In one of his recent but rare press conferences, Prime Minister Hailemariam Desalegn spoke of his frustration over the lack of development in troubled South Sudan, and the battle to overcome poverty at the home front. Nevertheless, he said he remains content in his two-years at the helm of political power in Ethiopia, where he sounded dismissive over opposition parties’ outcry over lack of political space and persecution in the run up to the national elections in May 2015. Like his predecessor, the late Meles Zenawi, he was combative toward international rights groups critical of the human rights records of his party and government, while being too optimistic with his bureaucratic engagement to address public discontent as he was upbeat about Ethiopia’s relations with Egypt. Delighted with the effect of the public diplomacy journey to Cairo, Hailemariam snubbed President Ismael O. Ghelleh of Djibouti’s call for economic and political integration with Ethiopia. Following is excerpts:
Fortune: There were times when there were many opposition members in Parliament raising different issues, while policy options were being talked about. Today, there is only one opposition member in Parliament. Where do you see the multiparty system going? Are we going backwards to a totalitarian state? Do you see hope that many opposition members will enter Parliament after the coming elections?
Prime Minister Hailemariam Desalegn: These are the usual questions that we are asked that is to replace the people. Multiparty democracy is gauged in terms of the process of the elections; not the result. It is a misunderstanding by those who want to have only results as a yardstick to measure democracy. Democracy is simply building a democratic culture. It is not something that you can take in one day and instruct so that everybody starts to be democratic. Anyone who understands the fundamentals of democracy knows that it is the masses who should determine how many seats should be committed to the ruling party and to the opposition. Who am I to decide for the people?
Democracy in general, and multiparty democracy in particular, is an existential issue for this country, which is a multi-cultural, multi-ethnic, and multi-religious,where there are many interest groups and individuals whose interests need to be addressed through a democratic system. It is an imperative that we have a multiparty democracy representing these interests. If we do not have a proper multiparty democracy, this country is going to end up like Somalia.
We are very keen to ensure that the multiparty democracy flourishes; and there is no direction that the government backtracks from democratic discourse. It is not failing; it is thriving. It will continue to flourish with all its limitations. We sense that this is a fledgling democracy that demands to be improved every time, that we have adequate room for parties to practise their rights.
Obviously, EPRDF is a dominant party and its social base is in the farmers, small and micro enterprise developers and the majority of city dwellers. We recognize that there is just about lack of engagement from our side with the upper strata of the community in this country; and we are attempting to engage them in a vast way. But we are not certain whether we can take enough votes from this part of society.
Q: Some of the opposition political parties accuse the government of imprisoning their leaders and members as election is drawing near; and suppose that the political space is constricted.
Legally registered parties have freedom to operate and run. When we talk of the leaders of political opposition parties arrested, there are few who have connections with outlawed terrorist organizations such as Ginbot 7, ONLF, OLF and Al-Shabaab. We are going to continue with this because our primary obligation is to make our people safe and secure. We advise legally registered and operating opposition party members to cleanse themselves and their leadership of such associations with these terrorist groups. If we have evidence that there is a connection, obviously, the government is going to take action in bringing these guys into the court of justice. We cannot be blamed for this because we are elected to safeguard and make sure that the safety and security of this nation is noted.
Q: Institutions such as Amnesty International, Human Rights Watch, Freedom House and also Committee to Protect Journalists are issuing statements and reports against your government in connection with the election. What sort of significance would this hold in the upcoming elections that will take place in 2015?
These organisations have gone on with their effort because they have agendas, such as their claims on land grab and that there are evictions of farmers from their ancestral soil and therefore the indigenous peoples’ right has been jeopardised. It is an allegation which has been determined and proven wrong by the diplomatic community in Addis Abeba, time and again. The movement is ideologically driven; and we can never reconcile our ideological position because Ethiopia pursues a democratic developmental ideology not willing to embrace their neoliberal ideology. In 2005, they had tried to call down a colour revolution but they failed.
Now the election has come and they are in similar processes of engaging themselves to create a colour revolution, which the people of Ethiopia and the government will not allow to happen. We are now in a right situation where our people do not want to have havoc and street action; there is democratic room for everyone to engage. We are dedicated to having democratic, free and fair elections in the coming season. The camel is going forward and the dogs will continue to bark.
Q: How comfortable are you to enter into an election where there is massive public discontent over the issue of good governance, public service provision, rule of law, serious and repeated reports of abuse by law enforcement agents? We all see that there is this huge discontent of the public and voters that is no less than 2005.
We are always with the people where we have a number of engagements with different sections of the society. We do not have that conclusion you have made that there is discontent similar to that of 2005. Yes, there is discontent from the public in terms of services that the government has to render in areas such as electricity, water, telecom, and transportation provisions as well as some areas like the justice system. There is some discontent with the courts in their handling and there are some other complaints in service delivery in some government offices. All this is true.
We experience a process of engaging our people, with civil servants, who are at the cutting edge of delivering services to our citizenry, being educated and having rigorous discussions. I guess with the exuberance of the civil service after the trainings and discussions, we feel that we can improve in addressing the discontent the public is now presenting.
Of course, we do not claim that we will manage this without employing the public itself. There are a number of engagement processes with the public which we are confident they will be settled with discussions. We do not say that it is out of hand; and as gloomy as you put it.
Q: Can you confirm if the EPRDF executive committee has talked over in your government’s decision to inscribe into the international capital market prior to getting into it? Do you believe this to be a major break in policy by your party as a signal that the nation is bracing to open its economy up for foreign investors more than the usual?
There is no need for the EPRDF political bureau to discuss on this matter. It has already been discussed and we have a proclamation the House of Peoples’ Representative has passed, perhaps 10 years ago. We were not capable to secure sovereign bonds from the [international] capital market simply because we were in the Highly Indebted Poor Countries (HIPC) list, which we were permitted to access only concessional loans. Only in the past five years, international financial institutions have left the countries to go to commercial loans; and we have graduated to access whatever kind of loans, including from the capital marketplace.
Issuing a bond is nothing more than a case of securing loans and people should not blur it with liberalizing the financial sector. It has nothing to do with liberalizing the capital account or allowing foreign banks’ involvement in the financial sector.
Q: What prompted your government to include in the prospectus unusual risks such as potential problems with Djibouti on the closing of access to ports; the potential violence following the 2015 national elections; and conflict with Eritrea?
I believe this has to be viewed as an academic exercise rather than anything,which tells you something is faulty. It is merely for reasons of technical assessment these issues were brought up and it is not because it may occur. Even though it is remote, for technical analysis, you necessitate to put all the potential risks on earth so that you give confidence to those who are giving you their money.
Q: How do you reply to the growing dissent within your party that some of them think your decision to inscribe into the international capital market is a turnaround of the core ideological convictions of the EPRDF?
I guess this might be a rumour that, as usual, is being told to some members of the media. But, of course, there is no difference of opinion in the ruling party’s leadership as far as this policy is concerned because this is not a new policy at all.
Q: If it is a beneficial thing to receive resources from the international capital market, why did your Finance Minister say Ethiopia will not issue bonds again for the next three years?
We have loans that are under process which are project based. Those have to be filled in. We reckon we can finish them within the coming three years and we will know where we are in the real parameters of the debt sustainability ratio. We are carefully navigating in securing loans because the parameters should not be jeopardized at any price. Debt crisis can occur if you are not so thrifty.
Q: Now that you have issued and over-subscribed your bond, taking after a credit of very favourable rating, what other means are you looking at to finance the cost of infrastructure? What sectors are you prioritizing?
This loan is not going to be allocated to consumption; it is a strict position of the government that the money will be allocated solely for investment. We focus on the areas where we can generate more exports so that we can increase our earnings and yield back the loans without any debt crisis.
The areas which have been selected are to establish industrial parks where export led industrialization will be enhanced. This is an opportune moment for a nation like Ethiopia to pull more light manufacturing companies to hold stock of the advantages we hold in terms of cheap labour, electricity, and a conducive investment environment. Currently, there is a huge demand from foreign direct investments flowing into this country to have pre-prepared industrial parks where they want to have a plug-and-play kind of operation. The labour cost has become very expensive in countries like China, Korea, and Japan.
We also design to apportion some of the funds into sugar plantations and factories where we can take in more exports from the industry.
Q: Some of the constructions of the sugar factories have been delayed because of financial constraints. Do you think that money secured from the capital market would solve this problem?
The delay in our sugar mills is not because of lack of money; it is because we have embarked on a fresh course of industrialization where we have started to take in our own manufacture for the manufacturing plants at home. This is a new venture and when you are a beginner, there is always a path of learning curve and process. Our Metal & Engineering Corporation (MeTEC) is the one which is fabricating the factories; they have had competence, skill and design capability problems which needed rectifying from time to time. This money [from the international capital market] is going to be allocated for new sugar factories; and not for already-existing investments.
Q: Are you also expecting other means of funding for such projects, infrastructure for example?
The most significant parameter for securing loans and funds is debt sustainability ratio. We are really careful in managing our macroeconomic situation where our debt sustainability ratio should always be at low stage. We are at low risk during this time because the parameters – all the five parameters which measure the debt sustainability issue – are sound. While monitoring the debt sustainability issue, we can secure more loans and funds from other sources as well.
Q: Over the past several years, there appears to have been a good deal of loans Ethiopia has been receiving from foreign creditors, and finance providers. Can you tell us the real breed of debt Ethiopia owes to these creditors and how far you are to get?
The country is at low risk and will continue to be as far as loan securing is concerned. I cannot exactly tell you the amount because it changes from time-to-time, but it is probably in the range of one billion to two billion dollars for the last five years.
Q: Your government has recently announced various types of housing development schemes; following that, there have been alterations in the design, in the process and the execution of the projects. What is the final status and what exactly are you going to do regarding the housing problem in Addis Abeba particularly? There are also accounts that your government is considering bringing in foreign actors in the real land business. Can you please confirm that?
The condominium projects have been there for the past 10 years and we have several modalities. We have some matters that have to be addressed though. There are complaints from some corners that those who have been registered are not all residents of Addis Abeba; we are now screening.
There is an option that a foreign company or anyone interested in working with the government housing project is permitted. That does not mean that these people are going to involve themselves in real estate. This is not a real estate project, but a government housing scheme. And those who are willing to work with us in the condition the government puts in place, I think they are welcome to come in. We want to deliver a technology transfer and an expeditious completion of the housing projects.
Q: Why doesn’t your administration allow Ethiopians to enjoy the reward from the international oil price dividend? The international price of oil went down 44pc and buyers in Ethiopia are not receiving more than eight percent.
It is not only when the oil price moves down or upwards; it may move up tomorrow. We need to understand the whole situation from the very beginning when the fiscal year starts to the end. You have to manage not simply the downs, but also the ups. The government is subsidizing when there is a high oil price in order to ensure peoples’ purchase at a proper price.
Q: Some Egyptian media are reporting that Ethiopia does not show any interest in the visit of the Egyptian president. Would you mind commenting on that?
We have excellent relations with Egypt; there is no reason not to let the Egyptian President visit Ethiopia. It is just speculation; the usual Egyptian media speculation. It is by no means a new thing. The request has come and we have reacted favourably.
Q: Djibouti’s President says that fostering political, economic and social integration with Ethiopia is going to be useful. What contribution will this have in the relationship of the two countries?
I agree fully with the President that we are moving towards economic integration, which ultimately will bring in political integration. At that point it is already a program within IGAD that the political consolidation will follow economic integration within the bloc. The more successful bloc in this example is the East African Community. The AU has also put a vision for 2063 where there will be a United States of Africa. Before that occurs, I think the regional blocs will have to integrate themselves into some kind of political integration. It is not something that is to occur shortly, notwithstanding. Merely, it is there as a vision to be put through.
Q: How concerned are you that political rivalries or in-fighting as such could unravel the gains made thus far in Somalia?
A new Prime Minister has been appointed by the President now, for the second time. It proves that there are some matters that needed to be addressed as far as the relationship between the leaders in Somalia concerned. We have talked about it with the President who promised us that this sort of squabbling will not go forward and there will be political accommodation. They are doing this with the backing of the international community, and I hope this kind of squabbling will not proceed.
Only the harm this has caused for the progress in Somalia is not so big because more than 60pc of the territory in Somalia is kept by the AMISON contingent of the Ethiopian forces. They are working with Somalia’s national defence forces and training them. The most important thing there is to establish grassroots institutions, including state-building in Somalia. We successfully have built state, which is the basis to eradicate and dismantle Al-Shabaab from Somalia.
Q: Can you give us an update on the offensive against Al-Shabaab and what your take is with regards to the threat the group poses to Ethiopia and the region?
Al-Shabaab is a threat to Ethiopia at present and for the years to come. It is not because Al-Shabab has not been threatening Ethiopia that incidents have not occurred here. It is because we have been vigilant and we should remain one. We are watching all its moves carefully, cooperating regionally with our neighbouring nations.
Q: It has been stated that Sierra Leon may not be able to rotate its troops. Is Ethiopia considering increasing its troop levels to replace or to make up for this factor?
If there is any request from the African Union, Ethiopia is ready to replace any contingent that leaves Somalia. But we use the same strategy that we are using now. It is not the number of forces that is important; it is the integration and the leadership that Ethiopia provides in fighting Al-Shabaab.
Q: The situation in South Sudan seems alarming again. There are contentious issues at the moment such as the structure and system of governance; there are no agreements even on the armies. What is the direction ahead in light of the dialogue a bit depressed at the moment? Are you worried that the talks might backtrack and South Sudan might perhaps stay in chaos for far too long?
We have never lost and continue to have hope that the negotiations will be resolved in good spirit and consequences. It is true that there is no clear agreement between the negotiating parties in terms of the structure of governance that they have to pursue during the transitional government of national unity. But that does not mean that things have fallen apart. There is a plan that the two parties who have adjourned for consultations will come back and we will push them to go on in the right track. South Sudanese have suffered for the last 40 to 50 years and they deserve peace, stability and prosperity. As IGAD leaders are preparing for the summit, it will help us with the support of the international community to strike a deal.
Q: Last month, the UN Security Council expressed frustration over the talks and at IGAD itself. Do you suppose it might be time for the UN to be more involved in those talks alongside IGAD? And could you dedicate us a date and some backdrop on this summit which is to occur?
The UN is not the only organization which has been frustrated over this process; all the international community members are. We, in the IGAD, have also expressed our frustrations in the negotiations. We have now dispatched a year since the negotiations have begun, and it is a vast clump of time for a country which stays in a conflict situation. Everyday there are killings and suffering.
Really, what choice do you have? You have to bring the negotiating parties together. They are the most responsible in South Sudan. You cannot replace them. You can only mediate and support them. IGAD has done everything at its disposal to help them sign a number of agreements. Not one; but a number of them. I do not imagine the international community can add something different, apart from taking some punitive measures.
Q: Do you support UN sanctions?
It has already been spelled out during the last communiqué of the IGAD leaders’ summit. If they fail to strike a deal during the coming summit, the IGAD leaders warned that there will be strong action and that action includes sanctions. IGAD has requested the AU and the UN to support the process.
Q: Will military intervention be the case if the warring parties do not concur on the sharing of power structure that has been offered to them? Why is the sanction not being done?
Actions and sanctions are not the best ways of resolving the conflict and we need to peacefully resolve the situation of South Sudan, with forbearance. We have been patient and we will continue to be patient for some time. The principal issue now is that in order to enforce the sanction, we have to be really certain that there is no other option; that it is the last resort.
Q: In a country where we are seeing a lot of development, something seems to be forgotten as the morality of society. We have been experiencing some rather disconcerting situations in the social media where schools are displaying unnecessary moral equipment for kids. Are you planning and ready to equip the Ethiopian society to shape it so that it can help the developmental activities of the nation?
This matter is not so much an issue of concern at this time. We require extending and deepening the usage but the most significant affair is to engross with the society to deliver a moral structure that helps to work on the progress and development of this nation. We have in schools, civic and citizenship education; there is also a moral education that is going to be introduced very soon.
Q: You have been Prime Minister of Ethiopia for the past two years; it is pretty much sufficient time for you to have digested and internalized the office. Have you had any frustration, at all over the past two years? What would be the cause of that frustration?
Something which frustrates me is the abject poverty. When you come to the helm of this power, you understand how much we need to come out of poverty as quickly as possible. That is the only frustration I have. But otherwise, I am content with what has been done for the past two years and the country is moving in the right direction.
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