The governing party’s weakened hold over the spaces of political debate coupled with recent liberalisation efforts, as well as new models of political mobilisation, have allowed political contestation to extend outside of EPRDF controlled structures. While the ethnicization of the formal economy and government institutions has been an established phenomenon during the EPRDF regime, the increasing space for contestation has expanded such dynamics into the urban informal economy. As such, ethnic networks in the informal economy are increasingly visible and instrumentalised in the political mobilisation efforts of a range of both new and established political actors. This chapter thus examines the role of ethnic identities and ethnic social networks in employment, as well as their increasing politicisation.
The explicit recognition of ethnicity and party affiliation as an organising principle under the EPRDF’s rule has had a substantial impact on the ethnicization of the formal sector. The developmental state model aimed to lead the way to a depoliticised economic growth model independent of private sector actors' influence, in order to avoid a fate in which the state itself would become the main resource to be divided through corruption and graft. While the state has indeed achieved a remarkable degree of economic growth, its founding logic also reframed all competition between the different power centres in the state and within its institutions in ethnic terms. Decisions surrounding the allocation of resources as well as key appointments became increasingly viewed as an ethnic balancing act, superseding considerations of merit, sectoral interests, minority rights and centre-periphery concerns. A range of political actors seems to have prioritised the ethnic components of the EPRDF’s ideology over its overarching goal of economic growth and poverty eradication. The ethnic redefinition of the regions resulted in inhabitants being put into categories of permanent majorities and permanent poorly represented minorities. Parallel institutions such as banks arose, serving different ethnically defined constituencies, and many mid- and lower-level public officials granted preferential access to government employment programmes and other publicly controlled resources to their own ethnic constituencies. As a consequence, ethnic federalism played an important role in the degradation of cross-cutting social capital between ethnic constituencies, ensuring ethnic politics came to be reflected in every formal sector.
As the Ethiopian state exerted a strong grip over private sector activity, similar ethnic considerations came to be mired in private enterprises. While some of the major Ethiopian companies and businessmen had explicit political links to one of the EPRDF’s parties through the endowment funds, parastatal companies (e.g. EFFORT, TIRET, METEC, etc) or credit facilities at one of the three major state-owned banks, other companies had similar incentives, as timely access to capital, permits and foreign currency frequently required warm relations with key decision makers. In some cases, this enabled political actors to direct new investments and a sizeable share of international development finance towards their own constituencies, creating stark differences in regional development. Recognising such dynamics, workers in turn paid special attention to the careers of colleagues from their own ethnic groups. As one interviewee noted, ‘No one sees your degree […] It works through who you know. […] People feel secure when they hire based on recommendation [...] You promote either by your network, or you switch to a new sector where you might be able to build such a network.’ As ethnic tensions became increasingly salient over the past few years, ethnic competition in the formal sector became increasingly evident in the informal sector as well, as the claims at stake rose beyond individual career prospects.
Whereas in the formal sector a person’s ethnicity has formed an important qualification for a variety of positions and career prospects for years, the informal sector in Ethiopian urban environments has historically been relatively depoliticised. Workers from a variety of backgrounds shared the same spaces, attempting to secure livelihoods on a daily basis rather than considering networking opportunities to further future any career prospects. As is evident from ethnographic studies of the informally employed urban youth in Addis Ababa, planning for the future is an activity only accessible to those with the resources that allow them to take the time and make meaningful investments into their preferred future. Considering that informal workers in Addis Ababa are generally (self-) employed out of necessity rather than entrepreneurial ambition, earning a living is frequently a daily overriding concern, further entrenching marginalisation and grievances.
While employment in the informal sector is not inherently politicised, an individual's social capital is an important factor influencing one’s livelihood strategies and resilience, especially in situations of marginalisation. As barriers to rural-urban migration were reduced by urban and regional authorities over the past years, rural-urban migration picked up significantly, leading to increasing competition between informally employed urban residents and migrant workers as well as between migrant worker groups. Given the difficulties for rural migrants to connect to existing urban social networks in such polarised environments, migrants’ ethnic identities became a key asset to rebuilding or reconnecting to a social network among an ethnically segregated migrant population. While some sectors require only low-skilled labour (mostly day labour, mainly in construction) generally hire any worker willing to take the job, most opportunities to advance one’s position are not as easily accessible. At a basic level, social connections are key to acquiring information regarding available job opportunities, and different ethnic social networks carry information regarding different sectors (depending on the predominant activities of its members). When it comes to accessing (low) skilled jobs, ethnically based professional networks have an impact beyond the information asymmetry they encapsulate. Not only do popular perceptions of different ethnic groups’ skills for different trades affect one's ability to sell goods and services, the ability of new rural migrants to acquire the skills required to participate in a certain trade relies significantly on having access to other skilled workers willing to share knowledge and at times invest time and effort to help new migrants build their skills. Additionally, in many of the more specialised jobs in micro-enterprises, a degree of start-up capital to buy equipment is a considerable barrier to entry. Embeddedness in an ethnic social network in many cases grants access to an informal savings group (equb) that does not require a local ID card like most banking services do. Knowing others who are willing to share, borrow or sell equipment (and potentially deferring payment) is a significant factor in overcoming such barriers, but one that is available only to those with access to other tradesmen in the sector. Once in operation, ease of access to specific suppliers of base materials and favourable rates form another key factor to ensure the continuity of many informal livelihood strategies. Such dynamics are further reinforced through migrants’ living arrangements. As housing in Ethiopia’s urban centres is generally scarce, expensive and difficult to access, migrants frequently find accommodation through their network and share accommodation with other migrants from the same ethnicity, leading to increasing ethnic segmentation in neighbourhoods at the edges of the city. Ethnic social capital is thus reinforced, and becomes a major source of livelihood security. As Bezu and Holden note: ‘Youth who have strong social capital feel less tenure insecure while the length of time one lives in the city or town did not improve the sense of tenure insecurity'.’ While it is unlikely that any of these factors are inaccessible without recourse to an ethnically based social network, strong ethnic social capital significantly reduces opportunity costs to access a range of necessities leading to an increasing degree of ethnic stratification of migrant labour. In practice, therefore, a range of informal occupations have come to be associated with migrants from specific regions, for example informal trade (Gurage), shoe shining (Wolayta/Hadiya), selling lottery tickets (Amhara) and door-to-door sales (Oromo).
While the ethnic networks structuring and becoming more visible in the informal economy are not inherently political, they connect a base that is jointly affected and easily mobilised by ethnic politics. While strong polarisation in the informal sector is not yet as pronounced and visible as in the formal sector, tensions between ethnic groups in the informal sector have been rising over the past two years as ethnic nationalisms have become increasingly pronounced in the political arena. As tensions rose, ethnically based networks and sectors became increasingly rigid and closed, and internal labour migration was curtailed as ethnonationalist attitudes raised barriers to workers from other zones. As trust between individuals erodes and ethnic prejudice rises, in-group connections grow in significance and, at times, form a type of social security. Similarly, social ties have become increasingly important in hiring decisions, as factors such as recommendations are increasingly used to overcome declining trust. Ingroup-outgroup tensions are further reinforced as political actors are increasingly seeking to mobilise individual ethnic groupings in the informal sector through the clientelistic allocation of benefits such as taxi licences, urban identity cards, loans and access to job programmes. As such, and given the severe vulnerability of many informal livelihoods to ethnic protest and violence (e.g. street vendors), the ethnic tensions are felt acutely in the informal sector. When protests erupted following rumours of an assassination plot on Jawar Mohammed (an Oromo politician) in November 2019, taxi drivers reported significant violence targeted at protesting colleagues, while workers in the construction sector (a generally depoliticised and multi-ethnic sector) indicated they do not discuss such issues among themselves for fear of violent repercussions.
The increasing ethnicization of the informal sector is reinforcing the sectoral segmentation of different kinds of activities, and is also translating into growing geographic divisions. Ethnically based social networks not only ensure access to employment and benefits to ingroup members, they also create barriers for outsiders to enter the same trade and/or location. As such, significant segments of Addis Ababa have come to be dominated by groups of informal workers from several professions that are closely connected. As one taxi driver from Hawassa based in Addis Ababa explains: ‘I can work anywhere, but I can’t park on just any spot. Other drivers claim other areas’ – a fact which co-ethnic parking guards, mobile phone air-time vendors and book vendors from the same street immediately confirmed.
The relatively closed nature of groups that occupy different urban spaces is reinforced by a number of administrative measures. In an effort to improve security and reduce crime rates, security forces and/or kebele administrations have begun registering young people with informal businesses stationed in specific areas. Registration does not entail formal rights to operate on the location, but does form a kind of informal acknowledgement that those registered will be allowed to operate on their designated spot by the police if they help maintain security around their workplace. Non-registered individuals do not have the right to operate near registered spots, ensuring new individuals can only start operations in the area following a formal invite by a registered person at that location (and registration of the newcomer at security/kebele administration). Groups of informal workers are thus able to claim sought-after locations and exclude other groups from those locations. Furthermore, registration requirements for informal businesses extends the reach of local politicians' clientelist networks, allowing them to allocate registration and other significant permits (cooperative registrations, taxi permits for specific routes, etc) only to specific ethnic groupings.
While some political actors have responded to the increasing ethnicization of the informal sector by handing out benefits to their base in order to strengthen their political positions and claim to certain segments of the informal sector, other actors have gone on to encourage migration to several multi-ethnic cities to reinforce their position in the cities’ multi-ethnic governance arrangement. As such, the identities of several traditionally multi-ethnic cities’ have come to be increasingly contested. Notable examples include Addis Ababa, Oromia, Dire Dawa and Sidama, where different ethnic groupings are attempting to challenge the governance arrangements by changing the demographic composition. This is at times done by encouraging rural-urban migration from ethnic regional states to specific cities with a close ethnic balance, often by advertising the economic growth and opportunities and encouraging cultural events attract additional migrants. On an administrative level, debates about the legalisation of new migrant neighbourhoods dominated by specific ethnicities, as well as discussions regarding whether such areas are within or outside city limits, drive similar conflicts within the city administration and with neighbouring ethnic regional states. IDP resettlement schemes have also become politicised in Oromia and Amhara regional state, as regional state administrations have been accused of demographic engineering by relocating IDPs to towns in which the regional state’s ethnicity forms a minority. Additionally, IDPs resettled in urban areas often receive support to establish small businesses, thus altering the city’s economic relations as well.
Ethnically based social capital has been key to many migrants’ decision to migrate, to finding employment and accommodation, and to gaining access to services and other support for their livelihoods. With political debate extending beyond previously formalised channels, ethnically based networks are gaining significance on a new dimension, as political actors increasingly seek to use them for mobilisation on both clientelist and identity-based appeals. While such appeals may help ethnic groupings secure control over various sectors, locations and at times even cities, it has also connected economic grievances with ethnic fault lines, allowing ethnic nationalist tensions to spill over into sometimes violent conflicts across a range of urban spaces.