The meaning and uses of privatization: the case of the Ethiopian developmental state

Abstract

Not long after his election as prime minister of Ethiopia, Dr Abiy Ahmed declared that the country would privatize state-owned enterprises (SOEs) such as Ethiopian Airlines and Ethio Telcom, opening up sectors once considered off limits to foreign capital as part of his medemer reforms. On the surface, it might appear as if the Ethiopian leader was signalling a greater embrace of neoliberal (or market liberalizing) policies through his advocacy of privatization. However, this article interprets the call not as an ‘opening up’ to the demands of global capitalism, but as a calculated policy decision existing within the logics of the state’s developmentalist ideology. Through an analysis of the intellectual foundations and institutional evolution of the country’s privatization programme, I argue that the Ethiopian government privatizes SOEs as a revenue-generating strategy that augments state economic power by capitalizing on incomes gained through development investments – using the case of the domestic beer industry as my ethnographic example. By doing this, I unsettle assumptions about the meaning and uses of privatization within a developmentalist framework, demonstrating how Ethiopian leaders contend with global ideas, producing innovative strategies of resource mobilization to promote economic growth while protecting local sovereignty – a distinct form of African state capitalism.