Over the past years, Ethiopia has been registering rapid economic growth that ensures fair distribution of wealth. In due course, how is the welfare of citizens and level of poverty addressed ? How is the job creation pace against unemployed rate? The Ethiopian Plan Commission Minister Dr. Yinager Dessie gave his reflections on these and related issues during the an interview he held with Addis Zemen daily. The excerpts:
Addis Zemene : How would you describe the fairness and inclusiveness of the country’s economy in improving citizens welfare and reducing poverty over the last ten years?
Dr. Yinager: Our economy is broad base. This meant the government is embarking upon all sectors. For instance, wide range of activities has been carried out in the agriculture sector over the past 15 years. This is simply because most of Ethiopians are highly dependent on agricultural development. Therefore, to change the life of the people focusing on agriculture is a must.
Especially, supporting the wider people engaged in agricultural sector is quite smart choice in ensuring fairness.
By the way, the rural and agricultural, industry and urban development strategies as well as other strategies and policies are focused on fairness. They were designed in a way to extricate most of the people from poverty.
Over the past years, budget allocation and focused activities have been made in line with this noble aspiration.
In urban areas, the industry development is mushrooming. Micro and small enterprises are expected to reduce urban poverty as they are basis for urban development.
Primarily, they create ample jobs and improve their income. This would ultimately trim down poverty in urban areas.
The incumbent attached due attention for urban policies to promote micro and small as well as big and medium industries. These industries would play decisive role in improving life and livelihood of most citizens in urban areas. In this regard, changes have been registered. Many citizens specially the youth have improved their lives. However, due to various reasons especially the poor governance and related problems, the number of unemployment still high. Our policies are proven to be viable and fruitful in some parts of country where implemented at fullest capacity.
To the contrary, we sense that in some parts of the country because of weak implementation youth have not been benefiting from job creation and economic growth as it was planned. It is against this backdrop, the government has established special youth revolving fund since last year. This is being done along the usual development activities to reduce the unemployment.
In general, though there are problems to effectively implement policies and strategies in rural and urban areas, the development policies and strategies have proven to be the basis of fair utilization of wealth in the country.
Addis Zemene: How do you assess the improvement of per capita income and expansion of socio-economic infrastructure development over the last decade?
Dr. Yinager : There are international and conventional parameters to measure a certain country’s growth. By dividing the Gross Domestic Product by the number of population we can get the average per capita income. In this computation, in 2008 EC the per capita income was 794 USD. This is an average and there are people who earn below and above this mean income. Over the years, the per capita income in the country has been growing as the country’s GDP grows. The growth encompasses the aggregate of agriculture, industry and service sectors growth. This aggregate has shown steadily increment and the county has registered 10.1 percent average growth over the past decade.
On other hand, there are sectors, significantly contributing for the economic growth, which are non financial parameters by themselves. For instance, the expansion of education and health services in the past ten years has big share for the social sector growth. In fact, the share of education sector is much high than health.
Obviously, the expansion of education is one of the results of development. If we desire to register sustainable growth and develop the manufacturing sector, the focus is on educated youth. This unquestionably would help undertake knowledge based development. The competitive workforce for the manufacturing sector comes from the education sector. Therefore, the education sector is potential growth arm for the manufacturing sector. Besides, the service sector has been backed by the education sector. No exception for the agriculture sector.
The expansion of education facilities at various levels has enabled the farmers to send their children to education facilities. This, for sure, would enable farmers to undertake knowledge based farming practice and technology application thereby sustaining the growth of the agriculture sector.
In sum, as the number of educated citizens’ increase, their contribution to all spheres of development would be imperative. Above all, the growth of a given country is labeled by its human resource development.
It is worth mentioning that the agriculture sector is also supporting the education sector. If a farmer improves his/her product and productivity, his/her income will improve. So, it is possible to fulfill the educational inputs and construct schools for his/her children.
Similarly, if the farmers are protected from any communicable disease, they would be productive. The life expectancy will increase. Again this would enable the people to enhance their role and contribution for the improvement of product and productivity in the agriculture, industry and service sectors. It is vivid that these growth indicators are complementing each other and have the capacity to sustain the development.
Precisely, the last decade was the time for the country to register commendable achievements in social development. In fact, there are pending issues related to quality which would be a focus area for the government. For instance, over the past years the government has been aggressively working to expand education. Hence, the issue of quality now becomes the focus. A number of reforms are being implemented to address the quality gap.
With regards to infrastructure development, wide ranges of facilities have been built. Road is one of the infrastructures that swiftly and widely undertaken. It also consumed huge budget in relation to other sectors. For obvious reason, the country’s economy needs to be networked with roads to ensure sustainability. In this regard, the rural road accessibility program has carried out valuable activities. The road sector development has multifaceted benefits including job creation, market access to farmers and supply agricultural inputs to farmers.
The power supply is also an ever demanding issue. All the power supply is generated from renewable energy resources. This is decisive to sustain the green development. Over the last decade, laudable job has been done in power supply. Currently, huge power supply projects are well underway. We have now managed to export power to neighboring countries. Actually, expansion of power supply is meant to provide energy demand at household level, for micro and small enterprises and in general for industry and service sectors.
Therefore, to measure a country’s economic growth all the financial and non financial measurements need to be reviewed.
Addis Zemen: The number of youth especially women was high in the last ten years. How do you evaluate the number of readily available working force and job creation capacity in the country?
Dr. Yinager : Our population is increasing. In our three censuses the population size shows sharp increase. In 1984 the population was 40 million. This number has increased to 54 million after ten years. In the third population census in 2007 the number had reached 73.4 million. The fourth one is expected to be conducted in the coming February. The estimation is 96 million. Though the population increases, thanks to the effort over the last four years the birth rate is declining.
For instance, the birth rate was 3.5 percent in 1990’s but currently this rate is below 2.5 percent. It is also anticipated that the rate would decrease in the coming years. The major reasons for the decrease are the activities done in the education and health sectors. Besides, putting in place modern family planning system attributed to the success in controlling population size as this was confirmed by researches. But this does not mean the population size would not increase rather at family level do so.
Yearly, the size of population that joins the workforce bracket is increasing in the absence of opportunities that can absorb this influx. Though considerable youth in rural and urban areas have benefited from job opportunities in agriculture, industry and service sectors, still there is imbalance between the increasing population and job creation capacity. As a result, the number of unemployed youth shows increase in rural and urban areas especially the women.
As the agriculture continues to be the leading sector to for the economy and most of the people living in rural areas, huge job must be created in this sector. Therefore, the youth should take part in agricultural job opportunities. There are ample opportunities in agriculture and related fields. This is one of government directions to address unemployment in the rural areas.
In urban areas, micro and small enterprises have great contribution for job creation. The expansion of medium and big industries would have also vast role in creating jobs.
Certainly, the role of micro and small enterprises should be enhanced as they are potentially promoted to medium and then to the big ones. Basically, the sustainable industry development is considering job opportunity creation.
Therefore, government at all levels should give priority to address the multifaceted problems of the micro and small enterprises. The problems related with loan and working areas provision as well as the relevance of the sector should be considered with urgency. If all actors employ efforts, the sector will go a long way in absorbing unemployed youth.
Addis Zemen: Does the manufacturing sub sector grow as the government desires over the last ten years?
Dr. Yinager : I think this has historical evolution. Before 26 years, the country’s economic system was socialism. This ideology does not encourage private investors. The manufacturing industry and other firms were owned by the government this would not encourage the private investors. In 1985 EC, the county did not have industry infrastructure. Since 1994 EC after the formulation of policies and strategies the country has pursued market led economy and structural change has been evolving. The weak role and contribution of private investors in the previous regimes has limited its contribution to country’s economy. Over the past ten years, thanks to the government’s efforts the involvement of private sector and the industry sector have grown.
For instance, the industry has registered 20.6 percent growth in the previous year. The manufacturing sector displays 18 percent growth. Apparently, the growth is huge but the base is not broadening. The inception of manufacturing industry was at lower level and this is the reason for the sector that limits its growth. The other sound reason is the attention for the sector is the recent phenomenon.
The manufacturing sector is highly dependent on agriculture sector. The price of raw agricultural products the global market has been fluctuating while the price of processed have not been as such varied.
Therefore, to secure sustainable foreign trade revenue exporting processed products are more preferable to complement various development programs. This is why the government is focusing on the expansion of industries in general and the manufacturing sub sector in particular.
Addis Zemen: Thank you for your time
Dr. Yinager: I also thank you.
BY HAILEGEBRILE BINIYAM