Ethiopian PM embraces 'strong developmental state'

Ethiopian PM embraces 'strong developmental state'
AFP

February 6, 2007

LONDON -- Market reforms in Africa at the urging of Western institutions have not succeeded and a "strong developmental state" is the best way forward for Ethiopia, the country's prime minister said in an interview published in the Financial Times Tuesday.

According to Meles Zenawi, "neo-liberal" reforms pushed by the World Bank and other institutions in Africa have failed to "generate the kind of growth they sought."

"I believe in a strong developmental state," Meles told the business daily in an interview conducted in Addis Ababa. "Developmental states do not intervene in the market in a wanton fashion. They intervene in the market to address pervasive market failures. It is a combination of market instruments and non-market instruments to optimize the outcome. That has been the model of, let's say, Korea and Taiwan," he said.

Meles outlined his reluctance to liberalize the mobile telephone market, telling the FT that mobile telephony "is a license to print money in Africa."

"The issue is how do you use that money. Do you use it to build less profitable but in [the] long term more important infrastructure? We are investing in the future in spite of the fact we are begging for food aid at the same time."

The prime minister also defended China's willingness to lend money to African states without demanding improvements in governance or other indicators, saying: "I think it would be wrong for people in the West to assume that they can buy good governance in Africa."

"Good governance can only come from inside; it cannot be imposed from outside. That was always an illusion. What the Chinese have done is explode that illusion."

"It does not in any way endanger the reforms of good governance and democracy in Africa because only those that were homegrown ever had a chance of success."

Meles told the FT that Ethiopia had attracted about $500 million in concessional loans from China, along with $1.5 billion in investment for telecoms infrastructure, and an extra $1.5 billion in short-term trade credits.

Middle East Times