Econ 333 Paper

Topics: Poverty, Economic growth, Population Pages: 13 (4024 words) Published: February 10, 2015
Ethiopia as a Less Developed Country

By: Danielle McGrady
i. Ethiopia
According to the United Nations Economic and Social Council, Ethiopia is considered one of the forty-eight least developed countries (LDC). The list of LDC are looked over every three years and this list was recently updated in March 2012. To be considered a least developed country, the Committee for Development takes into consideration these three factors: “ (A.) A per capita income criterion, based on a three-year average estimate of the gross national income (GNI) per capita, with a threshold of $992 for possible cases of addition to the list, and a threshold of $1,190 for graduation from LDC status; (B.) A human asset criterion, involving a composite index (the Human Assets Index) based on indicators of: (i) nutrition (percentage of the population that is undernourished); (ii) health (child mortality ratio); (iii) school enrollment (gross secondary school enrollment ration); and (iv) literacy (adult literacy ratio); and (C.) An economic vulnerability criterion, involving a composite index (the Economic Vulnerability Index) based on indicators of: (i) natural shocks (index of instability of agricultural production; share of the population victim of natural disasters); (ii) trade-related shocks (index of instability of exports of goods and services); (iii) physical exposure to shocks (share of the population living in low-lying areas); (iv) economic exposure to shocks (share of agriculture, forestry and fisheries in GDP; index of merchandise export concentration); (v) smallness (population in logarithm); and (vi) remoteness (index of remoteness)” (unctad.org).

Ethiopia is known to be the oldest independent country in Africa due to the five million year old remains found in the Awash Valley. Ethiopia was home to one of the most powerful kingdoms, Axum, which flourished as a main trading point as early as 1st century BC. Ethiopia just recently elected Mulatu Teshome as their new president and Hailemariam Desalegn as their new prime minister. Ethiopia is structured as a federal parliamentary republic. ii. Poverty

Ethiopia is currently one of Africa’s poorest countries and one of the poorest countries in the world. Ethiopia is considered one of the highest performing economies in the Sub-Saharan Africa yet it still manages to be a very poor. Twenty-nine percent of Ethiopia’s population lives below the national poverty line and 78% of the Ethiopian population survive with an income of below $2 a day: .

Some statistics that measure a countries poverty include: the poverty gap, the poverty headcount ratio, poverty gap at a national poverty line, poverty headcount ratio at national poverty line, poverty gap at rural poverty line, and the poverty gap at urban poverty line, etc. According to the World Bank, Ethiopia’s poverty gap at $2 a day is 37.9%, poverty gap at $1.25 a day is 16.2%, the poverty headcount ratio at $2 a day is 86.4%, poverty headcount ratio at $1.25 a day is 55.6%, poverty gap at rural poverty line is 12.2%, poverty gap at national poverty line is 11.9%, poverty headcount ratio at national poverty line is 44.2%, poverty head count ratio at rural poverty line is 45.4%, poverty gap at urban poverty line is 10.1%, and the poverty headcount ratio at urban poverty line 36.9%.

The reduction of poverty in Ethiopia has decreased from 38.7% in 2004 to 29.6% within a five-year period due to economic growth trends. Ethiopia has a target goal to decreased poverty to 22.2% by 2014-2015. In 2012, it was recorded that the poverty is at 27.8%, so by the looks of it, it seems that Ethiopia will not meet its goal to reduce poverty to 22.2% by 2014-2015. Ethiopia is having a very challenging time at fixing the causes of poverty, but the Ethiopian government is devoting a great amount of its budget to “pro-poor programs and investments.” For example, the Ethiopian government has committed to a series of...

References: http://www.dol.gov/ilab/reports/child-labor/ethiopia.htm
http://www.ruralpovertyportal.org/country/home/tags/ethiopia
http://www.cia.gov/library/publications/the-world-factbook/geos/et.html
http://archaeology.about.com/cs/africa/a/aksum.htm
http://www.ethioembassy.org.uk/fact%20file/a-z/history.htm
http://borgenproject.org/education-ethiopia/
http://search.worldbank.org/all?qterm=Ethiopia&title=&filetype=
http://www.dw.de/gloomy-future-for-ethiopias-press-freedom/a-16852430
http://www.indexmundi.com/ethiopia/gdp_per_capita_(ppp).html
http://www.bbc.co.uk/news/world-africa-24084472
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