Obituaries

Ethiopia Ranks in the Bottom Five – Prosperity Index

The UK based Legatum Institute, an independent research and advocacy organization, issued its 2010 Legatum Prosperity Index that assesses the wealth and wellbeing of 110 countries. According to the group, the “index seeks to understand how economic fundamentals, health, freedom, governance, safety, education, entrepreneurial opportunity, and social capital influence a country’s economic growth and the happiness of its citizens.” In all of eight sub-indexes the group studied, Ethiopia ranked in the bottom ten, ranking in the bottom five in most of those indicators.


 Economy - Ranked 106th

Ethiopia’s economy faces severe challenges. With inflation rampant at 44%, and gross domestic savings at just 0.4% of GDP, it ranks in the bottom six of the Index on both variables. However, employment figures seem reasonable: the official unemployment rate is 5.4% and the 52%* of people reported that they had either paid or unpaid work. Still, Ethiopia ranks 72nd* in terms of affordability of food and shelter and just a third* of the population is satisfied with their standard of living, a rate that places at 102nd in the Index. Economic pessimism is rife: only one out of five* people believe that job market opportunities are improving, and the average citizen believes conditions are getting worse*; this ranks Ethiopia in the bottom quartile of the Index with respect to economic expectations.

 

This is despite an average increase in GDP per capita of almost 8.9% year-on-year between 2004 and 2008, suggesting that high growth has led to social instability and dissatisfaction. Additionally, there is limited potential for additional growth: capital per worker in Ethiopia is the fourth lowest worldwide**, and the country places 77th in terms of market size. The rate of high-tech exports, at 5.9%* of total manufactured exports, is around the global average, but the country attracts little foreign direct investment. Although more than half* of respondents have confidence in the Ethiopian financial sector, this variable only places 74th in the Index. No data are available on the proportion of non-performing loans.


 Entrepreneurship & Opportunity - Ranked 109th

Very little innovative activity takes place in Ethiopia. Income from royalty receipts is very low at just over 100,000 USD, and there is virtually no investment on R&D. ICT goods account for just 0.5% of total exports. Nearly four out of five* Ethiopians think that the environment for entrepreneurs is favorable, indicating optimism, but the ability to start and run a business is highly limited: business start-up costs are high at 19% of GNI per capita, and communication infrastructure is weak with only four mobile phones for every 100 citizens. Furthermore, levels of internet bandwidth leave Ethiopia 98th, while there is approximately one secure internet server for every 25 million people. What little wealth exists is relatively concentrated, as group-based inequality in education, jobs, and economic status is among the 15 most pervasive in the world. Consequently, just 71%* of the population believe that they can get ahead in life by working hard, which places Ethiopia in the bottom third of the Index on this variable.


 Governance - Ranked 99th

Ethiopia’s semi-democratic government, which faced a regime change and constitutional reforms less than two decades ago, suffers from ineffective governance. While political constraints are relatively high, preventing arbitrary political decisions by the executive, there is very little competition in the executive and legislative branches, and the judiciary lacks independence. Levels of approval for the government are low, with just a third* of all Ethiopians trusting the government. Only 17%* are satisfied with the country’s efforts to address the poor, while 36%* are satisfied with efforts to preserve the environment. On all three variables, Ethiopia places in the bottom quartile of the Index.

 

Most perceive corruption to be widespread in government and businesses, placing Ethiopia 88th on this variable. There appears to be little respect for the rule of law, and the country is notable for its poor regulatory environment for business, placing 100th in the Index on this variable. Levels of confidence in the military and judiciary are both very low*. Ethiopians have few political rights, but 17%* had voiced an opinion to a public official in the year prior to being surveyed in 2008. Unsurprisingly, only 21%* of the population believe that the electoral process is honest.

Education - Ranked 108th

The enrolment rate at primary education is only 78%, dropping to 33% at secondary level, and 4% at tertiary level. On all three variables, the country ranks amongst the bottom 10 in the Index. There are 20% less girls than boys in primary and secondary classrooms, indicating gender discrimination. With one teacher for every 59 pupils at primary level, there is a massive shortage of educators, and Ethiopian workers are typically poorly educated: an average of 1.9 years of secondary education per worker is around the global average, but an average of just one month of tertiary education per worker places Ethiopia amongst the bottom five countries on this variable, worldwide. Ethiopia does not fare any better on subjective variables. Just 43%* of the population are satisfied with the quality of their children’s education, while only one-third* believe their children have the opportunity to learn and grow every day.

 Health - Ranked 108th

On most health outcomes, Ethiopia performs very poorly. Its infant mortality rate of 7.5% is among the 10 highest in the world, while its health-adjusted life expectancy, at 41 years, places in the bottom 10. Over half of the population is undernourished. Less than three-quarters of people are immunized for infectious diseases, while less than two-thirds are immunized for measles; Ethiopia places 100th and 105th, respectively, on these two variables. A meager $30 (PPP) per capita is spent on healthcare, the lowest amount of all countries in the Index. Tuberculosis infections and deaths from respiratory diseases are very high. Levels of access to hospital beds and improved sanitation facilities are very low, placing the country 107th on these measures of health infrastructure.

 

Only 29%* of people are satisfied with the quality of their water: the lowest such percentage in the world. Still, a surprising 79%* of Ethiopians are satisfied with their general level of health, placing 70th, while a low 24%* reported having worried a lot the previous day, placing the country in the top 25 of the Index. Astonishingly, just 14%* of Ethiopians report debilitating health problems, which is the third lowest percentage in the world. Although over six out of 10* Ethiopians report being well-rested, this rate places very poorly in a global context. Only 58%* are satisfied with their environmental surroundings, which places in the country in the bottom 15.

Safety & Security - Ranked 103rd

Ethiopia has many national security problems and this reflected in the country’s position in the bottom 30 on most sub-index variables. There are many refugees and internally displaced persons in the country, and the level of group grievances from recent or historical injustices, is very high. The Ethiopian government has been known to engage in political violence placing the country 80th with regard to this variable. Additionally, Ethiopia is one of the 10* countries in the Index where expression of political views is perceived by the population to be most restricted. This may be contributing to the flight of professionals, intellectuals, and political dissidents, which is among the 15 highest in the world.

 

Additionally, the country has the second highest level of demographic instability arising from border disputes, ownership or occupancy of land, access to transportation outlets, control of religious or historical sites, or proximity to environmental hazards. There were also a few, episodes of civil unrest in 2008. Personal safety is also very poor with over 15%* of Ethiopian respondents reported that they had been assaulted in the year prior to being surveyed, and one out of six* had property stolen. However, over half* feel safe walking alone at night, which is just below the international average.

 

Personal Freedom - Ranked 93rd

Ethiopia is one of the least free countries in the world, but its citizens are remarkably tolerant. Ethiopia ranks among the bottom 25 countries for citizens’ freedoms in expression, belief, association, and personal autonomy. This relates to only 35%* of people reporting satisfaction with their freedom of choice, ranking Ethiopia 109th in the Index. However, tolerance for outsiders is above the international average: 71%* of Ethiopians think their neighborhood is a good place for immigrants, while 75%* think the same for ethnic and racial minorities.

 

Social Capital - Ranked 85th

Ethiopia fares poorly on most measures of social capital. With 24%* of the population having donated to charity, the country places 66th on this variable. Just 13%* had formally volunteered in the same time frame, while 38%* had helped a stranger, ranking the country 76th and 74th, respectively on these variables. The 42%* marriage reported in a 2008 survey is low and a very low three-quarters* of Ethiopians reported feeling that they could rely on relatives and friends in times of need. However, religious networks are stronger; a very high 77%* attended a service a week prior to the survey, a rate which is the 11th highest in the Index.

The Bottom 10
101 Zambia
102 Cameroon
103 Mozambique
104 Kenya
105 Yemen
106 Nigeria
107 Ethiopia
108 Central African Republic
109 Pakistan
110 Zimbabwe

Top 10 Most Prosperous Countries:
 1. Norway
 2. Denmark
 3. Finland
 4. Australia
 5. New Zealand
 6. Sweden
 7. Canada
 8. Switzerland
 9. Netherlands
 10. United States

Full Story (Ethiopia’s 2010 Prosperity Index) or here.

 

Ethiopia’s 2010 Bottom Five Ranking Marathon includes being ranked; 

Top 10 Most Prosperous Countries:

 1. Norway
 2. Denmark
 3. Finland
 4. Australia
 5. New Zealand
 6. Sweden
 7. Canada
 8. Switzerland
 9. Netherlands
 10. United States
 

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