Economic Development in Ethiopia: Development Gap and the Obstacles

Economic Development in Ethiopia
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Introduction
Africa has long been termed as the source of raw materials for the rest of the world. Most of the continent's economic outlook painted quite a bleak picture of how the countries progressed. However over the past decade or two, the narrative has been changing with Africa slowly turning into the next important global economic player. Among the leaders in the economic turnaround of the continent is Ethiopia. The country has experienced a steady economic growth over the past decade, something that is a combination of several factors. This report details Ethiopia’s economic development over the last 60 years, the development gap between it and OECD countries, and the obstacles for Ethiopia to close the development gap.
Overview of Ethiopia
Ethiopia is a country on the East of the African continent, specifically located just near the horn of Africa. It is a landlocked country bordering Sudan, South Sudan, Kenya, Somalia, Djibouti and Eritrea. It is a rugged country with undulating hills and valleys, perhaps due to the passage of the Rift Valley across it. With a population of around 116 million people, Ethiopia is the second-largest country in terms of population, with only Nigeria boasting a bigger population. Over the past two decades, the country has experienced a rapid turnaround in its economic outlook, with it boasting of stable economic growth for almost ten years running. It was growing at a rate of 8.5% per annum in 2018. That, however, slowed down a bit due to the pandemic. Even though it is landlocked, the country’s strategic location has served it well.[Hauge, Jostein, and Ha-Joon Chang. "The Concept of a" Developmental State" in Ethiopia." Oxford University Press, 2019.] [Gray, Alex. "Ethiopia is Africa’s fastest-growing economy." In World Economic Forum, vol. 4. 2018.]
It is next to the Middle East, which offers a ready market for its exports, while the Middle Eastern countries offer great trading partners for the country. The country enjoys sufficient labor provision backed up with abundant natural resources with its large population. Like most African countries, the country is still heavily dependent on agriculture as the backbone of its economy, even though it is trying to diversify into other sectors of the economy. Also, like most other African nations, there seems to be quite a discrepancy between economic growth and the people's living standards, as a majority of the population is still poor. Establishing a balance between economic growth and pa capita income still remains the major challenge for the country.
60 Year History of Ethiopia
6O years ago, Ethiopia was the last proud absolute monarch under Haile Selassie. He had become the first foreign head of state to visit West Germany and was making efforts to try and bring economic and technological development back to Ethiopia. After a decade, however, unrest had begun back home, with Ethiopians starving and the economic outlook being so bleak. The unrest was so much that Haile Selassie was toppled in a coup led by Col. Mengistu Haile Mariam. Life under Mengistu, just like in other African nations that were under military rule at the time, w...