Ethiopia is considered a model recipient of foreign aid by international aid agencies, since it uses much of the aid on its people, rather than just to fill the Swiss bank accounts of its rulers (as is often the case with foreign-aid receiving countries). But it uses the aid to promote political repression, by giving – or denying – such aid to hungry villagers based on whether they support the ruling party, as a recent article in the New York Review of Books explains. By solidifying the Ethiopian government's control, foreign aid gives the government the ability to put off doing things that would expand economic growth -- like letting farmers own their own land.
Most Ethiopians are subsistence farmers, and 85 percent of all Ethiopians live in the countryside. Land was collectivized in the 1970s during the Red Terror of the Marxist Mengistu regime, and today, Ethiopian peasants lease rather than own land.
Ethiopia is one of the world’s hungriest counties. In its percentage of chronically malnourished people, it's edged out in Africa only by a few war-torn countries like the Congo and Liberia, and its misgoverned neighbors, Eritrea (which is governed by a Stalinist control-freak) and Somalia, which is in a state of anarchy. Ethiopia is also the most populous country in Africa after Nigeria, with more than 80 million people.
On paper, Ethiopia’s backward economy supposedly grows by 10 percent or more per year. In reality, those statistics are cooked, and its economy probably grows by no more than 5% annually -- barely enough to keep pace with a population growth rate of at least 3.3%.
Ethiopia’s economy is more government-controlled than most of Africa (with government monopolies over things like telecom), although admittedly its government is not as incompetent as many Third World governments in running what it does control. Billions in foreign aid allow the government to artificially achieve modest economic growth despite outmoded, state-controlled development policies and a stunted private sector. In the absence of the aid, the government might be forced to liberalize the economy to create genuine economic growth -- the way countries in East Asia like South Korea that were once incredibly poor became rich after they pursued a free-market path.
Ethiopia is also the home of teff, a nutritious, drought-resistant, high-protein grain that could easily be exported and marketed to health nuts and greenies if the country had a decent transportation system or modern trade infrastructure. (Health nuts will eat even things that aren't grain, like quinoa, if you call them "organic whole grain cereal" and trumpet the fact that they are grown by Third World peasants). Because of its economic backwardness, Ethiopia is missing out on this kind of marketing. So are fat people, who could perhaps lose weight if they ate the teff grown in the Ethiopian highlands, rather than starchier, less nutritious grains.
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