The effects of wars in different parts of the world have contributed to rising costs of living. This has created adversity and sufferings for the wretched people of the developing countries, with Ethiopians suffering immensely. They are unfortunately exposed to severe crises due to the civil war that create havoc to the people living the war areas. They have suffered from shortages of basic necessities due to continued skirmishes in their places of residence, both urban and rural. The scarcity of goods has led to high costs of food, health, housing and education. These social amenities have been caused to migration of people from their place of origin. Sometimes, such movement of people has been obstructed by unexpected civil wars or disturbances. These people have also been affected by lack of transport services due to shortage of fuel. Even if these services are available, their costs have not been affordable, accelerating the susceptibility and helplessness of the rural people. These situations have contributed to the reduced welfare of the poor.
It is necessary and crucial to explore the various risks that people are exposed to. It is also important to figure out how the people will be facing the resultant cost-of-living crisis. Researchers have focused on the effects of the crisis on different parts of the country. Social conflicts have resulted in the most horrible results for those with the low incomes and for the unemployed. The recurrence of social conflicts and civil wars resulted in high cost of living that made Ethiopians war exhausted.
Yet, it is still steadily rising as a consequence of domestic and external factors. Raw materials, inputs, finished goods and services that are imported carry inflation. This is shown in the cost of goods and services produced domestically by using “imported” inputs. Studies reveal that imported materials and services are also carriers of world inflation into Ethiopia. Inflated local prices prohibit the low income workers from markets where they purchase basic goods and services. Those people of the society that are most affected by inflation are the poor families with large number of unemployed dependents residing with them.
Social security system that provides unemployment benefits is absent in Ethiopia. Thus, the impact of rising cost of living is intense on these families. They, however, devise ways and means of with which they feed in rotation. In other words, each family member may be forced to miss one meal a day. Moreover, the meal is found to be not nutritious and causes all kinds of exposure to diseases. There is, therefore, a need to help families to be relieved from the burden of the cost of living due to inflation. In most parts of Ethiopia, the costs of basic foods are on the rise. Simultaneously, wages are “not” rising proportionally to cover the cost of living. Real wages of workers fall if they are not compensated for inflation. Collective agreements between employers and trade unions may not necessarily generate enough benefits to employees to cover the rising costs of living.
The rising cost of living increases the burden for disadvantaged workers when compared to the high income groups. This disparity becomes obvious after the emergence of social conflicts, which inevitably creates a shift in labor relations or disputes. In the labor market, skilled workers earn more pay, while unskilled workers suffer from inflation. Workers employed in the private enterprises earned insecure pay, and faced difficulty of supporting their families. This situation indicates that many workers will be forced to achieve high skills for escaping low pay. Low-skilled, underpaid workers would be helpless unless their employers invest in skills training. However, if the total costs of production are higher than revenues of enterprises, there will indeed be a cause for grave concern at country level. In Ethiopia, where costs of production rise, they lead to inflation making workers dissatisfied with their low earnings.
The weight and burden on households facing high food and energy costs would increase sharply and abruptly. Low-income workers with incomes below poverty line may not endure long with insufficient food. These workers and their families may be unable to pay rent, water and electricity bills. Those employees who reside in public houses may have to worry about paying rents that are very low. These employees face heavy risks in the urban centers. Other individuals facing vulnerabilities are those employed in the transport sector, mostly truck and taxi drivers. They are forced to take full responsibility for the costs of vehicles and maintenance. Added to these are insurance and fuel costs. Included in this sector are those workers who rely on transport vehicles for their survival. However, all transport operators are able to transfer their expenses on to users of their services. These users of transport facilities come from all parts of the society, including the rural ones.
The rising cost of living may result from insecure and unstable economic conditions that imply the redesigning of economic policies. Policies related to tax and debt may need to be redesigned and applied for controlling the rising cost of living. Tax revenues of the government may be used to address it. These revenues may be used to address demand for and supply of goods and services in the economy. Of course, peace is crucial for enhancing labor productivity that raises supply to meets the economic demands of all Ethiopians. Without it, there is no market stability to address the demands of the citizens of the country. It is believed that a share in the “Peace Dividend” is the major objective of any society involved in social disturbances, civil wars, and infantile ethnic clashes. Social problems may contribute to low level of production and productivity. These may result in closing of enterprises, unemployment and poverty. These situations ultimately lead to hunger which result in dependency on food aid. Hunger in Ethiopia is caused by social disturbances and conflicts that forces Ethiopians dependent on food aid.
The rising cost of living is an excellent opportunity to the so-called donors to penetrate into the peaceful society of Ethiopia. In so doing, they create chaos and destruction of social relations making normal agricultural activities in the country a difficult task. This interference comes into the country in different forms and masks. One strategy is to look sympathetic to the hunger stricken people. They supply wheat grain that is not fit for seedling except for temporary feeding. Hunger stricken people, however, would thank these aid givers that come with evil missions. They design the means to keep the people dependent on their food aid, leaving them poorer and unable to grow food grain and feed themselves. The Ethiopia poor have to become psychologically dependent on aid and do not have the means to farm their land and produce for their own consumption and for the market. This allows external investors to come into the country with the goal of keeping it underdeveloped.
As aid addicts, some of the poor Ethiopian peasants tend not to work on their parcel of land. This practice leads to low production and low supply to the market, causing high prices of grain that induce high cost of living. Because of this situation the poor urban consumers find it difficult to pay for the high market price of grain. The urban workers are also facing the hidden hunger caused by the high cost of living. These are symptoms of failure to face the economic challenges of imposed by alien forces. These forces are ready to provide Ethiopian with food aid thereby discouraging domestic production of grain. This is a strategy to make the country suffer from food shortage that indicates strong failure. This opens the avenue for aliens who design the outdated ethnic politics in the country. This becomes a strategy for entry into the country to deliver food aid to those parts of the country seriously affected by ethnic conflicts. Petty and normal local skirmishes are over magnified by the media of the donor countries.
These developments seriously aggravate rather than resolve problems. Food aid is supplied to some regions of the country where it is not needed. In this endeavor, foreign investors are welcome to operate in parts of the country where peace, law and order have reigned. These investors tend to produce goods and services for both the domestic and external markets. To maximize their profits, they raise prices to an inflated level. They also raise wages of Ethiopian workers, both skilled and unskilled, to boost their productivity. These developments have indirect impacts on some low salaried civil servants. A few of these state employees may be forced to accept bribes in the face inflation. One may safely postulate that there is a vicious circle of inflation and corruption. Experts think that annual increments of wages and salaries may not cover the fast rising cost of living. Consumers are scared of the situation in which prices of basic goods increase on a quarterly basis, if not monthly. It is, therefore, advisable to organize efficient and effective consumer societies. These ensure supply of basic goods and services that tame the rising cost of living in Ethiopia.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
BY GETACHEW MINAS
THE ETHIOPIAN HERALD WEDNESDAY 19 JUNE 2024
