Delivering shock therapy: Ethiopia’s new Prime Minister Abiy Ahmed – The Wall Street Journal

JOHANNESBURG — The driving force behind change in Ethiopia is the new Prime Minister Abiy Ahmed. Yet the 42 year old Ahmed has only been in power for four months, and the country has been pleasantly shaken in such a brief period. The country has since broken silence with once bitter foes Eritrea, both at odds since a 1998-2000 border war that claimed as many as 100,000 lives. While talk of privatising elements of Africa's powerhouse airline, Ethiopia Air, and the telco arm, sees him ticking the right boxes. He seems to be pushing the right buttons politically, economically and business-wise. We all know the tortoise and hare story, let's just hope this time the hare doesn't stop for nap as legacies are built over time. – Stuart LowmanEthiopia's Young, New Leader Shakes Up One-Party SystemBy Joe Parkinson and Matina Stevis-Gridneff ___STEADY_PAYWALL___.(The Wall Street Journal) ADDIS ABABA, Ethiopia – In this strategically vital nation of 100 million, a charismatic young leader is delivering shock therapy to one of the world's most entrenched one-party systems..In the four months since Abiy Ahmed – a 42-year-old former army officer – emerged as prime minister from an opaque power struggle in Ethiopia's ruling party, he has riveted this East African nation with announcements that have shattered political taboos..The premier has smiled, hugged and glad-handed his way across the country, calling for national reconciliation in the midst of violent ethnic discord, ordering the release of thousands of political prisoners and legalising opposition groups long classified as terrorists..He has conceded that Ethiopia's ruling EPDRF coalition – in power since overwhelming the communist junta in 1991 – is tainted by corruption and accused the powerful security services of conducting "terrorism" against their own population. He has angered hard-liners by launching a fast-track end to the two-decade conflict with Eritrea, removing a barrier between neighbours that came to be known as Africa's Berlin Wall. Mr. Ahmed recently visited Eritrea to sign a peace agreement and he hosted Eritrean President Isaias Afwerki, who formally reopened Eritrea's embassy in Addis Ababa on Monday for the first time in more than two decades..Mr. Ahmed has also pledged to liberalise Ethiopia's tightly controlled economy and partly privatise state-owned enterprises, including Ethiopian Airlines, one of the world's fastest-growing carriers. Market analysts expect him to tighten commercial and investment relations with the West over China, which has so far dominated the Ethiopian economy and owns most of the country's massive debt load.The outcome of Mr. Ahmed's breakneck overhaul agenda could fundamentally reshape politics across the Horn of Africa, a strategic coastline perched on one of the world's busiest shipping lanes and site of mounting geopolitical competition between the Gulf monarchies, Iran, China and the US. His agenda has been supported by U.S. policy makers hoping to move a crucial counterterrorism partner closer to Washington and away from Beijing.Mr. Ahmed's message – and his telegenic delivery – has won him adulation from young and marginalised voters in a country where the median age is 18. Taxi buses in this traffic-choked highland capital are plastered with stickers of the premier smiling or holding his arms aloft. Souvenir shops sell T-shirts bearing his image.But his sharp rhetorical shift comes with significant risks, lifting the veil on Ethiopia's existential challenges. "It's difficult not to be carried away by the euphoria about Abiy," said Rashid Abdi, an analyst with Brussels-based think tank International Crisis Group. "But he's still struggling with significant pockets of discontent internally, and the frenetic pace of reform is upsetting his conservative critics."Behind the headlines, Ethiopia's challenges are immense. Lauded internationally for sky-high growth rates, the economy has amassed unsustainable debt to fund an infrastructure spree, while many of its people still face hunger and extreme poverty. A crippling shortage of foreign currency has slowed production in factories and marquee construction projects including the $4.2 billion Grand Ethiopian Renaissance Dam on the Nile, which has been only temporarily alleviated by a $1 billion cash infusion from the United Arab Emirates.Analysts say Mr. Ahmed's pledge to sell stakes in two of Ethiopia's largest state-owned enterprises – Ethio Telecom and Ethiopian Airlines – has more to do with resolving the currency crisis than a damascene conversion to free market capitalism. Auditors PricewaterhouseCoopers are valuing the assets of EthioTel, and Deloitte, Ernst & Young and others will help advise on the share sale. McKinsey is advising Ethiopia's government on regulatory overhaul in preparation."This reform is irreversible. The fundamentals are ripe for this change. But it needs to be done properly," said Tewolde Gebremariam, chief executive of Ethiopian Airlines, in an interview. The chief executive of Ethio Telecom, Andualem Admassie, added: "We can do this very quickly, maybe even within one year. We are ready to take on any competition."Mr. Ahmed's agenda has created powerful enemies, including the longtime political and intelligence elite he outflanked but which are starting to regroup. The premier now delivers speeches behind bulletproof glass after an assassination attempt at a rally last month."Love always wins…to those who tried to divide us, I want to tell you that you have not succeeded," Mr. Ahmed said in an address shortly after the blast.Western diplomats in the capital are hopeful the new leader will translate rhetoric into real change, but they caution that opening Ethiopia's system carries danger. "This is extraordinary and his PR is genius—he is talking individual rights and freedoms from within this Leninist system," said one senior Western official. "But in some ways he's playing with fire. What happens when you take the lid off this system?"Mr. Ahmed emerged as prime minister in March from a struggle within the ruling coalition sparked by nationwide protests and the surprise resignation of his predecessor. His succession was the first leadership transition in Ethiopian history not precipitated by revolution or an incumbent's death.Popular resentment had been stirred by the widespread belief that the government was controlled by the Tigrayan ethnic group, which makes up just 6% of the population. The protests were particularly intense among the Oromo, who account for one in every three Ethiopians, but have long felt marginalized. Mr. Ahmed is the first ever Oromo to hold the premiership.His rise was aided by his revolutionary credentials. He enlisted to fight in the guerrilla war against communist dictator Mengistu Haile Mariam and served in key battles in the Eritrean war. Mr. Ahmed entered parliament with the ruling coalition in 2010. His mixed ancestry – son of a Christian mother and Muslim father – and fluency in three of the country's main languages has allowed him to bridge ethnic divides. Friends of Mr. Ahmed say that his smile is twinned with driving political ambition. "From a very young age, he always wanted to be prime minister," said Feseha Tekle, a colonel who served alongside Mr. Ahmed. Senior officials say he also has a ruthless streak. One morning last month, four senior cabinet members arrived at their offices to find letters relieving them of their duties.Top officials say he has moved quickly to reshuffle powerful military and security service commanders allied to the old guard. The changes have unsettled an elite that rigidly controlled Ethiopia's "developmental state" – a Chinese-style system that shunned private enterprise in favour of state-backed industry, manufacturing and agricultural processing.Addis Ababa, the teeming capital, is a monument to Ethiopia's paradoxical development: cranes, new construction and the continent's first light railway stand alongside swelling slums for the city's fast-growing population.Mr. Ahmed's rhetoric appears to be changing one of Africa's most paranoid political cultures. On the streets in Addis Ababa, voters feel more comfortable discussing politics or criticizing the government. Newspapers report that voters who always avoided speaking about politics are now coming to them with their views."I am 70, and I've never seen a prime minister like this," said Girma Birtu, a retired lawyer in a tweed flatcap. "This is Ethiopia's time to move to the next chapter. We've needed to do this for a long time." – Yohannes Anberbir contributed to this article.Write to Joe Parkinson at joe.parkinson@wsj.com and Matina Stevis-Gridneff at matina.stevis@wsj.com

Delivering shock therapy: Ethiopia’s new Prime Minister Abiy Ahmed – The Wall Street Journal

Ethiopia's Young, New Leader Shakes Up One-Party System

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