One of the most extraordinary growth records over the past two decades was to be found, perhaps surprisingly, in the horn of Africa. Real GDP per person in Ethiopia, the second-most-populous country in Africa, rose by an average annual rate of 9.3% from 1999 to 2019, just 0.4 percentage points less than China¡¯s pace of growth. Now a year-long war between Ethiopia¡¯s government and forces led by the Tigrayan People¡¯s Liberation Front (TPLF) threatens to spill into the capital city, wreak humanitarian disaster and wipe away those economic gains.
Three decades ago, its economy was among the world¡¯s least developed. Then in 1991 forces led by the TPLF overthrew the Marxist regime that had long run things. Though the TPLF-dominated government remained authoritarian, it began liberalising the economy and directing investment towards infrastructure. Ethiopia¡¯s GDP per person has risen more than sevenfold since 1995, faster than other sub-Saharan economies and the emerging world as a whole. The share of Ethiopians living in extreme poverty fell from half the population to under a quarter in the 2010s.*
A protracted conflict, by contrast, would undo most or all of the country¡¯s past economic gains. Whatever happens next, Ethiopia¡¯s case already demonstrates that a state¡¯s capacity to maintain order is the most important, and often the most elusive, condition for development. 〈The Economist Nov 20th 2021〉
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