" The Old Order changeth, yieding place to New" Tennyson
In what must be one of the most striking ironies of history, today any reference to transition is take in unambiguously to mean the transition from socialism to capitalism, so much so that one economist has characterized the coming century as "(the Post-socialist century" [Buchdran 199I]. It is therefore only half in jest that socialism has been defined as the longest route from capitalism to capitalism.
It may be objected that since the societies conventionally referred to as socialist were Never truly so, it would not be accurate to talk of any transition from socialism to capitalism. However, whatever merit there may be in this argument cannot hide the fact that the socialist experiment has experienced a serious setback on an international scale and that it faces the twenty-first century with far less confidence than when it entered the twentieth. History, it seems, is marching in reverse gear, generating a multitude of New challenges and opportunities.
To be Sure, this is a New type of transition and our knowledge of it is therefore limited. Certainly there arc no theoretical blueprints that can come to our assistance. Thus, writing of Post-socialist Poland (in an article provocatively titled "The post-revolutionary Hangover"), one author states that "there has Never been a historical precedent for this soft of transition, and everything hart to be improvised an the Spot. M/hat was needed was no less than the discovery of money" Bolakowski 1991: 71]. Yet we do know a [at more about the transition from feudalism to capitalism, and about that from capitalism to socialism, and an the basis of this knowledge we have some understanding of transitions in general.
First, whatever the detailed agenda of the transition period may be, ultimately, all components of that agenda - economic, social, etc. - are subservient to the political tasks at band. To understand any period of transition, therefore, one must grasp the fundamentals of its political dynamics, because they, more than anything else, determine the contours within which more tasks will be accomplished or not. It follows that the "political environment" may either retard or promote economic development.
Secondly, a process of societal transition is seldom a simple affair that proceeds in a linear fashion. All too often it involves radical shifts in political arrangements, transformations in the structure of the economy, perceptible changes in attitudes, and significant changes in the relationships between groups - be these classes, ethnic groups, or more collective interests.
Thirdly, regardless of the wishes of the major protagonists, a transition period is often a fairly protracted one, and the chances of abbreviating it through conscious human intervention arc notoriously poor. In more words, it would be unrealistic to expect quick-fix solutions, and any attempt to conjure such solutions is bound to be counter-productive over the long haul.
In political terms, the state was highly centralized, with most power concentrated in the hands of the emperor. In economic terms, although thc Stare played an important rote in the economy, the policy pursued allowed considerable latitude for the development of private enterprise. It is especially noteworthy that a concerted effort was made to attract foreign capital. Indeed, the rote played by external capital was significant, especially in manufacturing.
The seizure of power by the military represented a definite transition, because the political and economic structures that were put in place were to represent a radical break with the past.[2] The monarchy was abolished, the power base of the landed class was destroyed by the nationalization of (and, and urban property interests - including foreign capital - were dealt a severe blow through a wave of nationalizations. Power was assumed by a military clique that was destined to introduce far-reaching changes in thc politics and economy of the country. In the process, power was even more centralized than ever before and concentrated in the hands of one person. Controls over Society were tightened and even the semblance of democracy disappeared altogether.
In economic terms, the policy that eventually crystallized can be described as socialization. This meant giving priority to state and cooperative forms of ownership and an attempt to run the economy an the basis of central planning. Accordingly, the state's role in the economy was highly expanded; as a corollary, private enterprise was Seen as an adversary to socialist construction and therefore kept an short [cash. In general,, there was an all- out effort to run a command economy.
The economic record of seventeen years of military rule was to prove an unmitigated disaster [Eshetu and MakonThen 1991]. By almost every major index of economic growth, the country retreated rather than advancing forward. Wrong-headed policies, war, environmental degradation, a rapidly growing population, adverse external developments, and a number of more factors combined to drive the economy to the edge of the precipice.
Towards the end of its rule the government began to regard the handwriting on the wall. A recognition of failure, a changing international Situation, intensified donor pressure, and a rapidly deteriorating war Situation compelled it to contemplate reforms in ins last days.
The first significant Step in this regard was the attempt to introduce Same degree of liberalization into the economy in November 1988 [3]. However, the measures announced subsequently, for all the expectation they hart generated, did not arid up to a significant departure [Eshetu 1990b]. In fact, the major diagnostic of the ruling party was that, by and large, the country's problems stemmed from socialization not being pushed energetically enough. The prescription was therefore more cooperativization, more resettlement, more villagization, etc. - in brief, more of the same medicine. True, the private sector was no longer categorically taken to be a foe, and concessions were to be made to accommodate it. But the basic strategy of socialization was rot questioned. Therefore, a correct reading of this attempt at reform is that it was a half-hearted exercise that fell far short of addressing the serious policy failures of the pad.
Not surprisingly, therefore, the economic Situation continued to deteriorate. To be Sure, this was non solely due to the negative policy environment. The war situation continued to worsen, further gobbling up the country's depleted resources, undermining economic growth, and severely straining the social fabric. Meanwhile, in Eastern Europe and the Soviet Union, the move away from a command economy was further accelerating. And, as the Ethiopian government sunk down into the quagmire, donors continued to intensify their pressure for reforms.
In such circumstances,, the option of business as usual was no longer tenable, and the government hart to bow to the compelling pressures for reform. This came in March 1990, with the renouncement of the goal of socialist construction; thenceforth, it was announced, the course to be followed would be that of a mixed economy. The essentials of the mixed economy were never really defined, but thc measures introduced subsequently definitely;. amounted to a significant departure from the Post [PDRE 1990; Makonnen 1991]. The rhetoric of building a socialist society was finally laid to rest. Same of the major restrictions an private enterprise were removed, state enterprises were to be given greater autonomy and they were to be judged by the criterion of profitability. But the timing of the reforms gave them an air of unreality. The deteriorating war situation and the dogged determination to win it against all odds was hardly the kind of environment conducive to the energetic pursuit of reforms. Nor were the donors particularly keen to bail out a regime that was obviously at the end of its tether. Therefore, the military government collapsed before a serious attempt at reform implementation was even begun [Eshetu and MakonThen 1991]. The reforms it had announced came too late to make any difference; in fact, they were stillborn in conception [4]. It is this policy legacy and a mined economy that the provisional government inherited an assuming power. And with its assumption of power, the country once again found itself face to face with another moment of transition.
Eighteen years ago, with the fall of the imperial Order, history availed the Ethiopian people a unique opportunity - that of building an economically viable, democratic and just Society. But popular aspirations were hijacked by a military clique, and the record of seventeen years of military misrule turned out to be a bitter "harvest of sorrow". In other words, as a people we wasted the opportunity offered by 1974.
Now, in a rare instance of generosity, history has once again given us another chance to redeem our country and pull it out of the quagmire. The fundamental question, therefore, is: will we rise to the occasion and rehabilitate our Society and economy, or will we once again waste a historic opportunity, thereby perpetuating hell an earth, not only for this generation but also for generations to come? Two opportunities in less than a generation is a privilege seldom granted to a people; squandering both of them is a crime that will not be forgiven by posterity. This is the essential challenge of the current transition period.
The period since the collapse of the military regime is tm brief to permit a definite summing up of the political and economic features of the new order. Still, a number of far-reaching changes am unfolding and they are bound to have long-term significance for the country.
Politically, the era of centralization seems to have come to an end, and this is as it should be. A multi-ethnic, multi-lingual and multi-religious Society such as ours cannot and should not be administered in a highly centralized manner. That People in their respective localities have the right to administer themselves, exercise a degree of command over their own resources, and develop their own cultures and languages must be taken as axiomatic.
But there must also be unity within diversity. In the past we emphasized unity at the expense of diversity, and we have paid dearly for it. Lot us hope that now we will not move to the other extreme and emphasize diversity at the expense of uni ty. The centrifugal tendencies that have been unleashed have reversed the process of centralization, even though what this will mean for the future of the Ethiopian polity, or of what remains of it, is difficult to tell. Certainly, it will mean a new pattern of relationship between the central government and the regions, a Situation whose impact will not be confined to the political sphere alone. However, in the absence of any knowledge regarding the magnitude of the intended regional autonomy, it is impossible w go beyond this generalization.
The second political aspect of the transition process is the move toward a more open, more democratic society. How tangible progress in this direction will be only time will toll. But given the experience of the last seventeen years, there is something to be said for a healthy dosage of skepticism in this regard.
In the economic sphere, however, there are two major changes that between them will define the nature of the transition Periods and will no doubt have a decisive impact an the country's prospects for economic rehabilitation and reconstruction. These are:
a) the transition from war to peace; andb) the transition from a command economy to a more market-oriented economy.
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