By Jaime Ortega Simo.
Betre Yacob is a writer and a journalist from Ethiopia.
1) Ethiopia has experienced strong growth on exports which increased its GDP over the past years. Seems like the Karuturi Corp. and other Trade Diversify companies that control the agricultural market are doing great. But what about the inhabitants of Ethiopia, are they living better than in the past?
1. As it is known that over the past years Ethiopia has witnessed a rapid economic growth. According the Ethiopian government report, since 2004 the GDP of the country has witnessed two digit growth, although IMF reduces the growth to 5 to 7 percent. For instance, according to the IMF report in 2011/12 the GDP of the country was grown at 7 percent. However, despite the fact that there is such remarkable economic growth, there is no visible change in the life of Ethiopians who have been in rampant poverty.
In the past 4 years I have frequently travelled to different parts of the country for work, and tried to trace the impact of the economic growth in the life of the people, particularly in the life of the rural residences who amount 85 percent of the overall population of the country. During these times what I have realized is that despite the economic growth chronic food insecurity has still been a defining feature of the poverty that has affected millions of Ethiopians in rural areas. Rural households live are still heavily reliant on very backward and rain-fed agriculture and, in years of short rainfall, the threat of widespread starvation is terrified. Even in years with enough rainfall, food shortages and hunger are recurrent problems for many millions of people. More recently, this problem has also been exacerbated by economic inflation.
In addition to my personal observation let me add some data which can illustrate the fruitless economic growth of Ethiopia. According to the data obtained from the Ethiopia’s government, more than 7 million chronically food-insecure farmers have currently been under the Safety Nets Program, which is funded by a consortium of donors aiming at improving the lives of poor rural people. Look, they are chronically food-insecure farmers. Additional 8 million people are also waiting to be the part of the program. Currently, the program is expected to be scaled up to 15 million people.
In addition, although it has been succeeded in averting mass starvation, more than 4 million Ethiopians on average need emergency food assistance every year. For instance, in August 2012, the Ethiopia’s government call upon the international community for 314 thousand tone emergency food assistance.
Here, in addition to the food insecurity, malnutrition is still a serious problem in Ethiopia. There is, according to the report of Sweet Potato Initiative (SPI), insufficient energy in the diet; there are still also major micronutrient deficiencies. Among the latter, lack of sufficient vitamin A intake is a serious national problem that can lead to impaired sight or blindness, increased morbidity and mortality in young children and increased illness in pregnant and lactating omen.
In dealing about urban areas, the poverty rate has been becoming almost similar to that of the rural areas. There are studies indicating that the poverty in urban areas has been aggravating due to the increasing price inflation that has reached 33.2% in 2011 coupled with the widespread unemployment problem. According to UNICEF, more than 600,000 people living in different cities across the country are currently homeless due to critical poverty, and of them 100,000 are found in the capital Addis Ababa.
When we come to the reason why the economic growth hasn’t made a change in the life of the poor, we will find what Jaime Ortega said to be right. The growth is the result of the success of very few corporations and trade companies that control the agriculture and other basic economic sectors. The farmers, who amount 85 percent of the total population of the country, are still with the backward and low productive agriculture like the past.
2) Meles Zenawi was pro capitalism and globalization. Is Jacob Zuma pro capitalism or does he offer another perspective that would be lucrative to help feed the demands of Ethiopians?
2. First of all I don’t accept that Meles Zenawi was pro capitalism. Because, during his rule most of important business companies were government owned, and the rest was also affiliated with his party. I think as far as we give different meaning to the word capitalism, we don’t have a ground to call Meles capitalist.
I also say the same thing regarding globalization-Meles was not pro globalization. I believe in the Russian proverb that says “looking at a tree sees its fruit; looking at a man sees his deeds”. We should measure him based on his conduct instead of his sweet words. His rule was marked by a cynical divide-and-rule strategy; he was playing off ethnic groups against one another for his cheep political benefit; he was promoting the superiority of his ethnic group, Tigrayan.
3) Is Ethiopia the rode model for Eastern African countries to follow?
3. I think no one can’t run from the naked fact that the main objective of an economic development is to bring about change in the life of citizens. In this regard, the economic growth of Ethiopia lacks a lot. In addition to this, Ethiopia uses its primary resource such as land and minerals unfairly and unwisely to attain cheep economic growth and it also will have its own negative impact on the future development of the country. So based on these facts it is better if Eastern African countries look for another role model to follow.
4) Are people concerned that these transnational corporation will eventually “buy-off” Ethiopia, and even perhaps sell it to other future investors, without authorization from local state officials?
4. Many Ethiopian are concerned that the transnational corporations might “buy-off” Ethiopia. But I don’t think that they are concerned that the corporations will eventually sell the land to other future investors, because the corporations are not given the right to sell the land to a third party in the agreement with the Ethiopian government, and they are also believed to be aware of the bad consequence of trying to do it without authorization from local state officials.
Anyway it should be noted that the ‘land grabbing’ has been totally unacceptable by Ethiopian, it has been done forcefully by the governing party, Ethiopian People’s Revolutionary Democratic Front (EPRDF), which has been ruling the country by force. So, if the party step down from the power, the following government might transfer the lands occupied by the corporations to indigenous farmers.
5) Are they been any plans in The African Union to foment or try to incorporate a single currency into circulation that would allow free trade?
5. A common African currency has been one of the main strategies of the African Union (AU) to achieve its goal that is politically and economically united Africa. Particularly, since the old inter-governmental organization (OAU) transformed into the new one, the African Union (AU), the plan to lunch the common currency has been given a priority agenda. In addition to uniting the whole Africa, a single currency is also believed by the AU to be a means to boost investment and trade in Africa.
However, there have been several challenges faced by the AU to launch a single currency for the time being. The first one is that lunching a common currency in the continent where there are nations in extremely different economic performance have its own potential risk-low performing nations could affect others in the region. In addition, the continent lacks the minimum economic integration that could allow to have a common currency. And also there exist low institutional capacities in nearly all the nations, and are no independent financial systems in most of them. Here AU believes that a currency that is ill managed could lead continent into serious economic crises.
In the past few years the AU has been engaged in building and strengthening the African Economic Community (AEC), which consisted of the existing eight regional economic communities such as the Common Market for Eastern and Southern Africa (COMESA), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), and Southern African Development Community (SADC). The objective of the AEC is to transform the fifty three member state economies into a single economic and monetary union, with a common currency, and free mobility of capital and labour. The AEC is planned as a gradual undertaking to be carried out in six stages. Currently, the AEC is at the third stage of the process, which requires establishment of a Free Trade Area (FTA) and customs union in each of the regional economic communities until 2017.
However, according to the performance report of AU issued in 2011, despite the progress made by Member States towards economic cooperation, the creation of the economic unions has been hampered by conflicts and political, economic and social governance challenges in some parts of the continent.
6) Could tensions with neighboring countries like Eritrea or Somalia, damage the prosperity needed in Ethiopia?
6. It is not doubting that tensions with neighboring countries could harm the prosperity needed in Ethiopia. High political instability in the region puts off the coming investment in Ethiopia and also disturbs the existing investment; this is, in fact, a long run loss in terms of loosing investors’ confidence for both: existed and expected future investors.
In addition to this, as the result of the instability in the region, the military Expenditure of Ethiopia is alarmingly increasing. For instance, evidences indicate that after the military intrusion in Somalia, Ethiopia’s government bought more than 500 tanks, several weapons, and other military equipments, and the number of military personnel have also been increasing. It has an impact on the development programs in the country by declining the amount of resources allocated for the program.
