SEATTLE — The fastest growing economy on the African continent is that of Ethiopia, with large improvements likely to be seen in the near future. The Ethiopian economy has grown at a rate of about 10 percent over the past decade, and has been one of the world’s fastest growing economies since 2000. Ethiopia’s economy is predicted to grow by 8.5 percent in 2018 alone. This prediction shows remarkable progress; for comparison, the U.S. economy is predicted to grow by 2.9 percent in 2018, a difference of 5.6 percent.
Despite this great success, there is always room for improvement. The rate of growth of the Ethiopian economy can be augmented by U.S. support. This help from the U.S. will advance Ethiopia’s economy in order to aid its citizens, many of whom, despite the nation’s economic growth, are still impoverished. However, U.S. aid and investment can help ensure that Ethiopia’s economic success will benefit those in need of it most.
The Borgen Project reached out to Dr. Shimelis Gulema for his take on Ethiopia’s economic progress, its future and the role of the United States. Dr. Gulema is a professor of Africana Studies and Political Science at Stony Brook University on Long Island, New York, as well as an Ethiopian immigrant with firsthand experience in the nation. Dr. Gulema’s scholarly areas of focus are on modern and contemporary African migration, urbanization, governance and development.
The Borgen Project: How has Ethiopia’s economy grown so steadily in the past decade? How are its practices different from that of other African nations?
Shimelis Gulema: Ethiopia has seen unprecedented growth over the last 10 or so years, and a major part of the explanation is foreign direct investment […] which includes investment but also loans which Ethiopia uses to build and modernize its infrastructure. Huge building projects, massive free economic zones and growing investment in commercial agriculture is creating continuous growth and a rising standard of living. Ethiopia is different in the sense that such growth is registered under a government that is authoritarian but also developmental. The state, rather than the private sector, is the driver of economic growth.
TBP: What are the three greatest problems that Ethiopia must solve in order to decrease its percentage of impoverished citizens?
SG: There are a number of important policy measures that need to be taken to tackle poverty in Ethiopia […] One: addressing the issue of population growth, which is posing strategic challenges to long-term development prospects. Two: devising a development policy that aims to reduce poverty (an example would be a policy that pays attention to rural areas, agriculture and creates jobs). Three: Transform education so that it can address fundamental questions of poverty and inequality (problem solving or solution-oriented education that is also liberating and empowering).
TBP: What do you believe is the best way for nations like the United States to help bring an end to poverty in Ethiopia?
SG: The U.S. and other nations can and should help to end poverty in Ethiopia and the developing world at large. Poverty is not just a development question; it is also a moral issue. Global poverty is also a national and global security issue, as it contributes to the rise of social breakdown, political crisis, populism and extremism. One crucial area of support is that of democratization […] training and funding independent civil society organizations is crucial. Helping the building of independent institutions like the media and strengthening the rule of law is essential. The other is to shift the development discourse from aid to trade and investment. Aid is still important but a new focus on trade and investment is imperative.
If the U.S. were to increase trade and investment in Ethiopia, as well as in other developing countries, the U.S. economy would benefit as well. If American businesses and corporations were to start projects in Ethiopia and other African markets, these businesses would grow exponentially on an international scale. This would then call for an increase in employees, contracting other American companies to build offices and warehouses and more, thus boosting the U.S. economy greatly. Investment in African economies will grow U.S. presence in international markets as American businesses gain increased name and product recognition.
Ethiopia’s economic success in recent years shows that further progress is possible. The U.S. is instrumental in bringing about economic prosperity for Ethiopia’s everyday citizens through investment and aid. These changes will empower the people at a political and economic level such that Ethiopia’s economic success will soon be felt by all of its citizens.
– Theresa Marino