Understanding Poverty: The Ethiopian Context

1 Understanding poverty : The Ethiopian Context ( A Paper presented at The Gambia AAPAM Roundtable Conference, Banjul, The Gambia, April 19 - 23, 2004 ). Asmamaw Enquobahrie ( ). Asst. Professor (HRM). &. Managing Director Global Vision Consultants International March 2004 Addis Ababa - Ethiopia Table of Contents Page 1. Introduction .. 1. Definition of poverty in 2. Determinants of poverty in Ethiopia .. 3. 2. Socio-economic Performance during the 4. Agriculture .. 4-6. Industry .. 6-8. Employment .. 8-9. 3. Sectoral Analysis of poverty in Ethiopia .. 9. Agriculture .. 9-11. Food Security .. 11-12. Primary Education .. 13-14. Health and Nutrition.

2 14-15. 4. Distribution of poverty in Ethiopia .. 15. Rural poverty .. 15. Urban poverty .. 15 - 18. 5. Ethiopia's Development and poverty Reduction 19. ADLI and Food Security .. 19. Justice system and Civil Service Reform 19.. Governance, Decentralization and Empowerment 19.. Capacity Building .. 20. 6. Summary and 20 - 21. References 2. ACCRONYMS. ADLI - Agricultural Development Led Industrialization CSA - Central Statistical Authority CSO - Central Statistical Organization EEA - Ethiopian Economics Association EHNRI - Ethiopian Health and Nutrition Research Institute FAO - Food and Agricultural Organization FSS - Forum for Social Studies MoFED - Ministry of Finance and Economic Development MEDaC - Ministry of Economic Development and Cooperation SDPRP - Sustainable Development and poverty Reduction Program WFP - World Food Program List of Tables 3.

3 1. Gross Domestic Agriculture Output at Constant Factor Cost (million Birr). 2. Fertilizer Consumption of the Peasant Sector ( ). 3. The Performance of Medium and Large-scale Manufacturing Industries. 4. Value Added at Factor Cost by Industrial Categories (1991/92- 1996/97 in 000 Birr). 5. Unemployment by Sex, Rural and Urban Areas. 6. Area, Production and Yield of Major Crops (1979/80-2000/01). 7. Vulnerable Population (million), 1980-2001. 8. Approximate Crop Production, Food Aid Requirements and Needy Population. 9. Estimates of Food-insecure in the 1990s. 10. Gross and Net Primary Enrollment Rate by Gender, Geographic Area (from grade 1 to 6).

4 11. Literacy Rate (%). 12. Trends in Absolute poverty between Urban and Rural Areas in Ethiopia : 1995/96-1999/00 (%). 13. Trends in Urban poverty . 14. poverty Profile of Five Secondary Cities in Ethiopia (1995/96- 1999/00). 15. Projected Urban Population of Ethiopia (1995-2020). 4. Understanding poverty : The Ethiopian Context By Asmamaw Enquobahrie ( )*. 1. Introduction: poverty is generally considered as a situation in which the underprivileged do not have adequate food and shelter, lack access to education and health services, are exposed to violence, and find themselves in a state of unemployment, vulnerability and powerlessness. poverty is multi-dimensional and has to be looked at through a variety of indicators such as levels of income and consumption, social indicators and indicators of vulnerability to risks and socio-political access and participation.

5 The most common approach to the measurement of poverty is based on incomes or consumption levels. It is widely understood that an individual is considered poor if consumption or income level falls below some minimum level necessary to meet basic needs poverty line. The nature and level of basic need satisfaction varies along with time and societies and the poverty line to be established should be appropriate to the level of development, societal norms and values (World Bank poverty Net). Information on consumption and income is obtained through sample surveys where households are to give feedback on their spending habits and sources of income, the nature of their basic needs and their perception of poverty .

6 Income and non-income indicators like social indicators for education and health, access to services and infrastructure are used for data gathering and assessment of trends on the poverty situation of a country. The study of poverty also includes developing indicators to track other non- income dimension of poverty such as risk, vulnerability, social exclusion and access to social capital. This facilitates comparison of a multidimensional conception of poverty . Participatory approaches help illustrate the nature of risk and vulnerability, how cultural factors and ethnicity interact and affect the livelihood of the poor and how social exclusion sets limits to peoples participation.

7 A typical poverty scenario as described above is reflected in the socio- economic condition of Ethiopia. In that respect, Ethiopia has carried out several economic reform programs in order to achieve economic stability and renewed growth in the fight against poverty . Though the programs have resulted in improved macro-economic performance, they have had a limited impact on the poverty situation at household level. In fact the poverty situation in Ethiopia over the past decade has been exasperated by the Structural Adjustment Program (SAP) and other reform measures as well as by the irregularity of natural conditions, war and other human and environmental factors.

8 As a result almost half of the Ethiopian population is believed to be below the poverty line. Dr. Asmamaw Enquobahrie is Asst. Professor (HRM) and Managing Director of Global Vision Consultants International (GVCI). 5. This study presents the extent and depth of the poverty situation in Ethiopia and shows the challenges ahead with regard to poverty alleviation efforts in the Definition of poverty in Ethiopia poverty is characterized by inadequacy or lack of productive means to fulfill basic needs such as food, water, shelter, education, health and nutrition. The multi-dimensional character of poverty in Ethiopia is reflected in many respects, such as destitution of assets, vulnerability and human development.

9 The World Banks definition of poverty indicates that poverty is ..a pronounced deprivation of well-being related to lack of material income or consumption, low levels of education and health, vulnerability and exposure to risk and voicelessness and powerlessness (World Bank 2001a, as quoted by Pradham et al., 2002). This definition fairly describes the nature of poverty in the Ethiopian Context . As the concept of poverty reflects socially perceived deprivation of basic human needs, its Understanding also considers the minimum living standards of the people. poverty alleviation and reduction of economic inequality is the major socio-economic and political issue in the country.

10 As experience has shown, the existence of large number of poor people and the prevalence of economic inequality may bring about social tensions which would induce various criminal acts if situations go beyond the limits of social tolerance. poverty alleviation would, therefore, enhance economic development and result in improved incomes and better well-being of the people which is a pre-requisite for peace and further development. However, attempts to eradicate poverty would require strong commitment on the part of concerned authorities in favor of economic development to induce the sustainable livelihood of millions in urban and rural areas of Ethiopia.