"Tell me," said a puzzled visiting Western economist, "Why does Ethiopa continue to function so well in the midst of so much political chaos?"
The question is being asked by many resident Western economists as well. For whatever one thinks about the socialist revolution here, the fact is that Ethiopia, after three years of almost constant political turmoil, has one of the healthier economies among those regarded as the Third World's least developed countries.
Compared to most of the other struggling African socialist states, Ethiopia is a model of economic health. Although there is little growth, this country has at least held its own in the midst of unprecedented politcical confusion.
It seems to defy the widely held view and general reality in Africa, that sweeping reforms and nationalizations are destined to cause devastating ahocks to the economy and set back economic growth for years.
Neither the civil war being waged in Ethiopia's northernmost Eritrea Province, the nationalization of most industries, radical land reform nor sputtering rebellions in half a dozen provinces has really crippled country's economy as many Western, and even Eastern, diplomats here expected.
The Ethiopian military government has even had the luxury so far of being able to afford both "guns and butter," buying expensive new American arms and importing tens of thousands of tons of grain.
Blessed during the past two years with unusually good rains and soaring prices for its main export, coffee, Ethiopia has been riding high while most economies in Africa and the West have gone into a serious slump. It finished 1976 with well over $300 million in foreign exchange holdings, a phenomenal sum for a country of such all-embracing poverty and with no mineral resources.
Ethiopian city dwellers of all walks of life grumble about the spiraling cost of living (26 per cent in the past year), the shortage of teff , the grain used to make the pancake-like staple injerra , and the high price of berbere , the hot spice used to season their vast array of sauces.
The shortages here, however, are nothing compared to those in the Tanzanian capital. Dar es Salaam or the Zambian capital, Luska, where even crucial items like butter, cooking oil and soap are in short supply . . Nor are there long lines outside stores with half-empty shelves such as one sees in Angola and Mozambique.
Here the stores are packed with cheap local meats and vegetables and an astounding array of imports - Danish caviar, French wines, Italian prosciutto, Chinese canned braised Duck and American peanut butter. All come at fancy prices, but they are availble.
While there is gas rationing here, it is not nearly as strict as it is in South Africa, Rhodesia or Tanzania. The Latter for instance, has banned all travel on Sunday for Private cars.
WHile power failures and faulty telephone systems plague far richer black African states like Nigeria and Zaire, such problems rarely occur here.
Western, and even many Eastern diplomats were convinced that the sweeping land reform enacted here two years ago would result in a disastrous drosp in production and total disruption of the marketing system that would cause starvation and rioting in the cities. In fact, an outside Western evaluation of agriculture after the move found a 10 per cent increase in production the first year.
The land revision did create something close to a food crisis in the cities as peasants decided to eat, rather than sell, their crops and many moderns farms were "cannibalized" by the former tenants or nearby farmers. The governmenthad to import about 125,000 tons of grain last year, three-fifths of which was used in the cities.
This year, there are fears among Ethiopian officials of another grain shortage, perhaps running as high as 400,000 tons. But the rains have again been excellent in most parts of the country and Western economists feel that the government fears are unwarranted.
Here in the capital, the shortage of grain has eased considerbly in the past month or so an deven the steady rise in the cost of living has begun leveling off.
In january, the government issued the first statistics on the state of the country's small industrial sector since the revolution began three years ago. As expected, they showed a declline in production, but nothing like the drops some economists thought were inevitable with about one-third of Ethiopia's industrial capacity based in wartorn Eritrea and with the state having taken over so many industries.
The manufacturing sector showed a decline in output of 1.6 per cent, 3.8 per cent and 6.1 per cent for the past three years, although there were big jumps in some industries - leather, footware and tobacco.
Precisely how accurate these figures are is uncertain. One Western embassy has estimated that the decline in industrial production outside Eritrea was only about 4 to 5 per cent since the onset of the revolution. This would indicate that the government's figures are reasonably accurate.
Western economists here believe that four main factors account for the "Ethiopian economic miracle."
Ethiopians have long shown a high degree of technical and managerial capability and do not depend on vast numbers of outside advisers and technicians as do most other African countries. Banks, communications services and the airline (one of Africa's best) are all run by Ethiopian. The state takeover of more than 100 enterprises. However, has seriously strained the country's manpower capacity.
Former Emperor Haile Selassie, who was deposed in september 1974 and died a year later, "bequeathed" to the revolution more than 300 million in foreign reserves. The new military government unearthed close to another $100 million in gold dust the emperor had hidden away.
The government has yet to come up with an economic development plan and is not pending much of importing expensive industrial goods. Thus its high foreign reserves can be seen as a sign of stagnation as much as of health, in the view of some Western economists.
The world price of coffee has more than quadrupled in the past year due to cold weather in Brazil and civil war in Angola, two other big coffee exporters. With the price now at $2.35 a pound here and with exports projected around 75,000 tons this year, Ethiopla may earn over $300 million from coffee alone.
With the political crisis worsening in the past few months and with the accumulation of problems in the expanded state sector, it is not clear how much longer Ethiopia can sustain its economic health. Probably, for at least another year, it will remain one of the Third World's "rich poor countries."