Ethiopia Geography

Ethiopia is an Eastern African country located in the Horn of Africa. Ethiopia a country divided by the Great Rift Valley is home to millions of years of archaeological history. Addis Abada is the capital of Ethiopia and home to over 3 million people. Ethiopia has a total population over 99 million people, a number that has been greatly influenced by the HIV/AIDS epidemic. In addition, it is around twice the size of Texas and Ethiopia is second only to Nigeria as the most populous country in Africa. According to the CIA World Fact Book, the majority of the population is fourteen years of age and below, and over sixty percent of the population is below twenty-four, providing a large workforce.

Historically, Ethiopia is known as the only African

country to maintain freedom from colonizing forces. Expect for a short period of time where there was Italian control between 1936-1941 (CIA World Fact Book). Ethiopia has seen its fair share of hardships throughout the nation's history, such as, famines, droughts, wars, and military juntas, all of which will be discussed later.
The national language of the country is Amharic, but Oromo is the official language of the state of Oromiya, which is one of the nine regional states within Ethiopia. Amharic is a Semitic language and is the second widely spoken Semitic language after Arabic. In addition, to these two languages there are other regional languages spoken across the country. The main religions of the country are Ethiopian Orthodox, Islam, and Protestantism.
Ethiopia is a completely landlocked country.

The country shares borders with Djibouti, Eritrea, Somalia, Sudan, South Sudan, and Kenya. The geography of the country comprises mostly of plateaus with a central mountain range that is divided by the Great Rift Valley. Ethiopia is also home to 14 rivers and has a large water reserve. Its natural resources are, gold, platinum, copper, potash, natural gasses, and hydropower (CIA World Fact Book). Due to the amount of people who live in rural areas, agriculture comprises 47.7% of the GDP and accounts for 85% of the countries workforces. The countries major exports are "cereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish" (CIA World Fact

Book).
In this analysis we will investigate three different measures of economic development and growth. First we will examine Ethiopia's GDP per capita, then study the Poverty Rate at the national level, and finally, we will look at the country's inequality through their GINI Index.
Economic Development and Change
According to the International Monetary Fund Ethiopia is one of the fastest growing economies, seeing as it grew over 10% between 2009-2014. The economy is nonoil dependent and is generally agriculturally focused, however in recent years there has been a push towards "manufacturing, textile and energy generation" (CIA World Fact Book). Coffee is the countries major export. Despite ineffective practices and the frequency of droughts the majority of Ethiopians work in the Agricultural sector in some form.
In order to gain a greater understanding of the country's economic we will first look at the GDP per capita (constant LCU) (Figure 1). As you can see there has been a steady increase in GDP per capita since around 2003, with only slight downfalls around 2009 and again in 2012. This increase is tied closely into growing inflation within the country; additionally the per capita rate is measured in thousands of Birr (the local currency) illustrating how economic poverty is pervasive in the country. The current exchange rate betwen Birr and US Dollars is 20.90 Birr to the Dollar. This means that the GDP per capita in 2014 at 7,011 is equivalent to $335.49 US dollars. This comparison easily highlights the level of economic poverty we are encountering in Ethiopia and according to the CIA World Fact Book, Ethiopia has one of the lowest GDP per capita rates in the world.
The GDP per capita decreases prior to 2003 correlate to major events in Ethiopia. First, we must consider 1998, the beginning of the war between Ethiopia and Eritrea. This war was focused on land and territorial growth. According to BBC hundreds of millions of dollars were spent by both countries, two of the poorest in the world, while many lives were lost on both sides. It was estimated that during this time both countries spent one million dollars a day " since the conflict started" (BBC). Second, we must look at 2003, which began one of the worst famines the world had seen in many years. According to both The Guardian and The New York Times, the famine of 2003 was even more threatening than the famine Ethiopia had seen from 1984-1985. According to The Guardian as many as 20 million people were at risk of dying from starvation in Ethiopia. Due to the country's overall dependence on agriculture for national and personal economic growth, it is surprising that the drought did not have a more sever effect on GDP per capita. As of 2004 Ethiopia entered into the Humanitarian Appeal created in conjunction with the UN to help relieve some of the poverty created by the drought and famine in 2003. The New York Times highlights how rural Ethiopians never fully recovered from the previous major drought and consequent famine which explains why the GDP per capita rate is taking so long to rise despite the passage of ten years.
For a better understanding of how these events hurt the country overall examine Figure 4. This clearly illustrates the devastating effects of the three major events mentioned above. Additionally, Figure 5 illustrates the annual GDP growth in comparison to the annual GDP per capita growth where one can see how deeply connected these two elements, which is an intuitive element, but is interesting to see graphically.
Next, we will examine Poverty Rates at the national level to further understand the economic situation in Ethiopia. Figure 2 is a chart of the Poverty Headcount rate at the national Poverty line. A headcount ratio does not account for distribution but is relative to the poverty line. Figure 2 illustrates that the percentage of poor people in Ethiopia is going down if it has followed the trend seen. According to The World Bank's economic overview of Ethiopia, "while 38.7% of Ethiopians lived in extreme poverty in 2004-2005, five years later this was 29.6%, which is a decrease of 9.1 percentage points as measured by the national poverty line, of less than $0.6 per day". This indicates two major elements that are vital to understanding a poverty headcount decrease. First it says that extreme poverty has decrease meaning more people are poor rather than extremely poor. However, it does not go into an in-depth analysis of absolute verse relative poverty. Second, it designates what the poverty line for Ethiopia is in terms of US Dollars, "$0.6" per day. That means that 29.6% of the Ethiopian population lives on less than $1 a day by a significant amount. While all of this explains that many people in Ethiopia it does not illustrate how many people hold most of this poverty compared to others who are slightly better off, which denies the devastating reality of many Ethiopians.
You cannot analysis poverty and growth without taking into account inequality.

Which is why we will now examine the GINI Coefficient for Ethiopia (Figure 3). The GINI Coefficient looks at inequality within a country through the ways in which the GDP of a country is distributed. Figure 3 indicates that despite a growing GDP per capita, the inequality is growing, this means that the rich are becoming richer while the poor and the extremely poor are in even worse economic situations. The GINI rose from 30 to 34 in less than 20 years, highlighting how little effect increasing GDP can actually have on alleviating extreme poverty. A main factor behind this gap is due to the amount of people in agriculture, around 90% of the total work force. While it comprises the majority of the countries income, it is not an extremely profitable job for small farmers, but extremely beneficial to those who control the exports. This system allows for certain people to reap the majority of the agricultural

benefits.
Moreover, Ethiopia has experienced significant political unrest over the years with aids in growing inequality. In 1974 there was a military junta, which led to a socialist state, this regime was overthrown in 1991 by Ethiopian People's Revolutionary Democratic Front ( EPRDF). This is known as the Ethiopian Civil war and more than 1 million people were killed during this time. The new government lasted from 1991 through 2012 when the country experienced the first peaceful transition of power in decades. Political unrest and war always correlates with low GDP growth both nationally and on the individual level, due to the countries shift in priorities. During all of the political unrest and corruption Ethiopia experienced one of the worst droughts and famines in its history, which was mentioned earlier. This leads to bad harvests, low production and an increase in poverty, and while the poor starve the people in power are benefiting from corruption and unrest.
Conclusion
In conclusion, the economic situation of Ethiopia is precarious. Due to a general lack of data and constant struggle the country will have economic issues for a long time. However, it does appear that with a large population will be entering the workforce, hopefully there will be jobs available for them to make a living. The charts illustrate a steadying of the GDP growth, an increase in GDP per capita, and a decrease in the national poverty headcount, which indicates that a new economic era could be on the rise for Ethiopia. Their biggest challenge will be lessening the inequality within the country. Maintaining political stability after the most current elections in May, where the EPRDF party won again, will be vital especially as Ethiopia is once again thrown into a period of famine and drought.