Ethiopian Economy Idles Despite Radical Moves

A SUNDAY soccer match at the main city stadium is jammed with fans cheering wildly as a military team loses to a civilian one. And a few blocks away, at the national theater, a show of traditional and modern Ethiopian music sells out at $3 a ticket. But on a back street, a mother of two, living in a one-room stick-and-mud hovel about the size of a double bed, with no water, electricity, heat, toilet, or window, explains that she earns only 25 to 50 cents a day selling vegetables. Her earnings are typical of many poor families here.

``When I get just 25 cents we have only bread to eat,'' she says. ``I'm living from hand to mouth.''

Two months after the government's dramatic announcement that Ethiopia was abandoning Marxist socialism in favor of a freer economy and possible political change, the economic life in this crowded, hilly city goes on pretty much as normal - both for those who have money and for those who don't.

In his March speech, Ethiopian strongman Mengistu Haile Mariam said the country's ``failure to give due attention to the private sector'' has had a negative effect on the economy. Citing a ``world today ... far different from the world'' 15 years ago when Ethiopia adopted Marxist ideology, Mr. Mengistu called for a reduced government role in the economy and more private enterprise.

Outsiders often are surprised to find that many shops in this city are privately owned. And most farm production comes from land individually farmed, rather than from state farms.

Mengistu is calling for unlimited private investment, the right to buy and rent houses, and an end to cumbersome government controls on farming and agricultural marketing. He says farmland will remain state property but farmers will have legal use rights to the land and the right to transfer such use to heirs.

The changes will not be complete, though, as the state will continue to ``direct'' the economy and run a number of enterprises.

With the lifting of government marketing controls, the retail price of some grains has fallen sharply. In many rural areas, the announcement of reforms has brought chaos - and violence.

Angry farmers are said to have killed a number of government officials. These officials were working in state agencies that forced farmers to sell their crops through them, often at prices below the market. With the March announcement that the agencies would be abolished, anger pent up for years has been released.

Many farmers are reclaiming land taken from them through various government farming schemes. ``Things have gotten a little ugly,'' says a Western development official.

An Ethiopian source puts it more bluntly: If the government doesn't come up with detailed plans on how to make the transition from state-run to a freer farming system by June, ``this place [Ethiopia] could explode.''

``There's been a proclamation, and nothing else,'' said an Ethiopian man, as he stepped out of a taxi-van. Another Ethiopian said that a move away from Marxism was not enough. ``Total change'' is needed, he says, explaining that he meant Mengistu should be replaced.

International donors and diplomats take the government's proposed changes seriously, but offer various assessments about the motives behind them.

Mengistu was pushed into announcing the changes by a reform bloc in the Politburo, an Eastern European diplomat says. He adds that Mengistu may not be able to carry them out. ``He's a hard-liner: a military man. He lacks political flexibility.''

``What Mengistu is trying to do is play a shell game. He's trying to pretend this is Eastern Europe,'' a Western diplomat says. A ``top-down'' economic reform, with the same man staying in power, is far from what's happening in Eastern Europe, he adds.

Desperation at gradually losing the civil war is forcing Mengistu's hand, he says, but changes such as seeking more foreign investment are impractical while fighting rages.

But an international donor official disagrees with most of that view. The idea that Ethiopia is making the changes only to ``garner external assistance in a desperate economic and military situation is only 25 percent correct,'' he says.

The other 75 percent of the reason is that the reforms are an ``evolution of a process that began in 1987,'' he adds.

Parts of Ethiopia produce agricultural surpluses, but experts think the country could produce more with less strict government control.

This is the last in a three-part series. Parts 1 and 2 appeared May 2 and 4.