About this White Paper
The rise of Prime Minister Abiy Ahmed in 2018 unleashed an unprecedented series of political reforms in Ethiopia. Following years of unrest and a prolonged state of emergency, the opening up of the political sphere has led to concrete results, including peace with neighboring Eritrea, the release of political prisoners, the repeal of restrictive media and civil society laws, and the return of exiled political opposition parties. However, little has been said about the economic vision of Ethiopia’s new generation of leaders. Former Prime Minister Meles Zenawi was a strong advocate of a “democratic developmental state,” an ambitious program of centrally coordinated, top-down industrial transformation deriving its legitimacy from broad-based economic growth rather than from competition between opposing parties and interests. This approach to economic governance, stemming from the ruling party’s revolutionary guerrilla roots, has overseen a remarkable reversal of fortunes for the Ethiopian economy. However, its limitations have also become obvious: macroeconomic imbalances are piling up, while the authoritarian nature of the Ethiopian developmental project played a major factor in the regional unrest around the country.
As a new generation of leaders is taking over at the helm of Ethiopia’s economic institutions, the issue of Ethiopia’s future economic model is again on the agenda. Prime Minister Abiy’s government has taken a pragmatic approach, combining a rhetoric of reform with de facto continuity in many areas. But what does the long-term policy framework look like?