Contributing to the enquiry into the role of the private sector in the Ethiopian developmental state project, this paper explores the relationship and patterns of interaction between the EPRDF government and chambers of commerce in Ethiopia since 1991. It addresses the following questions: How do chambers of commerce in Ethiopia relate to the state and vice-versa? What patterns of interaction can we identify? How does the existing legal and political framework structure the relationship between the Ethiopian state and chambers of commerce?
Studies on the East Asian developmental states have long drawn attention to the importance of the relationship between state and business membership organisations to understand the rapid and sustained growth that these countries featured over extended periods of time. Rather than being completely autonomous from representatives of the private sector, the success of developmental states has been found to depend on their ability to mobilise business membership organisations to buy into and support the developmental state project (Evans 1995).
Research on the Ethiopian developmental state has commonly focused on the state as the primary subject of analysis (Oqubay 2015; Schaefer and Abebe 2015; Prunier 2007) and little attention has been given to the relationship between state actors and representatives of the private sector. Some studies indicate that the private sector in Ethiopia remains weak and that business are to a large extent controlled by the EPRDF and its supporters (Weis 2014; Vaughan and Gebremichael 2011; Abegaz 2013). Scholars hold that the chambers of commerce, as representatives of the private sector, have been co-opted by the EPRDF government (Weis 2014, 274f; Vaughan and Gebremichael 2011, 23). According to Altenburg, “the Chamber is mainly seen as an instrument to disseminate government policies and mobilise support for them, rather than a politically neutral representation of business interests (Altenburg 2010, 8).” Despite these preliminary insights, previous research failed to investigate how the EPRDF government has established control over the chambers of commerce and to analyse the chambers’ ability and willingness to represent the interest of the private sector vis-à-vis the Ethiopian state.
Chambers of Commerce were among the first modern civil society organisations that emerged in Ethiopia in the 1940s (Rahmato 2002, 101f; Clark 2000, 4) and while their main role has been to protect the interests of their members, they have participated in Ethiopian politics beyond private sector issues and used their economic weight to exert political pressure (Deguefe 2006; Yusuf, Zerihun, and Chanie 2009). During the formative period of the EPRDF regime, the chambers of commerce in Ethiopia commanded “[…] respect and projected considerable influence in the economic and political life of the country. Chambers in Ethiopia were seen as formidable members of the civil society and a strong lobbying group for the private sector” (Seyoum 2016). The chambers became increasingly active during the late 1990s and early 2000s, questioning the EPRDF’s developmental state model and state led economic development as well as pushing for democratisation in Ethiopia.
The EPRDF government restructured the chamber system in 2003 through passing a new Chambers of Commerce Proclamation (Proclamation 341 2003). While the government presented the restructuring of the chamber system as necessary to align the chambers with the EPRDF’s developmental state agenda, evidence suggests that regime survival concerns took primacy over the EPRDF’s developmental state agenda. In this paper, I argue that rather than turning chambers into strong partners of the developmental state, the capacity of chambers was weakened and their ability to support the EPRDF sanctioned development agenda decreased as a consequence of the restructuring. Prioritising regime loyal business associations in the chamber system came at an expense of organisational capacity. Moreover, the introduction of affiliated business associations into the chamber system led to fighting between the old and the new leaders and the progressive decay of the chambers.
The paper draws on thirteen months of fieldwork carried out in Ethiopia between November 2015 and March 2018. Data was drawn from archival studies, observations and 63 semi-structured and unstructured interviews. Interviewees included employees at the national, regional and city chambers of commerce, employees at sectoral associations and other business membership organisations, business owners, as well as employees at relevant public organisations and experts in the field.