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Ethiopia The Derg and the West
Although the Derg depended on the Soviet Union and its
allies for military aid, it was just as reliant on the West
for economic development and relief aid (see
Balance of
Payments and Foreign Assistance, ch. 3). For example, the
European Community (EC) was Ethiopia's most significant
source of economic aid. In the early 1980s, Western sources
accounted for more than 90 percent of Ethiopia's economic
aid, most of which came from the EC. Since then, communist
countries had increased their proportion of total aid to
Ethiopia to about 20 percent. Other multilateral and
bilateral donors also had provided increased aid. For
example, after refraining from giving aid to Addis Ababa
between 1975 and 1981, the
World
Bank (see Glossary) pledged
more than US$250 million in project aid, the European
Development Fund promised about US$300 million, and the
International Monetary Fund (
IMF
--see Glossary) agreed to a
loan of almost US$100 million. The regime accepted the IMF
loan even though it claimed to disagree with IMF policies.
Moreover, a joint venture law in 1983 and a foreign
investment policy initiated in 1988 had stimulated the
gradual return of private investors, although the level of
such investments remained low.
Even though Ethiopia was dependent on Western economic aid,
no Western donor was able to influence day-to-day economic
policy on a regular basis. For instance, the Swedish
International Development Authority, the United States
Agency for International Development (AID), the World Bank,
and other donor agencies historically had favored the
development of agricultural cooperatives if they were
organized on free-market principles. However, the Ethiopian
regime attempted to guide the development of cooperatives so
that they might be transformed into socialist collectives
compatible with a centrally planned and directed economy.
Like the imperial government before it, the Derg attempted
to play off a multiplicity of donors against one another and
thereby maximize certain benefits without surrendering its
sovereignty.
Data as of 1991
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