Ethiopia's market reforms stall.(Country overview)

Ethiopia is, by far, the biggest country in East Africa in terms of population, and the biggest, but not by a wide margin, in land area. Since the mid-1990s the country has pursued a reform agenda with the goal not only of improving the lives of its desperately poor citizens, but as well becoming a factor in the global economy.

Ethiopia is among the bottom 10 in the world in terms of per capital income. The country ranks between Niger and the Democratic Republic of the Congo (DRC).

One vivid illustration of the enormous struggle the country faces in upgrading to market economy status is that 70.5 percent of its population collects firewood to use as cooking fuel. The source of this information is Ethiopia's Central Statistical Agency (CSA). Firewood is even collected in the country's urban areas (16 percent).

According to a March 2004 story distributed by the Integrated Regional Information Networks (IRIN), a United Nations agency, "85 percent of the population ekes out a living in the agricultural sector, although almost all are small-scale subsistence farmers in the countryside." Agriculture accounts for about half of Ethiopia's GDP.

It is therefore of more than passing note that in a February 23, 2007 story in The Christian Science Monitor that the newspaper is reporting a move underway in Ethiopia toward establishing a commodities exchange.

The Monitor says that Ethiopia produces more maize than Kenya, Uganda and Tanzania combined, but only 30 percent of production reaches market. The traditional commodity distribution system in Ethiopia includes numerous middlemen, meaning that Ethiopia's farmers are paid a fraction of market prices because of several markups.

A commodities exchange-with adequate communication to regional warehouses-would mean farmers could get better prices and actually make a profit. Wages, presumably, would increase to drive consumer spending.

The exchange idea is a progressive one, but lack of warehousing and transport infrastructure are serious problems.

LACK OF MARKET DIVERSITY AND POOR HEALTH CARE SAP ECONOMIC VIGOR

The population growth rate for Ethiopia is below the East Africa regional average (birth rate, 41 per thousand) with a birth rate of 39 per thousand. Job creation has not kept up with growth of the labor force in recent years. Ethiopia's CSA published a 2005 national level "Labor Force Survey" showing urban unemployment at 20.6 percent, and rural unemployment at 2.6 percent. The country's huge rural population is mostly subsistence farmers, which accounts for the low rural unemployment rate.

Ethiopia's population reached 75-million people mid-2005, which amounted to just over 24 percent of East Africa's 284-million inhabitants. According to data released by the Population Reference Bureau (PRB), Ethiopia's population will reach 108-million by 2025. Also, according to that source, Ethiopia is going to have a population of 145-million people in 2050.

The PRB revealed that a low 15 percent of Ethiopia's population lived in urban areas during 2006, and that the country's population density is a comparatively moderate 175 people per square mile. Ethiopia is almost exactly the same size as all of Western Europe, which has two and a half times the population. The CIA's World Factbook says that 44 percent of Ethiopia's population was birth to 14 years old in 2006, 53 percent was 15 to 64, and 3 percent of was 65 years of age and over.

The CIA estimates the country's population growth rate at 2.31 percent in 2006. According to the United Nations Population Division, by 2050, 33 percent of Ethiopia's population will be birth to 14 years old, 59 percent will be 15 to 59, and 21 percent of the populace will be 60 years of age and over.

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