THE ECONOMY OF ETHIOPIA

Transcription

1 THE ECONOMY OF ETHIOPIA

2 Also by Keith Griffin ALTERNATIVE STRATEGIES FOR ECONOMIC DEVELOPMENT THE POLITICAL ECONOMY OF AGRARIAN CHANGE HUMAN DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT STRATEGY FOR THE 1990s (editor with John Knight) LAND CONCENTRATION AND RURAL POVERTY INSTITUTIONAL REFORM AND ECONOMIC DEVELOPMENT IN THE CHINESE COUNTRYSIDE (editor) INTERNATIONAL INEQUALITY AND NATIONAL POVERTY THE ECONOMIC DEVELOPMENT OF BANGLADESH (editor with E. A. G. Robinson) GROWTH AND INEQUALITY IN PAKISTAN (editor with Azizur Rahman Khan) THE TRANSITION TO EGALITARIAN DEVELOPMENT (with Jeffrey James) WORLD HUNGER AND THE WORLD ECONOMY

3 The Economy of Ethiopia Edited by Keith Griffin Professor and Chair Department of Economics University of California. Riverside M St. Martin's Press

4 e Keith Griffin 1992 Softcover reprint of the hardcover 1st edition 1992 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Coun Road, London W I P 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published in Great Britain 1992 by THE MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library ISBN ISBN (ebook) DOI / First published in the United States of America 1992 by Scholarly and Reference Division, ST. MARTIN'S PRESS, INC., 175 Fifth Avenue, New York, N.Y ISBN Library of Congress Cataloging-in-Publication Data The Economy of Ethiopia I edited by Keith Griffin. p. cm. Includes bibliographical references (p. ) and index. ISBN Ethiopia-Economic conditions-i Ethiopia-Economic policy. I. Griffin, Keith B. HC845.E ~c CIP

5 Contents List of Tables Preface Map of Ethiopia viii xii xiv 1 The Commitment to Socialist Development 1 The Social Revolution of The Ten Year Perspective Plan 6 The Challenge of Resource Mobilization and Accumulation 14 Major Recommendations 19 2 The Next Great Task: Agricultural Growth with Equity 22 Recent Agricultural Performance 23 Modes of Agricultural Production 25 Advantages of Alternative Farming Systems 32 The Legacy of Internal Colonialism: Regional Concentration and Economic Fragmentation 42 Marketed Foodcrop Surpluses and the Means of Distribution 49 The Way Forward 51 Major Recommendations 54 3 Institutional Transformation and Agricultural Development 55 Agrarian Economy in Transition 57 The Question of Economic Surplus 61 Mechanisms of Surplus Extraction 64 Labour in Agriculture 68 Area Expansion and Institutional Change 70 Major Recommendations 74 4 Coffee: The Leading Export Sector 78 Production Problems 81 v

6 vi Contents Export and Revenue Earnings 87 Major Recommendations 90 5 The Role of Industry 92 Existing Forms of Industrial Organization 94 Alternative Forms of Industrial Development 106 Policy for Small-Scale Production 116 Policy for State Enterprises 120 Summary and Main Recommendations A Floor to Poverty: Essential Public Services 132 Primary Health Care 132 Water Supply and Sanitation 142 Nutrition 148 Basic Education 154 Urban and Rural Housing 162 Major Recommendations Changes in the Distribution of Income 169 Rural Redistribution 169 Impoverishment Without Growth 174 Urban Poverty 180 Components of a Distributional Balance Sheet 183 Implications for the Ten Year Plan 187 Recommendations The Urban Labour Market 192 Urban Employment 193 Unemployment 197 Measurements of Unemployment 201 Vacancies 209 The Operation of Labour Markets in Ethiopia Income Generation and Employment Opportunities for Women 222 The Situation of Women in Ethiopia 224 Legislation and Political Organization Affecting Urban Women 234

7 Contents vii Legal Status of Women 235 Education 236 Mechanisms of Representation of Women's Interests 238 Recommendations Employment Opportunities for Women: Prostitution, The Last Resort 244 History and Growth 244 The Extent and Nature of Prostitution 245 Problems of Definition and Attitudes Towards Prostitution 249 Reasons for Becoming a Prostitute 250 Recommendations and Conclusions Education in a Socialist Society 259 Secondary Education 261 Technical and Vocational Training 267 Higher Education 268 The Demand and Supply of Skilled Manpower 271 Major Recommendations Population Policy: Two Issues 275 Growth of the Population and Labour Force 276 Family Planning and Fertility Control 279 Internal Migration 281 Major Recommendations Summary and Conclusions 289 Accumulation and Cooperation 290 Infrastructure and the Social Services 292 State Farms 293 Industrialization 294 Foreign Exchange 296 Urban Labour 297 Index 301

8 List of Tables 2.1 The contribution of agriculture to the gross domestic product Trends in agricultural growth, to Peasants Associations, service co-operatives and producers' co-operatives, The employment intensity of state farms Criteria for ranking the three modes of production Average size of holding by province, Intensity of cultivation Crop yields, Administrative regions ranked by land productivity compared with rank of size of holding and cultivation intensity Production of cereals and pulses by region, 197~ Regional contribution to the national output of cereals and pulses Regional pattern of production (cereals and pulses) Foodcrop production per capita by administrative region, 197~ Actual and potential yields for some major crops Relative importance of the three types of production units, to AMC purchases of agricultural products by sources of supply, AMC sales of agricultural crops by types of buyers, AMC purchases of agricultural products by region, , from sources other than state farms Tax rates on agricultural incomes exceeding 600 birr per annum Cost of production, prices and terms of trade, Arussi, Distribution of chemical fertilizers Labour requirements of crop production on a 2-hectare farm in Arussi, Coffee exports, viii

9 List of Tables ix 4.2 The regional pattern of supply to government inspection and grading centres at Addis Ababa and Dire Dawa ( to 198{}-1 average) Government coffee purchases and exports Output, yield and revenue of state coffee farms in the south-western region Government and producers' share of coffee value Output and employment in industry, Small-scale private manufacturing (HASIDA Survey, ) Ministry of Industry: Employment, output and fixed assets in public enterprises, Capital, labour and value added in manufacturing industries, Distribution of permanent employees in selected industries, public and private, by income groups, Ratio of administrative, technical, clerical and office workers to permanent, seasonal or temporary workers, by industry group, public and private, The foreign exchange component in investment A comparison of Ethiopia with a middle-range developed country (the UK) New urban jobs required by Manufacturing industries by administrative regions, summary data, Medical and health facilities and personnel by administrative region, Average intake of calories and nutrients as percentage of daily minimum requirements in 11 administrative regions Housing types in Addis Ababa and 17 other major towns, Inter-regional price differences for six crops, Marketed surplus of foodgrains Warranted and actual growth rates, to Economic performance and Plan targets Urban poverty lines,

10 x List of Tables 7.6 Households and employment by income classes, 1976 to The incidence of urban poverty The minimum wage and minimum food costs Kebele and open-market prices of foodgrains in Addis Ababa, and Procurement and sales prices of grains, Warranted and target growth rates in the Ten Year Plan Estimated urban employment for Estimated urban unemployment rates by sex and age-group, Estimated future urban labour force (economically active) Employment in large establishments, Sectoral employment in large establishments, Occupational distribution in large establishments, Registered job-seekers by educational level, Percentage of job-seekers classified as illiterate Change in the number of registered job-seekers with educational levels of grades 7-8 and 9-12, to Registered job-seekers by age, Percentage of registered job-seekers by marital status Occupational breakdown of vacancies Vacancies as a percentage of numbers employedall establishments Economically active rural population and proportion engaged in agriculture, by sex, 1970, 1978 and Economically active female population by type of 226 occupation and province, Marital status of employed female population, Addis 227 Ababa and 17 towns, 1976 and Estimated urban employment, by sex and industry, Estimated urban employment, by sex and 230 occupational group, Work status of urban workers, 1970 and Employed population by sex and income distribution for 16 tow.ns,

11 List of Tables xi 9.8 Employed persons by sex and income group, per week, Addis Ababa, December Employment and salaries in manufacturing, to Student enrolment by sex and grade, to {i and Higher education: Enrolment of men and women in Addis Ababa University, {i to Trainees in vocational training institutions, by sex, Distribution of monthly income by prostitute type, and total population of prostitutes for 22 towns Reported reasons for becoming a prostitute, Marital status of prostitutes Distribution of education by age-group of prostitutes Age and duration in occupation, by prostitute type Age breakdown of prostitutes not wishing to change jobs Supply of skilled manpower Population size and density, Rural, urban and total population by sex and agegroup, Population projections, Labour force projections, Annual rates of growth of the population, Expenditure and savings ratios 290

12 Preface In 1982 I led a team of seventeen economists and other social scientists to Ethiopia. Our task was to prepare a study of the economic problems of the country and to make policy suggestions. Unfortunately, the political situation in Ethiopia in the early 1980s made it impossible to publish the report in the usual way. Indeed shortly after the report was completed the country was struck by two blows, a massive famine and intensified civil war. Despite the political problems, drafts of the report did circulate both inside the country and abroad, albeit among a restricted audience. Circumstances have now changed, the intensity of the debate on economic policy has abated somewhat and the study can be made available to a larger readership. I believe the original analysis retains much of its validity and that the data, largely unobtainable elsewhere, are still useful. Ethiopia of course remains one of the world's poorest countries and for that reason alone is likely to be of interest. Responsibility for this edited volume is entirely my own, as is the decision to publish. The writing, however, was a collective effort and initial drafts of chapters were prepared by the following members of the team: Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Keith Griffin and Andrew Graham Roger Hay and Keith Griffin Ajit Ghose Roger Hay Andrew Graham, Roger Opie, James Pickett and Teshome Mulat Manzoor Ahmed Ashwani Saith and Vali J amal Derek Robinson Sheila Smith Peggoty Graham Keith Griffin and Sheila Smith, assisted by A.K. Andoh Keith Griffin Keith Griffin xii

13 Preface xiii The initial drafts of chapters were then edited and modified by myself. I have tried to resist the temptation to alter the text of the original study. Only minimal changes have been made. The work of the team was greatly assisted by a large number of Ethiopians, in Addis Ababa, in the six provinces we visited (Arussi, Bale, Kefa, Gojam, Hararge and Eritrea) and in many districts where we conducted local investigations. Staff members of the University of Addis Ababa, government officials and ordinary citizens were generous in providing information, sharing their experience and reacting to our ideas. Although Ethiopian informants must remain anonymous, I am very grateful to them. KEITH GRIFFIN

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