Ethiopia needs more than peace talks
Washington’s new special envoy for the Horn of Africa, David Satterfield, and Assistant Secretary of State for Africa Molly Phee, are heading for Ethiopia this week. They are doubtless buoyed by some rare good news from the country: Prime Minister Abiy Ahmed has released some political prisoners, toned down bellicose rhetoric against the Tigrayans who are fighting fiercely in the country’s 14-month-old civil war, and spoken with President Joe Biden for the first time. Abiy also gave a green light to the African Union’s high representative, former Nigerian president Olusegun Obasanjo, to meet with the leaders of the Tigray People’s Liberation Front.
The shifts are real. The center of political controversy in Addis Ababa is no longer the Tigray war but the question of whether Abiy will be able to corral enough of the Oromos — the country’s largest ethnic group — into his planned “‘national dialogue.” The position of Jawar Mohamed, a leader of the Oromo democratic movement and committed federalist, now at liberty after 18 months in prison, will be crucial. Abiy is now wooing the splintered but still vigorous Oromos, speaking positively about the federal constitution, and distributing promotions to army officers — many Oromos — like confetti. In doing so, he also surprised and antagonized the unionist constituency, mostly Amhara ethno-nationalists, who had been the most hardline supporters of the war on Tigray, some of them indulging in blatantly genocidal rhetoric. Planned festivities in Addis Ababa and Amhara region cities to celebrate “victory” were abruptly called off.
Abiy’s maneuvers caught many Ethiopians off guard and won him some room for maneuver. Western diplomats are hopeful that peace negotiations with the TPLF may now be in prospect; Kenyan President Uhuru Kenyatta has been active behind the scenes. In his talk with Abiy, Biden stressed the need for humanitarian access to the starving in Tigray, halting human rights abuses, and the need for peace.
Nonetheless, the war rages on. Following the Tigrayans’ withdrawal of their forces from neighboring regions last month — under pressure from the United States as well as onslaught by newly-acquired swarms of drones — fierce fighting has continued. The Ethiopian army stalled its ground offensive into Tigray, but air strikes continue on a daily basis, killing scores of civilians.
Abiy and Eritrean President Isaias Afwerki have not relaxed their starvation siege on five million people. The most recent United Nations food assessment for Tigray was in June last year, and it forecast widespread famine within three months if aid were not delivered at scale. Abiy has permitted only 12 percent of needed aid to go in. For six months, the official figure for the starving has remained unchanged at 400,000 — a number that is no more than a desperately optimistic guess given the dreadful logic of famine. Last week, the World Food Program reported that its warehouses in Tigray were empty, while Tigrayan doctors detailed the near-total collapse of health services. Not even insulin for diabetic patients is allowed on the UN’s sole weekly supply flight. Ending the famine was top of Biden’s talking points when he spoke with Abiy on January 10.
For Abiy’s close ally Afwerki, political dialogue, prisoner releases or federalism are anathema, and he made clear his contempt for Abiy in a rare television interview earlier this month. Isaias remains determined to crush Tigray. His troops are still fighting inside Tigray, and his agents are all over Ethiopia, sowing discord and running illicit businesses.
These issues make for a full agenda for Satterfield, Phee and Obasanjo. But it’s important that they don’t mistake short-term maneuvers for a fundamental and essential political reorientation. Abiy is like a skilled seaman who can keep his ship afloat, but he’s not a navigator who can steer it to a destination.
What explains Abiy’s latest maneuver is that he has run out of money. Alongside the disintegration of the unified national army and the fever pitch of ethnic mobilization, bankruptcy portends protracted state crisis, perhaps collapse.
When Abiy took office four years ago, Ethiopia’s economy, following an East Asian “developmental state” model, had been growing at nine percent annually for a decade. Now it’s a basket case: growth in 2021 may be just two percent, and the uncertainties are such that the IMF hasn’t made any forecast for 2022. Having overspent massively on the 2021/22 budget (the fiscal year runs from July), the government presented a supplementary budget to parliament in December. Grants and loans have dried up; its credit rating is rated “junk;” and the country is considered “uninvestable” by the private sector. Despite desperate lobbying, Ethiopia lost its beneficiary status under the U.S. African Growth and Opportunity Act on January 1 due to its gross human rights record. Abiy boasted that he could always turn to other allies, including China, Russia, and Middle Eastern countries. But while they may offer him cash in hand and discounts on weapons sales, none will bail out a failing economy in a nation of 115 million people. Only the Atlantic powers and the Bretton Woods institutions can do that.
Ethiopia needs a rescue package to stave off galloping inflation, restructure its debts and keep the lights on. The donors won’t step up while it spends all its resources on the war.
Most urgently, Ethiopia is facing a nationwide food crisis. According to the USAID-funded Famine Early Warning System Network, “expanding conflict and prolonged drought [are] expected to drive record-level and extreme need in 2022.” Alarms don’t come more explicit than this. The FEWSNET map shows emergency and crisis food insecurity across half of the country. Faced with a crippling harvest shortfall six years ago, the government mobilized a rapid and effective response. It wasn’t just a humanitarian effort — government leaders feared that a 50 percent hike in the price of food would lead to unrest and endanger the regime. Food price inflation recently hit 40 percent.
It’s Western nations, especially the United States, that fill Ethiopia’s emergency food basket. They insist that the government feed the starving in Tigray as well as the hungry in the rest of the country.
Abiy’s political challenge is encapsulated in the name of the Prosperity Party he leads. It’s both a nod to his Pentecostalist faith and a promise of material rewards to his followers. When he took office in 2018, Abiy entranced Ethiopians by telling them that everyone could have everything, once the magic of the free market worked its wonders and the corruption of the previous regime was rooted out. But his real sorcery was a one-time fire sale of state assets. He doled out prime real estate in return for political favors and began selling off the crown jewels of the developmental state, notably the government-owned telecoms.
In fact, the war on Tigray was not only a power struggle but a huge grab of land and assets. The internment of Tigrayans in Addis Ababa en masse late last year amounted to a massive shakedown, as their businesses have been confiscated and they are extorted to pay bribes to make phone calls, get medicine or — if they can afford it — buy their release.
Eritrea grabbed its share of the spoils by pillage. It also snapped up Tigrayan companies and runs illicit foreign currency exchange schemes. To recapture the hard currency from remittances — Ethiopia’s most reliable source of dollars — the Central Bank of Ethiopia is contemplating a new parallel exchange rate. Unconcerned with the stability of the Ethiopian currency, Eritrea will be a ruthless rival in that market.
Abiy is adept at managing the urban elite through the autocrat’s classic playbook of coercion and patronage. In the provinces, his coercive options are limited because security is in the hands of regional ethnic forces whose loyalty isn’t to him. And Abiy has probably left it too late for financial stabilization. The region’s merciless political operators are circling around a wounded and weakened leader, expecting him to stoke political disorder because he thinks he can zigzag more smartly than his rivals. That may be correct, but that way lies protracted instability — saving a government by sacrificing a functioning state.
The transactional politics practiced by Abiy and his backers is possible only with a solid macroeconomic foundation. The Ethiopian state is failing because that foundation is crumbling, and the help needed can only come from America, Europe, and the international financial institutions they still control. Washington has strong cards to play, if it wishes to play them.