edri jan 13 2011
TRANSCRIPT
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Some key challenges for Ethiopia:
An outside perspective
Lawrence Haddad
Institute of Development Studies
January 2011, Addis Ababa
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Four questions
How important is agriculture for Ethiopias
future economic growth?
From growth to poverty reduction: is Ethiopia
going to be more like China or India?
Can large scale public works projects help
generate growth?
How can relationships between state and civilsociety be strengthened?
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Question 1
How important is agriculture for Ethiopias
future economic growth?
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Annual GDP/capita growth, 5 year averages (%)
-0.50
1.81
2.98
6.19
-1.45
0.7
1.97
3.04
1991-95 1996-00 2001-05 2006
Ethiopia SSA weighted average
Source: A.K. Fosu. CESifo Forum 2010. WIDER.
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Structural Composition of Economy (%)
4844
1412
38
44
2003-4 2008-9
Agriculture Industry Services
African Development Bank Group.
Economic Brief. Sept 2010.
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Sectoral growth rate, annual (%)
16.9
6.4
11.6
9.9
6.3
14
2003-4 2008-9
Agriculture Industry Services
African Development Bank Group.
Economic Brief. Sept 2010.
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Increase in marginal productivity of smallholders
is possible
1.39
1.981.67
2.281.97
3.55
yield (tons/ha)
wheat
yield (tons/ha)
maize
Smallholders without fertilizer
Smallholders with fertilizer
large farms
0 0
0.155
0.181
0.147
0.225
total fertilizer
(tons/ha) wheat
total fertilizer
(tons/ha) maize
Smallholders without fertilizer
Smallholders with fertilizer
large farms
Source: Mellor and Dorosh 2010
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Total area cultivated by farm size (Ha) and
agro-ecology, 2007/8
Source: Mellor and Dorosh 2010
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GoE spending on agriculture
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Question 2
From growth to poverty reduction: is Ethiopia
going to be more like China or India?
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Ethiopia has a history of doing relatively well at
converting growth into poverty reduction
0
0.5
1
1.5
2
2.5
Growth-poverty gap elasticity 1977-2004
Growth-poverty gap elasticity 1977-2004
Source: Fosu. 2008. WIDER Research Paper No. 2008/107. Inequality and the Impact of Growth onPoverty: Comparative Evidence for Sub-Saharan Africa
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One of the Top MDG performers
Source: Leo and Barmier 2010
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Mixed results across various poverty
measures, Ethiopia
Source: Oxford Poverty and Human Development
Initiative 2010. Ethiopia Country Briefing.
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H o o e e o o la io i oo e e e i ie .
Com a i o o Ho e ol S ve a FAO e ima e
76 75 7371
60
51
45 44 44
37
44
66
32
45
63
15
31
43 43
21
Ho e ol S ve FAO
Source: From Data in IFPRI Research Report 146 2006. Smith, Alderman and Aduayom
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Simulations of Poverty Headcounts driven by growth
under different distributional assumptions
0
5
10
15
20
25
30
35
40
45
50
2000 2001 2002 2003 2004 2005 2006
Poverty Headcount with Distributionally neutral Growth
Poverty Headcount with Equally Distributed Growth
Source: Alemayehu Geda, Abebe Shimeles, John Weeks. JID. 2008
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Question 3
Can large scale public works projects help
generate growth?
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Productive Safety net Programme, impacts on food security and
non-farm own business activity, first 18 months
Impact PW vs NPW Daily per capita calorieacquisition in last 7 days
More likely to participate
in non-farm own-business
activity?
Average impact of any
receipt of PW transfers
Increase, but not
statistically significant
Positive and significant
Source: Gilligan, Hoddinott, Taffesse, Dec 2008, IFPRI
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Productive Safety net Programme, impacts on food security and
non-farm own business activity, first 18 months
Impact PW vs NPW Daily per capita calorieacquisition in last 7 days
More likely to participate
in non-farm own-business
activity?
Average impact of any
receipt of PW transfers
Increase, but not
statistically significant
Positive and significant
Average impact of PW
transfers of at least 90
Birr per household
member
Increase, but not
statistically significant
Positive and significant
Source: Gilligan, Hoddinott, Taffesse, Dec 2008, IFPRI
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Productive Safety net Programme, impacts on food security and
non-farm own business activity, first 18 months
Impact PW vs NPW Daily per capita calorieacquisition in last 7 days
More likely to participate
in non-farm own-business
activity?
Average impact of any
receipt of PW transfers
Increase, but not
statistically significant
Positive and significant
Average impact of PW
transfers of at least 90
Birr per household
member
Increase, but not
statistically significant
Positive and significant
Average joint impact of
PW and Other Food
Security Transfers
Increase, statistically
significant
Positive, not significant
Source: Gilligan, Hoddinott, Taffesse, Dec 2008, IFPRI
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Question 4
How can relationships between state and civil
society be strengthened?
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Contesting resource allocations
Are PSNP resources allocated politically? Human Rights Watch says yes.
Gilligan and Hoddinott 2004, analysing household data from nine villages
which received food aid in the aftermath of an agricultural drought in
2002, found that:
Having a father who was considered important in the social life of the village increased
the likelihood of access to [public works] by about 10 per cent, and having a relative whoheld an official position of some sort within the kebele increased the likelihood of
obtaining gratuitous relief by about the same amount.
2006 study by Gilligan et. al. Political allocations tend to be specific to local
power struggles in some areas, rather than any systematic use of the
targeting system for political ends (Farringdon, Sharp and Sjoblom 2007).
But when PSNP resources are allocated within food insecure woredas
served by the PSNP using a mix of administrative guidelines and
community knowledge (Gilligan et, al. 2008) this is inviting second-
guessing.
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Increasing domestic resource mobilisation
0
2
4
6
810
12
14
2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Tax revenue as a percent of GDP
Tax revenue as a percent of GDP
November 2010. IMF Country Report No. 10/339
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Monitoring
commitment
to hunger
reduction
Ethiopia, ranked
18 out of 29
Source: actionaid 2010
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Four questions. Conclusions How important is agriculture for Ethiopias future economic
growth? Old agriculture no, new agriculture, yes. All acrossthe size scale.
From growth to poverty reduction: is Ethiopia going to bemore like China or India? More like China (?) but watchincome distribution and non-income dimensions of poverty
Can large scale public works projects help promote growth?Not clear
How can relationships between state and civil society bestrengthened? Negotiation over taxes, commitmentmonitoring, service delivery accountabilitymechanisms, collect data for transparent allocationmechanisms