Summary
This book addresses the prevalence of inequality and poverty in Ethiopia and suggests strategies to solve the problems. The first chapter provides country background information, population, political structure, and the economy. The second chapter focuses on income distribution, household expenditure, cost of living, health, housing, and education inequalities. The highlights from the two chapters are summarized as follows:
Ethiopia is an ancient independent country located in the horn of Africa, with a land area of 386,102 square miles. The capital city, Addis Ababa, hosts international headquarters, notably, the Economic Commission for Africa (ECA), and the Organization of African Unity (OAU). Ethiopia is also the second most populous country in Africa, and 12th in the world, with a total population of 114.96 million, out of which the female population comprises 49.7 %, and the male population accounts for 50.3%. The young population (15-24 years) is estimated at 22% of the total population. The share of urban population is 21%; the rural population accounts for 79% of the total population. The share of urban population is expected to increase with increase in the number of people migrating to urban areas.
For Ethiopians, life expectancy is 66 years, because most people do not have access to quality healthcare and better nutrition. Societies in developed countries live longer, with a life expectancy of 80 years. Maternal mortality rate in Ethiopia is 422 (per 100,000 live births) while it is 2 in Italy, 4 in Sweden, and 5 in Germany. In Ethiopia, there is one physician for 10,000 people, while in Germany there is one physician for about 239 people.
In primary school enrollment, Ethiopia ranks 110th, and in adult literacy, it ranks 157th in the world. There is one teacher for 55 students in primary schools, which implies that primary schools in Ethiopia are underfunded. On the other hand, for developed countries, there is one teacher for 11 students. This means that a teacher in a developed country has ample opportunity to monitor the performance of students and provide individualized assistance, when needed.
Income held by fourth 20% of Ethiopians declined from 21.3% in 2010 to 20.6% in 2015. On the contrary, income held by highest 20% increased from 41.7% to 46.7% during the same period. Ethiopia is also confronted by inflation. Food inflation increased to 25.9% during the month of April 2020. Ethiopia ranks 6th place in food inflation in the world. Venezuela and Zimbabwe rank first and second place, respectively.
The country is also facing housing shortages. The annual demand for housing (655,800 units) by far exceeds the housing supply of 165,000 units. This housing shortage excludes the urban poor because the market caters to wealthy individuals, and to those who provide collaterals.
With respect to international trade, Ethiopia’s major trading partners are the United States, Saudi Arabia, Germany, Switzerland, and China. Foreign trade accounts for 29% of the country’s GDP, with a negative trade balance of US $12.4 billion in 2019.
Chapter three provides an assessment of the development strategies of Ethiopia between 1960 and 2020. The review of evidence shows that past development programs have failed to tackle poverty. And despite the recently available evidence, which shows that poverty headcount decreased from the 2010 level of 29.6% to 23.5% in 2015, the poorest 10% of the population did not experience growth since 2005. As a result, poor people in 2016 were poorer than the poor in 2005.
Chapter four addresses the impact of environmental degradation on the poor. Major polluters are the world’s richest 1%. However, most air pollution-linked deaths occur in developing countries where laws are weak and not applied.
In the case of Ethiopia, where access to electricity is only available to 45% of the population, most Ethiopians resort to the daily use of wood, charcoal, or dung for cooking and heating purposes, thereby contributing to carbon gas emissions. Unsafe water also contributes to deaths. The share of deaths from unsafe water increased from 7.14 % in 1990 to 8.9% in 2017.
Chapter five discusses the implication of corruption and COVID 19 on economic growth and the poor.
Regarding corruption, most studies demonstrate that corruption is anti-growth, which disproportionally affects the poor. The comparative assessment on corruption (for 2020) identifies Denmark, New Zealand, Finland, Singapore, Sweden, Switzerland, and Norway as the least corrupt countries. Somalia, Syria, South Sudan, Yemen, and North Korea are the most corrupt countries. According to the 2019 “Bribery Risk Matrix”, Ethiopia, ranking 176th out of 200 countries with a risk score of 71, is listed as a high-risk country for bribe.
The pandemic also creates a burden on the poor. The UN estimates that the pandemic will push 71 million people back into extreme poverty.
Chapter six provides an overview of poverty, employment, and unemployment trends at the global level and in Ethiopia. So far, attempts to curbing poverty at the international and local levels have failed to provide solutions. The final chapter proposes recommendations to reduce inequality and pervasive poverty in Ethiopia.