The paradoxical revelations reflecting Ethiopia, it is endowed with a range of natural resources and untapped wealth, but labeled as a poor, aid-dependent where some segments of its population lead a subsistence life, have given anyone hard time in due course of developing a firm stance. If a given nation is rich, how will they be called poor, where is the missing link? Such tough but simple questions need to be well replied to, too.
Unequivocally, every country in the universe houses poor people, who live in poor housing and struggle to afford basic goods and services like having meal for themselves and their families, transport, clothing among others. It is natural as nothing is absolute everywhere. However, why are the nations forced to host people devoid of social, economic and political and even cultural wealth? What is poverty? Or what is dearth? Where does it emanate from? How could it be tackled?
Poverty is a manmade or circumstance-oriented phenomenon and socio-philosophical facet, not an innate socio-economical feature of human race. Yes, it is a multidimensional and dynamic concept having multiple causes that exhibit economic, social and political characteristics and hence, poverty reduction policies require multidimensional approaches and strategies when it comes to a country level.
The Ethiopian government has devised a range of means to defeat poverty and underdevelopment via successfully reducing poverty. Poverty reduction policies have to be one of the priority policy targets of the Ethiopian government and the pillars of external financial assistance. The challenges to reduce poverty are formidable in Ethiopia where poverty is deep and widespread, income is extremely low, growth rate is weak, and so is income distribution uneven. Not just economic growth, but also the distribution of that growth matters. If the inequality of income increases, the poorest can be left behind, and there is no chance at all to leave poverty behind.
Locally, nationally, regionally, even globally, achieving sustainable economic growth helps the nation achieve the dignity and standard of living citizens all deserve. Truly speaking, economies with remarkable growth rate could not achieve sustainable poverty reduction if the growth process does not generate productive job opportunities, mobility, and accumulation of assets and capital for an increasing share of the population.
Poverty in Ethiopia has resulted from economic, political, demographic, geographic, environmental, and policy causes. Ethiopia is labeled as one of the poorest countries where low income and productivity, weak capital accumulation and investment, high levels of unemployment and underemployment are the main features of the economy.
The agrarian based subsistence economy has been subject to the vagaries of natural forces and hostile political environment and hence it could not achieve sustained economic growth as well as structural transformation. When an economy finds itself in such a situation, it takes structural change and fundamental political and institutional reforms to enable economic agents realize their economic potentials and improve their productivity and generate improvement in living standards.
The central challenge of economic growth and poverty reduction in Ethiopia is essentially how to generate sustainable rise in the productivity of the labor force in agriculture, improve the application of modern and appropriate technology and inputs in the sector, reduce its vulnerability to shocks, secure non-farm related activities to the rural residents and enable the sector play a leading role in growth process of the country.
The agriculture sector has to be made capable of supporting a rapidly increasing rural population at its prevailing state of technology, labor productivity and policy environment. As productivity level of the farmers remain near subsistence, well framed and organized agricultural activities have to be entertained as it is a critical step to make a difference.
Capital investment, application of modern and improved agricultural production technology, secured landownership, and effective financial services are some of the factors that could initiate and sustain improvement in productivity in agriculture. The main impediments to poverty reduction in Ethiopia emerge from a complex web of interaction of economic, political, demographic, social, geographic, and institutional factors and hence poverty reduction policies should address these underlying forces to develop strategies with lasting effects. Poverty generally refers to the inability of households to provide sufficient subsistence and to lead a decent economic and social life.
A strategy to reduce poverty should therefore be undertaken with a clear understanding of what mechanisms influence the situation and dynamics of poverty in Ethiopia. The good thing is the nation is working towards this end.
Cognizant of the fact that economic growth is indeed the most powerful instrument to reduce poverty provided that it creates employment opportunities to the poor, increases the demand for factors that the poor owns, and creates the condition in which the poor develop the capability to accumulate productive assets that prepare them for productive and better life, Ethiopia has been working from dawn to dusk along this line.
Since Ethiopia lacks nothing except commitment and strategy to successfully exploit its untapped resources and promote the working culture of the society, it is now high time to deal with every problem and shortcomings with regard to efficiently exploiting resources, human capital and societal unity and empowerment of the farming community. Demographic forces also play a role in the accumulation of human capital among household members in which poor households with large family size would have difficulty in providing the necessary education and health services to enable their children with more chances to escape poverty.
A nation with a population of more than 120 million people has to have the capacity to manage the resources be they are natural or manmade possessions, to produce more and more. True, Ethiopia has about a third of its land very suitable or moderately suitable for crop cultivation so that a relatively minimum external input is necessary for crop development. In a country as predominantly rural as Ethiopia, it is necessary to modernize the agriculture sector for two principal reasons: to confidently feed the ever-increasing population growth and to support all other sectors via providing them with a range of inputs.
Unequivocally, the innermost economic and poverty stumbling block in Ethiopia is how to transform the agricultural sector for it would not trap millions of Ethiopians in its low level equilibrium. Improving agricultural productivity requires investment in physical and human capital and improved farming practice and technology with which farmers operate their farm or livestock.
Needles to state, Ethiopian agriculture is predominantly smallholding farming in which the decision making behavior of millions of vulnerable ones, in combination with natural forces, determines the aggregate output. Such a trying trend has to be prettily altered if the county is to successfully deal with poverty and see it off for good.
Moreover, infrastructural activities that could improve the social capital stock of the nation could have multiple benefits both in creating job opportunities as well as in improving the vibrancy of the rural sector in generating income for households. As in the majority of the nation, agricultural investment in smallholders farming comes only from farmers themselves and could not be undertaken by external forces, including the urban sector, foreign direct investors, or the government, the firm combined effort of all badly requires. In so doing, the fight against poverty will bear fruits.
Agriculture remains to be dominant for a foreseeable future in the economy and it is here that the most pressing challenges to poverty reduction concentrate. Ethiopian agriculture is burdened by lack of strategic policies that could transform the sector and enable the farmers to play important role in the economic development endeavor of the nation.
Poverty in Ethiopia could not be alleviated sustainably without fundamental political and institutional reform toward democratic good governance. Sustained poverty reduction in the Ethiopian setting could be achieved only if the bottlenecks and insecurities are removed from the shoulders of the peasantry which constitutes the overwhelming majority of the population.
It is therefore necessary to take timely action to accelerate the accumulation of physical and human capital, maintain and build upon endogenous social capital, undertake comprehensive policy reform measures that promote market forces and private sector development, pursue institutional reforms to reduce hurdles to full utilization of the potentials of the economy, and implement inclusive economic and political policies.
Expand irrigation schemes to reduce dependence on rain and insure food security, improve methods of farming and increase the delivery of farm implements, produce drought-resistant crops that would ripen in a short period of time, promote voluntary resettlement, improve livestock marketing, provide professionals and the community with sustainable training.
Besides, development and conservation of natural resource, utilization of local water resources to increase access to water supply and ensure food security, establish seedling nurseries and plant the indigenous species, strengthen environmental protection, prevent deforestation by imposing more stringent fines on people who fell trees illegally, planting trees on denuded hills and promoting alternative sources of energy geothermal, wind, hydropower, among others, are of the pillars that have to be well underscored thereby helping the country defeat poverty.
Moreover, allowing foreign banks to work in partnerships with local banks as foreign banks help develop modern banking systems and contribute in foreign currency earnings and in building confidence of foreign investors.
Capacity building should also be seriously focused as it is as important as economic advancement itself since bolstering economic development in one way or another is a viable means to do away with this social menace.
The impact of education in alleviating poverty is significant in both rural and urban areas of the country, i.e. households with higher levels of literacy are less likely to fall into poverty than those households with lower levels of literacy. Investing in education should be one of the key elements in reducing poverty in the country.
A well-coordinated industrial strategy is also required to make the sector the engine of growth and strengthen its forward and backward linkages with the agriculture and service sectors to ensure sustainable growth. The service sector is significant in terms of both national output and employment. The centerpiece of growth and employment generation strategy should be to increase the productivity of the service sector. With improvement in transport and communication infrastructure, modernization of the marketing and trade sector and promotion of the tourism industry, the service industry should be able to generate more productive employment.
In sum, no question about it, poverty is not an innate phenomenon. Hence, it can be done away with from the soil at all. Having all things required for fulfilling any social, economic and even political interests, why is Ethiopia labeled as a poor nation, and how does poverty prevail, the root causes have to be well singled out and possible solutions need to be systematically devised thereby pushing the country steps forward via defeating poverty for good! As far as this writer’s understanding is concerned, in the Ethiopian context, poverty is a phenomenon entertained by will!
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
BY MENGESHA AMARE
THE ETHIOPIAN HERALD SATURDAY 27 JULY 2024
