PRIME MINISTER MELES ON THE FUTURE OF AFRICA

C O N F I D E N T I A L ADDIS ABABA 001202


E.O. 12958: DECL: 05/18/2019
TAGS: PGOV PREL ECON EAID PINR ET
SUBJECT: PRIME MINISTER MELES ON THE FUTURE OF AFRICA

Classified By: Ambassador Donald Yamamoto. Reasons: 1.4 (B) and (D).

Summary
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1. (C) Prime Minister Meles Zenawi relayed to USUN Ambassador
Susan Rice May 16 that he would like to step down as Prime
Minister, hinting that it could be after the 2010 elections.
According to Meles, Africa faces unprecedented challenges
from the world economic downturn to climate change. Africa's
fate will depend on countries embracing political and
economic transformation, and being able to pursue
non-traditional development mechanisms. Green technology,
including alternate and reusable energy, complemented by a
more effective use of resources, including a shift to
budgetary assistance for deserving governments over
dependence on inefficient and expensive NGOs, are elements
for success. U.S. programs such as the African Growth and
Opportunity Act (AGOA) and Millennium Challenge Corporation
(MCC) are important examples of market mechanisms helping
development. He pointed to Taiwan and Korea as models for
transformational development. For Africa to succeed, Meles
argued, it needs to be able to experiment, explore new ways
and means to identify and take advantage of a more
transformational environment. End Summary.

Recognizing the Challenges
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2. (C) In the first visit by a Cabinet level official from
the new Administration, Prime Minister Meles discussed with
USUN Ambassador Susan Rice during a six hour meeting the
unprecedented challenges Africa faces today in fighting
poverty, promoting political openness and economic
development. Pursuing economic and political transformation
will be key to Africa's survival. Meles outlined three
important prerequisites for creating a transformational
environment. First, national leaders and the electorate must
recognize the challenges facing Africa and understand their
causes. Meles was not optimistic and said Africa will not be
a "pretty sight" in coming years with severe problems made
worse by the global economic downturn and other factors
including climate change which could see droughts become more
common as the continent witnesses rising temperatures, less
rain, and expanding deserts.


3. (C) Second, national leaders must "escape traps" of
traditional political and economic policies and be able to
pursue truly transformational ideas. For instance,
Equatorial Guinea (EG) is doing well economically and
developing its carbon fuel base. But EG is not a
transformational country because the world is changing, and
for EG to ensure its sustainable development it must
transform its economy away from dependence on purely carbon
fuel development. South Africa is pursuing important
elements of transformation which can help lead Africa. There
will be a few bright lights as some nations embrace
transformational ideas and these nations will be the models
and the stimulus for change and development on the continent.


4. (C) Third, African countries must have political and
policy space, free from outside criticism and pressures, to
experiment on new policy approaches and new non-traditional
development ideas which may, in the end, prove more
beneficial to sustainable development and combating poverty.
These countries must be given "space" to take risks and not
be confined to adopting traditional "safe" policies advocated
by international organizations and NGOs.

The Way Forward - Market Mechanism, not Patronage
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5. (C) Meles offered several key areas in which political and
economic transformation can be pursued by African countries.
First, Meles said donors and aid recipient countries must
dare to think boldly and act decisively if there is to be
true change. Consensus among a nation's people or support
from international organizations, NGOs and donors may not be
possible, but experimentation, the constant ability to
develop new ideas, methods and means to achieve development
goals is very important to success and progress.


6. (C) Second, development transformation is critical to
Africa's success. Noting that the U.S. allocates over 90
percent of its aid to Ethiopia through NGOs, Meles called the
NGO community inefficient and argued that NGOs are not bold
enough to take risks and develop new ideas. Further, echoing
complaints of developing countries, Meles said many American
NGOs spend as much as 80 percent of the development
assistance they receive from USAID and other donors in the
U.S., not Ethiopia. He said U.S. and other NGOs spend the
bulk of their funds on paying salaries and overhead costs,
procuring materials and hiring experts from the nation where
the NGO is registered. The money could be better spent in
the developing country rather than the U.S. or Europe. Meles
added that NGOs create an environment of dependence and
advocate a politics of "patronage."


7. (C) He cited the example of local Ethiopian organizations
which are caught up in the culture of patronage where such
local organizations change their behavior in order to pursue
funds rather than to understand what will help development or
advance ideas and causes. Meles noted that as a college
student he fought against the Emperor but his funding derived
from his own means and from devoted supporters dedicated to
their cause. There was no dependence on outside funding from
NGOs. People committed to real change and to a cause will
succeed because it is an ideology not the patronage of
securing funds from foreign NGOs that motivates them. Meles
referred to NGOs as "big business" that can stifle
development rather than promote change. NGOs undercut market
mechanisms, Meles argued, which hinders true economic
development. While Meles criticized USAID's use of NGOs as
undermining market mechanisms, he praised MCC and AGOA as
truly transformational ideas which advocate markets
sustaining economic development and growth.


8. (C) Meles praised the UK for its commitment to budgetary
assistance. It is more efficient, cost effective and allows
Ethiopia, which has low corruption, to pursue innovative
development programs, Meles claimed, because Ethiopia
understands how to match the funds to reaching its goals and
objectives. Meles cited the economic successes of Taiwan and
Korea, as well as China and Japan, as models for rapid
economic development and adopting transformational concepts.
In these countries, the national leadership experimented,
took risks, and implemented new ideas to reach sustainable
economic growth.


9. (C) Third, critical to a transformational environment is
information. Research is critical in securing data and
analyzing information that will help leaders think "out of
the box" and pursue irregular or non-traditional ideas. It
offers different perspectives to accepted traditional policy
approaches.


10. (C) Fourth, national leaders must broaden their economic
and political agendas. For Ethiopia, counterterrorism is a
concern, but not the sole objective in the government's
policy thinking. Meles said other transnational threats must
also be considered, such as climate change, development of
alternate, reusable and renewable energies, and other
concerns. Meles went into detail on the importance of
harnessing "green" technology to catalyze transformational
economic development in Africa and cited not only the
emphasis on wind and solar energy, but also the importance of
reforestation, irrigation and water resource efforts. Meles
stressed that one must look beyond obvious challenges to
fully understand what a nation, a region, a continent must
deal with to ensure successful development. The global
economic downturn is made worse by other factors, such as
climate change and competition for resources as well as poor
policies adopted in an effort to deal with these challenges.
Meles noted that the average temperature is increasing
throughout Africa. This has led to delayed rains, poor crop
yields, and expanding deserts. This, more than the turmoil
at the large financial institutions in Washington, New York
and Europe, though serious, will have a profound affect on
Africa. In this context, Meles cited his home region of
Tigray, for instance, where 800 million trees will soon be
planted and an innovative water catchment project is
expanding throughout the region.

Comment
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11. (C) Prime Minister Meles is brilliant and articulate as
he passionately describes the urgency of the economic
problems in Africa and how to deal with them in an innovative
and creative manner. He represented the African countries at
the G-20 summit, selected by other African leaders because of
his intellectual command of economic issues, and effectively
argued for USD 50 billion in non-consessional loans, placing
a greater emphasis on economic performance criteria and less
on governance conditions. Meles' desire to step down
reaffirms press rumors and what he has told to us and others
on numerous prior occasions. End Comment.

YAMAMOTO