In 1991, as the Cold War drew to an end, the only African country that had never been colonized by European imperialists was but a pale reflection of the Great Ethiopia that generations of the kingdom’s monarchs had pursued. A million people lay dead following two decades of civil war. Secessionist movements in the provinces clamored for self-determination. The economy was in tatters, and another catastrophic famine loomed. The world came to associate Ethiopia with images hoards of starving children, and the country’s regional and domestic decline opened questions about its very survival.

Nationalist historians trace the Ethiopian state’s roots to the second millennium BCE. With the story of King Solomon and the Queen of Sheba as one of its founding myths, Ethiopia’s history has between entwined with the development of the Abrahamic faiths: the Jewish presence in the Ethiopian Highlands predates the destruction of the Temple; Ethiopian Orthodox Christians claim that the Ark of the Covenant is located in Axum; and the first Muslim hijra, or flight from Mecca to escape religious persecution, was to Ethiopia. Mystical ancestry and military greatness provided legitimacy to Ethiopia’s rulers for centuries as they controlled their formidably diverse empire through a policy of violent internal assimilation and external expansion.

But ideas of that greatness lay shattered as rebel soldiers from the countryside marched on Addis Ababa in May 1991 and overthrew the (formerly Soviet sponsored) dictatorship of Mengistu Haile Mariam. The leftist liberation movement promised a constitution that would give self-determination to Ethiopia’s ninety-plus nations and nationalities and address the political-economic inequities that had torn the country apart, but observers were sceptical about the ability of the Horn of Africa’s once mightiest empire to reconstitute itself. When the northeastern territory of Eritrea voted for and got independence in 1993, it not only cut Ethiopia off from the sea, but also risked triggering cascading claims for self-rule.

A quarter-century on, though, the mood in Addis Ababa could not be more changed. Between 2001 and 2012–13, Ethiopia’s economy grew more than seven percent per year on average. It was the only African country to move at a pace comparable to the East Asian tigers—and to do so without a hydrocarbons boom or a huge mining sector. The economic miracle resulted in real pro-poor growth, lifting millions of people out of the vicious cycle of poverty, hunger, and poor health. While the country’s population soared from roughly 40 million in the 1980s to nearly 100 million today, it achieved the 2000–15 Millennium Development Goals for child mortality and is likely to also meet them for combating HIV/AIDS and rolling back malaria. Ethiopia is also making giant strides tackling income volatility and illiteracy. And, with sequential bumper harvests of Ethiopia’s staple crop, tef (a cereal similar to millet), millions of smallholder farmers might well be able to escape the productivity traps that historically have kept them in abject poverty.

Ethiopian farmers collect wheat north of Addis Ababa, October 21, 2009. Barry Malone / Reuters

Ethiopia’s economic resurgence has underwritten an ambitious state-building project by the governing Ethiopian People’s Revolutionary Democratic Front (EPRDF) that differs resoundingly from Washington Consensus recipes of electoral democracy and laissez-faire economics. Ethiopia has become the prime example of what my colleagues and I have termed “Africa’s illiberal state-builders.” In the aftermath of two decades of war, the EPRDF established a durable political order that seeks autonomy from internal and external threats, builds functional institutions, and establishes hegemonic control over the political economy. The economy’s commanding heights are in the hands of state-owned enterprises and business elites closely wedded to the EPRDF project. In the last parliamentary election, the EPRDF and its allies won all but two of 547 available seats. The party is emphatically statist when it comes to development, and it relies on a relatively narrow social base, but its organization is extraordinary in political and coercive terms. The latter is derived from decades of armed struggle and close cooperation with the Chinese Communist Party (CCP), which advised the EPRDF in its drive to recruit five million new members between 2005 and 2010 and has developed deep party-to-party ties. There is no state in Africa where talk of a “China Model” sounds more substantive than in Ethiopia under EPRDF rule.

With its domestic authority seemingly firmly consolidated, a decade ago, the Ethiopian government re-embraced huge regional ambitions under Prime Minister Meles Zenawi, who governed Ethiopia from 1991 until his death in 2012. Central to this is a vision of a Great Ethiopia “finally” fulfilling its historical destiny by casting off the shackles of poverty to lead Africa: domestic and regional ambitions were always closely entwined in the mind of the premier. On the one hand, Meles understood that forging alliances and acquiring international legitimacy would boost the Ethiopian economy and consolidate ERPDF rule. On the other hand, he saw a domestically secure Ethiopia as uniquely capable of ridding Africa of the epithet “the hopeless continent.”

To fulfil his ambitions, the prime minister developed excellent relations with a wide variety of partners, guided by the belief that depending too closely on one set of friends would expose Ethiopia to their whims. And so Meles struck up personal friendships with Tony Blair and Bill Clinton, Bill Gates and Joseph Stiglitz. He also went on trips to study the South Korean economic miracle, and debated the economics of big infrastructure with Hu Jintao. He played the role of spokesman of the developing world with equal verve, representing Africa at the G–20 and climate change summits, where he denounced the inequities of the global political economy and the marginalization of his continent. And as the EPRDF developed its institutional ties with the CCP, Meles saw no contradiction with Addis Ababa fulfilling the role of Washington’s regional “deputy sheriff” in the Global War on Terror. Ethiopian diplomats, generals, and spooks have been crucial U.S. allies in the Horn of Africa, the Red Sea, and the Gulf of Aden. With U.S. officials fretting over the stability of old allies in Egypt, Kenya, and Saudi Arabia, Ethiopia’s reliability and effectiveness in the war on terror is seen as vital.

A boy stands in front of wind turbines at the Ashegoda Wind Farm 485 miles north of Addis Ababa, October 25, 2013. Kumerra Gemechu / Reuters

Meles, his successor Hailemariam Desalegn, and the party’s powerful politburo cast their vision of a Great Ethiopia in terms of benign regional hegemony: What is good for Ethiopia is good for the Horn of Africa. And so, growing Ethiopian clout is increasingly projected through the regional organizations that Addis Ababa dominates. Its immediate security agenda for the region focuses on conflict prevention (it deployed thousands of Ethiopian UN peacekeepers to the Abyei border region between Sudan and South Sudan), conflict management (hosting mediation efforts for the South Sudanese civil war), and combating terrorism (continual military action against Somalia’s Al-Shabab). Its longer-term strategy revolves around regional integration through energy and water infrastructure. The plan is to tie the region to Ethiopia by exporting thousands of megawatts of electricity generated by dams on the Blue Nile and Ethiopian rivers.

This is a financially lucrative proposition for Ethiopia and its energy-hungry neighbors, but above all, it would shift the regional balance of power away from Nairobi, Khartoum, and Cairo to Addis Ababa. The construction of the Grand Ethiopian Renaissance Dam (GERD) in particular is an audacious bid to reset power relations in the Nile Basin, with one mega-project. The dam is Africa’s biggest infrastructural project; because of the sheer volume of its reservoir, GERD will be singularly able to undermine the hydropolitical status-quo that for decades gave Egypt such disproportionate weight in regional politics. The EPRDF vision for regional integration is thus one of economic interdependence, but very much on Ethiopia’s terms. The relative gains of Ethiopia’s dam program are as important as the absolute gains stressed in technocratic language of “benefit sharing.”

Egyptian President Abdel Fattah al-Sisi is welcomed by Ethiopian Prime Minister Hailemariam Desalegn at the Bole International Airport in Ethiopia's capital Addis Ababa, March 23, 2015. Tiksa Negeri / Reuters

Take, for example, the heavily publicized “Nile Deal” of March 2015 between Egypt, Ethiopia, and Sudan: the “Declaration of Principles” includes an embryonic mechanism for dealing with water disputes and the recognition that downstream countries such as Ethiopia have the right to prioritize electricity generation. It is therefore a de facto admission by Cairo’s General Abdel Fattah el-Sisi that Ethiopia, and not Egypt, is now the most influential state on the Nile. In other words, Ethiopia’s vision of regional integration under emerging Ethiopian hegemony is increasingly becoming a reality. African and Arab states alike (and Egypt in particular) are fast recognizing that it is better to improve relations with Addis Ababa now, than try to postpone it and be forced into cooperation in five years’ time with an even stronger Ethiopia.

Ethiopia’s emergence as a regional hegemon is, of course, not inevitable. World Bank economists, ambassadors, and NGOs fret over the stability of the country’s financial system, the enduring poverty in rural areas, and the discontent of millions of citizens who lack civil liberties. Internationally, Ethiopia has contained conflict in South Sudan and Somalia but has not been successful at resolving it—historical grievances against Addis Ababa run deep in the region and this limits its capacity to act as a neutral broker. Moreover, “no war, no peace” relations with Eritrea remain the Ethiopian security establishment’s obsession, with the hawks offering little beyond continued containment of what they call Africa’s “rogue regime.” Ethiopia needs Eritrea’s ports to further boost its economic transformation, yet Addis Ababa has no credible plan to either deal with a predicted collapse of Eritrea (and the giant refugee flows this would generate) or to spur reform from within.

Ethiopia has come a long way since the dark days of a quarter-century ago. Its resurgence, domestically and internationally, is unmistakable. Never have so many Ethiopians had so much reason to be optimistic and confident about the future. The Ethiopian vision of a Nile Basin where resources no longer lead to zero-sum competition and violent (proxy) wars, but rather to joint strategies to tackle poverty, unemployment, and climate change deserves wide-ranging support. Simultaneously, however, Ethiopia’s rulers know that they will face a long, uphill struggle to persuade their neighbours of their good intentions: In a region where interdependence has historically been considered a political liability as opposed to an economic opportunity, Ethiopia’s strategy generates plenty of blowback. How successful the country will prove in its mission will determine the sustainability of its own resurgence and the future of the Horn of Africa.