2.2.3 CASE STUDY - ETHIOPIA

Where is Ethiopia located?

Ethiopia is located in east-central Africa, bordered on the west by Sudan and South Sudan, east by Somalia, south by Kenya and North-east by Eritrea.

This means that it is a landlocked LiDC.

How does Ethiopia’s location affect its development?

• Landlocked + mountainous = no access to coast

• trade by sea requires access via neighbouring countries which can be difficult

• trade by land and air is more expensive than sea

• will not make any capital to spend on developing its on economy and infrastructure

• trade deficit - export = US $3 billion, import = US $11 billion

• its neighbouring countries being LiDCs means that their infrastructure is limited and unreliable

Describe the landscape of Ethiopia.

Ethiopia has several high mountains, the highest being Ras Dashan at 4,620m.

How does mountainous land (landscape) affect Ethiopia’s development?

• Mountainous land, up to 4500m mean that there are steep slopes and thin soils

• difficult to build any infrastructure like houses

• difficult to grow crops, farming is subsistence, no capital is made

• fortunately, coffee, cotton and grains can still grow in lower valleys and be exported

• however, they are exported in its raw form, meaning they are low value cash crops

• little capital made and cannot be invested into building infrastructure like factories which could then manufacture its own goods

• instead, EDCs and ACs make more profit by converting them into manufactured goods

How do lowlands (landscape) affect Ethiopia’s development?

• Lowlands contain both livestock grazing and agriculture due to more flat and fertile land.

• The land can be overgrazed and overcultivated, leading to soil erosion and desertification

• those lead to crop failure over time and livestock become malnourished and people will soon experience famine

• lowlands suffer from mosquitoes, malaria and unreliable rainfall

• severe illness and loss of workforce, leads to loss of earnings and less development of economy

• both then lead to people being too ill to work and country develops reliance on aid, getting into debt, further hindering development

How does climate affect Ethiopia’s development?

• unreliable rainfall = altering monsoon and dry climates

• higher risk of drought, soil erosion and desertification, lead to widespread famine

• cattle face lack of food and water, so die

• locals lose essentials of food and clean water, unable to develop

• loss of workforce and increasing rate of poverty

How do natural resources affect Ethiopia’s development?

• small reserves of natural minerals like gold, platinum, copper and natural gas

• but only one large scale gold mine in operation, plans to develop more mines and oil & gas reserves

• already 19% of exports that come from mining, however no manufacturing means that they are low value

• they still generate income, boosts economy and can be invested into infrastructure and a manufacturing base

• exported a higher cost = better economy

Describe Ethiopia’s political history and its political development.

• 1974 - 1987, military coup evicted the goverment, prompting the start of a civil war, killing 1.4 million people

• During that, 1984 - 1985, severe drought and famine

• government funds were focused on war, developing weapons instead of providing essentials for its citizens

• 1.4 million killed = workforce lost

• years of political instability would require several years to recover from financial and social damage, setting them back from development

• 1993 Eritrea became independent, Ethiopia landlocked

• need of good political links

• trading, import and export becomes more expensive

• hindering development

How does trade affect Ethiopia’s development?

• trade deficit, import US$11 mil, export US$3 mil

• major exports (80%) and 46% of national GDP is from agricultural

• largest producers of food and flowers

• economy is vulnerable due to unreliable rainfall, climate change and global price changes

• however, economy has been growing at an average of 11% per year, less poverty and improving quality of life

• however, trade deficit = debt, less income invested to development

How does international investment affect Ethiopia’s develoment?

• TNCs like Hilton Hotels invest in Ethiopia, leading t growth in tourism, more jobs, above average wages in Ethiopia

• could be poor treatment to workers

• more businesses, boost economy, less poverty

• H&M manufacture clothes and Siemens manufacture electrical equipment in Ethiopia

• More income from trade of manufactured goods

• could be poor working conditions

How does population affect Ethiopia’s development?

• large population of over 94 million

• high birth rate and a slowly falling death rate

• natural increase, population growing by 2.6% per year

• pressure on economy because of overpopulation

• increase demand for food, clean water, clothes

• need for imports

• strain on economy due to shift in investments

• little job opportunities = high rate of unemployment

How does employment structure affects Ethiopia’s development?

• one of the world’s lowest levels of development , HDI of 0.435

• reliant on agriculture (primary sector) is huge, 89% of all exports and 80% of all jobs

• secondary is becoming more popular due to international investments

• tourism and travel trade is taking off, meaning increasing numbers of tertiary service jobs

• over 2.5 mil of tertiary jobs, contributing 4x as much to the national economy

How does education affect Ethiopia’s development?

• poor education rate, especially girls, only 43% were in schools in 2000

• education gender gap was still not closed

• 93% of girls are now in primary schools

• government installed schemes like the national education development plan, ensuring that 96% of children join a primary school

• however quality of education varies, adult literacy rate of just 36%

• more males than females in primary education

• very little females in secondary education

• slow development

How does healthcare affect Ethiopia’s development?

• risen by 50% since 1990, successful

• now, 80% of population live 10 km within a doctor

• one doctor was shared by 3333 people

• malaria was leading cause of death

• now, 100% of population have access to a mosquito net

• child mortality reduced from 97/1000 to 45/1000, improvement of maternal health and child health

• maternal mortality dropped 23% due to better before and after care

How does technology and innovation affect Ethiopia’s development?

• Ethiopia is behind other African countries

• have a state-owned monopoly, operated by just ethio telecom

• lack of competition

• slow technological developments

• poor network coverage

• no usage of credit cards or international banking systems, making online purchases inaccessible

• less than 4% of population in 2015 were connected to internet

• only 12% of population uses mobile phones

• little online connection to the rest of the world

• slowing development

How does Goat Aid affect Ethiopia’s development?

• goats were mostly given to girls

• able to sustain themselves and their families

• sell their products like wool, milk, manure for money

• support in education, status and security

• less likely to be subjected to arranged marriage, prostitution and poverty

• aid and debt relief from international communities

• debt of 155% decreased to 21% by 2012

• able to invest in services and infrastructure instead

Determine where Ethiopia is according to the Rostow’s model and determine its future path.

It is most likely in between stage one and two (traditional society and preconditions for take-off) as only 12% of its population uses mobile phones, still a gender gap in education, 89% of all exports and 80% of jobs still come from agriculture, however with increasing international investments, Ethiopia' could take off soon.