The Party That Consumes the State: The Rise of Oligarchy in Post-1991 Ethiopia Tefera Negash Gebregziabher 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 1 This dissertation is part of the research programme of CERES, Research School for Resource Studies for Development This research was partially funded by a fellowship from the Open Society Foundation (OSF) Civil Society Scholar Award. FSC LOGO © Tefera Negash Gebregziabher 2019 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission by the author. ISBN 978-90-6490-111-9 Lay-out & design: Legatron Electronic Publishing, Rotterdam Cover: Brian D. McKenna 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 2 The Party That Consumes the State: The Rise of Oligarchy in Post-1991 Ethiopia De partij die de staat inlijft: De opkomst van de oligarchie in Ethiopië na 1991 Thesis to obtain the degree of Doctor from the Erasmus University Rotterdam by command of the Rector Magnificus Prof.dr. R.C.M.E. Engels and in accordance with the decision of the Doctorate Board The public defence shall be held on 12 December 2019 at 16.00 hrs by Tefera Negash Gebregziabher born in Bokoji, Ethiopia 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 3 Doctoral Committee Doctoral dissertation supervisors Prof. W. Hout Prof. M.A.R.M. Salih Other members Prof. G.J. Abbink, Leiden University Prof. K. Berhanu, Addis Ababa University Dr. M.K.A. Kniou 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 4 To my mother Tsige Tilaye, whose kindness and hard-work always amazes me and To my daughter Zala Tefera Negash Olofsson, who chose to join me in the most challenging times 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 5 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 6 Table of Contents Acronyms IX Acknowledgments I Abstract III Samenvatting V Chapter 1: Introduction 7 Prelude: The current state of affairs 7 Background 8 Statement of the problem 10 The Focus: Research objectives and questions 11 Methodology 12 Data collection in a politically sensitive setting 13 Methods 14 Overview and organization of the thesis 16 References 18 Chapter 2: Theory and analytical tools 19 Introduction 19 Oligarchy and elite theories: a brief history of thought 20 Oligarchy 20 The State and Oligarchy 26 Theoretical Framework: Oligarchic politics in a party-state 28 Analytical tools 30 References 31 Chapter 3: Ideology and power in TPLF’s Ethiopia: A historic reversal in the making? 33 Abstract 33 Conceptual and methodological note 35 Ethnonationalism and the emergence of the TPLF 37 The Marxist-Leninist turn 39 The revolutionary democratic turn 40 The turn to the democratic developmental state 42 The semi-ideological threads 44 Conclusion 47 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 7 Chapter 4: The rise of oligarchy in Ethiopia: the case of wealth creation since 1991 49 Abstract 49 Introduction 50 Rise of Oligarchy, 1991-2016 52 The three oligarchs in Ethiopia 57 The political nomenklatura 57 Sheik Mohammed Hussein Ali Al-Amoudi 58 The ‘tiny oligarchs’ 58 Conclusion 59 References 61 Chapter 5: Soldiers in business: the pitfalls of METEC’s projects in the context of 63 Ethiopia’s civil-military relations Abstract 63 Introduction 64 Soldiers in business: a theoretical note 65 The Inception of METEC 67 From barracks to market: the pitfalls of METEC’s engagement 70 METEC and civil-military relations 73 Conclusion 75 References 77 Chapter 6: Is ‘developmental patrimonialism’ a misplaced chant? explanatory 79 comparison of politics of development in Ethiopia and Rwanda Abstract 79 Introduction 80 Causal mechanisms in comparative research: Methodological prelude 81 Developmental patrimonialism: The model and its cases 83 Contextual conditions 86 Comparative causal insight: Concentration of power with variegated tendencies? 93 Conclusion 96 References 98 Chapter 7: Analytical summary and conclusions 101 Introduction 101 Analytical Summary 102 Conclusions 107 References 111 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 8 IX Acronyms AAMI Adama Agricultural Machinery Industry ABMI Akaki Basic Metals Industry AC Africa Confidential ADB African Development Bank ADP Amhara Democratic Party ANDM Amhara National Democratic Movement APPP Africa Power and Politics Programme BAI Bishoftu Automotive Industry BMEI Basic Metals and Engineering Industry CSA Central Statistics Authority CVL Crystal Ventures Ltd DAVI Dejen Aviation Industry DBE Development Bank of Ethiopia EBC Ethiopian Broadcasting Corporation EDDC Ethiopian Domestic Distribution Corporation EEA Ethiopian Economic Association EEP Ethiopian Electric Power EEPCO Ethiopian Electric Power Corporation EFFORT Endowment Fund for the Rehabilitation of Tigray EGRD Ethiopian Grand Renaissance Dam EIA Ethiopian Investment Agency EIC Ethiopian Investment Commission EIGs Endowment Investment Groups EIU Economic Intelligence Unit EPEI Ethiopian Power Engineering Industry EPRDF Ethiopian People’s Revolutionary Democratic Front EPRP Ethiopian People’s Revolutionary Party FBC Fana Broadcasting Corporation FEACC Federal Ethics and Anti-Corruption Commission GAI Gafat Armament Industry GDP Gross Domestic Product GIZ German Development Agency GTP Growth and Transformation Plan HAEI Homicho Ammunition Engineering Industry HIPC Highly Indebted Poor Countries HMMBI Hibret Manufacturing Building Industry HTI Hi-Tech Industry IES Institute of Ethiopian Studies IMF International Monetary Fund ION Indian Ocean Newsletter JICA Japan International Cooperation Agency KSDP Kuraz Sugar Development Project 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 9 MEISON All-Ethiopia Socialist Movement METEC Metal and Engineering Cooperation MFI Metals and Fabrication Industry MIE Mesfin Industrial Engineering MIDROC Mohammed International Development Research and Organization Companies MLLT Marxist-Leninist league of Tigray MoFED Ministry of Finance and Economic Development MoT Ministry of Trade MPE Ministry of Public Enterprises MPI Ethio Plastics Industry NAI Nordic Africa Institute NBE National Bank of Ethiopia NPC National Planning Commission ODP Oromo Democratic Party OFAG Office of the Federal Auditor General OI Oakland Institute OPDO Oromo People Democratic organization PPESA Privatisation and Public Enterprises Supervising Agency SEPDM Southern Ethiopian People’s Democratic Movement SMEs Small and Medium Enterprises RDF Rwandan Defence Force RIG Rwanda Investment Group RPF Rwandan Patriotic Front TPLF Tigray People’s Liberation Front UNDP United Nation Developmental Programme UNESCO The United Nations Educational, Scientific and Cultural Organization USD United States Dollar WB World Bank 537793-L-sub01-bw-Tefera Processed on: 5-11-2019 PDF page: 10 I Acknowledgments I met so many wonderful people during the PhD journey, I have developed scientific curiosity and learned humility – thank you all for these gifts!! The seeds of my PhD journey was sowed in the summer of 2012 when I met Prof. Mohamed Salih – the warmth and encouragement you gave me that day commenced this journey at the ISS. Mohamed, you were actively engaged in my work as the first promoter, reading the various drafts of my proposal and placing me here – which I would call a home that gave me a lot. You have read my subsequent papers till you left the prime responsibility to Prof. Wil Hout. Wil, taking over the first promoter-ship, done all that is possible for the realisation of this dissertation. Wil - you have listened to my rough ideas patiently and help transform them, meticulously read many drafts of my chapters (including sacrificing your weekend whenever necessary), you calmed me down when I got frustrated, you have done whatever is possible in your capacity when my already precarious financial situations got worse, you’ve believed in me and promoted me to various venues. I could only say – Thanks Wil, you are a special promoter. There is another special person as far as the PhD journey and my life in the Netherlands is concerned – Marina de Regt. I have thought a lot but no words Marina! I only try. You are not just a generous soul but fun to be with and eager to help in academic work or anything else. What makes you distinct in my life is that your support was unabated by circumstances – lots of respect to this unconditional support!! A sincere thanks and appreciation to scholars and peers who read and examined my thesis at different levels from the proposal to the full manuscript – Prof. Jan Abbink, Dr. Ward Vloeberghs, Dr. Jeff Handmaker, Dr. Fasil Taye. Your critical readings of my proposal and post fieldwork paper have shaped my research and the writeup of my thesis. Furthermore, I am exceedingly humbled to have the following scholars as members of my public defence – Prof. Kasshaun Berhanu, Prof. Jan Abbink, Prof. Lindsay Whitfield, Dr. karim Knio, Dr. Jean- Nicolas Bach, and Dr. Lovise Aalen. I am also indebted to my fieldwork advisor Dr. Solomon Mebre of Addis Ababa University (AAU) for all the support and encouragement. At the AAU, my dear friend Eyasu Gizaw deserves a special thanks for reading my work and for the seasoned conversation we always have as well as the priceless friendship. At ISS, I have to check my records not to miss anyone of the extraordinary people I met that nurtured my thoughts and absolutely drenched the rather lonely PhD journey