15-hour drive west from Ethiopia’s capital past coffee forests and jigsaw fields brimming with cattle and people, the road leaves the high country and enters the Gambella region — an expanse of flatter bush and forest with rich grasslands and rivers.

The land is sparsely populated; locals are taller and darker than their upcountry compatriots. Most are of Nuer or Anuak ethnicity. The Nuer, whose statuesque men display parallel horizontal markings on their foreheads, herd cattle and grow maize in the water-blessed expanses.

Gambella, long ignored if not invisible, has recently become a battleground over development, modernization, and human rights – one creating a furor inside the World Bank, which approved programs worth $920 million in Ethiopia last year.

Ethiopia’s effort to resettle local farmers into main villages while also leasing land to foreign corporations or wealthy Ethiopians has put Gambella under scrutiny for charges of violent forced relocations.

Now the issue is coming to a head: Ethiopian authorities since 2010 have embarked on a plan known as “villagization” to move some 45,000 households. The plan takes scattered families and consolidates them into fewer settlements. It is sold as a scheme for better schools, clinics, cleaner water, and, authorities say, more democracy.

Yet simultaneously Ethiopia is trying to lease up to 42 percent of Gambella – a state the size of the Netherlands – for agricultural investors. India’s Karuturi Global Ltd and Saudi Star are the most prominent. Both have started huge farms for export of rice and other crops. Saudi Star is owned by Ethiopian-born Saudi billionaire Mohamed al-Amoudi and is the nation’s largest single investor.

The result is a bitter dispute in which NGOs like Human Rights Watch (HRW), and local people, some of them now in Kenyan refugee camps, allege that villagization mirrors previous brutal resettlement campaigns. They charge the government with Stalin-style collectivization that has increased poverty, carried out by beatings, rape, and killings. They say forced relocation occurred to clear land for investors.

The government denies all allegations. Former regional president Omod Obang Olum oversaw the plan in Gambella and says it was voluntary and successful. Some 35,000 families were gathered to 100 new or enlarged villages, putting them closer to roads and services.

“You’re going to transform the economic structures, the social structures, even political structures,” Mr. Omod affirms. “It’s an area for good governance, not only development.”

The situation is a dilemma for Western donors in Ethiopia who deliver over $3 billion a year. They trust Ethiopia, Africa’s second most populous nation, for growing the economy, building infrastructure, and reducing poverty.

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