Development story since 1973

• Overview of the economic development of an LIDC, including influences of population, society, technology and politics, particularly in the past 50 years


  1970
• Ethiopia's population has grown rapidly. 20 million people have been added to the country's population from 2008 to 2018 with an addition 2.5 million Ethiopians to feed annually!
• In 1970 the population was 28 million. Since then it has quadrupled to 105 million!
• The annual growth rate has been very high at around 3%
• Timeline showing the influences of population, society, technology and politics

  1. Key event

  2. So what? How did it affect the people or the country's development?
• 1941 to 1973: Empire restored


  During WW2, British and Commonwealth troops helped the Ethiopian resistance to defeat the Italian invaders. The British restored the Ethiopian Emperor Haile Selassie.
• 1974: A military coup led to civil war


  The military seized control of the country in 1974 in a coup and were known as the Derg. The emperor was deposed. There was a violent political conflict called the Red Terror between rival communist groups resulting in the mass killing of 200,000 people. People were arrested, tortured, and massacred if they were not part of the Derg political party. The military dictator in charge was called Haile Mengistu. In 2006 he was convicted of genocide in his absence.
• 1974 to 1984: The Derg government


  Introduced agricultural policies which made rural farmers poorer, causing living standards to decline significantly. The Derg also used enforced resettlement programmes which moved farmers away from their land. 10,000s of peasants died because of forced resettlement.
• 1984/85: Major famine


  Civil war had damaged the country's economy and so the Derg was unable to provide any relief for the people affected by the drought and subsequent famine. Fighting and political unrest stopped aid getting to the hungry. 8 million people were affected, and 1 million people died. Civil war, and poor farming policies multiplied the effects of the famine.
• 1991: Derg out


  The Dictator Mengistu was removed from office. The Derg military leaders were replaced by a democratically elected government.
• 1990s: Economic reforms but crippling debt repayments


  Democratic government changed the country's economy through economic reform which improved its ability the trade and allowed TNCs to operate easily in the country. International debt repayments are a huge economic burden on the country leading to a lack of investment in education, health, access to clean water and transport infrastructure.
• 1999-2000: Border war and Drought/famine


  Full scale border-conflict war with Eritrea erupts, draining the government of much needed funds. This only ceased in 2018. Drought and famine in 2000 affect farmers and agricultural productivity.
• 2000: Ethiopia is the poorest country in the world in terms of its GNI per capita
• 2001 to 2005: Debts cancelled. Development at last!


  The IMF and World Bank agree that Ethiopia qualifies for debt relief under the Highly indebted Poor Countries Initiative (HIPC). 100% of the country's international debts were cancelled, allowing to finally to invest fully in poverty reduction. The stable government were now able to invest money into education, health, access to clean water and transport infrastructure.
• 2005 to 2018: Rapid development


  Having one party with a firm control of the country has meant that economic growth can be fast forwarded. They want to become an EDC by 2025! The country has been rapidly industrialising. Ethiopia has become a major recipient of Foreign Direct Investment (FDI) via TNCs. FDI was 20% of GNI but it has now shot up to 40% of GNI. The state has been investing in transport infrastructure on a par with China. Since 2010 it has been one of the fastest growing economies in the world at 10.9%. GNI per capita has risen rapidly but this growth has not yet improved levels of development (and improved quality of life). However, the poverty rate (% of people below $1.90 has reduced from 62% in 1995 to 30% in 2016. Life expectancy has risen from 47 years in 1990 to 65 years. Mean years of schooling is one of the lowest in the world – only 2.6 years. Children will have finished school by 10 years. This is a huge brake on human development and is one of the reasons for Ethiopia's low HDI ranking. GNI per capita was $649 in 1990 and is now $1500.
• Challenge task: Discuss the influence of politics, society and technology on Ethiopia's development (8)
• International Debt Relief driven by international political pressure 2001 to 2005

  The IMF and World Bank agree that Ethiopia qualifies for debt relief under the Highly Indebted Poor Countries Initiative (HIPC). 100% of the country's international debts were cancelled, allowing to finally to invest fully in poverty reduction.
• Government stability


  The stable government were now able to invest money into education, health, access to clean water and transport infrastructure. Rapid development has occurred with GNI annual growth of >10% since 2003.
• Government fragility


  Having one party with a firm control of the country has meant that economic growth can be fast forwarded. They want to become an EDC by 2025! However, Ethiopia is a one-party state with lots of political unrest. This could make the government vulnerable to terrorism, revolution, and exterior economic shocks. So, although the government has been stable it is viewed as one of the most fragile governments in the world.
• Soil degradation


  The overuse of soil in Ethiopia has led to soil degradation (soil erosion and loss of soil fertility) which decreases crop yields (amount of crops per hectare of land area). Another issue facing farming is the lack of basic water supply infrastructure to irrigate (artificially water) crops which makes Ethiopian farming more vulnerable to drought.
• Landlocked location & trade

  Ethiopia has low trade openness in terms of its trade to GNI. It doesn't trade that much. This is partially caused by Ethiopia's landlocked location which increases the cost of exporting its goods to market. This is because virtually all its exports must be transported through neighbouring port in Djibouti. Ethiopia has done two things to overcome this landlock trap. They have built an international airport in the capital city of Addis Ababa to export flowers by airfreight.
• Lack of power generation and distribution

  The country has a lack of energy production and energy distribution networks which also limits development
• Urbanisation Rate


  Ethiopia's urbanisation level is currently 20% (only one fifth of Ethiopians live in towns and cities like Addis Ababa). This places it as the 13th least urbanised country in the world in 2015. Ethiopia's population is therefore overwhelmingly rural, but this is expected to rapidly change as the country develops. There is a generally a strong positive correlation between urbanisation and levels of GNI growth as economic productivity is generally twice as high in cities as it is in the countryside. Increased rural to urban migration should fuel economic growth.