17 February 2013

Ethiopia: Risky Military Resurgence


Our fair nation has been talking about its military might for most of the past week, where Addis Abeba hosted a military exhibition. The technological advancements of the national defence forces were on display, exuding the feeling that we are all living in a socialist country.

For a young man who witnessed only a glimpse of the pseudo-socialist era, the week brought back the horrible stories told by the older generation. Yet, it is easy to tell the difference between the two since the rhetoric, and of course the display at the exhibition, portrays the forces as guardians of peace and development. Indeed, the whole scene showed the unparalleled advancement of the forces.

For a nation that experienced hegemonic, incompetent and corrupt defence forces, both during Emperor Haileselassie's and the Dergue regimes, building a force that has managed to be a power house of technological innovation is something to be proud of. Reorienting the whole defence strategy towards development is also an achievement that the Ethiopian ruling elite, and particularly the late Prime Minister Meles Zenawi, should be recognised for.

With the dawn of the era of military resurgence, however, comes an era of market suppression. And that is exactly what was revealed in last week's showcase.

The national defence forces have now branched out into scores of corporations that manufacture and sell different products, from television sets to tractors. They seem to have grown into corporate beasts with a superior advantage in skills. Therein lays the risk they would bring to the private sector of our fair nation.

If the story we have heard and seen in the past week is anything to go by, the capacity possessed by the forces is not one that should be taken lightly by the Ethiopian private sector. Operating with a very low skill base and constricted capital the Ethiopian private sector lives each day struggling for survival, a state that is made cumbersome by the addition of new regulations.

Hence, its competitive capacity is very limited. Let alone competing with the corporations of the defence forces, which, for obvious reasons get preferential treatment from the state, the Ethiopian private sector cannot plan its survival under purely competitive market conditions.

The resurgence of the defence forces is then an eminent threat for the private sector. No matter how much they are said to be developmental- a word often employed to depict economic sympathy although it does not exist in textbooks-they would have a crowding out effect.

My visit to the exhibition, which saw its completion on Sunday, February 17, 2013, has shown me nothing but the unsuitable growth of the defence forces, which is headed towards eventually overwhelming the market with their dealings. They seem intent on leaving their fingerprints in every corner of the economy. Amazingly, they look as if they are proud of seizing the opportunities that ought to be reserved for private investors.

Of course, there is no denying that the Developmental State model of the ruling elite has rightly served the forces and enabled them to be mighty market players in and of themselves. Their inclination towards the production of capital goods rightly shows this. There is no justifiable economic reason for a defence force to get engaged in the assembly of flat screen televisions and four-wheel drive vehicles, whereas it could fulfil the demand by contracting it out to private companies. I could not understand which theory of economics would make the production of water pumps by defence forces more viable than production by private companies.

It is only in the Asian, especially Chinese, model that the defence force would have such market influence. All other developed nations have forces that effectively link themselves with the private sector.

They outsource tasks for the private sector rather than doing it themselves. Amazingly, they do so even if their private sectors are too big to compete with any establishment, globally, let alone locally.

This should have been the model followed by our defence forces. Instead, they have settled for a model that suppresses the private sector, crowds it out of the market and threatens its existence.

Certainly, the resultant outcome of the model would not help the economy. It would deprive it of an essential strand that would have ensured its sustainable growth and expansion: a vibrant private sector.

After all, a free market economy does not exist in a world that is developed and sustained under the stewardship of mighty defence forces.

Getachew T. Alemu Getachew T. Alemu Is the Op-Ed Editor

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