Anyone who may have been present at the United Nations Economic Commission (UNECA) Conference hall on the morning of April 29, 2014, could have felt the tension filling the sphere. In a gathering that saw most of the high-level representatives of foreign agencies and embassies, dubbed development partners, in the parlance of the ruling Revolutionary Democrats, the National Human Development Report (NHDR) 2014 was officially released.
The report that came 15 years after its predecessor, very long by any standard for such kind of analytical outcome, seems to have garnered so much attention within the policy circle. The large crowd of policy gurus present at the launching event showcased this.
Cherishing the event was Mulatu Teshome (PhD), president of the federation known for his keen interest in development issues, a bit mainstream as compared to his environmentalist predecessor. It was not the rather humble and appreciative speech made by the president that attracted the attention of the development movers and shakers who gathered at the historic hall built by the last monarchy. It instead was the largely technical and rarely bold speech of Mekonnen Manyazewal, commissioner of the National Planning Commission (NPC), often considered as a darling of the development partners. In his unrehearsed reflection on the Report, Mekonnen said his government does not agree with some aspects of the report, mainly the finding on the non-inclusivity of the nation’s growth experienced over the last 12 years. Mekonnen was also forceful in indicating how much the report failed to account for the historical legacy of inequality in the various regions of the country.
It was indeed a speaking of the mind for the largely tactful Mekonnen, an experienced development policy guru who served as State Minister for Finance & Economic Development (MoFED) and Minister of Industry (MoI), before being appointed as Commissioner of the newly formed NPC. The case stands out as typical, considering the fact that the Report was conducted with the participation of key staff of the NPC.
On the one hand, it seems that the NPC has allowed the Report to go official without change for it presents the facts on the proud. On the other hand, it seems that the core team of the report, including those from the NPC, was independent enough to speak its mind.
Of course, partly, the United Nations Development Programme’s (UNDP) standard for the preparation of National Human Development Reports (NHDRs) might have helped infuse professional independence in the process. Analytical independence and national ownership are the two key guidelines. This is not to mention the rigorous peer review mechanism. The process that the report passed through before making it to the limelight was as tough as the acceptance it received from the government.
In total, the effort to produce a NHDR took about six years. So many repeated iterations by commissioned consultants, including the Ethiopian Economic Association (EEA), ought to have been done, before the latest report, stirred by a multi-stakeholder technical committee.
In light of the previous versions, most of which were compilations of data from administrative sources, the latest report is technically upbeat.
It is not only the methodological integrity of the report that has improved over time, but also the boldness of its policy recommendations. Departing from the largely conciliatory tone of its former versions, the official NHDR has adopted an independent tone. It is this very shift in technical integrity, language and structure, that seems to have taken the report to the limelight.
In terms of findings, the report admires what it called an “impressive growth” of the nation. It claims that the nation’s gross domestic product (GDP) has witnessed 10.9pc growth rate over the 15 years up to the 2012/13 fiscal year. This growth, the report reads, has helped the nation witness considerable social and economic changes.
In a finding that seems to largely boost the morale of the Revolutionary Democrats, the report goes on to say that the pro-poor investment of the nation has helped reduce poverty in both rural and urban areas. A total of 2.5 million people have been lifted out of poverty since 2005, according to the report. This means poverty incidence had declined to 26pc in 2012/13. Social services, from education to healthcare, have also seen considerable improvement over the years.
If one is to go by the findings of the report, Ethiopians are cherishing improved access to basic services and are living a better life. But the good news ends there.
The very growth that is impressive in numerical terms is not inclusive, the report identified. Development is occurring slowly in certain socio-economic groups and growth is not evenly distributed across the country. The number of people living under absolute poverty remains the same, at 25 million, and most of those living over the poverty line are very vulnerable to fall back to the poverty trap, according to the report. Even worse, poverty severity – the magnitude of the hardship poor people feel – continues to increase in the country.
In light of these latter findings, it is understandable why officials, including Mekonnen, went on the offensive. After all, the findings stand in direct contrast to what they have been declaring at every opportunity they find. For them, then, it is not just about credibility, but about political returns.
In a way, the findings are not new. Various studies have been showing that the growth benefits are concentrating within certain socio-economic groups. Social service inequalities, between regions and income groups, have been widening. It has also been said for long that the income side of the growth is increasingly seeing unevenness due largely to inflation and unemployment.
What the latest report does therefore is to compile the scattered studies and give them a boost in terms of evidence base. Considering the importance attached to NHDRs, then, the completion cannot be easily sidelined by policymakers and politicians.
By and large, it seems to be time for the Revolutionary Democrats to avoid their conventional tactic of sidelining research results that do not support their rhetoric. They may benefit from giving attention to what critics are saying. They can leverage the findings of professional reports, such as the latest NHDR, for better developmental results.
Both the reality on the ground and the research results are shouting out loud for a reconsideration of the economic policy in favour of inclusiveness and balance between the private and public sectors. It would be naive of them if they are to wait for such a time that the inequalities, distortions, imbalances and biases of the economy grow stronger and begin to haunt them.
It does not need rigorous economic analysis to see that inequalities are challenging the very economy the Revolutionary Democrats are overseeing. A journey to the border of the country, in any direction, or a drive through any of the cities of the country can show that the wealth divide is growing in leaps and bounds. Complemented with economic distortions, such as inflation, and policy complacencies, such as the lack of good governance and growing corruption, it is obvious that the inequalities have become too big to maintain the sustainability of the growth.
With the NHDR on the table, then, the Revolutionary Democrats, predicted to be the winners of the upcoming election, will have the job of reconsidering their lines about growth. They will be expected to come up with policies that can effectively reduce poverty, enhance productivity, create more jobs, and empower the private sector. Failing to do so will certainly be politically costly for them.
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