Excerpts from an FT interview with Meles Zenawi, prime minister of Ethiopia.
William Wallis, FT Africa Editor, interviewed Meles Zenawi at his office in Addis Ababa on Wednesday June 17th.
On progress in meeting pledges towards a rescue package for African economies since the G20 summit in London
FT: Africa seemed to do very well at the G20 meeting. Are you satisfied that what was agreed to is being delivered?
Meles Zenawi: Yes in the sense that unlike previous promises this time around roughly half of the fifty billion dollars appears to be more or less ready for disbursement through the IMF – some $17bn of our quota of new Special Drawing Rights (SDRs), and $6bn that was promised as part of the gold sales. It appears that the managing director of the IMF is finalizing the allocation of the new SDRs and is likely to disburse the resources before the end of this year. And he has indicated to all ministers that there is a possibility of $6bn of gold sales to be front loaded. He doesn’t have to sell the gold now to disburse the money.
So something like $23bn is more or less ready now. But of course we were promised $50bn so there is $27bn that still needs to be accounted for. That is still iffy. But I think what we have got so far is much better and quicker than people expected.
Watch PM Meles Zenawi Press Conference video below
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On relations with western donors
FT: Donor governments were much more outspoken until two three years ago. They made statements, they protested at certain laws. Now it seems they are all going along with you.
MZ: No. They are still protesting. They are still telling us frankly that they don’t agree with this or that but they never have said in the past you either toe the line or you are dead. They gave us some slack in terms of policy space and we tried out our policy alternatives. I would argue that we have something to show for it, something perhaps better than the average. Our arguments are now better backed with actual results than was the case several years ago.
FT: You seem very adept at playing off different foreign interest groups, for example the East against the West.
MZ: I do not know what being adept at this means. We try to get help from every quarter …This is because we need all the assistance we can get. It would be stupid for us to say to the Indians for example, that we prefer Chinese assistance. It would also be stupid for us to say to the Brits now that the Chinese are helping out some infrastructure projects, keep your money. It doesn’t make sense. We want to get as much assistance as we possibly can because on balance we get about half of the average assistance that other African countries get in per capita terms. It’s not like we are overflowing with assistance. At this stage what we are trying to do is make the best use of every avenue we have.
FT: Historically assistance from the west has tended to come with more prescriptions than for example assistance from China and India. Are you more comfortable with the relationship you have with the east?
MZ: I think each donor has his or her own strengths and weaknesses. In the case of western assistance there are sometimes prescriptions attached. But to be fair to the western donors as far as Ethiopia is concerned we have not accepted any policy prescriptions that we are not comfortable with. Everything we have done by way of reform economic or political is because we are convinced it is good for us.
FT: How have you been able to do that where some other African governments have not?
MZ: Maybe we are more bloody minded than the others.
FT: One argument often cited is that whatever else happens in the region this country must remain stable. You have Sudan, Somalia, Eritrea, on your borders and it is as if they are giving more freedom to you than other countries on the economic and the political front.
MZ: There has been a sort of tacit understanding with the Bank for example for almost a decade now since the time of Joe Stiglitz was the chief economist. That tacit understanding was, and it is just tacit, that we would get less assistance than the average but more space in return. Over the years I think we have made good use of the policy space we were given. I don’t think any donor government would have complaints with our economic performance. Our growth has been on average about twice the African average. Our investment in pro poor growth has been very much higher than the African average. Something like 70 percent of our budget goes to pro poor investment. That is not available elsewhere on the continent. So we have something to show for our experimentation and the donors would be hard pressed to say that we are not delivering. What they are arguing that we could do even better and they are still arguing and they are still in per capita terms giving us less money than the average African country. Take the EU for example, in per capita terms it gives four times more money to Eritrea than to Ethiopia.
FT: The donors do have concerns that there is slippage now, in macro-economic policy, and that’s reflected in foreign exchange problems you have had, the high levels of inflation you have had, and in the private sector being crowded out by government borrowing.
MZ: Yes and some of it is very valid. We have high persistent inflation rates, and that needs to be taken care of. We have a programme with the IMF to adjust that. We have had a lot of pressure on our balance of payments. That needs to be taken care of. We have a programme with the IMF to do so. These concerns are very valid and we are trying to address them.
As far as crowding out the private sector … that is difficult to do when the budget deficit is technically zero. We have had no bank borrowing in the past year, so technically we are more prudent than the Maastricht treaty would have required of every member of the EU. Bank borrowing this year has been exactly zero, this budget year ending July 7th. And in any case previous budget deficits have been for investment purposes, in infrastructure. Some in my economic team would argue that we are actually crowding in rather crowding out the private sector.
On coup plots, new legislation and politics
FT: On the political front, there have been more arrests recently, talk of plans to assassinate members of the government, new laws restricting NGOs, new anti-terror laws. From the outside it seems like you are a government besieged by enemies. Do you have significant enemies and if not why is there a need for this clampdown?
MZ: Well you see I understand that some people interpret it as a clamp down but look at the points you are identifying. Anti-terrorism law: some people would argue that under our obligations due to decisions taken by the African Union, the United Nations, we should have had an anti terrorism law in place a few years ago. We were too busy with other issues and this law lingered for some time. It so happened we have completed it now. When we completed it, if you see the draft in many instances it is an attributed quotation from this or that anti-terrorism law in the west including the UK.
FT: There are some pretty invasive elements that would not pass in the UK.
MZ: I would suggest you read it, because what you hear may not be the same as what you read as is always the case in Ethiopia. I would say our anti-terrorism draft legislation is in no way more draconian than any legislation in Europe. So there is no clamping down as such. In any case the criminal court that we have was to a large extent adequate to deal with terrorism that is why we did not feel in a hurry. We took our time in proposing this legislation.
With regards to people detained. A number of people have been detained and these people had plans or aspirations to assassinate some officials.
FT: Including you?
MZ: There is no clear sign as to whether they are telling us the truth about that. Some would say no. Some of them say yes. That is beside the point.
FT: They have confessed?
MZ: Yes. I can tell you this crop of terrorists as opposed to al-Itihaad and al Shabaab are a bit more amateurish. While they had plans to assassinate the possibility of them pulling it off that operation was very remote.
FT: But this was not a manifestation of serious problems within the army, which is what some people suspect.
MZ: No. The civil society law, some people would say this is clamping down, we would say this is an empowering law. The odd thing about our legislation from the African perspective is that we separate foreign NGOs and local civil society. Local civil society would be free to participate in any political activity. Foreign NGOs and foreign funded entities would not participate in political activities. Some people say this is clamping down on civil society. We would say this is empowering civil society because civil society has to be an expression of the membership and that is why in the USA foreign funded organizations cannot contribute.
FT: All over Africa there are human rights organizations and pro-democracy advocates who are funded from abroad. It would be difficult to raise sufficient funding within a country like yours. Effectively this means these organizations will disappear.
MZ: That I think is a bit presumptuous … if you push your argument to its logical absurdity you would be saying poor people cannot exercise their democratic rights unless rich people pay for it. We would say if those rights are important to poor people then those poor people are capable of organizing by mobilizing their own time, their own resources, because those rights are important to them. History in this country has shown that for example in the early 1970s peasants with very little education or funding from abroad organized to call for land reform in Ethiopia and ultimately brought down the imperial regime without foreign funding.
Now if that could be done in the 1970s we think it could be done in the first half of the twenty first century. On the contrary we think if there is foreign funding for civil society organizations what it does is undermine the democratic nature of civil society because the leadership does not depend on the membership. The leadership depends on the embassies.
FT: You depend also on these same embassies and donors as a government.
MZ: For development activities absolutely.
FT: You could argue that aid is fungible and so you depend on them for political activities too.
MZ: We have made a point of making sure that our recurrent budget is financed domestically. We thought that was essential for our own health. But for development activities we have of course sought assistance from abroad and we are now asking foreign NGOs to continue to participate in economic, social and environmental development. We are not restricting foreign NGOs in these areas.
FT: And good governance for example?
MZ: That would be politics. And that is for citizens.
FT: All these events have contributed to an atmosphere where people do not feel free to speak.
MZ: Have you read the local newspapers? Do they mince their words about government …
On plans to resign from office
FT: Is there a danger though that your liberation movement could go the way of some others on the continent which have over time lose their original ideals and are prey to cronyism and the pursuit of power for its own sake rather for the sake of the people?
MZ: Absolutely. There is no guarantee. Every movement will have to renew itself everyday or risk degenerating.
FT: Including changing leadership?
FT: You have said before you are willing to stand down? What developments are there on this front?
MZ: At least we are discussing in our party and the discussion in our party I think is more mature than people give it credit for. We are not talking about Meles only. We are talking about the old generation, the leadership of the armed struggle that continued meaning that the party needs to have new leadership that does not have the experience of the armed struggle. For the sake of the party that needs to happen. There may be no answers in tactics: exact timing, there may be some debate. But there is no disagreement on the principal that the old leadership needs to go and a new leadership needs to take full power.
That’s part of the solution, not the only solution. I think our movement has by and large avoided much of the degeneration of various other liberation movements.
FT: Are you saying that you won’t be standing in the elections next year?
MZ: All I am saying is that my personal position is that I have had enough. I am not a lone gunman. I have from time to time been outvoted even while I was a prime minister and I have done things that I don’t like, don’t agree with but implemented party positions particularly during the war with Eritrea. I have two options under such circumstances. Resign from the party or follow the majority. So I am arguing my case and the others are also arguing their case. I hope we will come up with some common understanding on the way forward that would not require me to resign from my party that I have fought for all my life. I would like to keep my party membership even after I resign from my government position. My hope is we will come up with some understanding. I don’t think the differences are all that big.
FT: When might that take place? Is there a party congress coming up?
MZ: Yes there is a congress in September.
FT: Is that where this decision will be debated?
MZ: Yes but it will also be discussed much earlier.
FT: Just to clarify, from what you were saying if the majority of the party does not decide to back your plan for renewal you would resign?
MZ: There would be two options. I could go on in the hope of convincing them at some time in the future or I could resign. My hope and expectation is that we will reach some kind of compromise position because the margin of difference is not all that big.
FT: Who would you like to succeed you?
MZ: I would like the party to make that decision.
FT: Your idea of a renewal of leadership seems similar to the Chinese model given the restrictions on political freedom here, and less to do with a western model of electoral change.
MZ: Countries like yours appear to have done that. At least the Labour party. And so there is a lesson to be learned from the labour party too… Renewal of leadership is needed in any party western or eastern. In some instances parties might be in power for longer periods than others and in that instance the need for the renewal of leadership becomes even more important. In other instances the electorate does the rotation for the party.
FT: Why is it that Ethiopians don’t really believe you could go?
MZ: Because it has not been done in the past in Ethiopia.
FT: But this is a precedent you would like to set?
MZ: This is a precedent that I would almost kill to set.
FT: And what will you do when you eventually step down? I gather you haven’t had a holiday for 34 years.
MZ: I think my preference would be to read, perhaps write, but again that will be a decision for the party. One thing that I will not do, one thing that the party should not consider is be involved in any government work.
FT: You will withdraw?
MZ: That is a necessary condition and without that there is no change of leadership. But once we have done that the party will have its decision as to whether I will be allow to sit back read and write, or give me other party (role).
FT: Like party chairman?
MZ: I don’t think so because the prime minister has to be the party chairman. That is not a position for a retired leadership.