Development Denial | 8 debunked claims so far, what’s next?

Is there a term for a brazen rejection of Development reports? There should be. Because, such a phenomenon has emerged in Ethiopian discourse for some time now. It is spearheaded by an odd coalition of Ethiopian politician and bloggers from different political extremes.Ethiopia - Development Denial

They are not the usual type of inquirers. That is their camouflage. They have more preconceived conclusions than questions. Of course, they are pessimists. But that is not the sole factor that skews their reasoning. They present flawed analysis, yet ignorance is seldom the cause. In fact, they capitalize on the pessimism and ignorance of their audience.

The theme is one: Denying Ethiopia’s economic progress. The strategy focuses on deceiving than informing and confusing than enlightening. The goal is to drain hopes of progress from the people. Thus, Development Denial is a befitting term.

The best way to describe the Deniers is to present their lines of deception, as witnessed in the last 7 years.

Line 1 – Argue ‘it is just the bouncing up effect’

The fiscal year 2003/04 was the first of the 7 years of economic stride, following the reform of the ruling party, EPRDF, that resulted in policy refinements and single-minded efforts on development. But it was also preceded by a year of natural calamity with food-shortage and a negative GDP growth.

The naysayers were quick to dismiss the policy impacts and attributed the growth solely to ‘bouncing up effect’. That is, the normalization of the economy and the re-engagement of factors of production idled in the previous year.

A little arithmetic would have sufficed to reveal that the ‘bouncing up effect’ explains less than a quarter of the 11.7% GDP growth. However, such technical discussion turns off most people and prompts them to subscribe to Development denial or at least remain confused.

Line 2 – Giving the credit to rain

The GDP continued to grow, at 12.6% rate, in the next year. However, the post-election crisis foreshadowed the good news. In fact, few had an appetite for economic data in the face of a political deadlock that cost the life of the young.

Thus, the naysayers belittled the economic performance with a naive explanation. It is the rain. Alas, few knew that the industry and service sectors make-up more than half of the GDP and fewer asked how a good weather could bring a 9.4% and 12.8% growth in the two sectors, respectively.

Line 3 – Rejecting government data

As the political turmoil subsided and as forecasts for the year 2005/06 came out, a third consecutive year of double-digit GDP growth started to dominate Ethiopian discourse. It has become evident that it was going to be a consolation and an inspiration for the populace dismayed by the post-election crisis.

The naysayers were biting their nails.

Suddenly, the reliability of government data become disputable, by the same individuals who were using it to show the poor state of the economy in the run-up to election 2005 and before. There were even some funny allegations; like, in 2006, the government fired some rural kebele Agricultural extension workers (Development Agents) due to their unwillingness to report exaggerated production figures. Nevertheless, the main source of growth data is Central Statistics Agency, not the Ministry of Agriculture that collects data through local officials.

Line 4 – Accusing IMF, World Bank, AfDB, etc as EPRDF accessories

As the economy continued to expand, so did the scope of the naysayers’ allegations. They started to accuse International organizations as accessories to the government in cooking the Books.

The spin began by rejecting the data from International Monetary Fund (IMF), World Bank and African Development Bank (AfDB), alleging they are mere copies of government reports, thus unreliable. But people soon started to ask how these organizations could simply publish data reported by governments if they have no way of ascertaining. Or, is the Ethiopian government too smart to be detected?

The naysayers improvised. Started to argue that the international organizations are part of the data manipulation. Since presenting Ethiopia as a success story helps these institutions justify their existence and the continuance of development aid programs globally.

Well, Elvis Presley might still be alive and perhaps man didn’t set foot on the moon.

Line 5 – Arguing ‘high inflation, thus production decreased’

The GDP continued its expansion at double-digit rate. But so did the inflation rate, which hit harder those with fixed-wages. The naysayers didn’t waste time to capitalize on this phenomenon. They started presenting slanted explanations claiming the inflation proves a dwindling of production, despite government data of growth.

They argued, ‘when supply decrease, price increases; now price increased so it must be the case that supply (production) decreased’. Ha? How convenient? This is as silly as claiming ‘if it rains, there will be a mud. Here is a mud, so it must have rained.’
Of course, the naysayers won’t mention the various factors that pushed prices up. They ignore the annual double-digit surge in Household Final Consumption Expenditure recorded in 2007 and 2008. They are lip sealed when it comes to the inflationary effects of the surge in export volume or the then global inflation.

The ‘inflation-thus-production-decreased’ logic is soon to fade away, as prices stabilized and the inflation rate remains at a single-digit level, while the economy continues to climb upward.

Line 6 – Claim ‘it is due to government expenditure or external finance’

The deniers did not even spare weird arguments. Former MP Temesgen Zewdie puzzled everyone by arguing the growth figures are nothing but a reflection of increased government expenditure. Another former MP, Bulcha Demeksa, alleged it is simply an echo of increased foreign aid & loans.

Yet, both are economists by training.

Someone should summon the two economists to comment on Barack Obama’s economic stimulus package that is financed by about trillion-dollar borrowing from China. Interestingly, the size of Ethiopian government expenditure decreased relative to the GDP by about 10%; that is from 29.7% in 2003 to 17.2% in 2009.

The recent talk that Ethiopia receives high level of aid is simply false. In reality, Ethiopia remains ‘comparatively under-aided on a per capita basis’, according to the July/2010 report of the Development Assistance Group (DAG-Ethiopia), the consortium of 16 Donor countries and agencies. Moreover, in the last 7 years the size of Official Grants decreased when compared to the GDP – from 7.5% in 2003 to 4.9% in 2009.

But that is beside the point. Had all the finance been available domestically, Ethiopia would not have been categorized as a ‘low income’ country, to begin with. Not to mention that even developed nations too often resort to external finance for one reason or another. The question should rather be how prudently it is expended. As the above-cited DAG-Ethiopia report affirms,

‘Ethiopia has a capable government that is demonstrably committed to addressing poverty and promoting development, with an impressive record of pro-poor spending, relatively sound financial management and sustained economic growth over recent years.’

Line 7 – Citing indexes and their rankings

Frustrated by the figures in IMF, World Bank and AfDB reports, lately the Deniers took refuge in various published indexes – transparency index, economic freedom index, corruption index, prosperity index, happiness index, etc. Though, these indexes are based on data from secondary sources, mainly from World Bank database. All indexes explicitly state that they do not reflect current reality, as their input data is late by at least two to five years. [One of the reasons is that the kind of data some indexes require are gathered by surveys that take place once in 3 or 5 years]

Yet, as years went by, virtually all indexes with cross-temporal data of five years or more started to reflect Ethiopia’s socio-economic progress. But the Deniers did not budge by the improvement in the index scores. The theme changed subtly: ‘how come Ethiopia still rank at the bottom if there has been successive years of economic growth?’ Had this question been triggered by patriotic zeal, it would have sufficed to respond by reminding of the low-level Ethiopia started from and by noting that its GDP has become the fourth largest in Sub-Saharan Africa.

The problem is the Deniers bring up Ethiopia’s rank just because and only when they find it convenient. That is why, they simply ignored recent reports that ranked Ethiopia at the top in terms of its pace of Human Development improvements and MDGs progress.

No, the Deniers are not asking for a faster growth. To the contrary, they do not believe Ethiopia can grow even at the current pace.

Line 8 – Claim ‘it is HDI score that matters’

As Ethiopia’s GDP growth data becomes harder to dispute, the Deniers changed their tune. They started lecturing everyone about the difference between growth and development. Gauging development by GDP growth is misleading, they explained, it is Human Development Index (HDI) that matters.

Ethiopia has been improving on HDI too, however. Apparently, the public has not been informed. But the 2010 Human Development Report was different. [HDI is a component of the annually published Human Development Report (HDR)]

First, the report revealed, between 2005 and 2010, Ethiopia has been the fastest improving country in the world or, in the words of the report, ‘at the top of the top movers of development achievers’.

Second, the report included a 40 years analysis of education, health and per capita income that revealed the development of the last decade is unprecedented in Ethiopia’s recent history. [Read my summary, ‘A decade of change Ethiopia’]

Third, the Human Development Report explicitly indicates that it uses reliable data and/or valid estimates only. In the absence of such data and estimates, ‘countries are excluded to ensure the credibility of the HDI and the HDR family of indices.’ The report’s explanatory note states:

Data availability determines HDI country coverage. To enable cross-country comparisons, the HDI is, to the extent possible, calculated based on data from leading international data agencies and other credible data sources available at the time of writing. However, for a number of countries data are missing from these agencies for one or more of the four HDI component indicators. Where reliable data are unavailable and there is significant uncertainty about the validity of data estimates, countries are excluded to ensure the credibility of the HDI and the HDR family of indices. [Emphasis mine]

Thus, it would be unseemly to allege the report is based on flawed data.

The deniers may also be tempted to accuse the Human Development Report Office (HDRO) as data manipulator. The problem is that HDRO uses data from a dozen or more international agencies, including United Nations Department of Economic and Social Affairs (UNDESA), United Nations Educational, Scientific and Cultural Organization (UNESCO), World Bank World Development Indicators(WDI) database, Luxembourg Income Study; EU Statistics on Income and Living Conditions; United Nations Children’s Fund Multiple Indicator Cluster Surveys; Measure DHS; the UN University’s World Income Inequality Database;  the World Bank’s International Income Distribution Database and data from the United Nations Population Division.

Is this the end?

Of course not. The Deniers will come back. It would be hasty to assume the recent Human Development Report is a nail on the coffin of Development Denial. Yes, it is a huge blow. But, do not be mistaken. The Deniers are licking their blood, but they are not dead yet. They are flummoxed, but they will resume their deception. They got incentives to do so. The motives vary – personal, political, financial, vengeance, publicity, the list goes on.

Based on experience, one can rest assured, the Deniers will never run out of a data to cite. After all, cherry-picking has been the norm so far:

They cite IMF when it reports high inflation rates or forecasts a modest GDP growth, but reject its year-end reports of price stabilization or high GDP growth.

The Deniers quote a World Bank report to tell Ethiopia’s per capita income is at the bottom, but reject another part of the same report that reveals its improvements.

No Denier would fail to cite the HDR to show Ethiopia’s poor rankings, but at the same time reject the pages that reveal Ethiopia’s astonishing progress.

Lest the shrinkage in the size of the extremist camp or some divine power forces them to change, the Development Deniers are here to stay.

The Transition [From nay-saying to blatant denial]

Arguments denying Ethiopia’s achievements are not a new phenomenon, per se. The crowd that you call ‘rejectionists’, ‘doomsayers’, or ‘naysayers’ have been doing it all along. But, the lines of denial were disguised by the fluctuating GDP growth of the pre-2003 period.

In fact, in pre-2003 years, there was no much need for a blatant denial. The rejectionist would oscillate between two lines of rejection. When annual GDP figures are positive, the naysayers would bring up the general living conditions. When reports indicate overall socio-economic improvements, the naysayers would talk over the recent bad year. Moreover, constantly predicting an upcoming disaster, the naysayers were able look rational once in a couple of years, when annual GDP figures were negative.

Recent years stripped of their camouflage one by one, however. That is: consecutive years of GDP growth and reports evidencing overall improvements. Some of the naysayers had the sanity to admit that and shift to other agenda.

But others chose to take their denial to its logical absurdity.

This group had shown high perseverance, or stubbornness if you wish. They rejected all national and international reports, on after the other. They had shown us how to accept and reject the same report at the same time. They left no stone unturned to make their point, be it a passing remark made by some researcher or comments found on a western magazine.

Let’s do them justice. They have earned it. They deserve to be called Development Deniers.

Daniel Berhane