Ethiopia’s Leader, Hailemariam Desalegn, Aims to Maintain Tight Rein on Key Businesses

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Photo: An Ethiopian Orthodox Priest talking on a mobile phone

By Katrina Manson

Addis Ababa, May 27, 2013 — Ethiopia’s new prime minister has ruled out loosening state control of key businesses, dealing a blow to foreign investors circling one of Africa’s fastest growing economies and sending a clear signal that his administration will stick closely to the statist policies advocated by his predecessor.

Hailemariam Desalegn, who took over from Meles Zenawi after the latter’s death nine months ago, said the telecoms, retail and banking industries in Africa’s second-most populous country after Nigeria were still too weak to withstand external competition.

“This sector [telecoms] is a cash cow, and that’s why the private sector wants to get in there, and they’re trying to tell us all kinds of stories … to get the licence,” he told the Financial Times. “We want to use that money for infrastructure development.”

Mr Hailemariam’s stance on privatisation in the state-dominated economy is at odds with much of the rest of the continent, where private investment by African and global companies has transformed the quality and accessibility of services.

It does, however, match that of his predecessor, who was heavily influenced by Marxism during his time as a guerrilla leader but came during his 21 years in power to see Taiwan and South Korea as economic models. He termed his ideal state “democratic developmentalism”.

Under his rule industry and services from telecommunications to banking – as well as politics – remained tightly controlled by his ethnic-based party, the Tigrayan People’s Liberation Front, founded by northern guerrillas to oppose Ethiopia’s central government.

The sudden death last year of Meles, a linchpin of African diplomacy who juggled strong ties to both China and the US, left a vacuum both in the region and at home. Mr Hailemariam, who was Meles’s only deputy and is a southerner from a minority ethnic group, emerged as a compromise choice. Meles had groomed the quietly spoken and little-known academic, engineer and administrator, appointing him foreign minister and deputy prime minister.

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