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UNPRECEDENTED ECONOMIC GROWTH: ALSO BROUGHT ALONG INCOME INEQUALITY (LESSON II)

January 5 , 2020

Ethiopia averaged 9.9pc annual GDP growth from 2008 to 2018, an impressive record by any standard. It has experienced uninterrupted and unprecedented expansion in the economy from six billion dollars in 1988 to 97 billion dollars it is projected to reach in 2020.

Before all foreign news stories about Ethiopia started with the sentence, “The reformist Prime Minister of Ethiopia who came from humble backgrounds . . .,” they started with, “One of the fastest-growing countries in the world . . .”



There was no falsity to that narrative. Ethiopia averaged 9.9pc annual GDP growth from 2008 to 2018, an impressive record by any standard. It has experienced uninterrupted and unprecedented expansion in the economy from six billion dollars in 1988 to 97 billion dollars it is projected to reach in 2020. Per capital income has surged seven times as well.




But growth brought with it almost as many problems as it solved - income inequality was the most evident of these. Ethiopia added two percentage points in the Gini-coefficient index in 2015, from 33 points five years earlier, showing an evident increase in the gap between the poor and wealthy. Economic inequality reared its ugly head higher and higher as growth sped along.


At the same time, as Karl Marx had predicted, it became clear to the economically disenfranchised that they were getting the short end of the stick and decided to rise up. Together with a range of social and political demands, income inequality became one of the catalysts in driving the anti-government movement that climaxed in April 2018.


PUBLISHED ON Jan 05,2020 [ VOL 20 , NO 1028]



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