If there is one thing that worries the echelons of power within the tiers of the EPRDF, it is the task of putting together a working plan for the next five years. The attempt to replace the first generation of Growth & Transformation Plan (GTP), the most popular five-year plan ever, has been going on for the last year. Key people from the camp of the Revolutionary Democrats, including those gathered around Prime Minister Hailemariam Desalegn as policy and special advisers, have been struggling to craft the planning document ever since the days of the late Meles Zenawi.
For one, the plan comes after a sweeping election from the side of the ruling coalition. A complete dominance over regional and federal legislature means that the expectations are high. It also means that there is no way to predict where the opposition for the upcoming plan might arise. The whole balancing act is, therefore, left to the centres of power within the ruling party.
What makes things even more complicated is the fact that the acclaimed policy genius of Meles is not around. As much as the planning process, now at a public consultation level, could benefit from the analytical works of the late premier, the actual intervention of Meles could not be leveraged. Certainly, this will make the task all the more difficult for the planners.
Of course, this is not the first planning experience for the nation. It has been about 60 years since the first medium-term plan was crafted by the Imperial Regime. Much of the planning framework in the nation was designed and realised by the last monarchic regime. After the overthrow of the monarchy by a popular revolution, the military junta that took power maintained the planning practice. The practice under the military regime entailed crafting 10-year plans, from which subsequent five-year plans are derived.
The whole task of crafting such plans was also bestowed to the ministries of planning and cooperation in both regimes. This, of course, is not to mention the frequent mergers and splits these ministries have seen during those days. Even then, the whole planning framework stayed intact between the two regimes that had distinguishable structural differences.
As they overthrew the bloodiest military dictatorship after 17 years of war, therefore, the EPRDFites inherited somewhat intact planning framework and experiences. This was one, if not the only one, of the strongest systemic elements that they have inherited.
Partly due to their socialist inclination and partly due to external factors, such as the push from the Bretton Woods institutions, the EPRDFites maintained the planning structures and framework. This does not mean that they have not made any adjustment to it, though. As their politics was directed at regional self-administration, an upshot of the federalism hoopla, they redirected the whole planning effort to regional planning.
In merging the ministries of finance, and economic development and cooperation, under the banner of the Ministry of Finance & Economic Development (MoFED) in mid-1990s, then, regional planning stood as one of the priorities. It had a departmental structure under the ministry. And much of its task was dealing with regional infrastructure development, budgetary allocations and economic revitalisation. Since that was a time of transition, from a war-torn economy to a relatively stable nation with somewhat consolidated government, not to mention the war with Eritrea that came in the middle of the period, the whole focus of planning at the time was reconstruction.
It took almost a decade before medium-term planning came to the scene again. And the introduction has a lot to do with the poverty reduction strategic programme (PRSP) of the International Monetary Fund (IMF) and the World Bank, largely a follow-up to the widely discredited Structural Adjustment Programme (SAP) of the 1980s and 1990s.
The EPRDFites were quick to adopt the PRSP effort. Not only have they resurrected the planning framework they inherited, but they also made the whole process the centre of their governance. Three generations of plans, one with three years of life and two with five year spans, have since been introduced. The latest one, GTP-I, is on its final days, leaving naysayers with much to analyse and comment on.
From the outset, the first generation GTP was criticised as being overly ambitious. Its targets were widely considered as wild with no clear sources of growth. Experts were dismissive of the 11.4pc and 14.1pc base and high case growth targets, respectively, considering them as “moving targets”. Similar criticism was heard on exports, local resource mobilisation, energy generation, economic infrastructure and social service targets. Though a comprehensive assessment of performance is yet to come, it is obvious that little is there for the EPRDFites to be happy about. Serious shortfalls remain within the major economic and social spheres.
It is not all about the targets, though. As important as the targets, is the very planning process that is churning out these economic blueprints. Indeed, the nature, independence and functionality of the planning structure matters. One caveat that has constantly been disturbing the waters is the interference of politics in the planning process. And this is especially so when it comes to the policy matrix of the plan – a key document that guides the macro aspect of physical planning.
In all the past medium-term plans, and especially in GTP-I, politics has played a distortionary role. Targets have been inflated, promises have been stretched, and commitments overrated to unrealistic levels by virtue of the influence of politics. It is politics that took targets to the corner of “ambitious, but achievable”, in the parlance of the EPRDFites.
In the crafting of GTP-I, for instance, the original plan was inflated after the post-election speech of Meles, wherein he promised to deliver a plan that lived up to the elation of the electoral result. It all went as the speech promised, even if major donors criticised it as being unrealistic. In a way, then, politics prevailed over economics.
It seems that the situation is to be repeated in planning for the second generation of GTP. Signs are that the EPRDFites are trying to give their political prerogatives more weight in the plan than the economic realities. Word has it that the plan will be no less ambitious, even if many of the targets included in the preceding plan were not realised.
It would be naive to imagine a planning process that remains purely economic. Politics will always have a role in the planning process. If anything, what needs to be debated is how much of a role and the direction that it takes.
Under the leadership of the EPRDFites, the depth of the politicisation of planning has been increasing, over with time has reached to a point where the distortionary impact is making the plans almost mere wish lists. One needs no more evidence of this than the export and energy production targets of GTP-1 that happened to have a less than 40pc and 10pc achievement rate, respectively.
Therein lays the risk for GTP-II. Considering the shortfalls of GTP-I, letting politics have an unnecessary role in the planning process will be disastrous to the economy. It will lead to worse structural earthquakes in both the economic and political front. This, in economic terms, entails piling debt, widening trade deficit, foreign currency crunch, negative balance of payments, huge budget deficit and hyperinflation. The political ramifications of the widening gap between planned targets and achievements, is public disappointment and a growing sense of insecurity.
Hence, it is vital for the EPRDFites to reduce the distortion in economic planning. They have to let economic realities guide the whole planning exercise. Politics ought to be limited to giving guidance to the whole process and creating an effective operational system. It is by containing the distortionary impact of politics that a credible and realistic plan could be crafted.
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