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One evening in Bahar Dar, the town that sits on the southern shores of Lake Tana in Ethiopia, I was trailed through dusty, unlit streets by a small, serious, shoeless boy. No more than 13 or 14, he was a student, and passionate about chemistry.

Did students have enough text books in my country, he wanted to know. Did we have school laboratories? Stocks of chemicals? Equipment for experiments? My answers were simple but difficult to give, for of all these things we take for granted he had seen not a sign. Nor was he ever likely to.It was my turn to ask him a question. Had there been much change, I asked, since peace returned to Ethiopia? He thought for a moment as we trudged along past darkened, tin-roofed huts and wandering donkeys.

"Before, the situation was intolerable," he finally said. "Now it is unfavorable."

For all his quaint and unpracticed schoolboy English, it was in its simple summing up as good an answer as I was able to get from anyone in Ethiopia.

After 17 years of bloody revolution, civil war, foreign invasion, plagues of locusts, mass civilian liquidations, large-scale displacement of refugees, geo-strategic super-power machinations and some of the worst famines of recent history, Ethiopia has emerged from cataclysm.

But since 1991, when the fighting stopped and Ethiopia began rebuilding a demolished country, the world has moved on to fresher horrors in other places. Ethiopia, whose starving children were once the dying darlings of a fickle world press, has vanished from the front pages.

Obscure, geographically isolated in a zone that remains violent and unstable, the country endures as it has always endured. But my friend of that dark evening was right.

While Ethiopia remains in dire straits - it is after Madagascar and Tanzania the poorest country in the world - by the standards of its own recent past things have improved dramatically.

On the surface one might find room for optimism. Eritrea, formerly a Red Sea region of Ethiopia and the largest bone of contention during the long civil war, has been given its independence. Ethiopia's return to civilian rule and a new constitution has permitted the holding of elections and, just as important, a devolution of power; ethnic federalism - the establishment of self- administered regions structured on ethnic lines - represents a dramatic break from a 2,000-year-old feudal history of highly centralized and autocratic control.

Officials from the world's financial institutions in Addis Ababa will tell you with pride that Ethiopian economic administrators are different from most of their counterparts on the rest of the continent: Retaining one positive tradition of their centralized bureaucracy, they are fiscally responsible to the point of severity.

In its shift from a command-based to market-based economy, Ethiopia is showing zealous adherence to classic IMF-inspired reform programs, and receives high marks and good credit ratings from international donors.

Balanced budgets and other encouraging macro-economic indicators are one thing. Attitudes and expectations, however, are another.

It does not take much travel through towns and rural areas, much talking with ordinary Ethiopians, to see that my young acquaintance from Bahar Dar was correct on another count - while life has moved upwards from the intolerable, most Ethiopians remain skeptical about their prospects.

Much of this has to do with living conditions that have always been abysmal. The statistic indicating an Ethiopian per capita income of $100 a year hardly conveys the state in which most of the country's 55 million people live. Another simpler one, concerning the basic matter of clean drinking water, is more eloquent - one of five Ethiopian children dies of preventable, infectious diseases before age 5.

But there are other reasons for a growing dissatisfaction. Seventeen years of civil war taught Ethiopians the hard lesson that the greatest agent of preventable death is not unsafe drinking water but abusive political power. It is the thought of a return to those practices that worries many Ethiopians.

With more than 80 cultural and linguistic groups, ethnic divisions have always played a large role in Ethiopian public life. Its civil war was not simply one of socialist and capitalist ideology, but a rebellion against the ruling Amhara elite who, from Addis Ababa, dominated the political and economic life of Eritreans, Tigreans, Oromos and others for more than a century.

The Tigreans who led the military coalition that defeated Ethiopia's brutal Marxist regime today leads its government. But despite the formal setting up of an ethnically representative federation, critics say, Tigreans have merely replaced Amharas in their dominant and suppressive role.

With no tradition of pluralism, politics remains a game of winner-takes-all, a field with no middle ground for the give and take of democratic tussle. Whether because of its vastly superior organization, as the ruling party claims, or because of intimidation and unfair electoral practices, as its opponents insist, last year's elections failed to provide the Ethiopian People's Revolutionary Democratic Front with a parliamentary opposition.

With long-suppressed ethnic aspirations now released but nowhere to go, tensions are developing. Abroad, parties-in-exile fulminate. In Addis Ababa, journalists are jailed. In the provinces, non-Tigreans complain that Tigreans are awarding political spoils to surrogate parties they have created in new ethnic regions.

Not only that, it is maintained, Tigreans are also using party organizations and financing to establish commercial firms. Using predatory pricing to undercut competition in such vital sectors as transport, trade and the coffee industry, they are coming to dominate the economy and politics.

Ordinary Ethiopians who make such complaints have little legal proof of discrimination. But in one sense proof hardly matters. Amharas continue to refer disparagingly to Tigreans, their former subjects and now their rulers, as peasants. For the first time Ethiopians at large are openly and defiantly identifying with an ethnic group.

With ethnic issues growing more critical, the government has a tough act to perform. In the short term its policies must generate enough prosperity that all groups feel they are getting a fair share. Ethiopia's long-term survival, given its traditions, is even more of a challenge: it must develop a political culture that can accommodate opposition.

If it does not, the slippery slope towards violence may not be so far away. In the west it would mean further destabilization in an already fragile region. In Ethiopia, it is a prospect that even schoolboys recognize and find fearsome.

(Distributed by Scripps Howard News Service.)