Oxford Research: the exception, not the norm about Ethiopia
By Bereket Gebru (5 July 2014)
Various sources show that in the second half of the 1980s that mark the final years of the Derge regime, Ethiopia’s GDP declined by 5 percent and inflation soared. A steep decline in exports and collapse in international coffee prices reduced foreign-exchange reserves to an all time low. Recurring famine, especially the highly publicized 1984/85 drought, put the lives of millions of Ethiopians at risk.
As a result of these and numerous other problems, the World Bank classified Ethiopia as the world's poorest country. The celebrity studded fund raising activities on the international stage also largely associated Ethiopia with famine and drought. The Oxford dictionary also went along those lines in citing Ethiopia as an example in explaining the meaning of famine.
It has been a quarter of a century since those dark days for Ethiopia. Since the early 1990s, Ethiopia has been doing its level best to make the years count. The result is a country hopeful of uplifting itself to middle income status in a decade. Present conditions also reflect how far the country has come from those days of agony and testify to the right path to development adopted by its people.
The country’s GDP per capita has increased four folds from 120 USD in 1990 to 500 USD in 2013. Export has gone up tremendously with semi-processed goods among the ranks in stark difference to the export of primary agricultural goods back then. The country’s production capacity has also shot up with agricultural and industrial production enjoying a bask in the sun. The recurring cycle of famine has finally come under control. Ethiopia has become one of the biggest economies in Africa.
All international organizations, including the World Bank, have as a result hailed the achievements of Ethiopia in economic growth and poverty reduction at one time or another. The United Nations (UN), the International Monetary Fund (IMF), the World Bank and the African Union (AU) along with governments of various countries and other economic institutions have at different times come up with reports acknowledging the changes in the country.
Recent annual reports by Oxford University, however, seem to depart from the rest of the world in claiming that it has found Ethiopia to be the second poor of 108 countries it has examined. Apparently, the people in Oxford are still hangover their use of Ethiopia to explain famine and poverty. Whether it is a fact of old habits dying hard or a sound argument that holds water is the purpose of this article.
The 2014 global Multidimensional Poverty Index (MPI) of Oxford University was launched recently. Those involved in its preparation claim that it “complements traditional income-based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.” These three dimensions of poverty are then divided into ten sub-divisions: years of schooling, school attendance, nutrition, child mortality, electricity, sanitation, water, floor, cooking fuel and assets.
If someone is deprived in a third or more of the ten indicators, the global index identifies them as ‘MPI poor’, and the extent – or intensity – of their poverty is measured by the number of deprivations they are experiencing. This year’s index has come up with a new measure of poverty – destitution. A person is destitute if he/she is deprived in at least one-third of the same indicators, but according to more extreme criteria than those used to identify the MPI poor - such as having lost two children, or having no one with at least one year of schooling at home. Other extreme criteria include the presence of someone at home with severe malnutrition, no access to clean water or a round trip of 45 minutes to find safe water by foot, dirt or dung floor and open defecation.
In 2014, the global MPI covered a total of 108 countries which are home to 78% of the world’s population. Some 30% of them – 1.6 billion people – are identified as multidimensionally poor. Of these 1.6 billion, 85% live in rural areas, which is a markedly higher percentage than income poverty estimates of 70-75%. Most live in South Asia (52%), followed by Sub-Saharan Africa (29%), and most – 71% - live in middle income countries.
Despite making the largest reduction of destitution out of all the countries covered by the research at 30%, the index claims that “Ethiopia is still home to more than 76 million poor people, the fifth largest number in the world after India, China, Bangladesh and Pakistan. 87.3% of Ethiopians are classified as MPI poor, while 58.1% are considered destitute. In rural Ethiopia 96.3% are poor while in the urban area the percentage of poverty is 46.4%.”
The index has ranked Ethiopia as the second poorest of the countries it analyzed next to Niger. That has widely been reported by various electronic media rather not exactly as if Ethiopia has been rated the second poorest country in the world. Considering the 108 countries analyzed include only 31 low-income Countries, with the other 77 constituted by middle and high income countries, the research is clearly a long way off from ranking all low income countries in the world. The index just makes the point that Ethiopia is the second poorest of the 31 low income countries it analyzed.
Another peculiar thing about the index is that it has ranked countries that spell anarchy and chaos as better off than those with rapid economic growth and development. The lower Multidimensional Poverty Index (MPI) value assigned to Somalia, a country that has been stateless and unstable since the early 1990s, as compared to Ethiopia, a country that has recorded average double digit economic growth, peace and stability over the last decade, is indicative of the hardship involved in identifying the right parameters of poverty.
A quarter of a century of statelessness and weak government marred with social division and conflict obviously derives any nation into the extremes of poverty as social service provision becomes non-existent besides the destruction of already established social services and the country at large. In such a society, the provision of formal education along with the establishment and running of modern health care facilities is barely possible. Recurring cycles of armed conflict and economic stagnation also don’t help attempts to expand access to electricity, sanitation, water and nutrition. On top of that, Somalia was hit by the most severe drought in the region for over half a century just a couple of years ago. The constant worry about security and the potential danger to people and their loved ones also infringes on standard of life.
On the other hand, the methods used by the researchers at Oxford suggest that millions of traditional Ethiopian cattle breeders in various administrative regions who own thirty or more cattle individually are categorized as poor or destitute even if the price of a cow or an ox is a minimum of 500 USD. Accordingly, a person owning one thirty cattle has an asset of 15,000 USD. Someone owning hundred cattle has an asset of 50,000 USD. This figure is not exaggerated as more than 50 cattle are usually the normal amount for dowry in various parts of the country. The research, however, contends that an asset that big would not help someone from being labeled poor or destitute as dirt floor, open defecation and a round trip of 45 minutes to find safe water would be enough to have him labeled destitute.
As an international definition for the poor is not existent, various parameters are used to determine those who fall into the group. Although Multidimensional Poverty Index (MPI) provides a broader approach to income levels as the main criteria, not even its staunchest of supporters can claim that it is the ultimate method.
In fact, MPI pushes the bar of poverty up including those peripherally out of poverty back into the category. With income used widely as the parameter of poverty, health and educational coverage along with some living conditions were not considered. By introducing these variables in the equation, MPI has pushed up the bar of poverty to include those who could have otherwise been out of the category. The large number of poor people around the world indicated in the index is therefore a result of this liberal approach towards categorizing people as poor.
The Oxford research also claims that the poorest of the poor, destitute in the research’s terms, are mainly located in rural areas. It uses criteria such as having no one with at least one year of schooling at home to determine one’s status. In most cases though, the poorest of the poor struggle for their daily meals and they have barely any assets.
To categorize farmers who have a plot of land to plough and their families’ labor to depend on as destitute is somewhat a drift from reality. After all such people have two (land and labor) of the three tools of production – land, labor and capital. In contrast, a majority of those who live in non-dirt floor houses, with family attending school and using latrines or toilets only depend on the sale of their cheaply valued labor. Their access to land or capital is almost unimaginable. Often, family members depend on income from a single family member. With rent, food, education and other variables all included in the expenses of such families and salaries stagnating in the face of skyrocketing prices of goods, such families cannot make ends meet. Such families are very vulnerable to real destitution, as in having no shelter and food, as the termination of employment of the bread winner would deny them of all the three tools of production.
Accordingly, those who live in non-dirt floor descent toilet houses, with family attending school might be vulnerable to survival threatening conditions while the opposite category of farmers depend on their labor and land to produce subsistent to their families’ needs with a better sense of stability. That is indicative of the fact that the parameters used are not that much in line with the realities on the ground. Therefore, the index needs to come up with parameters that sort out such problems associated with its application or risk being irrelevant.
The Case of Ethiopia
The study identifies Ethiopia as the country that has made the largest reduction of destitution in the country despite it being the second poorest of the 108 countries it examined. It is a fact that poverty reducing activities push people of different living standards up on the ladder of riches. National policies and implementation activities that manage to lift as significant as 30% of the destitute up would, sensibly thinking, also help some of the poor out of poverty. However, the index suggests that those who have their lives improved were just the destitute. The up scaled poverty bar used by the index might have pushed things to that effect though.
With the adoption of a pro-poor method incorporated in the concept of ‘developmental state’, the government of Ethiopia has steered the country on a fast economic growth and development track. This approach, based on high levels of public investment, has been associated with strong economic growth and delivered notable progress towards the attainment of many Millennium Development Goals (MDGs). Subsequently, the country is on track to achieve five of the eight MDGs as stipulated in the 2013 United Nations MDGs Report.
Let’s look into the educational, health and standard of living changes evident in Ethiopia over the past few years to get a realistic picture of the poverty reduction efforts in the country.
Education: the country has registered tremendous achievements in availing educational access for all. The gross enrollment rate increased from 32% in the 1990s to 96.4% in 2010/11. Currently, the country is on the final push to ensure a 100% enrollment rate.
The 2011/12 Growth and Transformation Plan progress report states that “the goal of making primary education accessible is expected to be attained before the conclusion of the MDGs time frame. Primary school parity index between male and female has marginally declined from 0.94:1 in 2010/11 to 0.93:1 in 2011/12 and is also slightly lower compared to the annual target of 0.94:1. This achievement indicates that it is possible to reach the 1:1 ratio before the 2014/15 time frame. With regard to gender parity of primary schools, better community participation, improvement of attitudinal change of the community to send female children to school and better availability of other inputs have enabled to achieve such encouraging results.”
The above stated data clearly show that Ethiopia is on the right track to ensure that families having no one with at least one year of schooling at home would be history. Currently, the number of such families has gone down in folds with nearly universal primary education becoming a reality.
Health: the health component of MPI is classified into nutrition and child mortality. Although data for nutritional trends in Ethiopia could not be accessed by the writer of this article, UNICEF’s 2013 progress report on child mortality entitled “Committing to Child Survival: a Promise Renewed” brought Ethiopia the good news that it has already achieved the Millennium Development Goal (MDG) for child mortality three years ahead of schedule. The already achieved goal on child mortality is to reduce it by two-thirds by 2015.
Under five mortality rate also declined from 166 between 1995 and 2000 to 88 between 2006 and 2011. Infant mortality rate reduced by 38.7% between 1990’s – 2010. The above data clearly show that the incidence of two kids dying from a family has gone down significantly.
Living Standards: this section of the MPI includes cooking fuel, sanitation, water, electricity, floor and assets. Clean water coverage in Ethiopia in 2014 is 71% from 17% in 1990. The figure is expected to grow to 94% next year. According to the 2011/12 GTP report, the national electric service coverage of the country was 48.5% during that year. The target for 2014/15 is to increase the national electricity service coverage to 75 percent.
The 2013 UN MDGs report states that “the best news the 2013 report has given us is that the world has successfully halved the proportion of people living in extreme poverty.” The report states that the world reached the poverty reduction target five years ahead of schedule. The 2013 UN MDGs report identifies 45 MDG trailblazers – strongest performers. Ten of these trailblazers are in sub-Saharan Africa. Recognized as one of the strongest performers in Africa, Ethiopia is one of these trailblazers with a progress index score of 5.5. The score shows that Ethiopia was then on track to fulfill five of the eight MDGs besides going half on the sixth. The identification of Ethiopia as a trailblazer by the UN shows that its rate of poverty reduction is among the fastest.
The 2011/12 GTP progress report states that the per capita income has increased from USD 377 in 2009/10 to USD 387 in 2010/11 and further to USD 513 in 2011/12 as a result of the economic growth. According to the Household Income and Consumption Expenditure Survey, the total population living below the poverty line has gone down to 29.6 percent in 2010/11 from the level of 38.7 percent in 2004/05, showing a decline of 9.1 percentage points over the five years. In 2011/12, the level of poverty is forecasted further to decline to about 27.6 percent. The Survey results show that poverty headcount index is declining in all regional states and city governments. With regard to food poverty, the Survey results indicate that food poverty index has declined from 38 percent in 2004/05 to 33.6 percent in 2010/11, registering a decline of 4.4 percentage points. The food poverty level is expected to decrease further to 32.7 percent in 2011/12. Disaggregated estimation of poverty levels across areas of residence also indicates that poverty is declining in both rural and urban areas. Rural poverty headcount index was 39.3 percent in 2004/05 and 30.4 percent in 2010/11, showing a decline of 8.9 percentage points in poverty index over the same period. Using this trend, rural head count poverty index is forecasted to decline to about 28.6 percent in 2011/12. According to the Survey, urban poverty headcount index has declined from 35.1 percent in 2004/05 to 25.7 percent in 2010/11, showing a decline in poverty level of 9.4 percentage points. Using this survey results, urban poverty index is forecasted to decline to 23.8 percent in 2011/12.
With regard to improving non income poverty, massive investments have been undertaken in the social sector. Investment in the construction of new health facilities and upgrading of existing ones, strengthening the implementation of the health extension program, and expansion of health human resource development have led to significant improvements in the welfare of people. The primary health care coverage increased to 93% in 2011/12, while significant progress has been made in improving maternal and child health. Likewise, massive investment has been undertaken in the expansion of primary, secondary and tertiary education. As a result, enrollment has increased at all levels of the education system.
With international organizations such as the United Nations (UN), International Monetary Fund (IMF), World Bank, African Union (AU) and others reporting on the fact that Ethiopia has become an economic powerhouse in Africa shrugging off its synonymy with poverty, the Oxford study identify it as the second poorest of the 108 countries it examined is the exception, not the norm.
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