Addis Abeba — After 20 years in power it is still very difficult to say that Prime Minister Meles Zenawi has yet gained the love and admiration of his subjects. At best the feelings towards his person and leadership are still very divided and polar.

He is also far from gaining the approval of any of the groups and governments that are calling for democracy in Ethiopia. However his stature as one of Africa's intellectual leaders seems to be growing as his probable departure from political power draws close. His ego must have been boosted by recent comments about him being the voice of Africa's concerns. Like wine his fame is growing better with time, although many would find it hard to say the same for his country.

Again look back on the self imposing international institutions. The infamous structural adjustment which the World Bank forced on developing countries, which have always been short of cash for development, and who have had no choice but to obey, is now a very old story that it is committed to economic history writings. But the recent report by the United Nation's Conference on Trade and Development (The Least Developed Countries Report 2009 - The State and Development Governance) is a comic turnaround where by this prominent body "endorsed" Ethiopia's kind of economic policy without giving the government or its leader any credit.

It is not really that they have endorsed a developing country's point of view, but that their thinking, recommendations and analyses are very much determined by what happens at the moment. The new report is very much a product of the outcomes of the current global financial crisis. It is like all that the brains that want to point us the way we should go have no access to the tools they have gained through all their knowledge and experience; they have not garnered enough knowledge to steer us through crisis moments.

Two economists have probably benefited from the crisis, in terms of getting a belated recognition: Nouriel Roubini and Nobel laureate Joseph Stiglitz (a Meles mentor?). These people had warned the world fairly ahead of time of the disastrous direction the debt-dependent economies were following. Their predictions came true, and the world is "re-thinking"- a way of saying "Sorry, we had no idea that we had no idea" without actually saying it.

"Rethinking the role of the state in LDC's- towards development Governance" reads one of the major chapters. In recent months major rethinking about the role of the state has been taking place no where but among the governments of the richest nations. Prime Minister Gordon Brown led the way by boldly stepping in to financially bail out troubled British companies. In the United States the very tenets of capitalism were in danger as one company after another started crying out for the government to step in to rescue them. It was not a sweet thought for the president to do that. Obama was repeatedly heard that he had more important issues to manage such as a war than running a company. As it dawned on him that he had no choice he forcefully reiterated that his government would divest from the rescued companies as soon as the storm had passed. Other leaders, including the French Nikolas Sarkozy, were beginning to call for a better capitalism and globalization.

In Rethinking the Role of the State in LDC's, it is not very clear who is doing the rethinking. The producers of the Least Developed Countries report at the UNCTAD do not admit to any past errors in thinking nor do they recognize the developmental approach followed by certain countries so far. They reject "current good governance institutional reform agenda" and "the old developmental state, including successful Asian cases." What they have come up with is a "brand new" developmental state which occurred to them because of the current financial crisis.

UNCTAD's new developmental state "is adapted to the challenges of the 21st century; creates and renews micro-foundations of democratic practice to harness local, bottom-up problem solving and opportunity-creating energies; and embraces a wide range of governance modalities and mechanisms within a mixed economy model to harness private enterprise, through public action, to achieve a national development vision." And if you, dear reader, are a prime minister or president of a developing country, the UNCTAD experts promise to show you in 37 pages how their idea or model could be "adapted to provide a viable and useful model for development governance" in your country.

Nouriel Roubini earned laughter from his learned colleagues when he made a speech warning that the economic boom was going to bust. Stiglitz, who rejected the fairness of a free market in an environment of unequal information, who also wants to bring an end to a capitalistic dominance based on Adam Smith's embryonic work of economics, has, for all his knowledge, gained little ear from decision makers.

Stiglitz, like John Maynard Keynes, believed in government involvement in development. Keynes, who emerged from the rubble of the post World War I economy, advocated increased government spending to boost economies. His advice was not desired by leaders. The creator of macroeconomics did not live long enough to see that it had become fashionable to say "I am Keynesian." The world is full of true voices, not necessarily prophetic, that are muffled in favour voices that influential people want to hear.

The Ethiopian government has weathered numerous pressures to privatize some of its big business involvements, such as the Ethiopian Telecommunications Corporation and its banks; it has resisted stern warnings from the IMF and the World Bank to reduce government spending on public infrastructure, mainly roads, but also buildings. The wisdom of the latter advice, meant to curb sharply rising inflation, is yet to be seen. The government may have proved to be the wiser to reject an advice that was probably no more than telling someone to stop exercising so that his muscle cramp will not get worse. Whenever pressured to change policy, the prime minister, at least publicly, loves to tell the important donors that they can keep their money if they wanted.

A certain amount of liberalization would very certainly be welcome. At the same time one might question the wisdom of privatising a financial giant such the Commercial Bank of Ethiopia, whose customer satisfaction is unmatched by any private bank and whose profitability seems to grow by the year.

A developmental state is different from a capitalist state, because there will be a significant government presence in it. So a developmental state like Ethiopia can have its own developmental regulatory mechanisms to manage a more liberalised economy, thereby fostering its own version of an economic system that encourages overall development. Ethiopia's leaders are often unperturbed by claims of growing urban poverty, or, as some put it, rural growth at the expense of urban livelihoods. They say they have a pro-poor development policy that is enabling double digit growth over the years.

The problem with such states is that the likelihood of building democratic values is limited; the way such states are run is in itself a hindrance in their developmental endeavour. The state presence that is inherent in the idea of a developmental state is a threat to democracy unless it is ensconced in democratic values in the first place.

Nevertheless, that does not make the imposition of any policy suggestions which draw "principally on existing literature" any more palatable. For some, it seems, economic policy is a remedy based on the symptoms and not the actual problems.