Will Ethiopia Finally Achieve Its Potential?

Ethiopia, a key strategic partner of the United States in the Horn of Africa, is in the process of a remarkable turnaround. Under the leadership of Prime Minister Abiy Ahmed and his “reform agenda,” the nation is transforming itself from a statist, authoritarian regime in a state of perpetual “no war, no peace” with its neighbor Eritrea to the north, to an example for the rest of Africa due to its strong economic growth, democratic governance and regional stability.

It is a place where private investment is being welcomed, educational opportunities are flourishing and women are finally being seen as equal contributors to national development. In addition, the 20-year border conflict with Eritrea has ended, with Ethiopia accepting the final decision of a UN border demarcation commission that awarded most of the contested territory to Eritrea.

It is an Ethiopia that is vastly different from the one I experienced during my first tour in the country from 1983–1985, when the brutal Communist Derg regime welcomed the Soviet Union as its key partner, displaced millions of people in forced resettlement schemes and murdered tens of thousands of others. Hundreds of thousands of Ethiopians fled the country during that time, and many resettled in the United States, creating the first major Ethiopian Diaspora.

When I later served as Ambassador to Ethiopia from 1999–2002, the country was outwardly friendlier to the United States, but it was still led by veterans from the movement that ousted the Marxist dictator Mengistu Haile Mariam. At their core, the leadership didn’t trust democracy, free elections or market economics. They much preferred maintaining a Chinese-style authoritarian regime and state-controlled economy.

Ethiopia’s strategic position in the Horn, coupled with its willingness to contribute to four peacekeeping missions in the region and combat international terrorism, has always made it an enticing military partner for the United States. But now, Abiy’s reform agenda offers opportunities for partnership in many more areas, including trade and investment; higher education; security and judicial reform and support for stronger democratic institutions, including free and fair elections and a vibrant civil society.

Now serving as Assistant Secretary of State for African Affairs, I am proud to say that the United States is helping to facilitate this renaissance.

I knew something big would have to happen to allow Ethiopia to break free and maximize its potential. With the selection of Abiy as prime minister, that moment may be at hand.

Ethiopia is in the midst of a reform movement that is breathtaking in its speed, scope and ambition to improve practically every facet of the economic, political and social life of its citizens. These reforms offer the chance for Ethiopians to achieve what many have always wanted for their country: greater political engagement and opportunities and the chance to establish long-term peace and prosperity.

Since coming to power last year, Prime Minister Abiy has already released thousands of political prisoners and journalists, formalized peace with the country’s longstanding adversary Eritrea, lifted many restrictions on civil society and decriminalized opposition groups. It is this drive for national reconciliation that makes his leadership so unique—and so promising.

However, though Abiy’s popularity is high, his position remains tenuous as his shakeup in the higher echelons of power has unsettled much of the political elite. Furthermore, some of his reforms have exacerbated communal tensions. Success in the long run will require strong leadership and adaptive approaches to governance.

Nonetheless, other countries are watching and responding. In light of Ethiopia’s economic growth rate of 9.2 percent in 2018—one of the fastest rates in the world, let alone Africa—previous inhibitions on foreign direct investment have been eased, if not entirely satisfied. The U.S. Chamber of Commerce recently led a high-powered U.S. business delegation to Ethiopia that identified several promising investment opportunities. An Ethiopian Partnership Forum organized by the State Department attracted a standing-room-only crowd of hundreds of American businesses, including some from the Ethiopian diaspora community.

Abiy’s actions are creating a buzz around doing business in Ethiopia. He broke from Ethiopia’s longstanding state-controlled economic model and announced the privatization of major state-owned enterprises such as the telecommunications company and the national airline; he also proposed legislation to liberalize the marketplace. New legislation creating an independent telecom regulator opens the long-closed door to foreign investment in that critical sector. He has announced his intention to finalize World Trade Organization accession, introduce capital markets and reduce the time imported goods spend going through customs. The shift in economic policy is driven by the real need to build an economy that can provide economic opportunity to 70 million young Ethiopians.

While the government of Ethiopia looks to increase the role of light-manufacturing in its economy, it also recognizes that agricultural growth remains an important driver of poverty reduction. The United States provides assistance through the Feed the Future initiative, which promotes food security, nutrition and economic growth at every level from field to fork. In Ethiopia, Feed the Future links food producers to markets and finance, facilitating private-sector investment and enhancing vulnerable populations' capacity to take part in and benefit from these transformational changes. With over $10 million in loans, we helped more than 300,000 Ethiopian farmers adopt new or improved agricultural technology, increasing sales by nearly $8 million in 2018 and creating more than 15,000 full-time jobs.

But that is only part of the important role the United States is playing. In fact, the United States is the largest bilateral donor to Ethiopia. Through USAID alone, we have invested more than $4 billion in humanitarian assistance and development programs over the past five years that improve health and education, strengthen food security and community resilience and help people across the country become more self-reliant and lead healthier and more prosperous lives.

However, to sustain this economic progress and attract increased foreign investment, democratic governance and an active citizenry are also key. Indeed, the Ethiopian government has encouraged U.S. organizations, such as the National Endowment for Democracy, to return and work alongside Ethiopians to regenerate a vibrant and constructive civil society.

Abiy himself has suggested that Ethiopian prime ministers should adhere to strict term limits, has acknowledged past serious human rights abuses and has committed to holding free and fair elections.

The reform agenda has identified Ethiopia’s “weak democratization and justice system” as a primary obstacle to development. To help Ethiopia address these challenges, the United States launched several new activities over the last year. Notably, we are supporting the National Elections Board of Ethiopia as it prepares for national elections in 2020. In addition, we are helping to build the capacity of the Attorney General’s Office to successfully implement legal and judicial reforms. These activities will be instrumental in the revival of a vibrant civil society and a responsible media in Ethiopia.

These developments are also having a positive effect on the participation of women in the country’s move forward. Women now fill half of Ethiopia’s cabinet and 37 percent of its legislature. Ethiopia also has its first female president, Sahle-Work Zewde. These are milestones undreamed of just a short time ago.

Furthermore, Abiy understands that Ethiopia’s economic future depends on integrating its economy with those of other countries in the region. He has thus prioritized making attempts toward goodwill with his neighbors, not only for Ethiopia’s economic well-being, but also with an awareness of the fact that his reforms could lead to greater democratization on the continent.

He also recognizes that unlike many African publics who are primarily focused on economic concerns, Ethiopians also want their government to prioritize security. Here, Abiy pioneered a new approach to peace in the Horn of Africa, first establishing a rapprochement with Eritrea and then brokering the agreement that ushered in the Sovereign Council of Sudan, ending months of pro-democracy protests. He has initiated a process of modernization, de-politicization, professionalization and civilian accountability in his security services, for example, abolishing the Ministry of Interior and replacing it with a Ministry of Peace. Central to the reset in Ethiopia’s security operations is an overt commitment to striking the right balance between allowing Ethiopians to exercise their rights while maintaining respect for the rule of law and public peace.

Leaders of the security services have reached out to American counterparts to improve cooperation and partner more closely on critical issues such as counterterrorism, peacekeeping and security sector governance reform. Again, the United States is doing its share to assist Ethiopia in stabilizing the region. Recently, U.S. Army Africa and the Ethiopian National Defense Force co-hosted the Justified Accord 2019 exercise, designed to enhance the capacity and capability of peacekeeping operations in support of the African Union Mission in Somalia (AMISOM).

Although much progress is being made and so much hope is being expressed, skepticism remains. For example, Freedom House recognized the positive potential for democratic reforms under Abiy’s leadership, but it continues to label Ethiopia as “not free.” Much of this could be attributed to recent history in the country or the regional track record, but it is evident that work is still to be done for Ethiopia to be considered fully free.

With the forward momentum on so many issues, and Abiy’s leadership to help take it there, Ethiopia’s success or failure will have ramifications for the rest of the continent. Ethiopia is grappling with an increasingly wired and sophisticated youth population seeking jobs, opportunity and the same future as their counterparts in Europe, Asia or North America.

The challenges will continue, but if more come to believe—as I do—that Ethiopia is finding its place on the world stage, then the dividends of success will be grand indeed, not only for the country, but also for the continent.

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Ambassador Tibor P. Nagy is the Assistant Secretary of State for the Bureau of African Affairs and has spent 32 years in government service, including over 20 years in assignments across Africa. He served as U.S. Ambassador to Ethiopia from 1999 to 2002, U.S. Ambassador to Guinea from 1996 to 1999 and Deputy Chief of Mission to Nigeria, Cameron and Togo.