Binyam Tamene
20 July 2008
Addis Abeba — It will take Ethiopia a difficult 25 years to join the ranks of countries in the middle income status, as the registered ecomonic growth can not be in par with the ever growing size of poor population, a new study report revealed on Thursday.
The report said Ethiopia was among the Least Developed Countries (LDCs) where economic growth has accelerated in recent years, but the rate of progress in terms of poverty reduction and human development remained very low.
It said given the current trend of economic growth, Ethiopiap will make it to the middle income level only in 25 years.
The report said Ethiopia must reach the income threshold in the long term and, if recent development strategies are improved, will pull out of the poverty line in the next two decades where the annual income of a citizen is estimated to reach above 1040 dollars a year.
As regards to the country's econmic performance, the report placed Ethiopia among the economies growing above 7%, together with Afghanistan, Angola, Bhutan, Cambodia, Lao People's Democratic Republic, Maldives, Mauritania, Mozambique, Myanmar, Sierra Leone and Sudan.
Other African countries in this group are, but not limited to, Equatorial Guinea and Angola which are sid to already have achieved the income threshold: Djibouti, with Sudan and Mauritius "close to reaching the point." Other African countries UN labels on a "promising track" include Sudan, Angola and Liberia.
"Overall economic growth rates of 7% and more in the LDCs in 2005-2006 should have provided an opportunity for substantial improvements in living conditions," the report released on Thursday by United Nations Conference on Trade and Development (UNCTAD) said.
"But rapid population increases and other factors mean some 581 million people continue to live in material deprivation out of a total LDC population of 767 million in 2005," it said.
According to the report three fourths of those living in these nations continue to survive on less than US$2 a day, with the recent rising food costs threatening to undercut the modest progress achieved.
"As a result, income of under US$2 per day does not allow most to meet basic needs for food, water, shelter, health, or education," the report noted.
The report finds economic growth has had some impact on absolute poverty, the most extreme form of material deprivation.
The report noted, even with faster economic growth, the number of those living in absolute poverty rose until 2003 and then stabilized.
"Absolute poverty' refers to those living on less than $1 a day," it continued. "The share of the overall LDC population (the so-called poverty rate) living below this income level declined slowly from 44% in 1994 to 36% in 2005," according to new poverty estimates made by UNCTAD.
The report said however that the number of poor living on more than $1 a day but less than $2 a day continues rising According to the report, slow progress in reducing poverty means the LDCs will not be able to achieve the first of the United Nations' Millennium Development Goals (MDGs): halving the proportion of those living on less than $1 a day between 1990 and 2015.
"To achieve the poverty goal of MDG 1, the LDCs would need to cut their absolute poverty rate to 20% by 2015," the study revealed.
The report has suggested LDC countries to highly depend on self-agriculture-based economic development strategies than wait for aid which comes based on the policy and personal interest of wealthier nations.
According to the report, economic growth has been accompanied by sluggish progress towards achieving other human development goals related to nutrition, health, education, gender equality, and environmental sustainability.
The report indicated that most LDCs will probably be unable to meet most of the MDGs by 2015 "There is no evidence of a significant change in trends in social development since 2000, after the adoption of the Millennium Declaration and more socially-oriented policy reforms," it said
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