News / Africa

Despite Fast Growth, Ethiopia Still Plagued by Poverty

People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
x
People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
Ethiopia has one of the fastest growing economies in the world, but remains one of the poorest countries at the same time.  It might take years before the majority of people benefit from the growth.
 
Ethiopia's economy has grown at an annual rate of nearly 10 percent for the last seven years.  But a third of the population still lives below the poverty line.
 
Samuel Bwalya is the economic advisor for the United Nations Development Program (UNDP) in Ethiopia.  Bwalya says that the country has to be patient while waiting for a trickle-down effect to lift more people from poverty:

"Ethiopia is starting from a very low base in terms of development, so it should actually take much longer for this impact to take root," Bwalya noted.  "So I think we are too much in a hurry to see seven-year growth to start asking questions about how many people are out of poverty.  Ethiopia is still very poor.  But if you look where Ethiopia is coming from, it has made significant progress in reducing poverty."

The late Prime Minister Meles Zenawi was often praised for his approach to helping the poor.  Poverty has declined by a total of 10 percent in the last seven years.  But the country is still one of the largest donor recipients worldwide, receiving over $3 billion annually.
 
Ethiopia ranked 174th out of 187 countries in the UNDP's 2011 Human Development Report.  Life expectancy is estimated at just 57 years, the inflation of 26 percent remains a problem for most people and there are over 12,000 street children in the capital city alone.
 
Bwalya of the UNDP says ongoing measures by the Ethiopian government will benefit the whole of the Ethiopian population in the long run.

"Ethiopia is spending over 40 percent of its budget on infrastructure development, public works, schools, health and roads," Bwalya added.  "That is extremely important in the initial period and these are investments that bring impact, slightly, in the medium- to long-term.  We don't see the impact of actually constructing a road today, to take impact on the lives of people the next day.  It may take a couple of years to do that."

Despite these investments, there are still challenges to make sure the economic growth helps all Ethiopians.  Youth unemployment continues to be a major problem.
 
Jan Mikkelsen is the International Monetary Fund's (IMF) resident representative in Ethiopia.  Mikkelsen believes the country is making progress in the public sector.  But he also believes that the private sector should be able to help the economy overcome some challenges such as the large number of young people who don't have jobs.

"We believe that most of the employment in the long haul will be generated in the private sector," Mikkelsen noted.  "So this will be more dynamic, new jobs in new areas - IT (information technology), trade manufacturing and so forth.  That's where sustainable high value jobs will be."

The IMF also believes the financial sector needs to be developed further to support smaller businesses, especially in rural areas.  But the private sector is given little room to operate in Ethiopia's state-run economy, and there is little direct foreign investment.
 
Wolday Amha is the director of the Association of Ethiopian Microfinance Institutions.  He says that loans needed by micro-enterprises are coming from the poor themselves, and voices support for this approach.

"What you see in these countries in the rural areas and urban areas is huge demand for loans," Amha explained.  "This country is mobilizing resources from the poor people.  If this is hijacked by the private sector, which wants to maximize profit at all costs, that will be a disaster, and it will create economic, political crisis."

The government is implementing its Growth and Transformation Plan, which has ambitious development and economic projects that aim to make Ethiopia into a middle-income country by 2025.
 
Whether Ethiopia will achieve this goal with its current approach remains difficult to say, says Mikkelsen:
 
"There are different models around the world and there's not one development model that is the right one," Mikkelsen said.

Ethiopia predicts its economy will expand by more than 10 percent again in 2013.  The IMF and the World Bank predict slightly less robust growth of seven percent.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid