Ethiopia case study 1

where is Ethiopia located?

Ethiopia is an LIDC located in Eastern Africa/in the horn of Africa.

what is Ethiopia’s current level of development?

• has a GNI of $505, compared to the world average of $10,858

• Ethiopia is less wealthy per person compared to other LIDCs, which could be due to its large population of 94 million, 2nd largest in Africa

• has a HDI of 0.435, one of the lowest in the world, due to the long history of disease, poverty, drought and political unrest

• although life expectancy is increasing (63 years), it’s still lower than the world average of 72 years

• receives more imports than exports, with 89% of all exports reliant on agriculture (exports include coffee, pulses, sugarcane, vegetables)

• the high birth rate and slower death rate has led to a rapidly growing population in Ethiopia

what are the barriers to development for Ethiopia?

• being landlocked (it is surrounded by 6 other countries).

• poverty.

• frequent droughts.

• history of political unrest and corrupt governments.

• disease.

• previous war with Eritrea.

being landlocked is a physical barrier to development.

why?

because it means that Ethiopia doesn’t have access to the sea, so may rely on other countries’ cooperation to help trade goods

how have politics impacted Ethiopia’s level of development?

• In 1974, the Derg, a communist military government, came into power.

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• During the ‘Ethiopian Red Terror’ from 1977 - 1978, the Derg government seized tracts of land and evicted the owners. Foreign businesses and church properties were also nationalized by the Derg.

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• As a result, there was increased migration, many refugees and great economic decline. In addition, at least 1.4 million Ethiopians died from the conflict and civil wars that arose. This political instability set back Ethiopia’s level of development.

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• In 1991, liberation groups overthrew the Derg and formed a coalition government, but they too committed decades of abuse in Ethiopia.

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• Therefore, politics have greatly influenced Ethiopia’s development, as they have had a long history of political unrest and systemic repression, which does not allow the country to develop.

how has Ethiopia’s environment impacted its level of development?

• Ethiopia’s unpredictable rainfall, prolonged drought seasons, infestations and water shortages make it very difficult to farm the land. In addition, the agriculture is becoming vulnerable to climate change.

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• As a result, their economy suffers as it is heavily reliant on agriculture; 89% of all of Ethiopia’s exports are agricultural products, including coffee, pulses, sugarcane and vegetables.

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(ECONOMIC)

• In addition, these agricultural products are natural commodities and are therefore low value and sometimes seasonal, which restricts the amount of profit that Ethiopia can generate from selling these exports.

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• This means less money is likely to flow into the country, so the government cannot invest in improving healthcare or education.

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• Therefore, Ethiopia’s environment has a great impact on its development, as it hinders the country’s progression.

what are the social influences upon Ethiopia’s level of development?

• In the mid 1980s, Ethiopia suffered from severe drought, which eventually led to famine. As a result of this famine and the high food prices, 1 million people died in just a year. Ethiopia has remained food deficient since this time.

• In addition, Ethiopia has a very high birth rate and a slower death rate. This leads to rapid population growth in the country, which further worsens the levels of extreme hunger. This restricts the country’s development as large proportions of the population remain malnourished.

how has technology influenced Ethiopia’s level of development?

Ethiopia is advancing in technology to be more competitive in the continent as well as globally.

why have politics been the greatest influence on Ethiopia’s development?

because the effects of the Derg regime still exist today, and Ethiopia’s lengthy history of political unrest has had a significant impact on the country’s current level of development

why is Ethiopia in the ‘pre-conditions for take-off’ stage (stage 2) of the Rostow Model of Development?

Although the primary sector dominates the economy, Ethiopia is in Stage 2 of the Rostow model.

Recent government spending has led to improvements in healthcare and education, and as TNCs arrive, bring about tertiary jobs and invest in infrastructure, Ethiopia’s level of development has improved.

why is the ‘take-off’ stage (stage 3) of the Rostow Model of Development Ethiopia’s next step?

Ethiopia is moving towards Stage 3 due to its rapid industrialisation and increasing wealth, which should trigger increased trade and investment, leading to further development in the country.

what are examples of international trade in Ethiopia/some of Ethiopia’s global connections? (TNCs)

Ethiopia has increasingly strong global links, and a range of TNCs, such as Hilton Hotels, Siemens, Afriflora and H&M, have began operating in the country.

how have TNCs positively influenced Ethiopia’s development?

• Siemens is a TNC that is helping to improve the levels of development in Ethiopia, as they have invested in building wind farms, and have also brought expertise and modern technology to Ethiopia that the country would not get without foreign investment.

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• In addition, other TNCs in Ethiopia invest in infrastructure such as roads and bridges, and they also invest in hotel infrastructure. This has led to increased tourism and travel in Ethiopia, which boosts their economy and leads to economic development.

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• TNCs also allow for a rise in jobs. For example, over 2.5 million people in Ethiopia are employed in the tourism sector, and these workers are often paid a fair wage and have access to facilities out of hours.

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• Moreover, the increase in employment not only allows for locals to gain a stable income, but also leads to more tax paid to Ethiopia’s government. This can be invested back into the country for development.

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• Therefore, investment from TNCs has a great positive influence on Ethiopia’s development.

how have TNCs negatively influenced Ethiopia’s development?

• Some TNCs that operate in Ethiopia exploit the lack of regulations on wages and working conditions. It was reported in 2019 that people in Ethiopia were being paid a mere $26 a month compared to $340 for the same job in Turkey and other EDCs.

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• In addition, some of the profits from TNCs don’t stay in Ethiopia, but are instead leaked back to the ACs where the TNC headquarters are located. This means that Ethiopia does not fully benefit from the wealth generated by TNCs in their country, which doesn’t allow for more money to be invested in development.

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• Therefore, TNCs can be problematic in Ethiopia, as they exploit the cheap labour costs and don’t keep all of their profits in the country. This restricts Ethiopia's economic progress and has a negative impact on its development.

will TNCs be beneficial or problematic in Ethiopia?

• TNCs will be problematic in Ethiopia if they continue to exploit the cheap labour costs and remove their profits from the country. This is because it has detrimental effects on Ethiopia's development and hinders its economic growth.

• However, overall the benefits from TNCS outweigh the problems, because TNCs such as Siemens give Ethiopia access to expertise, knowledge, and modern techonology, whilst also investing in the infrastructure of the country and bringing about job opportunities.