Ethiopia Ranks 108 Out of 110 Countries in Prosperity Index By Legatum Prosperity Index,

November 4th, 2011 Print Print Email Email

Ethiopia is among the bottom three countries in an index that measures prosperity as a function of both income and well being for 110 countries around the world. According to The 2011 Legatum Prosperity Index, Ethiopia ranks 108 out of 110 countries, ranking above just Zimbabwe and Central African Republic.

ECONOMY – RANKED 104th

Despite high levels of growth and relative optimism about their economic future, Ethiopia faces very high levels of unemployment and dissatisfaction.

Ethiopia’s economy faces severe challenges. Inflation runs at over 8% and the gross domestic savings rate is only 4% of GDP, comfortably placing Ethiopia in the bottom 30 of the Index on the latter variable. The unemployment rate is almost 21%, which is the sixth highest rate, globally**.

Ethiopia places 69th* in terms of affordability of food and shelter, and only four out of 10 people* are satisfied with their standard of living, which places the country 91st in the Index on this variable. Only one in three* people believe that job market opportunities are improving, although the average citizen believes that general economic conditions are getting better*; the country ranks in the top half of the Index with respect to economic expectations. This is consistent with an average increase in GDP per capita of almost 8% annually between 2005 and 2009.

There is, however, limited potential for additional growth: capital per worker in Ethiopia is the fourth lowest worldwide, and the country places 76th in terms of market size. At 4%, the proportion of manufactured exports that come from high-tech sectors is very low and non-performing loans account for over 5% of total bank loans. The fact that less than half* of Ethiopians have confidence in the country’s financial institutions, reflects this. However, more positively, the country is attractive as a destination for foreign direct investment. No data on self-reported employment were available.

ENTERPRENEURSHIP & OPPORTUNITY – RANKED 108th

Ethiopia’s weak communications infrastructure and low access to opportunity inhibits entrepreneurship and limits innovation

Income from royalty receipts is low at just over 2.2 million USD, and there is virtually no investment in R&D. ICT goods account for less than 1% of total manufactured exports. Ethiopians ability to start and run a business is highly limited: business start-up costs are high at 14% of GNI per capita, and communication infrastructure is weak with only five mobile phones for every 100 citizens.

Furthermore, on both internet provision variables – internet bandwidth and number of secure internet servers – Ethiopia places in the bottom 10 of the Index. What little wealth exists is relatively concentrated: inequality across different socio-economic groups, in terms of education, jobs, and economic status, is among the 20 most pervasive in the world. Possibly as a consequence of this, just 85%* of the population believe that they can get ahead in life by working hard, which places Ethiopia in the bottom half of the Index on this variable. Data on perceptions of the local entrepreneurial environment were not available.

GOVERNANCE – RANKED 101st

A lack of democratic accountability and confidence blights the Ethiopian political system

Ethiopia’s semi-democratic government suffers from ineffective governance. While political constraints are relatively high, preventing arbitrary exercise of political power, there is very little competition in the executive and legislative branches of government, and the judiciary lacks independence. Levels of approval for the government are low at just over a third* of the population, only 21%* are satisfied with the country’s efforts to address poverty, and 39%* are satisfied with efforts to preserve the environment. On all three variables, Ethiopia places in the bottom 30 of the Index. There appears to be little respect for the rule of law, and the country is notable for its poor regulatory environment for business, placing 101st in the Index on this variable.

Levels of confidence in the military and judiciary are both very low*. Ethiopians have few political rights, but 16%* reported having voiced an opinion to a public official recently. Unsurprisingly, only 19%* of the population believe that the electoral process is honest. Data on perceptions of corruption were not available.

EDUCATION – RANKED 107th

Ethiopia’s education system is poor at all levels and its population is deeply dissatisfied

The net enrolment rate at the primary level of education is only 83% in Ethiopia. This drops to a gross level of 34% at secondary level, and 4% at tertiary level. On all three variables, Ethiopia ranks amongst the bottom 20 nations in the Index.

The country has a significant under representation of girls in primary and secondary education. With only one teacher for every 58 pupils at primary level, there is a massive shortage of educators, and Ethiopian workers are typically poorly educated: an average of 18 months of secondary education per worker is only slightly below the global average, but low level of tertiary education per worker places Ethiopia amongst the bottom 10 countries on this variable.

Ethiopia does not fare any better on subjective variables. Just 48%* of the population are satisfied with the quality of their children’s education, while less than a quarter* believe Ethiopian children have the opportunity to learn and grow every day, which is the lowest such rate in the Index.

HEALTH – RANKED 107th

Ethiopia has a health deficit, but its people worry less than any other nationality

On most health outcomes, Ethiopia performs very poorly. Its infant mortality rate, 67 deaths per 1,000 live births, and its health-adjusted life expectancy of 50 years, place Ethiopia among the bottom 20 nations on both variables. Equally, 41% of the population are undernourished. Less than eight in 10 infants are immunised for infectious diseases, and only three-quarters for measles; Ethiopia places 98th and 99th, respectively, on these two variables. Each year, a meagre 30 USD (PPP) is spent per capita on healthcare, the second lowest amount of all countries in the Index.

Tuberculosis infections and deaths from respiratory diseases are very high. Access to hospital beds and sanitation facilities is very limited, placing the country 109th and 110th on these measures of health infrastructure, respectively. Only 29%* of people are satisfied with the quality of their water: the lowest such proportion in the world. Still, a surprising 74%* of Ethiopians are satisfied with their general level of health, placing 89th on this variable, while an exceptionally low 13%* reported having worried for a significant part of the previous day, placing the country top of the Index on this variable. This is despite 26%* of Ethiopians reporting debilitating health problems and only four out of 10* Ethiopians feeling well-rested; the country places bottom of the Index on the latter variable. Only 59%* are satisfied with their environmental surroundings, significantly below the global average.

SAFETY & SECURITY – RANKED 106th

Ethiopia’s national security faces major challenges while citizens also face high levels of crime

Ethiopia has many national security problems and this is reflected in the country’s position in the bottom 30 on most sub-index variables. There are many refugees and internally displaced persons in the country, and the level of group grievances from recent or historical injustices, is very high. The Ethiopian government has been known to engage in political violence and, globally, Ethiopia is the country where expression of political views is perceived by the population to be most* restricted. This may be contributing to the rate of flight of professionals, intellectuals, and political dissidents, which is among the 20 highest rates in the world.

Additionally, the country has the second highest level of demographic instability arising from border disputes, ownership or occupancy of land, access to transportation outlets, control of religious or historical sites, or proximity to environmental hazards. There were episodes of civil conflict in 2010. Personal safety is also very poor with 20%* of Ethiopian respondents reporting that they had been recently assaulted, and one out of four* experiencing a theft. Only half* the population feels safe walking alone at night, which is below the international average.

PERSONAL FREEDOM – RANKED 110th

Ethiopia is one of the least free countries in the world

Ethiopia ranks among the bottom 10 countries for citizens’ freedoms in expression, belief, association, and personal autonomy. Reflecting this, only 40%* of people report satisfaction with their freedom of choice, placing Ethiopia 109th in the Index on this variable. No data on tolerance of immigrants and ethnic and racial minorities were available

SOCIAL CAPITAL – RANKED 86th

Despite high levels of religious attendance, other social networks in Ethiopia are relatively weak

Ethiopia fares poorly on most measures of social capital. At 16%*, the proportion of respondents to a 2007 survey that had donated to charity in the previous month placed 86th in the Index. Just 13%* had formally volunteered in the same time frame, while 34%* had helped a stranger, ranking the country 81st and 97th, respectively, on these variables. Less than half* of respondents were married, while a very low 78%* of Ethiopians reported feeling that they could rely on relatives and friends in times of need.

However, religious networks are stronger: a very high 78%* of respondents had attended a religious service in the week prior to the survey, a rate which is the sixth highest in the Index.
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* Data is taken from the Gallup World Poll
** The terms ‘international’, ‘global’, or ‘world’ are used to reference the 110 Prosperity Index countries, which represent approximately 93% of the world’s population and ¬-97% of global GDP.

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