Ethiopia Growth and Transformation Plan

Ethiopia is trending. The AfricaReport of May 2012 had Meles Zenawi on its cover page with the heading ‘The rise and rise of Ethiopia’. NewAfrican of the same month had Special Report on Ethiopia with an article ‘from bankrupt to middle-income’ and The Economist had, on its Finance and Economics section, a balanced article on ‘investing in Ethiopia’. Of course the World Economic Forum Africa took place in Addis Ababa so the coverage of the country was expected. Tanzania hosted the same and the content of the coverage was not as trending as Ethiopia though.

Both countries are comparable in some key areas. Ethiopia will have largest population in Africa after Nigeria in the year 2050 with 174 million people. Tanzania will be the fourth most populous country in Africa with 109 million inhabitants.

Ethiopia will be the third biggest Economy in Africa South of Sahara in 15 years (as per estimates by Standard Chartered) with GDP of USD 472bn. Tanzania will be sixth biggest economy with GDP of less than USD 150bn trailing Kenya. But Ethiopian GDP will not be sourced from natural gas but Agriculture and manufacturing which have stronger linkages within different sectors of the economy.

Both Tanzania and Ethiopia have developed their economic Blueprints. The Ethiopian one is called the Growth and Transformation Plan (GTP) while in Tanzanian we have the Five Years Development Plan (FYDP). Reading the contents of both plans motivated this brief article.

From the Ethiopian GTP one sees ambition and well thought blueprint contrary to our Tanzanian one which is not as inspiring as it is supposed to be and seems to be relatively a collection of projects ie a wish list. Take an example of Power sector.

Ethiopia is expected to increase electricity generation fivefold in five years to 10,000MW. They have a USD 5bnGrand Millenium Dam as a national flagship project. Tanzania plans to generate less than 3000MW of electricity (2780MW) by 2015 and without any major national flagship project. Some would argue the Gas pipeline from Mtwara to Dar es Salaam to be one but The Five Years Development Plan does not include the gas pipeline. This is evidence of the ad hoc tendency in our Tanzanian planning. Taking an example following the emergency power plan, the pipeline idea propped up and was adopted.

While in Ethiopia all Public Entreprises are involved in Planning, here in Tanzania planning is poorly coordinated. There is no policy to guide Public Enterprises role in national development. In Tanzania for instance a point I have made time and time again some Public Enterprises would play a very significant role in the energy sector.

Ethiopia’s Growth and Transformation Plan clearly defines infrastructure targets and  social targets. One of the strategic investments done by private sector (from China) is the women’s shoes manufacturing factory by Huajian Group. With this factory, Ethiopia will be exporting USD 4bn worth of footwear every year. Prime Minister Meles Zenawi banned exports of raw hides and skin and insisted on value addition within the country to create jobs and increase value of the exported products. Contrary in Tanzania leather industry is dying as traders export raw hides and skin to countries like Pakistan and Vietnam. Tanzania’s plan lacks innovative ideas like this and sector targeting is not well articulated.

And this builds on an already existing Ethiopian shoe industry. Walk through Addis Ababa’s Piazza shopping district and you cannot miss the shops selling Ethiopian made shoes targeting a local market.

The Budget for implementation our economic blueprint is TZS 43.7 trillion as a quote from the plan shows;

“In order to fulfil the activities outlined in the priority areas, the Plan identifies a range of strategic activities, the responsible organs and the cost of implementation amounting approximately to TZS 43.7 trillion over the next five years; an average of TZS 8.7 trillion per annum exclusive of recurrent budget, of which TZS 2.7 trillion will have to be mobilized annually by the Government.”

Forecasts for 2012/2013 budget shows relatively no money for implementation of the Plan. Spending cuts badly undermine implementation of the plan as less than TZS 2 trillion has been set aside for 2012/2013 Budget. Again the role of private sector (local and foreign) as well as Public Enterprises in implementation of the Plan is vague.

As for the Ethiopians, the government and public enterprises will spend USD 71.7 Billion over a period of five years and spending is in order. The Plan is being implemented. From Ethiopia one sees thinking, sequencing and focus. Money follows the Plan. The Leadership has ambition and pragmatism.

On another angle, Tanzania is more open and democratic; leadership allowing dissent and press is free. Regardless of positive democratic credentials Tanzania lags behind in efforts to end poverty. The paradox of a fast growing economy without cutting poverty (growing economy with increasing poverty and inequality) still puzzles Tanzanian policy analysts. Is it enough having flourishing democracy with people deeply impoverished?

The linkages between Democracy and Development has been a debate and is still a huge and sometimes controversial debate. Malaysia and Singapore as well as China are always pointed out as countries which embraced little or no democracy and uplifted their people from poverty. Ethiopian leadership strongly argues for a developmental state and less emphasis on democracy. Ethiopia is trending now and things are not only happening but seen to be happening. Meles Zenawi strongly argue for a Developmental State Model. Tanzania should add ‘democratic’ before the other D word.  Is time for a democratic developmental state as a model for Tanzania?