Ethiopia hails new poverty reduction data; World Bank expresses concern inflation is undermining progress By Keffyalew Gebremedhin

March 18th, 2012 Print Print Email Email

Ethiopia Friday announced 29.6 percent of its population, or 30 million, subsists below the poverty line, compared to 38.7 percent in 2004/05. This is based on results of the official 2010/11 Household Income Consumption and Expenditure Survey (HICES), the fourth in a series.

For entirely different reasons, today’s announcement has taken by surprise both economists and political analysts. Economists concerned by the persistence of double-digit inflation seemed puzzled how this has worked out to this outcome, seemingly vowing to go back to the drawing board to review the details.

At the launching of the interim report on the Survey, Minister of State for Finance and Economic Development Abraham Tekeste also seemed to share that preoccupation, when he said considering the persistence of inflation the decline in poverty level is a “remarkable achievement”, according to VOA.

Nevertheless, World Bank Country Director for Ethiopia Guang Chen is more straightforward in expressing concern that inflation is undermining further progress. The table here shows the extent of inflation, going into third year and its severity. It shows that from 2010 into the first two and a half months of 2012, the country has gone through 17 months of uninterrupted and still rising double-digit overall inflation, averaging about 30.0 percent. At the same time, it has recorded 14 months of double-digit food inflation, which in February reached 47.4 percent making not only the price of food beyond the reach of ordinary citizens but also creating shortages of food items such as cereals,oil and sugar, etc.

VOA’s Peter Heinlein quotes Guang Chen saying, “The trend is very positive [shown by HICES results], but at the same time, as the state minister says, still we’re talking about 30 million people below the poverty line, and this is a very poor country, and when we’re talking about rural poverty line, their poverty line is actually below the world accepted average. So there’s still a lot of work to be done.”
In all this, the ebullient Associate Professor Tassew Woldehanna takes the survey results as confirmation that Ethiopia can achieve the Millennium Development Goals by reducing poverty by half, according to ENA.

For political analysts, more intriguing now seems to be the timing of this announcement. They say, it is coming as it does, when the country is extremely busy with security problems in many corners at the same time, citing as example, in Somalia, while they are also standing in readiness to ward off reprisals from Eritrea on the northern border, which Ethiopia claimed days ago it had made incursions into that country and destroyed training camps.

These analysts are concerned that the longstanding no-peace no-war situation with Eritrea is now changing, as tensions are also exacerbated by low intensity conflicts and insurgent activities in the Ogaden, onto which Gambela has become another addition. If not undermining the country’s stability in a serious way, these would still be nuisances that compete for attention and scarce resources, creating difficult environment for continuing the task of poverty reduction and ensuring to make economic growth broad based, beneficially contributing to every citizen.

VOA reports that Finance Ministry officials saying they had made progress in narrowing the inequality gap. However, the World Bank’s lead economist on poverty reduction in Africa Chorching Goh noted that the history of developed countries teaches temporary inequality is a necessary result of growth. She urged Ethiopian officials to be patient when it comes to inequality, and impatient when it comes to the eradication of poverty, although the Bank’s role in poverty eradication is barely one of the best models to follow.

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  1. selamyihun
    | #1

    One day will come out of poverty and live a dignfied life. Let’s work jointly narrowing a distructive difference and enhancing what unites us in diversity.

  2. Chalew
    | #2

    My messages to readers here to not trust the Weyannesä’s, for there is no iota of credibility left with them to trust their figures. Let alone with poverty figure where one can manipulate the figures easily and requires a quit a deeper understating of the concept to grasp, they did not even blink their eyes when the lie to Ethiopian people about the verdict of Badme from ICC. That was something that can be verified by every citizen of the country easily. Besides, the weyannes has completed the task of supplanting the whole beurocrartic machine of Ethiopia with their own people; especially all of the places with sensitive information are now manned by Tigrans and only them. I think it is very clear to the readers where I am going with this.
    If you have a patient enough person to turn on to the ETV nowadays, you couldn’t find an expert in any filed who is non-tigrainas. The few people you see who are non-Tigrainas in some positions are either because there is no expert yet in the filed or the position is not that sensitive and TPLF left that person just for mask and decoration, the rest, as the saying goes, is go figure. Now back to the report, If one look at the VOA report on the issue, there is already a contradiction with what the World Bank and the Melese government is apparently reporting:
    EtGov:
    “Finance Ministry officials told donor organizations Friday that about 25 million of Ethiopia’s 80 million people live below the poverty line.”
    The bank officals:
    “…. we’re talking about 30 million people below the poverty line, and this is a very poor country, and when we’re talking about rural poverty line, their poverty line is actually below the world accepted average”
    If you trust the WB figure, they say that 30 million out of 80 million are below the poverty line which according to my calculation is 37% not 25%.
    In addition, there are two sentences that caught my attention in the VOA report which says it all
    “Ethiopia’s poverty line is well below the internationally accepted rate of $1.25 a day.”
    And that in the in the human development index of 2011, Ethiopia standing was 174 out of 187 countries, and ten years ago out of 163 countries were are 159, so in terms a relative position Ethiopia haven’t moved forward that much .
    The other big thing that I don’t understand here is which Ato Kefyallew, one of my favourite blogist, has given a good coverage, I.e the inflation stupid, the fact that in Ethiopia the economic growth and its effects are decoupled from the inflation. It seemed so far- fetched to assume that such a significant poverty reduction can be achieved with such long and persistent inflation rate, at 30 % on average, 2.5 % population growth, without any polices on the ground to offset the negative effect of inflation. As far as I know the fact on the ground suggest that things has gone worse for many people, even for highly paid government workers unless they are in such positions to extract rent. Imagine that the percentage of salary indexation that should have taken place for the loss of income for everyone who earns his income from a wage.
    Imagine that the rate of salary indexation that should have taken place automatically to compensate for the loss of income for everyone who earns his income from a wage in order to keep the same level of purchasing power and that never happened.

  3. Chalew
    | #3

    My messages to readers here is to not trust the Weyannes’s, for there is no iota of credibility left with them to trust their figures. Let alone with poverty figure where one can manipulate the figures easily and requires a quit a deeper understating of the concept to grasp, they did not even blink their eyes when the lie to Ethiopian people about the verdict of Badme by ICC. That was something that can be verified by every citizen of the country easily. Besides, the weyannes has completed the task of supplanting the whole beurocrartic machine of Ethiopia with their own people; especially all of the places with sensitive information are now manned by Tigrans and only them. I think it is very clear to the readers where I am going with this.
    If you have a patient enough person to turn on to the ETV nowadays, you couldn’t find an expert in any filed who is non-tigrainas. The few people you see who are non-Tigrainas in some positions are either because there is no expert yet in the filed or the position is not that sensitive and TPLF left that person just for mask and decoration, the rest, as the saying goes, is go figure. Now back to the report, If one look at the VOA report on the issue, there is already a contradiction with what the World Bank and the Melese government is apparently reporting:
    EtGov:
    “Finance Ministry officials told donor organizations Friday that about 25 million of Ethiopia’s 80 million people live below the poverty line.”
    The bank officals:
    “…. we’re talking about 30 million people below the poverty line, and this is a very poor country, and when we’re talking about rural poverty line, their poverty line is actually below the world accepted average”
    If you trust the WB figure, they say that 30 million out of 80 million are below the poverty line which according to my calculation is 37% not 25%.
    In addition, there are two sentences that caught my attention in the VOA report which says it all
    “Ethiopia’s poverty line is well below the internationally accepted rate of $1.25 a day.”
    And that in the in the human development index of 2011, Ethiopia standing was 174 out of 187 countries, and ten years ago out of 163 countries were are 159, so in terms a relative position Ethiopia haven’t moved forward that much .
    The other big thing that I don’t understand here is which Ato Kefyallew, one of my favourite blogist, has given a good coverage, I.e the inflation stupid, the fact that in Ethiopia the economic growth and its effects are decoupled from the inflation. It seemed so far- fetched to assume that such a significant poverty reduction can be achieved with such long and persistent inflation rate, at 30 % on average, 2.5 % population growth, without any polices on the ground to offset the negative effect of inflation. As far as I know the fact on the ground suggest that things has gone worse for many people, even for highly paid government workers unless they are in such positions to extract rent. Imagine that the percentage of salary indexation that should have taken place for the loss of income for everyone who earns his income from a wage.
    Imagine that the rate of salary indexation that should have taken place automatically to compensate for the loss of income for everyone who earns his income from a wage in order to keep the same level of purchasing power and that never happened.

  4. Dawi
    | #4

    [[..29.6 below the poverty line, compared to 38.7 percent in 2004/05...]]

    It is a respectable achievement by any measure.

    Food inflation is a catch 22 – Income is low in Ethiopia and any increase of income is eaten up by food cost increases. In order to cool down food price increases, they have to look into cooling down economic growth. How do you balance the two?

  5. ahmed ali
    | #5

    Press Release

    Massacre in Somali Region: 22 Killed and 36 arrested by Liyu Police

    The latest report about the atrocity committed by the Luyu Police forces in Gashaamo District Somali Regional State of Ethiopia

    Mar 17, 2012 – According to a report coming from Gashaamo district in Somali regional State of Ethiopia confirms that a series of direct armed confrontations have taken place between the pastoralist and the luyu (Special) police of Somali Regional State on Friday, 16th march 2012 after the later shot dead a resident of one of the villages. The individual who was shot dead was known as Farah Ali Goohe. The three main villages that the armed clash had taken place are Galka-Boodo-Libaax, Dhoobo- Guduud ,Raqda and Adaada. Unconfirmed report also shows that 8 luyu police and 2 civilians were killed after the villagers organized themselves to defend their lives and properties. But, on Saturday, 17th of March 2012, reinforced Luyu Police Forces, started assaulting these villages in early hours of the day. As a result, a number of villages were burned down and more than 22 people were killed, 36 were arrested as they buried the killed ones, and a number of them were seriously wounded. The wounded were evacuated to medical centers around the villages. When writing this report, the conflict was still undergoing and there is no sign that the Federal Defense Forces has taken measures to stop the atrocity. This conflict is still going on when we were writing this report.

    This was not the single incident when the Luyu police under the pretext of controlling the border area committed series of atrocity against the innocent and peace loving pastoralists in the region formerly known as Haud and Reserve Area and populated by the Isaq clan. Primarily the Luyu police forces were established to fight against the armed terrorist rebel movement, Ogaden National Liberation Front. This rebel movement carry out its operation in Ogaden inhabited area of the regional state. But the Luyu police forces under the pretext of fighting against this rebel movement have widened the conflict area and created a war zone in the formerly peaceful area of Haud and Reserved Area. The inhabitants of this area have repeatedly appealed to both Regional and Federal Government about the injustice being committed by these forces. Nevertheless, no action has so far taken against these human right transgressions. The regional police forces were supposed to compose all ethnic clans within the Somali regional state. However, due to a number of maladministration and open discrimination, a number of former recruits left their positions and made the regional state police force to be dominated by the Ogaden Clan.

    The Diasporas community both in the United Kingdom and Northern American has clearly expressed their concern to the Ethiopian Federal Government and Regional President about the injustice being committed by the Regional Luyu Police Forces. Recently, the UK Diasporas community has met the regional president and clearly made their dissatisfaction with his ignorance to the plight of the Isaq community member within Ethiopia. It is known that this regional president has made a number of times to assure the community that he would personal made sure that these oppressions would come to an end. However, this latest incident clearly shows that the regional government has no any plan to look at the citizens of the regional state in equal term.

    It is very sad that all our efforts to prevent these problems in peaceful and amicable ways have not borne fruit due to the deliberate disregard and hidden agenda of the regional state to cleanse the Isaq community from the Ethiopian Somali Regional State. Many pastoralists are displaced within Somali Region and they are fleeing for their lives. In such circumstances, the members of Isaq clan have no other option to defend themselves in whatever means possible. We are calling the Federal Government of Ethiopian to protect the human rights of the Isaq Community in Ethiopia.

  6. AD
    | #6

    It’s the supply, Dawi. The communist land policy of Woyane has resulted in almost no improvement in agricultural yields for 20 years. Nearly 40 years if you add the Dergue. So we have all this aid and borrowed money chasing little food and you have food inflation. And instead of privatizing land and letting farmers become entrepreneurs, they give land to foreigners. Idiotic prodigal sons.

  7. Dawi
    | #7

    Thanks AD:

    I have read some supply have grown and export as well.

    What about the flowers grown for hard currency instead of eatable food?

    Is it the egg or the chicken?

    Hard currency to buy tractors for the future large farms or do we just grow Tef to eat today?

    “..Ethiopia increased by 17.7 percent from 2005/07, the prices of cereals jumped by 15 percent. This is both due to increases in the price of fuel oil and fertilizers, as well as inefficient market structures …”

    “…the diversification of the commodity export base that Ethiopia is pursuing under the (ADLI) paradigm, farm exports have grown on average by 25 percent ….’

    Recent leather products export revenue reported twice as much of last year, about 140 million dollars – the sector is now short of local leather input. And we are supposed to have the largest domestic animal stock in Africa.

    Opposition doesn’t admit of any growth and blames the World Bank for taking the words of Wayane. There maybe some truth to that but denying everything? C’mon!

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