With annual economic growth rates of over 10
percent and attractive investment conditions due to low infrastructural and
labour costs, Ethiopia is eagerly trying to rise from the status of low-income
to middle-income country in the next 10 years. Ethiopia,
with some 94 million inhabitants, is the second most populous country in Africa
after Nigeria, but it remains a predominantly rural country. Only 17.5 percent
of the population lives in urban areas, mainly Addis Ababa. It is also one of
the continent’s fastest growing economies. Between 2015 and 2018 growth is
expected to average 7.3 percent, according to a recent study by the United
Nations Industrial Development Organisation (UNIDO). While economic growth
since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the
percentage of people living below the national poverty line dropped from 38.9
in 2004 to 29.6 in 2011, government sources admit that eradication of poverty
remains a compelling issue.
“There is not a single country in
the world which has reached a high state of economic and social development
without having developed an advanced industrialised sector” – UNIDO Director
General Li Yong
The official target of rising to a middle-income
country is considered to be realistic, but an East Asian diplomat accredited to
the African Union in Addis Ababa says there is reason to be sceptical, partly
because although the amount of foreign direct investment (FDI) rose from 0.5 percent
in 2008 to 2 percent in 2013, investors continue to face trade constraints. According
to UNIDO, these are mainly related to border-logistics. Djibouti, the main
import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa,
which makes the cost of land transportation a critical factor. It is against
this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot
country for its ambitious inclusive and sustainable industrial development
(ISID) programme, which aims to achieve industrialisation in developing
countries in order to eradicate poverty and create prosperity. According to
UNIDO Director General Li Yong, “there is not a single country in the world
which has reached a high state of economic and social development without
having developed an advanced industrialised sector”. What distinguishes the
ISID programme is that “current modes of industrialisation are neither fully
inclusive nor properly sustainable”, he added. UNIDO is therefore not merely
promoting industrialisation but trying to approach the needs and challenges of
the globalised world that demand future-oriented concepts. Promoting the
sustainability that should be inherent to industrialisation, UNIDO says that
the ISID programme takes into account environmental factors together with its
partner countries and organisations. It also fosters an industrialisation that
is inclusive in sharing the benefits of the generated prosperity for all
parties involved, thereby promoting social equality within populations as well
as an equal distribution between men and women to ensure that nobody is
excluded from the benefits of growth.
To show how these objectives can be met and to
promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in
Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We
have a vision of a just world where resources are optimised for the good of
people. Inclusive and sustainable industrial development can drive success.” The
Secretary-General, who is a strong advocate of the sustainable development
agenda, also said that in order to achieve this objective, “industrial
development must abandon old models that pollute. Instead, we need sustainable
approaches that help communities preserve their resources.” Prime Minister
Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal
– representing the two pilot countries chosen for ISID – commended UNIDO for
implementing a partnership programme, and Ethiopia’s State Minister of
Industry, Mebrahtu Meles, emphasised that building industrial zones will
accelerate industrialisation, as has been done by Asian countries such as
China. Forum participants expressed optimism about Ethiopia achieving economic
growth through inclusive and industrial sustainable development provided that
leadership and vision focused on the country’s comparative advantages while
improving infrastructure. They said that regional integration could be key for
the development of the country, and called for further exploration of UNIDO’s
role as a catalyst of transformational change. In particular additional efforts
were required to enhance the productivity in existing light industries such as
agro-food processing, textiles and garments, leather and leather products.
There was also a need to diversify by launching new industries such as heavy
metal and chemicals and building up high-tech industries like packing,
biotechnology, electronics, information and communications. The ambassadors of China,
Japan and Italy to Ethiopia – Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe
Mistretta respectively – as well as business stakeholders and development banks
assured their continued support in helping Ethiopia take the path towards
inclusive and sustainable industrial development, mainly through UNIDO. Source (
IPS News Agency )
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