Our nation is on the right track to development. There is so much going on in the capital that almost every visitor is taken by amazement. Big development projects that consume significant public outlay can be observed in progress and the common refrain nowadays is that Addis Abeba has turned into a huge construction site.
Indeed, anyone interested in knowing the importance of such an undertaking can access information from the multiple books on the history of global development. Back in the early 1900s, most of the capitals of Western countries were witnessing the same kind of construction obsession. Many of the huge physical structures that we see today were crafted during that time.
Cities from Paris to New York obtained their current face during that era. The construction mania continued until the Great Depression of the 1930s, which saw the hugely indebted economies of countries go bust and expose the wrong decisions that the politicians of the day made at that time. It was, then, that Keynesian economics came to be the saviour of the world’s economies by giving public investment new economic objectives.
Asia also experienced the same situation in the 1990s. Fond of expansion in the gross domestic product (GDP) and hence associated political support, policymakers in countries as varied as Taiwan, South Korea and China expanded their glut to debt. They took no time to sign the cheque for ambitious projects hugely financed by foreign loans.
Their eyes were focused only on the political support they could buy from the projects. Even if the burden of loans they were signing demanded them to seriously think about the type and magnitude of risk they were putting on their economies and societies, they were reluctant to act responsibly.
It did not take long before the judgment of time arrived at their doorsteps, though. The boom went bust, slashing all the flashy wealth of the countries and putting the overnight rich at risk of bankruptcy. Had it not been for the support they obtained from global institutions, such as the International Monetary Fund (IMF), all the riches they had generated through the boom years would have been wiped out and their societies left with notes of misery.
But, thanks to the international system, they were saved. Part of their newly created wealth was maintained and hence they managed to keep a considerable part of it at their disposal. Even then, the hit was so hard that some of the countries continued to struggle to get away from it.
A mental trip through the books of global development history would show us that the costs of development are not limited to economic busts. They go further in dimension to environmental, social, cultural and life costs.
Even if the Chinese do not like to talk about it, the books of development history show that their historic development march, dubbed Cultural Revolution, burdened them with the loss of tens of million lives. The development of Europe was also inflicted with hunger, death, ethnic clashes, class-based discrimination and environmental pollution. North American development history is not so much different as it was tainted with racial discrimination, enslavement and repression.
It seems that the time is now that of Africa. All global media are talking about a continent that once was considered to be hopeless, but managed to peel its long overdue shell of poverty and disempowerment, to eventually rise. Talks are high that Africans are becoming empowered in a historic way; that many are marching up the income ladder. What one might not get is the cost of the exciting development of the continent of which the world is so proud.
Looking into Africa, one will see that the costs vary from environmental pollution to repression and to inequality. The budget books of many African countries are burdened with external debt, mainly Chinese, that carries the risk of future busts. This entails that the next generation will have the responsibility of shouldering the bust that its forefathers bequeath it and will have to find their way out of it.
One can get a typical example of what is happening in the Ethiopian capital, Addis Abeba. Many of the projects the capital witnesses are financed by Chinese loans. Not only are these undertaken by their loans, but also by their human resources. There seems to be little that is being done in the form of calculating the benefit of each dollar.
How much of a benefit does each dollar cost of the light railway transit (LRT) bring to the economy? Why it is easy to throw away millions of dollars on a dysfunctional subsurface electric power line that is abandoned without giving any use? Why it is easy to demolish roads on which millions have been spent?
These are the difficult questions of the time. It seems that policymakers do not like to be asked these questions. They rather want the public focus on their good deeds. But the question does not end there.
Why is ignoring environmental impact assessments becoming a norm? Why is public enterprises finding it easy to give contracts, even if these contracts are expensive (in both loan terms and benefits)? Why is ignoring public procurement procedures becoming common? Why is corruption so rampant? Why do regulators not care about the suffering of the public in making decisions?
Indeed, the questions are numerous. But all of them relate to the cost of development. Africa, including Ethiopia, should have learned from the experience of the rest of the world. It should have avoided most of these costs that would eventually lead to huge busts in the future and hence predictable suffering of Africans.
But it never is too late. There still is time for African policymakers to review their policies and avoid future busts. And this takes serious self-reflection.