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

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine May Be in Use by Jan.

WHO assistant director Dr. Marie Paule Kieny says clinical trials of Ebola vaccines are underway or planned in Europe, US and Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid