21 November 2017

Ethiopia: 'Sustaining Economic Growth Will Crackdown Poverty Bedrock', Prof. Tasasew Woldehana


Professor Tasew Woldehana has been teaching Economics in Addis Ababa University for the last 17 years. He earned his PhD from the Netherlands Wageningen University. Professor Tasew has been engaged in extensive research undertaking related to poverty since 1992 EC. More importantly, he has been involved since 1992 EC in the second poverty analysis surveys conducted in five years interval. Recently, the fifth survey has been released.

The Addis Zemen Daily has held exclusive interview with Prof. Tasew on the consecutive poverty analysis surveys and the preliminary report of the fifth survey. Hereunder is the translation of the interview: Excerpt

How do you assess the contribution of Poverty Analysis Survey conducted over the years to national policy design and plans?

Professor Tasew:- Obviously, such surveys would help emanates ideas to identify the root cause of poverty, our status in poverty index, and area of focus to reduce poverty. Then based on the findings of research and analysis it is possible to design viable policy. It is based on these poverty analysis the Ethiopian government has launched poverty reduction programs.

For instance, for the 1992 EC poverty reduction program the poverty analysis survey was valuable input. During the analysis survey the poverty rate in the country was 45 percent.

Poverty was rampant in the rural areas than urban areas. Though it was rampant and most of the people live at similar status. It was on this backdrop the government of Ethiopia has launched poverty reduction program focusing on rural safety net program with a special emphasis on agricultural economic and food security.

By the way, the poverty analysis conducted in 1997 EC revealed that poverty was decreased in rural areas than urban areas. There was a wide gap in wealth distribution among dwellers. The survey indicated that government should also focus on urban poverty reduction. As a result, various programs with special focus on youth, women and urban development were designed.

Similar survey conducted in 2002 EC has depicted that the poverty rate in rural and urban areas have been reduced. However, the difference between low income and rich ones at national level and living standard in rural areas had no difference as such. But the living standard in urban areas has decreased.

At that time the parameter for poverty was per capita income less than 3,781 Birr. The survey has also attested that the number of people live under poverty had decreased but the livelihood had not been improved. The survey had implied the government to prepare a policy that benefits the poorest of the poor. The previous experience showed that the poverty reduction programs were designed based on the poverty analysis surveys. Notably, it has to be understood that policies based on study would be effective. Otherwise, the result would be minimal or an incidence. Besides, the intervention through other means would make the fight against poverty very tough. Tracing problems and recommending solutions based on studies would help pursue the right path to achieve the ultimate goal. Mostly, the preparation of poverty reduction programs would be directed by the findings and recommendations of the studies. Sometimes, due to law level of understanding of the study among some public offices their intervention might be different.

Sometimes, when poverty rate officiated some people argue against the scientific results of the study. They resist accepting the findings of studies. Sometimes, the attention is given for other issues while the poorest of the poor neglected.

How was the preparation for the fifth Poverty Analysis Survey and what does the finding imply?

Professor Tasew:- Unfortunately, the data for the poverty analysis was collected during the last drought. The drought was really devastating disaster possibly damage public resource and investment in a year. However, the poverty rate has declined to 23.5 percent from 29.5 percent.

In connection with the reduction in number and economic growth we expect much decrease in poverty in rural areas. To the contrary, the reduction of poverty in rural areas was lower while in urban areas was very higher. Thanks to the aggressive urban poverty reduction interventions the poverty rate has significantly been decreased. Most importantly, it is not only the reduction of urban poverty but also the size of poorest of the poor. In rural areas, though the people who live under poverty line have decreased, the number of poorest of the poor has not been decreased. Of course, considering the drought situation was not as such devastating rather it was higher.

What special procedures have been employed for the fifth Poverty Analysis Survey from the previous ones?

Professor Tasew:- Of course, it is quite different from the previous ones. Samples were collected for the previous four Poverty Analysis Surveys in the months of February and July. Though the date was taken twice on average basis they didn't incorporate the differences in between the months.

Uniquely, for the fifth survey data was taken from 12 months. This, for sure, would enable show the reality in the country. The other thins was the size of the samples were increased and time for data collection was relatively wider. And this would improve the quality of the data.

Besides, the data taken previously from the pastoralist area was not fully representing their catchment area.

In brief, the survey objectively shows the current situation of the country. The data collection system was conducted in modern way not by papers as previous experience.

What were the criteria for the Survey?

Professor Tasew:- To measure the living standard of the community we use food and non food items expense. If a person consumes less than 2,200 calories per day, he /she said to live under poverty. The non food expenses include the capacity to cover house rent, clothing and transport costs. The wealth gap between the rich and the poor community both in rural and urban areas has got wider. Besides, the differences in living standard between the urban and rural areas have also been increased. The standard of living would be measured by Gini cofficient rated between Zero and One. If the number is approaching to one is indicating that the difference between rich and poor is getting wider. Currently, the Gini Coefficient in Ethiopia has reached 0.33.

Though it is not as such big increase, but it is a warning stage for action. When the living standard is getting wider and wider, it would limit the economic benefits for the poor ones. One of the problems for a country that has been in lower living standard is when it begun growing primarily the people, who were relatively in a better of, gain better income.

The fruits of the economic growth would reach to the poor community when the economy is getting steadily grower and grower. The bottom line is the Kuznets Curve economic theory that promotes the argument when economy grows the disparity between the rich and the poor also increases. This doesn't work for Ethiopia.

This is because as a country many of its citizens are poor it should design poverty focus policy. And it would be advisable for the country that its various policies should focus on the poor community. To bridge the wider gap in living standard between urban and rural areas, the government should sustain the economic growth and further intensify efforts for better achievements. While striving for sustainable economic growth, the government should benefit the disadvantaged segments of the society.

According to the fifth Poverty Analysis Survey preliminary report, 5.3 million people have been taken out of poverty. Is this size said to be higher as it is referred to the country's economic growth?

Professor Tasew:- Definitely, the number of people taken out of poverty is quite big. But the ever increasing population undermines the big figure (5.3 million people).

The poverty rate has decreased to 23.5 from 29.5 percent in five years time. Some argue that poverty does not decline in the country. What could be the reason?

Professor Tasew:- When we say the poverty rate has declined to 23.5 percent it doesn't mean totally eradicated. Still it is rampant. It is almost like saying some 23 million people have not secured its food security. Therefore, it is not as such a trumpeting achievement as more jobs are ahead of us. When poverty is decreasing many people don't believe or understand by comparing the level of poverty around its milieu. Therefore, the incumbent should work hard to reach out citizens through its poverty reduction program and sustainable economic growth. Besides, citizens should benefits equally from the social security programs. For this to happen, the social security provision capacity should be strengthened.

What should be done to narrow the living standard gap?

Professor Tasew :- Primarily, the poverty rate between urban and rural should narrowed. Of course, poverty rate variation among the state has been there for long. As states where poverty is rampant, are droughts stricken. Therefore, smart interventions are required to decrease their rain dependency. Harnessing irrigable lands and managing properly is very important. What is more, along with the aggressive agricultural activities, the government needs to intensify efforts towards the expansion of industries.

Does the final preliminary report include inputs from consultations' forum?

Professor Tasew:- Most of the numerical data won't be changed. The final report would outline the causes. The report would widely indicate how the poverty rate varies place to place, how the livelihood of citizens could be improved, how the poverty rate relates with family features and what kind of family could be taken out of poverty or indulged into poverty.

All in all, what do the Poverty Analysis Survey recommends?

Professor Tasew:- While engaging in wide range of activities to maintain the economic growth poverty reduction is the common agenda for all developing countries. The report indicated that much is expected ahead. As the survey was conducted not only assess the status of poverty but also to recommend inputs for poverty reduction interventions, it would be advisable to implement its recommendations. Traditionally, the comparison made during poverty analysis is to see from where we were with where we have reached now. But, currently we should compare not only with the previous status but also the capacity to attain human needs and deserves to get. The survey is always directing correctional measures.

What pending activities are ahead of time in poverty reduction efforts?

Professor Tasew:- To accommodate all the disadvantaged segments of the society it is important to consolidate Social security service in the country. For this, finance is very important. Time and again, we have been consulting the government to reach out poorest of the poor in urban areas through urban social security programs. Currently, the incumbent is trying to implement such programs. If the activities of the government are confined with the economic growth, people would only be benefited as per their capacity. In this case, the economic growth would mostly benefit the able segments of the society. But, social security programs can focus on the livelihoods of the poor against to free market society.

In fact, the social security programs underway in the country are common and fit well with the working people. But for those who are unable to work there must be a strong social security.

The incapable and for those who cannot manage themselves by pension need to be embraced at least by health providers. A lot is expected from the incumbent. If we fail to protect the basic needs and social security, the poverty reduction would just only be beneficial for those active and likely to be changed. Programs need to implement for each and every segment of the society. The current social security schemes are not inclusive. Thus, the national security programs should be strengthened. We always have to understand that the financial support from external sources would be decreased with times. The government should establish budget for social security programs. In this regard, we need to do more in furthering the services.

Thank you!

Professor Tasew:- I thank you also.


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