A full transcription of Ethiopian Prime Minister Meles Zanawi's interview with RNW correspondent Koert Lindijer and Financial Times reporter William Wallis.

See also: Ethiopian prime minister mollycoddled by the West
 
 
Question (Q): I am intrigued about your last visitor we saw going out, Salva Kir.
 
Meles Zenawi (MZ): That was a regular consultation.
 
Q: You must be concerned about events in Sudan?
 
MZ: That's a fair way of putting it.
 
Q: I am intrigued by what Ethiopia's position would be if Khartoum resisted a southern desire for independence. You would be in a very difficult position presumably.
 
MZ: Well, they would be in very difficult position. All Sudanese, because I think they have an internationally recognized agreement and I have heard President Bashir answer that question very clearly in an affirmative fashion, suggesting that if it is the wish of the people of southern Sudan to secede, then he would accept it. I have no reason to believe that is not his view.
 
Q: Relations are getting very tense all the same between the north and south.
 
MZ: They have never been easy at the best of times and there is quite a bit of tension.
 
Q: Which of your neighbours keeps you up most at night at the moment?
 
MZ: In terms of negative possible outcomes for Ethiopia and the region as a whole it would of course be Sudan, not the current state of affairs but what could turn out to be some time around 2011. We are very worried that the overall implementation of the peace agreement - unless all the wrinkles are ironed out in good time - would spell trouble for everybody.
 
Q: Moving on to what we were talking about last time we met in London, Africa seemed to do very well at the G20 meeting, are you satisfied that what was agreed to is being delivered?
 
MZ: Yes and no. Yes, in the sense that unlike previous promises this time around roughly half of the fifty billion dollars appears to be more or less ready for disbursement through the IMF. Some 17 billion dollars of our quota of new SDRs. And six billion dollars that was promised as part of the gold sales. It appears that the managing director of the IMF is finalizing the  allocation of the new SDRs and is likely to disburse the resources before the end of this year. And he has indicated to all ministers that there is a possibility of six billion dollars of gold sales to be front loaded. He doesn't have to sell the gold now to disburse the money.
 
So something like 23 billion dollars is more or less ready now. But of course we were promised 50 billion so there are 27 billion dollars that still need to be accounted for. That is still iffy. But I think what we have got so far is much better and quicker than people expected. With a little bit of effort maybe we could claw back some of the money that is not yet accounted for.
 
Q: Ethiopia seems to be doing pretty well out of it. You have IMF stabilization funds, World Bank talking about more project support.
 
MZ: Our share of the SDR is not that high, but obviously we will get our share of that. We will probably get some of the money of the gold sales and one of the agreements was that African countries would get double their IMF quota. So we get our share of that too. In terms of the bank and the African Development Bank there has been talk of front-loading of their current source of funding to all African countries, but we have yet to see the results.
 
Q: Some of the western donor countries seem to be frightened of you. You are not doing everything they would like, particularly on the political front, but also they would like to see faster liberalisation of the economy.
 
MZ: I don't think they are frightened of me. I am surprised to hear that. I suppose some of them are not fully comfortable with some of our policies. I would understand that because we are trying out new alternatives and new alternatives raise concern everywhere. I am not comfortable with change nor is every human being. We all fear to some extent change. To the extent that we are changing from the orthodoxy of development policy in Africa it would be understandable if people would be worried whether it will deliver better results.
 
My argument would be the proof of the pudding is in the eating. The pudding we have in place appears to be quite nutritious. Our economy is doing well. I can understand concerns, although I doubt whether there is fear.
 
Q: But they were much more outspoken until two, three years ago. They made statements, they protested at certain laws, and now it seems they are all going along with you.
 
MZ: No. They are still protesting. They are still telling us frankly that they don't agree with this or that but they never have said in the past you either toe the line or you are dead. They gave us some slack in terms of policy space and we tried out our policy alternatives and I would argue that we have something to show for it, something perhaps better than the average. So our arguments are now better backed with actual results than was the case several years ago.
 
Q: You seem very adept at playing off different foreign interest groups, for example the East against the West. Is this an Ethiopian trait?
 
MZ: I do not know what being adept at this means. We try to get help from every quarter. We don't mind if we get it from Somalia if it is available. But of course we would try to make sure if we get assistance from Somalia, this does not come at the expense of assistance from somebody else. This is because we need all the assistance we can get. It would be stupid for us to say to the Indians, for example, ‘we prefer Chinese assistance’. It would also be stupid for us to say to the Brits ‘now that the Chinese are helping out some infrastructure projects, keep your money’.

It doesn't make sense. We want to get as much assistance as we possibly can, because on balance we get about half of the average assistance that other African countries get in per capita terms. It's not like we are overflowing with assistance. At this stage what we are trying to do is make the best use of every avenue we have of getting assistance and investing.
 
Q:  Historically, assistance from the West has tended to come with more prescriptions than, for example, assistance from China and India. Are you more comfortable with the relationship you have with the East now, for example, than with these more prescriptive relations with the West which have tended, historically, in Africa to be less equal?
 
MZ: I think each donor has his or her own strengths and weaknesses. In the case of western assistance there are sometimes prescriptions attached. But to be fair to the western donors, as far as Ethiopia is concerned we have not accepted any policy prescriptions that we are not comfortable with. Everything we have done by way of reform - economic or political - is because we are convinced it is good for us.
 
Q: How are you able to do that where some other African countries have not been able to?
 
MZ: Maybe we are more bloody-minded than the others.
 
Q: The argument is being made that whatever else happens in the region this country must remain stable. You have Sudan, Somalia, Eritrea and it is as if they are giving more freedom to you than other countries on the economic and the political front.
 
MZ: There has been a sort of tacit understanding with the Bank, for example, for almost a decade now since the time of Joe Stiglitz was the chief economist. That tacit understanding was and it is just tacit, that we would get less assistance than the average but more space in return.

Over the years I think we have made good use of the policy space we were given. I don't think any donor government would have complaints about our economic performance. Our growth has been on average about twice the African average. Our investment in pro-poor growth has been very much higher than the African average. Something like 70 percent of our budget goes to pro-poor investment. That is not available elsewhere on the continent.

So we have something to show for our experimentation and the donors would be hard pressed to say that we are not delivering. What they are arguing is that we could do even better and they are still arguing and they are still in per capita terms giving us less money than the average African country. Take the EU for example, in per capita terms it gives four times more money to Eritrea than to Ethiopia.
 
Q: The donors do have concerns that there is slippage now, in macro-economic policy. And that's reflected in foreign exchange problems you have had, the inflation problems you have had and in the private sector being crowded out by government borrowing, among other concerns, including that some of the growth areas, because they have been backed so significantly by the state, may not be sustainable. These are the kind of issues that come up.
 
MZ: Yes, and some of it is very valid. We have high, persistent inflation rates, and that needs to be taken care of. We have a programme with the IMF to adjust that. We have had a lot of pressure on our balance of payments. That needs to be taken care of. We have a programme with the IMF to do so. So these concerns are very valid and we are trying to address them.
 
As far as crowding the private sector is concerned, that is technically difficult to do when the budget deficit is technically zero. We have had no bank borrowing in the past year, so technically we are more prudent than the Maastricht treaty would have required of every member of the EU. Bank borrowing this year has been exactly zero, this budget year ending 7 July. And in any case previous budget deficits have been for investment purposes, in infrastructure.

Some in my economic team would argue that we are actually crowding in rather than crowding out the private sector. But we have had to clamp down on monetary growth as a result of inflation. That means in spite of the fact that we don't have bank borrowing this year, the borrowing by the private sector from the banks has been severely limited by this strong clamp down on money growth. So, if there has been crowding out it is because we have had very stringent monetary policy to take care of inflation and to some extent the balance of payment challenge.
 
As to how sustainable our growth is, nobody can say.

Q: I am thinking of the sectors that have had a big stimulus from government that has led to growth. There is some concern that this will not be sustainable, and also that you could be more focussed if you left sectors such as the telecom and the railways, which in other countries have proved successful under private management.
 
MZ: The telecom sector is not a burden on our budget. The Chinese are taking care of that, with a 1.5 billion dollar credit which means that we can have the most modern communications infrastructure. When the project is completed our telecommunications infrastructure will be about as modern as that of South Africa and Egypt.
 
Q: When will that be?
 
MZ: The second half of 2010 maybe. As far as railways is concerned we are not seeking a monopoly on the part of the public sector. We have for the past 15 years been actively seeking investment in our medium piece of the railway we have between here and Djibouti, with very little success. So now we are suggesting we do prefer private sector investment in railways but it will be rather less prudent to simply wait for such investment with folded arms because the transport costs are very high and we need to reduce it. Pending private sector investment in railways we might have to look in public investment particularly in the key corridors.
 
In terms of incentives we give for the private sector, it is not like we are competing with anybody to have a low-tax haven here, no. We do give tax holidays from one to five years, but compared to what other countries in Africa are giving it is not out of the ordinary.
 
Q: But your overall tax base has fallen to a very low level.
 
MZ: That has to do with our failure as a government not with tax policy per se. It is not because tax policy is too low, it is because tax collection is dismal.
 
Q: On the political front, if you look at the events of recent months from outside Ethiopia - a lot of arrests, talk of plans to assassinate members of the government, new laws restricting NGOs, new anti-terror laws - it seems like you are a government besieged by enemies. Do you have significant enemies and if not why is there a need for this clampdown?
 
MZ: Well, you see, I understand that some people interpret it as a clamp down but look at the points you are identifying. Anti-terrorism law: some people would argue that under our obligations due to decisions taken by the African Union, the United Nations, we should have had an anti terrorism law in place a few years ago. We were too busy with other issues and this law lingered for some time. It so happened we have completed it now. When we completed it, if you see the draft in many instances it is an attributed quotation from this or that anti-terrorism law in the West including the UK.
 
Q: There are some pretty invasive elements that would not pass in the UK.
 
MZ: I would suggest you read it, because what you hear may not be the same as what you read, as is always the case in Ethiopia. I would say our anti-terrorism draft legislation is in no way more draconian than any legislation in Europe. So there is no clamping down as such. In any case the criminal court that we have was to a large extent adequate to deal with terrorism, that is why we did not feel in a hurry. We took our time in proposing this legislation.
 
With regards to people detained. A number of people have been detained and these people had plans or aspirations to assassinate some officials.
 
Q: Including you.
 
MZ: There is no clear sign as to whether they are telling us the truth about that. Some would say no. Some of them say yes. That is beside the point.

Q: They have confessed.

MZ: Yes. I can tell you this crop of terrorists as opposed to al-Itihaad and al-Shabaab are a bit more amateurish. While they have plans to assassinate the possibility of them pulling it off that operation was very remote.
 
Q: You face more formidable opponents out there than this bunch.
 
MZ: There are more professional terrorists around.
 
Q: But this was not a manifestation of serious problems within the army, which is what some people suspect.
 
MZ: No. The civil society law - some people would say - is clamping down. We would say this is an empowering law. The odd thing about our legislation from the African perspective is that we separate foreign NGOs and local civil society. Local civil society would be free to participate in any political activity. Foreign NGOs and foreign funded entities would not participate in political activities. Some people say this is clamping down on civil society. We would say this is empowering civil society, because civil society has to be an expression of the membership and that is why in the USA foreign funded organisations cannot contribute.
 
Q: All over Africa there are human rights organisations and pro-democracy advocates who are funded from abroad. It would be very difficult to raise funding within a country like yours. So effectively this means these organisations will disappear.
 
MZ: That I think is a bit presumptuous and some of my colleagues would find this difficult to accept, because if you push your argument to its logical absurdity you would be saying poor people cannot exercise their democratic rights unless rich people pay for it. That assumption needs to be proved. It cannot be taken for granted. We would say if those rights are important to poor people then those poor people are capable of organising by mobilizing their own time, their own resources, because those rights are important to them. We would say that history in this country has shown that, for example, in the early 1970s. Peasants with very little education or funding from abroad organized to call for land reform in Ethiopia and ultimately brought down the imperial regime without foreign funding.
 
Now if that could be done in the 1970s, we think it could be done in the first half of the 21st century. On the contrary, we think if there is foreign funding for civil society organisations what it does is undermine the democratic nature of civil society because the leadership does not depend on the membership. The leadership depends on the embassies.
 
Q: You depend also on these same embassies and donors as a government.
 
MZ: For development activities absolutely.
 
Q: You could argue that aid is fungible and so you depend on them for political activities too.
 
MZ: We have made a point of making sure that our recurrent budget is financed domestically. We thought that was essential for our own health. But for development activities we have, of course, sought assistance from abroad and we are now asking foreign NGOs to continue to participate in economic, social and environmental development. We are not restricting foreign NGOs in these areas.
 
Q: And good governance for example?
 
MZ: That would be politics. And that is for citizens.
 
Q: All these events have contributed to an atmosphere where people do not feel free to speak, for example, to us. We have been closely monitored, for example.
 
MZ: Have you read the local newspapers? Do they mince their words about government?
 
Q: It's more that when you are having a cup of coffee there is someone who immediately sits beside you and puts a tape recorder on. Compared to four/five years ago, when people were openly expressing themselves. You are a liberation fighter, you used to mingle with the people in Tigray, now it seems people fear you as if you are an emperor. Don't you feel uncomfortable with this? The interaction with people that I know from you, I don't see it anymore.
 
MZ: Not in Addis. But I don't think that has disappeared. I do sometimes leave Addis and visit smaller towns, rural areas and there people feel free to mingle, ask questions, debate issues. Here in Addis I mingle a lot less than I would like, but I think given the region we are in, and the nature of Addis - a big metropolitan city where all sorts of people can operate - security considerations begin to impinge on that freedom to communicate.

Now, I don't know how to dispel your feeling because feelings don't have to be proved to take hold. You don't have to prove to yourself that there has been a tape recorder following you for you to feel that it is indeed the case. I am telling you that even if we wanted to we don't have the means to follow everybody in Addis around. We cannot afford that kind of pervasive intelligence work. In any case it would be contrary to everything we stand for.

The only proof I can give you is the newspapers that are published here, which I would argue have no qualms about lying to tarnish the government... such as suggesting that we would want the president of Eritrea assassinated and that we are involved in such an attempt. There is no proof of that. The journalists don't have any shred of evidence, yet they publish it here.

Now, a fearful community, I would suggest, would think twice about falsely accusing the government in a published newspaper that it is out to assassinate the head of state of another country. That would not seem to suggest there is pervasive fear here. But as I said there is no way of dispelling feelings except over time, acclimatising and see what happens.
 
Q: Is there a danger though that your liberation movement could go the way of some others on the continent which have over time lost their original ideals and are prey to cronyism and the pursuit of power for its own sake rather than for the sake of the people?
 
MZ: Absolutely. There is no guarantee. Every movement will have to renew itself everyday or risk degenerating.
 
Q: Including changing leadership?
 
MZ: Absolutely.
 
Q: Is there any development on this front since you have been saying you are willing to stand down?
 
MZ: At least we are discussing in our party, and the discussion in our party, I think, is more mature than people give it credit for. In the sense that we are not talking about Meles only. We are talking about the old generation, the leadership of the armed struggle that continued, meaning that the party needs to have new leadership that does not have the experience of the armed struggle. For its own sake, for the sake of the party that needs to happen. There is no disagreement in principle. There may be no answers in tactics: exact timing, there may be some debate. But there is no disagreement on the principle that the old leadership needs to go and a new leadership needs to take full power.
 
That's part of the solution, not the only solution. I think our movement has by and large avoided much of the degeneration of various other liberation movements.
 
Q: Are you saying that you won't be standing in the elections next year?
 
MZ: All I am saying is that my personal position is that I have had enough. I am not a lone gunman. I have from time to time been outvoted even while I was a prime minister and I have done things that I don't like, don't agree with but implemented party positions particularly during the war with Eritrea. I have two options under such  circumstances. Resign from the party or follow the majority.

So, I am arguing my case and the others are also arguing their case. I hope we will come up with some common understanding on the way forward that would not require me to resign from my party that I have fought for all my life. I would like to keep my party membership even after I resign from my government position. So my hope is we will come up with some understanding. I don't think the differences are all that big.
 
Q: When might that take place? Is there a party congress coming up?
 
MZ: Yes there is a congress in September.
 
Q: Is that where this decision will be debated?
 
MZ: Yes, but it will also be discussed much earlier.
 
Q: Just to clarify, from what you were saying, if the majority of the party does not decide to back your plan for renewal you would resign?
 
MZ: There would be two options. I could go on in the hope of convincing them at some time in the future, or I could resign. My hope and expectation is that we will reach some kind of compromise position because the margin of difference is not all that big.
 
Q: Who would you like to succeed you?
 
MZ: I would like the party to make that decision.
 
Q: Your idea of a renewal of leadership seems similar to the Chinese model given the restrictions on political freedom here, and less to do with a western model of electoral change. Is this because you believe you have more to learn from countries like China than countries [like, for example, the UK]?

MZ: Countries like [the UK] appear to have done that. At least the Labour Party. And so there is a lesson to be learned from the Labour Party too.
 
Q: I wouldn't draw too many lessons from the Labour Party at the moment.
 
MZ: I think some people in the UK are making a mountain out of a molehill and I think there are lessons we can learn from the Labour Party. Renewal of leadership is needed in any party, western or eastern. In some instances parties might be in power for longer periods than others and in that instance the need for the renewal of leadership becomes even more important. In other instances the electorate does the rotation for the party.
 
Q: Why is it that Ethiopians don't really seem to believe you could go?

MZ: Because it has not been done in the past in Ethiopia.
 
Q: This is a precedent you would like to set?
 
MZ: This is a precedent that I would almost kill to set. 
 
Q: And what will you do when you eventually step down? I gather you haven't had a holiday for 34 years.
 
MZ: I think my preference would be to read, perhaps write, but again that will be a decision for the party. One thing that I will not do, one thing that the party should not consider, is be involved in any government work.
 
Q: You will withdraw?
 
MZ: That is a necessary condition and without that there is no change of leadership. But once we have done that the party will have its decision as to whether I will be allow to sit back read and write, or give me an other party [role].
 
Q: Like party chairman?
 
MZ: I don't think so because the prime minister has to be the party chairman. That is not a position for a retired leadership.
 
Q: One question on Somalia, how do you judge the present situation? Has the danger of Mogadishu falling into the hands of people you don't like passed? What do you see happening in the months to come?
 
MZ: There appears to be some sort of a stalemate now and that's better news than most people expected. Most people expected the government to crumble under the pressure of the Shabaab and its allies. That hasn't happened and I guess that should be good news. But I think the government could do better than holding its own. I  think it could push back the Shabaab. I don't think the Shabaab are about to take over.
 
Q: Is that what you and the African Union are fighting? Are you up against a front of extremists, the first one in sub-Saharan Africa? Is that what's at stake?

MZ: Technically the African Union is there because it has been invited by a member state, the Somali government. My own opinion is that indeed the empty space cleared by the collapse of the state in Somalia, has been filled by forces that are unlikely to contribute to the stabilisation of the region and could pose a serious threat not only to the region but also to everyone else. That needs to be contained if not rolled back.
 
Q: People don't equate it with...
 
MZ: I would suggest that Somalia is not as dangerous as Pakistan, there are no nuclear bombs I know of in Somalia, so that sort of gives some confidence that there is a limit to what the terrorists in Somalia can do. But, of course, they have not been engaged in spectacular activities in the Horn of Africa for five six years now. They have effectively been contained. Had they not been contained perhaps people would recognise that these people can cause serious damage.