An ideological competition between two diametrically opposed economic models
Now it is Christmas time in Ethiopia, up to a point. The country has a state-backed policy of boosting the economy and alleviating poverty, carried out by officials with near-dictatorial powers. Markets and foreign investors are allowed but mistrusted. The model borrows from China and is conceived as a rejection of Western free-for-all capitalism. It claims to nurture local employers and protect them from Wall Street predators. The government talks vaguely about moving to a liberal democracy in the future, but that is a long way off. The economy comes first. Meles Zenawi, the country’s late prime minister, developed a vision for the country of 85m that focuses mainly on improving its agriculture, which accounts for 46% of GDP and employs 79% of the workforce.
Some neighbours are following Ethiopia’s state-led development model, most notably Rwanda. Yet other African countries are taking the opposite approach. They have scaled back the role of the state and liberalised markets, embracing a Western model. Kenya, which proudly proclaims itself the homeland of the American president, leads the pack. It has attracted worldwide attention with its successes in telecoms and banking.