Tsegaye Tegenu, Ph.D.
2022-08-22
Recently I read an article on your website written by Dr Yonas Biru about “Cultural Enigma in Development Dynamics: Ethiopia & Iran Vs. China & Japan”. According to him the causes for the economic progress of Japan and China is cultural change. He did not clearly define what is meant by culture (way of life and belief system) and how this relates to institutional changes and development of capitalism (private sector development). He concluded that China and Japan experienced economic progress because they westernized their codes of manners, dress, language, religion, rituals, and art. According to him the adoption of western Europe and America culture is a source of economic progress and development.
He recommended that Ethiopia and Ethiopians can economically develop if they start to eat western food, wear western-style suits and dresses, have European hairstyle, speak their language, abandon their religion, break with African neighbors, love and embrace westerners, appreciate their dominance and condemn Russian and Chinese communists. In other words, westernization is the causes of economic progress and prosperity. It is as simple as that.
To begin with, cultural attributes are effects and not causes of economic growth and progress. In the economic literature factors commonly recognized as sources of growth are factor allocation, geographic location, human capital development, political systems, economic policies, etc. (see figure 1 below).
The author simplified the developments of Japan and China. In the second half of the nineteenth century, Japan adopted a sweeping policy of modernization in pursuit of parity with the industrial West, under the slogan fukoku kyōhei: “enrich the country, strengthen the military.” This old slogan states “He who wishes to make his soldiers powerful exerts himself to enrich his people.” Japanese officials thought that strengthening and improving of the economy (agriculture, commerce and industry) was the key to a stronger military force and strengthen sovereignty. It is the idea of forming strong military state and vision of economic sovereignty that made Japan rich.
In the case of China, it’s quest for “self-reliance” and achievements in science and technology that led to its economic progress and success. See China’s Pathways To Economic Self-Reliance: Lessons For Ethiopia. In both cases, as Professor Tyler Cowen observed, it is the idea and vision of creating a great nation that spurred capitalist development in both countries.
The Iranian version of strengthen sovereignty has literally killed the private sector development and market transaction of labor. The establishment of the Islamic Republic paradigm and the consequent interventionist government bureaucracy did not bring about a well-defined economic strategy in the country. The Iranian case shows that claim and guarding of national sovereignty is not enough. Their nationalist and populist rhetoric was devoid of economic strategies that transforms the economy and creates jobs just like Japan and China.
In Ethiopia the idea of national sovereignty and creation of strong state is questioned by ethnic politicians and political opportunists. The sovereignty of the state and the federal government is challenged by separatist forces. Just like Japan and China the idea of unity and sovereignty is not yet used as a platform and ideology for creating economic vision and mobilization of resources. The PM Abiy Government is struggling on this front.
In Ethiopia, the challenge is not only on sovereignty but also absence of consensus on long-term development strategies and goals similar to Japan and China. The absence of clearly stated long-term goals and development strategies in the country has contributed to lack of vision among the people. It is not possible to get among the people an outright agreement on the need for radical economic changes. There is no national consensus and agreement on goals and paths of economic prosperity.
For growth and development to happen, citizens should share a common strategy, goal, guiding policy and direction. What are the common vision and strategies of economic development shared by all ordinary people of the country? You do not get answer even if you want to ask this question.
What we have instead is a split-up economic ideas and hodge-podge economic policies (ad hoc, fragmented and patched up interventions) devoid of systematic and structural approaches. Officials speak all types of interventions out of good intentions and will. Unfortunately, all roads do not lead to Rome. At this moment the Ethiopian people need to share not only one-size-fits-all solution (common economic progress vision) but also strategies that they believe bring about exponential economic growth.
Ethiopian population has grown slowly and then accelerated to reach a breakneck speed of growth over the past 40 years. If a population grows by a constant percentage per year, this eventually adds up to what we call exponential growth. The larger the population grows, the faster it grows. Ethiopia is the second most populous country in sub-Saharan Africa after Nigeria. Current population is about 112 million and is expected to surpass 137 million by the end of 2037. Each year an estimated 2 million persons are added to the population. The economic solution to population growth (namely increase in GDP per capita) should therefore be big and fast to recover from backlogs and re-adjust to new additional shortages every year.
To conclude, the cause for lack of economic development in Ethiopia is not culture. It has nothing to do with religion, one’s belief or metaphysic. It is related to the absence of autonomous institutions, absence of exponential economic growth thinking and lack of a formal prosperity vision-strategy document that reflects the consensus of the people. If you have one, please put it on the table.
As to the challenge of globalization and how to deal with shifting balance in world economy, the answer is not cultural change. Opportunities and threats are numerous, and one needs to have good understanding of game rules, institutions, and growth of global networking.
Further references
Ethiopia’s Economic Prosperity Vision-Strategy: Challenges Of Old And New Recommendations
Ethiopia’s Economy Needs Strategies and New Policy Design