According to the World Bank report on the global economic outlook, during the Covid-19 pandemic, the deep recessions posed by the pandemic are expected to leave lasting scars through lower investment, an erosion of human capital through lost work and schooling, and fragmentation of global trade and supply linkages. For emerging markets and developing countries, many of which face daunting vulnerabilities, it is critical to strengthen public health systems, address the challenges posed by informality, and implement reforms that will support strong and sustainable growth once the health crisis abates.
It highlighted that countries need to undertake comprehensive reform programs to improve the fundamental drivers of economic growth once the crisis lifts.
Moreover, the emerging market and developing economies will be buffeted by economic headwinds from multiple quarters: pressure on weak health care systems, loss of trade and tourism, dwindling remittances, subdued capital flows, and tight financial conditions amid mounting debt.
Following the outbreak of the Covid-19 pandemic different countries closed their doors fearing the virus transmission. The pandemic limits the country’s economic exchange, donation, and borrowing. The situation hugely affects countries that rely on importing goods and services including food items from abroad like Ethiopia. Therefore, the Covid-19 pandemic season shows how much such countries’ economies that depend on imports are highly challenged.
The Ethiopian government has launched a “Homegrown Economic Reform” agenda, which aims to transform Ethiopia from a largely agrarian low-income country to an industrialized lower-middle-income country by 2030. This will require the private sector to take charge of growth amid waning public sector financing capacity. While unveiling the new economic reform agenda, Prime Minister Abiy Ahmed (Ph.D.) said that the initiative aims to propel Ethiopia into becoming the African icon of prosperity by 2030. The newly introduced initiative, among other things, outlined macroeconomic, structural, and sectoral reforms that are said to pave the way for job creation, poverty reduction, and inclusive growth. The initiative gives special emphasis to sectors such as agriculture, manufacturing, mining, tourism, and information, communication, and technology.
To this end, having a well-organized homegrown economic policy will have a significant role in realizing Ethiopia’s sustainable development. In the past, the country’s economy was highly dependent on imports from overseas and donations. The country has been importing food items from abroad while it could harvest locally. Ethiopia imports fruit and vegetables, wheat, oil, flour, and other products from abroad.
Having, suitable climate, wide arable land, and water potentials allow the country to harvest abundant crops. Thus, the country is expected to harness its wide potential in this regard.
According to the Ethiopian Economists Association, Ethiopia is home to diversified natural resources. It has been experiencing severe drought even though it is known as to be the water tower of East Africa. Being the water tower of East Africa has not benefited its development efforts in the past. However, supporting the agriculture sector with mega irrigation projects will enable the country to ensure food security and even export to its neighboring countries.
Beyond the agriculture sector, the water potential could also generate enough electric power to the country and even to its neighbors. Due to the lack of capacity to develop mega electric projects on its rivers the country and its citizens are still in darkness. Currently, reports indicate that more than 56 percent of the country’s citizens do not have access to electricity. That means, close to 58 million people in the country never know about electric power. On the other hand, it means the country is not in a good position to supply sufficient electricity for its growing manufacturing industries. That is why it requires building different hydroelectric dams like the Grand Ethiopian Renaissance Dam (GERD) and others. Expanding manufacturing industries is possible where there is ample electric power supply. In addition, it is impossible to witness development without industries. The service sector is also directly linked with electric power. There is no tourism, health, and education without electricity. Therefore, water is a basis of development if utilized properly, it stressed.
Most developed countries like China utilized their water resource potentials properly to reach their status. China has built numerous hydroelectric dams on its rivers during the 1980s and established small and medium manufacturing industries. These manufacturing industries ignite their endeavors towards industrialization. After this, industries blossom in China, electric-based irrigation projects expand and the agriculture sector becomes profitable beyond feeding the largest Chinese population. Then, China joins exporting food items to the global market.
India has also shared similar stories with China regarding its development. India launches a green revolution campaign to enable its water resource sustainability and limit desertification. As agriculture prospers, the industry also prospered in India. The story of the US and other countries is not different from this. A natural resource is the beginning of development for every country in the world.
Currently, Ethiopia accomplished more than 75% of the GERD construction. No doubt, the GERD Project will have an enormous potential to intensify the country’s development endeavors. The Ethiopian Economists Association surveyed how GERD will contribute to the country’s annual economic growth. The survey also assessed how much it benefits Sudan and Egypt. The research study assured that the three countries would be beneficiaries of GERD. Even if Ethiopia builds the dam consuming more than 150 billion Birr, it will benefit not only Ethiopia but also Sudan and Egypt. Thus, Sudan and Egypt are going to be profitable without investing a single coin in the GERD.
Accordingly, manufacturing industries’ will avail their products at a competitive price when there is sufficient electric power. The industries will also become competitive in the global market. GERD’s inauguration will mobilize the industry sector through increasing its employment opportunities, working hours, productivity, and finally promoting export. The research reveals that a 6.7 billion USD profitable economy will be built out of GERD per annum.
In addition, GERD’s presence will have a significant role in ensuring sustainable water flow to Sudan and Egypt. The Dam will increase the Sudanese dam’s productivity by 35%. As soon as the GERD water filling starts, more than 1.3 billion cubic meters of water that evaporates from the Aswan dam are saved. In general, the three countries will gain more than 1.8 billion USD benefits in sum from the GERD.
BY TEWODROS KASSA
THE ETHIOPIAN HERALD SUNDAY EDITION NOVEMBEBER 14/2021
