An analysis of institutional and spatial constraints of rural

employment and poverty in Ethiopia i

Kebede Kassa (2001)

Abstract

Ethiopia, like many other least developed countries, suffers from chronic rural povertywhich has become an inseparable part of life. Poverty was and is considered a disease, amalignant one, that had to be cured, largely by economic growth through modernization,export-oriented agricultural development, socialist collectivization and foreign aid.Unfortunately, most of the efforts to reduce poverty could not improve the socio-economicconditions of rural communities as well as their urban counterparts. Instead, people havebeen experiencing sustainable poverty with varying social groups, spatial, and temporalmanifestations. Why has poverty been sustainable in Ethiopia? This paper examines someof the underlying macro and micro level factors and argues that poverty is an end productof a lengthy process of underemployment and unemployment caused by a complex set ofinternal and external constraints. It underlines that any genuine solution to the problemof pervasive and progressive poverty lies in creating or facilitating gainful employmentopportunities in the rural areas with emphasis on family or household development. Howthis will take place is outlined in the last section of the paper.

Key words: Ethiopia, rural employment, sustainable poverty, and family development

Introduction. Poverty is a socio-spatial phenomenon. It affects

minorities, women, the youth, the elderly, etc., and is located

more in the rural than urban areas, in the South than in the North

as well as in societies vulnerable to drought, war, and other

socially and naturally induced calamities. Ethiopia, the second

poorest nation in the world a little ahead of Mozambique,

provides a typical example where centuries of natural and

destructive human actions impoverish people beyond recovery.

However, more weight needs to be given to the latter, for the very

fact that even though natural factors, such as bad climatic

conditions, drought or devastating floods, etc., play significant

roles, poverty is largely determined by institutional and

structural aspects of social life; hence sociological. Stressing

1

on people’s lack of access to rewarding employment opportunities

and on the socio-psychological dimensions of poverty, Serageldin

(1996) rightly states that “Poverty is universal … Poverty is far

more than the absence of income. It has to do with social

exclusion and the loss of status. It is about disempowerment and

the limited horizons for fulfillment. Absolute poverty, found in

the poorest countries of the world, is a condition beneath any

definition of human decency.” About a quarter of the world’s

population, most of them located in the rural areas of the so-

called third world countries, lives in abject poverty (Encarta

online Encyclopaedia,1993-2000). For example, between 45 to 50 per

cent of the population in Sub-Saharan Africa lives in absolute

poverty (World Bank, Findings, 1995). The global picture of

poverty, too, is remarkably gloomy. For example, in 1996, Asia

accounted for over two-thirds of the world's poorest people who

lived on less than $1 per day, a commonly accepted absolute

poverty line. Even the 10th richest country in the world, the

United States of America, hosts more than 36 million residents

living in poverty most of whom belong to ethnic minorities.

Similarly, since the fall of Communism in the late 1980s and early

1990s, poverty in much of Eastern Europe, including countries of

the former Soviet Union and Central Asia, has increased at a

daunting pace. Latin America as well shelters a considerable

number of the poor, representing the historically under-privileged

Native Americans, people of African ancestry, and mestizos (Encarta

online Encyclopedia, 1993-2000).

In the Ethiopian scenario, too, the percentage of the population

falling below poverty line is persistently growing, for instance,

from 22.3 per cent in 1989 to 44.2 and 48.0 in 1994 and 1995,

respectively (Drecon and Pramila, 1998). More pessimistic

2

estimates indicate that the proportion of the population which

lives on less than one dollar a day lies between 60 and 70 per

cent of the total (see Abebe, 2000). The remaining sections of

this paper discuss some of the most obvious internal and external

factors which have significantly constrained rural development and

employment thereby perpetuating poverty in the country.

Rural employment problems in Ethiopia: appreciating rural poverty from the root.

While the causes of poverty are diverse, this paper supports the

thesis that (rural) poverty is closely linked to employment

problems (ILO, 1978) despite disagreements among some scholars

(for example, Sen, 1975) on the correlation between the two.

Unemployment and underemployment, the author argues, are both the

causes and consequences of poverty. And unlike employment in the

“modern” or non-agricultural sectors, rural employment, briefly

defined here as the engagement of capable family members in

farming/cattle raising and/or a multiplicity of other productive

as well as service rendering sectors (commonly referred to as non-

farm activities), is conditioned by a variety of interrelated

factors some of which may or may not have any significant or, at

least, immediate impact on the former.

As could be illustrated by the diagram below, the discussion

revolves around four major interacting factors affecting rural

employment and thereby aggravating poverty. The first concerns

with the individual /household attributes (category I) consisting of (a)

the human or social elements internal to the members of the family

such as age, gender, health and physical conditions, family size,

family ties and social networks or social capital; and (b)

material endowments such as financial and livestock capital as

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© Kebede Kassa

well as ownership of land including access to farm inputs. An

integral part, though somewhat external to the

individual/household attributes, is its location of settlement,

which determines its proximity to or distance from social and

economic centres. The second refers to the institutional framework

of the society in which individuals and households find themselves

(category II). Institutions can be (a) internally located, hence

endogenous,

pertaining to the

given society in

question seen in

the light of

historical and

contemporary

contexts. For

analytical purposes

emphasis can placed

on the macro- and

micro-level

institutional dynamics reflected in such components as land tenure

policies and practices; rural development policies and

experiences; systems of rural surplus extraction and rural-urban

relations; the spatial dimensions of investment for development;

the institutions of war and methods conflict resolution; as well

as the spatial organisation of rural life; and (b) those

constraints attributable to institutions from outside, hence

exogenous influences. Specific elements in this latter category

pertinent to the subject at hand include external trade relations

between the country under discussion and the outside world;

external debt burden and dependency on aid; (cross-border)

military or armed conflicts; as well as dependency on external

4

© Kebede Kassa

© Kebede Kassa²

knowledge and technology transfer. The third, one very closely

related to the institutional climate just mentioned, focuses on

support facilities or enabling conditions (category III) still seen from two

perspectives (a) infrastructures (or physical capacities) like

roads, markets, schools, health centres, banks, etc., on the one

hand, and (b) actual services delivered to rural communities such

as transport and communication facilities, information, as well

as financial and credit services, etc., whose distribution across

space and time produces differential impacts on employment,

household security and development. The fourth factor involves the

natural environment (category IV), which affects and is, in turn,

affected by human actions. This environmental or ecological

component again consists of (a) a host of productive resources

such as farmland, forests, water, etc; and (b) climatic conditions

that may be conducive or constraining which, in the latter case,

may include excess or inadequate rainfalls, flood and drought,

etc., all leading to low productivity, disturbed working

conditions, narrowed employment opportunities, chronic poverty,

and at times famine and mass extinction.

To re-iterate the foregoing, it can be stated that, if the

combined outcomes of favorable influences from the four principal

categories (I-IV) of the diagram above and their multiple sub-

categories lead to better rural employment opportunities, this

will naturally result in improved production, food security,

family well-being, and equitable development, not mere growth with

inequality. On the contrary, their unfavorable influences would

naturally lead rural households to either chronic underemployment

or pervasive open unemployment which means forced idleness,

falling productivity, work and resource sharing, long-term

household insecurity, then sustainable poverty, a situation in which

5

people continually and progressively move from a state of self-

sufficiency to relative deprivation, then down to absolute poverty

and extreme vulnerability. The sections that follow attempt to

elaborate some of these components in terms of their contribution

to either side of the continuum: sustainable development or

sustainable poverty. To avoid repetition, however, category III,

support facilities, will be treated not separately but in connection to

the other three categories since it involves a number of feature

characteristic of all the other components.

Materials and Methods. The material for this paper has been obtained

from both primary and secondary sources. The first is based on a

field interview with households from two rural villages of eastern

i The original version of this paper has been presented at the 18th Congress ofthe European Society for Rural Sociology, held in Sweden between 24- 28 August1999. However, much of the details have been modified to fit it to the presenttheme on poverty. The author acknowledges the financial assistance receivedfrom the Department of International Students Affairs, Universitaet Klagenfurt,Austria, to participate in the Conference.

² The theoretical model entitled “Fig 3: multidimensional determinants of rural employmentproblems” is taken from the author’s dissertation on Rural employment problems inEthiopia … 2000.

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and central highlands (Batie-Iffa village of Alemaya woreda in

Hararghe and Hella-Zenbaba village of Shirka woreda, in Aresi zones)

of the Oromiya regional state of Ethiopia.

(MEth- Map of Ethiopia)Maps showing the Regional and zonal divisions of Ethiopia (MEth), Iffa Batie (W1V1) and Hella-Zenbaba (W2V2) (Courtesy: Map(MEth) –UN, Emergency unit of Ethiopia, 1997 accessed from the Internet; Map W1V1 – Adapted from Alemaya University of Agriculture, 1995;and Map W1V2 – Ethio-Italian Development Cooperation, Aresi Zone, 2000).

The first village (W1V1) is located 520 km east of Addis Ababa and

the latter (W2V2) lies about 265 km away, southeast of the

capital. Batie-Iffa is connected to two major towns, Harar and Dire

Dawa, 18 and 45 km, respectively, and a number of small but very

dynamic commercial centres; whereas Hella-Zenbaba is a typically

isolated rural area connected only to the district town, Gobessa,

the latter itself poorly linked to other towns owing to a very

bad, severely damaged dry weather roadii and lack of transport

services. (See the roughly adapted maps above).

An in-depth interview was conducted with a total of 35 households

(20 from the first and 15 from the second villages) in 1998.

Information was obtained about farm and non-farm employment

opportunities, availability of usable (productive) resources, and

income from various employment sources as well as its adequacy for

household utilities. The historical data were collected from both

published and unpublished documents as well as from resources in

the Internet. Data from secondary sources are used to illustrate

those aspects of institutional constraints responsible for

declining employment opportunities and sustainable poverty as

cumulative effects of long as well as short-range, usually

unfavorable social, political, economic and ecological changes.

For the sake of comprehending the context in which rural poverty

occurs, persists and affects millions of lives, it seems desirable

7

Shirka,ARESI

to first outline the macro-level or institutional constraints

before going into individual or micro-level aspects of the

problem.

Institutional constraints. Giddens (1987:11) defines “Institutions” as

“patterns of social activity reproduced across time and space”.

They represent complex entities and exert differential influences

on employment in its various forms. “ Sociologists view

institutions as the principal instruments whereby the essential

tasks of living are organized, directed, and executed … Thus

institutions constitute (1) the more or less standardized

solutions (cultural patterns) that serve to direct people in

meeting the problems of social living, and (2) the relatively

stable relationships that characterize people in actually

implementing these solutions” (Zanden, 1993: 49). Institutional

constraints or setbacks, therefore, negatively affect the

possibility of household’s access to resources, on the one hand,

and their survival strategies, on the other. What institutions

play constraining roles in rural development and employment in

Ethiopia? Since time and space could not allow a detailed

presentation of all the institutional problems of rural households

in the country, the following institutional components deserve

some sort of elaborations.

Land tenure policies and practices. Prior to the 1974 revolution of

Ethiopia, land was privately owned by feudal and semi-feudal or

emerging feudo-capitalist classes. The great majority of the rural

families were either landless labourers, dependent on the gentry

for their access to tenant farms, or were owners of small plots

unable to support their families. One of the causes of the

revolution was the question of entitlement to land with the motto

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of “Land to the Tiller”. Consequently, a radical land reform was

instituted in 1975 which enabled many poor families to receive

some plots of land of their own. However, despite positive starts,

the contribution of the reform to rural employment and food self-

sufficiency was insignificant owing to political and ideological

distortions characterized by (i) state monopoly in ownership of

land and other natural resources; (ii) ambitious agricultural

development projects like big but unprofitable state farms; (iii)

obsession with co-operative agriculture regardless of social and

local variations in interest and motivation; (iv) resettlement and

villagization programs seeking to forge geographic communities;

and (v) discouraging the market for rural commodities and labour

through imposition of quota delivery of grains to government

marketing agencies by farmers as well as restriction of labour

movements from one locality to another. Most of these undermined

the development of the smallholder sector through tenure

insecurity; lack of incentives; forced contribution of labour;

lack of access to extension services and farm inputs for private

family farms; and absence of participatory, employment-oriented

rural development activities. Despite the fact that many of these

constraints have been removed since 1989/1990, the land tenure

problem still lingers: land is still state property with only use

right to farmers; land-related taxation has increased; so has the

cost of inputs though the supply side has improved in some easily

accessible areas; farmers still contribute to support the state

including war; and access to land is still a scarce privilege for

millions of youngsters. Difficulties in access to land, tenure

insecurities, and the operation of “the black market” for land

have aggravated rural employment problems, especially among the

youth and women groups for whom employment outside the family farm

is extremely rare (Dessalegn, 1994).

9

Unequal trade relations and their impact on the rural sector. The rural sector

remains severely constrained by unfavorable internal and external

terms of trade. Ethiopian peasants sell their produces at cheaper

farm-gate prices especially during harvest seasons when “... about

79 per cent of their annual grain sales occur” (Gebremeskel, et

al., 1998: iv) to discharge financial obligations. On the

contrary, they buy urban goods at higher prices either due to

scarcity or growing demands for such items as fertilizers, medical

supplies, salt, sugar, soaps, kerosene, farm implements and

others. Domestic rural-urban trade imbalances can, in part, be

explained by limited infrastructure and market opportunities

entailing great differences between prices in remote localities

and the center. For example, a recent market survey reported that

"... the spatial wholesale price spreads between Addis Ababa and

other selected markets were found to be very high. The proportion

of spreads as of wholesale price in Addis Ababa ... was found to

be greater than 20 per cent in 10 of 30 cases, greater than 15 per

cent in 13 of 30 cases and greater than 10 per cent in 26 of 30

cases”, (Asfaw, 1998). Accordingly, a related study observed that,

“In Ethiopia, marketing costs account for about 40 per cent to 60

per cent of the total price spread between producer and retail

prices. The reduction of these costs represents a major

opportunity to improve farm production and simultaneously make

food more affordable to low-income countries” (Gebremeskel, et.

al. 1998: iv). Moreover, farmers and merchants are constrained by

lack of access to “high-quality market information upon which they

base their marketing decisions. The information that farmers get

in particular does not assist them in deciding what crops to plant

and how much. There is no market extension service in the present

system that guides farmers in their production, storage and

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marketing decisions. Information on the export market is also

lacking.”(Gebremeskel, et. al. 1998: iv).

Nevertheless, a large part of the problem should be attributed to

the negative terms of trade between Ethiopia and other countries

as well (see annex table 1 below). The country’s role in

international trade has been one of exporting a handful of items

of agricultural products such as coffee, hides and skins,

oilseeds, and livestock while importing a large quantity and

variety of goods and services ranging from raw materials to high-

tech commodities as well as expertise. Consequently, Ethiopia’s

external trade is characterized by (1) very limited inter-state

trade with African countries, except with a few of them, such as

Djibouti, Kenya, the Sudan, etc.; (2) limited exports to a limited

number of Euro-American countries but extensive imports from

almost all of them including from those where no recognizable

export items have been sent (e.g., Albania); (3) negative balance

of trade with a number of sampled partner-countries of Africa and

Europe, exceptions still being Djibouti and the Sudan where

Ethiopia’s exports exceed significantly that of its imports for

three period intervals (1986, 1990 and 1993/4). Similarly, data

computed for the same period shows that Ethiopia’s negative trade

experiences with Somalia, Kenya, and Zambia was Birriii 1.35,

155.65, and 3.60 million, respectively. The balance with selected

European countries as well shows a significant amount of

disproportion. The three most important countries in terms of the

magnitude of trade-based negative economic ties include the UK,

Italy and Sweden with 385.17, 244.80, and 204.90 millions of Birr,

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respectively, for the period mentioned above. The combined effect

of this imbalance, among other things, tends to discourage rural

employment and perpetuate rural poverty.

Regional iv and spatial patterns of investment . Development and employment-

oriented investment has been a rare luxury in Ethiopia. Moreover,

the pattern of existing investment shows a strong spatial and

regional bias, favoring urban or well-integrated semi-urban areas

while scarcely penetrating the countryside. For many decades and

more particularly so for the last eight years, the major centres

of investment happened to be Addis Ababa and its affiliates:

Nazareth, Awassa, Dire Dawa, Bahir Dar, Kombolcha, and Mekele. For

example, out of 123 private export/ service enterprises in the

country 116 or 94.3 per cent are located in Addis Ababa. Though

the concentration of such export companies here is a logical

necessity the same applies to producing and processing

enterprises, which, likewise, are conglomerated in and around the

capital, hence contributing little or none to rural employment and

development. Nor are these projects big or numerous enough to

provide such opportunities even to the urban labour force where

unemployment runs between 30 per cent (Govt. authorities, 1999)

and 50 per cent (Addis Tribune, March 20, 1997).

Similarly, the regional distribution of overall investment

projects (see annex table 2), licensed and/or operational, tends

to be uneven seen across federal states and population size of the

regions. Stratification of investment distribution among regional

states, for the purpose of this paper, is made on: (a) number of

projects in a given region, (b) population size of the region, (c)

volume of project capital, and (e) actual or potential employment

opportunities. Using the first criterion (a), Addis Ababa,

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obviously, stands first with 52, 480 (94 per cent) of the

projects. Amhara (362) and Tigray (361) stand second and third,

followed by Afar (60), Benishangul-Gumuz (24), Ethio-Somali (12),

and Gambella (9). In terms of population size, however, Amhara

regional state assumes the first place with a population of 13.8

million, followed by Ethio-Somali (3.4 million), Tigray (3.1

million), Addis Ababa (2.3 mln), and the other three whose

combined population makes close to 2 million. The volume of

capital of projects appears to be the most important

differentiating criterion, and according to this Addis Ababa again

leads. Among the predominantly rural regional states, Tigray (with

projects worth 4 billion Birr) seems to host a great deal of the

projects, significantly high for a population of 3.1 million

compared, for example, to that of Amhara (2.8 billion Birr) with a

population of 13.8 million. Of the remaining regions significant

capital attraction is seen in Afar (551 million Birr), and

Benishangul-Gumuz (203.35 million Birr). In terms of employment

opportunities, Afar (305, 947), Tigray (200,138), Addis Ababa

(150,000) offer new jobs and take the first, second and third

positions, respectively, whereas Amhara and Benishangul-Gumuz

stand fourth and fifth providing 75,883 and 23,126 new jobs,

respectively.

To sum up, though somewhat incomplete, the available evidence

suggests that (1) within the country as a whole, Addis Ababa

remains the most preferred centre of investment and development;

(2) among the rural dominated Regional States for which

information is obtained, Tigray has succeeded in attracting a

large number of projects with the highest volume of capital; (3)

the volume of actual or potential employment opportunities appears

to be low in all regions compared to the volume of investment

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capital; (4) most of the private investment projects being small-

scale family businesses, their ability to provide access to

employment for the rural labour force, thereby to alleviate rural

poverty, proves to be still insignificant; (5) rural

industrialisation or ruralisation of industries will take time to

come in Ethiopia because of the limitations in others sectors of

the economy and aspects of life; and (6) the skill or technical

backlog , i.e., the employability gap, which characterises the rural

labour force has not yet allowed this section of the population to

benefit from emerging employment opportunities in the short-run;

and the long-run is quite unpredictable.

Foreign debt. With over 10 billion dollarsv or about 85 bln Birr

(IMF, 1998) as of 1999, but excluding military related and rouble

credits (Addis Tribune, October 24, 1997), Ethiopia is one of the

third heavily indebted countries in Africa following the Sudan and

Ivory Coast with 16.3 and 15.6 billion US$, respectively (die

Kleine Zeitung, 23 Juni. 1999). “Debt accounts for 46.5 of the

percentage share of three main products, 25.9 per cent of public

sector external debt service as a percent of revenue, and 11.8 per

cent of tax revenue as a percent of GDP” (Oxfam, 1997). And though

debt servicing is claimed to have declined from 76.9 in 1991/92 to

36.37 in 1994/95 (Ethiopian authorities, 1999), Ethiopia’s “Total

external debt as a percentage of gross national product” (GNP)

amounts to 159 (Unicef, 1999). Accordingly, the ratio of total

debt services to exports is estimated at about 18 per cent in 1995

(Addis Tribune, Oct.24, 1997). The flow of scarce money into the

Koffers of multi-lateral and bilateral lending institutions has

meant no significant returns to exports and no significant inward

flow of capital for domestic investment. Even if aid money drips

in limited quantities, it is used primarily to tackle temporary

14

problems such as disaster relief rather than contributing to

development and opening up employment opportunities be it in rural

or urban areas. Of necessity, the country continues to borrow from

all sources. Commenting on the heavily indebted poor countries, of

which Ethiopia is one, and their further dependence on loan money,

Oxfam (1998) states that, “For this group of countries, with a

combined population of 126 million people, the total costs of the

NPAs (National Plan of Actions) are estimated at $2. bln per annum

over the period 1993-2000 ... [and] the heavy financing

requirements of one country - Ethiopia - accounts for around 50

per cent of the total”. Whatever the objectives for borrowing in

the short-run, the long term effect of debt is that it "...

undermines opportunities for investment, growth, and employment,

and it diverts to creditors resources which are desperately needed

for investment in people.” (Ethiopian authorities, 1999).

The costs of military expansion. Conflict and war have been the major

features of rural social life in Ethiopia through out its history,

with greater intensity in the last three or so decades. Between

1974 and 1991 alone, the country had to raise one of the largest

standing armies with nearly half a million armed forces in the

continent (George, 1997). The cost of maintaining this large

sector was immense, swallowing at times as high as 50 per cent of

the GDP. Excessive military spending meant that (1) precious

resources, mainly hard currencies, had to be siphoned to buying

sophisticated weapons and to train the expanding body of armed

personnel. For example, the Ethiopian civil war cost US $ 500,000

a day at its peak in the late 1980s and early 1990s (Parker,

1995); (2) the most productive and able-bodied labour force had to

quit productive activities and fight protracted wars from either

the government or the “other sides”. The latter is even more

15

significant in terms of numbers since not only those directly

involved in the fight against the government but also their

relatives, friends and/or sympathisers would be forced to abandon

their productive employment, go either into exile (refugee camps

which I would call poverty camps) or gradually and forcedly join the

“enemy” sides having seen that their lives were endangered, their

properties have been looted or destroyed, they have lost persons

dearer to them, etc; (3) in areas where fighting takes place,

bridges, power stations, communication infra-structures, public

and private business institutions, arable land, forests, waters

and other important natural resources would be demolished

impairing present and future development activities thereby sowing

the seeds of poverty; and (4) in most areas rural markets could be

rendered inaccessible not only due to communication breakdown but

also due to fears of being robbed by local bandits, government

soldiers and anti-government forces where law and order hardly

prevailed.

After three decades of devastating civil and cross-border wars,

Ethiopia seemed to have entered an era of "fare-well to arms" in

1991. Yet, the relatively short period (seven years) of “peace”

was broken in May 1998 when “Eritrea invaded Ethiopia”. This sad

return of a poverty stricken country has now led to an increase in

military spending which is said to have grown by many folds from

the pre-war period. Since May 1998, both countries are reported to

have been spending a million US dollars a day on the war. If one

accepts, but with great caution, this oft reported 1 million

dollars a day and calculates the economic cost of the current

Ethio-Eritrean war alone, excluding its wastage of human life and

energy, intellectual and land resources, etc., the two-year long

military expenses of Ethiopia would amount to 730 million dollars.

This much money could have bought 1, 946, 667 quintals (1947

16

tons) of Teff at 300 Birr per quintal which is the highest ceiling

of the market prices in normal harvest years or 29, 200, 000

quintals (29200 tons) of wheat or 38, 933, 333 quintals of

maize/corn at 150 Birr per quintal. If on the other hand, the two

years expenses were directly distributed to the currently drought-

famine affected population of 8 million for which international

aid is being desperately sought for, but very slow to come and

politically charged, the share would have been either 730 Birr per

head or more than 2.4 quintals of Teff or 3.65 quintals of wheat

or 4.8 quintals of maize/sorghum/barley per head. Assuming that an

average family consists of 6 members the combined share of the

grain for a household of six could have been 14.4 quintals of Teff

or 21.9 quintals of wheat or 28.8 quintals of barley/sorghum/maize

etc, all of which exceed the annual average yield of crops from

one to two hectares of land for each crop, respectively, under the

prevailing traditional farming methods. By the same token, these

figures by all standards, exceed the annual food grain consumption

of average families and could have avoided at least part of the

need for dependency on external aid even under the current level

of crisis had it not been for the war which devours much of these

resources.vi

Moreover, hundreds of thousands of civilians, most of them from

the rural areas, have already lost their lives and/or properties,

abandoned their homes, and suspended productive activities since

the eruption of the war. Consequently, the current border crisis

has (1) constrained ongoing government and non-government

development efforts, (2) prolonged the “old” reluctance by both

public and private sectors to invest in rural development

projects; (3) diverted financial and other resources from

development to war and limited the supply of hard currency for the

17

bi-weekly “forex”vii auctions, hence, significantly affected the

flow of goods and services into the country for development

operations; (4) reduced the purchasing power of the Birr, owing to

this further devaluation, among other things; (5) limited the

consumption power of the population both as a result of price

increases and income stagnation; and (6) prolonged the

cancellation of bilateral or multilateral debt burdens. Thus,

given Ethiopia’s centuries’ history of warfare of both internal

and external origins, it is very easy to appreciate the root

causes of sustainable poverty, following and accompanied by

shrinking employment opportunities in the rural sector, the scene of all

destructive wars where more than 85 per cent of the labour force is

employed.

Environmental determinants of rural employment. Perhaps the

environmental component of rural employment, as noted elsewhere,

is what distinguishes it most from employment in the modern sector

(industry, commerce and services) since rural activities are

overwhelmingly influenced by changes in the social and ecological

environment in which most economic and social actions take place.

For the last several decades, the greater challenge for rural

employment, and one that has forced people into chronic poverty in

Ethiopia has been environmental degradation. Millions of tons

fertile soils have been washed away by erosion; and millions of

hectares of forests have gone to the smoke at a rate of 200,000

hectares each year. From about 40 per cent of total forest covers

three to four decades ago, the country is now left with less than

3 per cent of forest resources (see, Kinfe, 1994). Environmental

hazards have resulted from direct and indirect human actions both

at the macro or institutional and micro or individual levels.

Distorted development and land use policies, violable property

18

rights and ownership laws, unsustainable use of natural resources,

etc., emanate from macro social realities and represent

institutional constraints to rural employment which in turn

aggravates poverty and vulnerability. Ethiopia’s experience during

the past three or four decades provides an illustrative example as

how harmful macro-level social actions negatively affect natural

and ecological balances. For example, when the military regime

nationalised land and rural resources, including forests, people

had to rush to fell down as many number of trees and shrubs as

possible both before the law came to effect and immediately after

it. In a matter of days, therefore, most parts of the country lost

millions of hectares of trees and forest areas. Moreover, the fact

that land was a state property with a frequent redistribution of

plots following the 1975 land reform, meant tenure insecurity and

disincentive for people not to plant trees unlike in the pre-

revolution years. Consequently, in spite of several years of

government attempts to restore forest resources, the country could

not recover the loss of precious natural resources and

biodiversity due to myopic and irrational policies.

Resource destruction entails direct and indirect costs. Directly,

it affects agricultural productivity and reduces yield per

hectare. Indirectly, regeneration of lost natural resources such

as reforestation, soil and water conservation, etc, require a huge

amount of material, financial, intellectual and energy resources

which will create pressure on the economy as a whole and on

peasant subsistence economy in particular. Some resource

economists and environmentalists argue that ... the ecological

and economic costs of land degradation and soil losses are

tremendous. Degradation is estimated to cost Ethiopia over 15

billion Birr in the next 25 years, or about 600 million Birr per

19

annum. This is equivalent to 14 percent of the contribution of

agriculture to GDP in 1982/83. In terms of cereal production, the

losses would amount to about 120,000 tons annually in the early

1980s (see Kinfe, 1994:202-203). The employment effect of

environmental destruction can be calculated only indirectly when

farmers lose a considerable amount of their arable land due to

desertification, erosion, deterioration of soil fertility and lack

of rain and moisture to produce the means of their livelihoods.

The resultant social consequences of deteriorating environmental

conditions and depleting natural resources have been dislocation

and migration of people, usually the younger generation, to urban

areas in search of employment, further impoverishment and limited

opportunities for human capital development which in turn hinders

future employability and sustains poverty in the form of social

inheritance. Unfortunately, our ability to compute the

environmental GDP, at least in Ethiopia, has not been developed

well and will, in effect, remain our greatest weakness in the

decades to come.

Individual /household attributes . Institutional and environmental

influences are external constraints (or potentials). They may not,

therefore, explain the entire problems of employment and

development except that they provide the framework of action for

individuals/ households in a society. It is, thus, imperative to

examine the role of household and local level determinants of

rural employment to clearly understand the complex factors

underlying rural poverty.

The impact of Age and Gender on rural employment. Unlike formal wage

employment which requires attainment of a specific lower and upper

age limits, rural employment is less sensitive to age in terms of

20

years. However, the main interest in age and sex as contributory

factors for rural employment here concerns with the differential

access to resources. As a matter of fact, land and cattle

constitute the two most important means of income, and by the same

token, employment opportunities. The poorest in a village is one

who has neither land nor any heads of livestock and who has to

live on his only resource, labour power, the ability and

determination to work, alone. For example, in the villages coveredii3 The road connecting this woreda with the neighboring woreda has been reconstructed after the fieldwork for this paper was conducted. It will be the duty of the author to compare and contrast the changes in the conditions of lifefor people in the study area before and after the rebuilding of the road.

iii4Two types of currencies are employed in this paper: the dollar when reference is made to foreign debt and / or external aid; and the Birr, the national currency of Ethiopia, for other purposes.iv Ethiopia is a federal republic with nine National Regional States organizedmainly along ethno-linguistic lines. These federal states include Tigray, Afar,Amhara, Oromiya, Ethio-Somali, Benshangul-Gumuz, Southern Nations,Nationalities and Peoples (SNNP), Gambella, and Harari regional states as wellas the two chartered cities : Addis Ababa and Dire Dawa with equal status likethe regional states

v5 Author’s estimations and interpretation based on information derived from the print and broadcast media, and on the market conditions of the country, May 2000.

vi6 For example, the amount of US Dollars supplied for this purposewas 25 million in June 1998, a month after the war broke out. Butit fell down gradually and reached 15 million Dollars by the lastweek of August 1998 with a decrease of 40 per cent in about twomonths of time. Currently, this figure has come down to 6 million,making a 74 per cent decline of the volume supplied in June 1998.At the same time, the value of Birr against the Dollar hasdeteriorated, though still stubborn, from 7.10 Birr to the Dollaron May 30, 1998 to Birr 8.12 last week of June 1999 (Govt. ofEthiopia, 1999; National Bank of Ethiopia, June 1999; WaltaInformation Center, 26 June 1999).

vii

21

by this study, four interviewees out of six landless labourers (or

150 per cent) belong to the age group 15-24, suggesting that the

youth group usually tends to be a loser. Other studies, too,

reveal a clear age and gender gap in access to resources and

productive work in the rural areas, particularly in the

agricultural sector (see the table below).

Table 1 : Distribution of respondents according to their age group and farm size

Size of holdingin hectares

Age group of interviewees (N=35)

15-24 25-44 45-64 65+ Total %

Landless 4 1 1 0 6 17.10.1-0.2 3 4 1 0 8 22.80.2-0.5 1 2 3 1 7 20.00.5-1.0 0 1 5 2 8 22.81.0-1.5 0 1 2 2 5 14.2

1.5-2.0 & above 0 0 1 0 1 02.8

Total 8 9 13 5 35 100

Source: Compiled from field data, 1998

As could be observed from the table, the four middle-adult ages

(25-29; 30-39) to late adult ages (40-49 and 50-59) exhibit a

pattern of landholding relatively higher than both the upper (65

+) and the two lower (18-20 and 20-24) age groups (CSA, 1997). In

addition to apparent age differences in access to resources,

inequality also prevails between the sexes in the country where

there are about “... 14 per cent rural women household heads”

(Parker, 1995). Refer, for example, to the following table for the

gender discrepancy in access to the two dominant means of

employment, land and livestock, in Ethiopia.

Table 2 : Number and holders by age and sex (Number in thousands)

Age ofholders in years

Type of holding

with crops only livestock only crop &livestock Total No. of holder

22

male female

% of women’s share

male

female

% of women’s share

male female % of women share

No. % of women share

Under 18

16.18 n.a n.a 8.52

5.78 66.6 21.16 2.28 10.7 54.94

n.a*

18-20 59.76 7.55

13.3 14.68

3.29 20 150.8 16.49 10.9 252.6

n.a

21-24 110.7 13.0

11.7 25.45

n.a n.a 345.9 36.94 10.6 535.7

n.a

25-29 231.7 25.5

11.2 24.7

11.2 44 932. 72.5 7.7 1297.

n.a

30-39 278.0 78.9

28.4 17.2

13.7 82.3 1,700.4

226.4 13.3 2,341

n.a

40-49 187.75

60.05

31.9 15.09

14.65 97.1 1377.1

233.0 16.9 1887

n.a

50-59 113.3 70.3

61.9 9.96

14.6 147. 898. 194. 21.7 1299.

n.a

60 + 130.9 99.0

75.5 17.4

34.7 199. 947. 210. 22.1 143.7

n.a

Not stated

1.2 n.a n.a .45 .73 n.a 1.62 n.a n.a 4.04

n.a

Total 127.6 355.

133.

101. 6374 992. 9085.

Less entitled age-and gender groups * n.a. (not available)Better entitled age and gender groups

Source: Major data from the 1996/97(1989 E.C.) Agricultural Sample Survey of CSA (SB 171, June 1997)but modified to include percentages with some figures rounded for the sake of space.

At the national level, women’s share in agricultural landholding

is 14.2 per cent for crop and animal production (CSA, 1997). This

happens to be relatively low when compared with that of their male

counterparts. The discrepancy in access to resources occurs from

the social, cultural and economic institutions which consider

women a natural affiliates to men, with little or entitlement to

common properties. For example, in both the study areas, girls or

newly married women do not claim for land from their parents

unlike their brother. Moreover, women-headed households are the

poorest and most vulnerable groups. They subsist on smaller

material endowments; many of them lack the required skills to

engage in sideline activities; and they often depend on male-

labour for most agricultural or physically demanding work. Yet,

they work for up to 18 to 20 hours a day, struggling face-to-face

with absolute poverty, to make ends meet or just to end it.

23

Family size and employment opportunities. The size of a family, which is

a concrete manifestation of the size of the population in a given

country, may have a significant bearing on these resources to be

converted into products of labour, knowledge and capital. Boserup

(1965) argues that as population size increases, the chances of

agricultural intensification and yield increment tend to be high,

leading to the conclusion that large size could be an advantage

for rural families. However, in areas where land resources are

scarce but labour is in good supply, large households experience

underemployment, unemployment, work and income sharing, reduced

consumption and eventual insecurity. Average family size in the

study villages happens to be 6.8 for Alemaya and 6.2 for Shirka

woredas. The Ethiopian statistical authority define employment

Assuming that persons aged 10 and above are engaged in productive

activities, as used in national labour force surveys of Ethiopia

(CSA, 1992), each household possesses an average of 4.5 adult

equivalent for the first and 4 adult equivalent for the second

village, respectively. In terms of employment the larger size

households report to have faced from mild to severe shortage of

income-generating employment opportunities and increasing food

insecurity.

Capital endowments. Capital is defined here as any asset (money,

land, tools/ implements, as well as livestock) which (a) helps

the available household labour force to engage in productive

activities, and (b) enables them to generate income for

consumption and/or the market. This section considers livestock as

an important part of capital since in a subsistence agrarian

economy animals are used not only as sources of energy (traction

powers, means of transportation, etc.) but also help to generate

24

an essential part of rural income and thereby, either complement

or substitute incomes from crop production. Particularly,

ownership of oxen contributes to relatively better employment and

income opportunities. Of the 35 households interviewed, 18 (51.4

per cent), own no oxen at all or have lost them in the past few

years; 10 (28.5 per cent) have one ox; 8 (22.8 per cent) possess a

pair of oxen while only one household owns more than two oxen.

Possession of cows seems relatively better: five (14.2 per cent)

households maintain more than two cows; and 6 and 15 or 17.1 and

42.8 per cent of the households own 2 and 1 cows, respectively,

though more than 25 per cent are without a cow. The most commonly

available livestock possessions are pack animals whereby 51.4 per

cent of the families own at least one pack animal though about 14

per cent do not own any. In addition, every household has at least

two small animals (sheep and/or goat) and poultry. Possession of

livestock, however, does not necessarily mean private ownership

for all households. For example, about 15 per cent of the

households have taken some heads of animals (oxen, cows, sheep or

goats) on special arrangements from either relatively rich

households or from those which lack adequate grazing fields. Such

contracting households use the animals either for traction or

transportation purposes, or to raise the offspring and share them

with the owner.

Access to land, farm size, and rural emplo yment . Access to land and farm

size determines the status of employment in rural areas. In both

villages covered, per household farm size has decreased

considerably. Some elderly respondents say that the size of their

plots has declined between 15 and 20 to 30 per cent during the

past ten to fifteen years since either the size of their family

has increased or they have given out land to “out-settling“

25

married sons who, in the time of land allocation, discussed

elsewhere, had received land with the parent-family but had to take

their own shares from the latter when they themselves established

their own families. Because of this continuous division of land

among sibs and across generations, everyone seems to have at least

a piece of land. But for many households the capacity of the land

to be further subdivided has reached its limits, making a

considerable number of families landless in both villages. For

example, as noted above, of the 35 case households, 6 or 17.1 per

cent reported to have no land at all, hence, forced to always look

for non-farm employment activities. Fifteen households or 42.8 per

cent of the total live on plots of land below 0.5 hectare and 8

(22 per cent) own land between 0.5 and 1 hectares. Five farmers

(14.2 per cent) and one household (2.8 per cent) depend on 1-1.5

and 1.5-2 hectares of land, respectively. All the landless and the

land-scarce respondents represent the lowest income groups, and

their ability to meet household needs are very small.

Location of settlement. Proximity to or distance from social and

economic centres, likewise, either increases or decreases the

opportunity for farm and non-farm employment. David (1997)

identified three types of rural places in the OECD member

countries in relation to urban centres: (1) integrated rural

areas, (2) intermediate rural areas and (3) remote rural areas.

Non-farm employment opportunities are relatively plenty in

integrated rural areas while their availability decreases as one

moves from the second to the third. Yet what is rural in Europe is

quite different from its counter-parts in Africa where there

exists hardly any difference between many towns and their rural

counterparts. In the Ethiopian context, for example, urban areas

are defined as settlements with 2000 or more people, areas below

26

this being rural. This, however, refers mainly to density per

square kilometres since in most cases the distinguishing

technological and/or institutional traits between the so-called

urban and rural areas: water supply, electricity, communication

and transportation links, bank or other financial institutions,

markets, hospitals, etc., are either non-existent or inadequately

functioning, thus, bearing only the name but not much in terms of

their impact on the social organisation of work and technological

facilities. Regarding employment, many of the rural towns hardly

provide relieving opportunities for the unemployed or

underemployed rural labour force. Quite the opposite, there are

several towns where a great majority of the residents derive a

large part of their incomes from rural employment (including

production of crops, animals as well as involving in petty trading

either in the rural villages or in the towns). For instance,

nearly 70 per cent of the population in the town of Gobessa,

Shirka (very close to the second site of this study) lives on

farming, competing for land with the rural poor in the vicinities

and often with better access to land by virtue of their social

networks, economic positions and relatively better access to

information.

Nevertheless, spatial differences do significantly affect

employment and income generation of rural families. For example,

the village of Batie-Iffa, Alemaya woreda, being located along a

big highway and very close to two major urban centres, Harar and

Dire Dawa, and two minor towns, Alemaya and Awaday, as well as a

number of social institutions, including a university, is well

furnished with better employment opportunities compared to its

counter part, Hella-Zenbaba, village of Shirka in the remote

corners of Aresi, devoid of most of the facilities enjoyed by the

27

former. It is very interesting to note that while in both

villages, collecting and selling firewood constitutes an important

area of non-farm employment with the participation of five (25 per

cent) of Alemayan and 4 households (26.6 per cent) of the Shirka

case households; petty trading employs 25 per cent of the

households at Alemaya and only by 6.6 per cent of the households

in Shirka, suggesting the importance of location and access to

market facilities for non-farm employment. Similarly, wage

employment shows a significant difference between the two

villages. Here, too, Alemaya, tends to have the largest number of

case households (6 or 30 per cent) involved in one or other forms

of wage employment compared to its counterpart, Shirka, with only

one or 6.6 per cent of the households involved in wage employment.

Family incomes from different sources and their reported level of

adequacy. It has been stated earlier that, access to farmland and

animals influences access to income for rural households. However,

many households lack the required income to ensure family well-

being for most of the year. As the annex table 3 shows, the study

reveals that, 7 households or 20 per cent of the total (N = 35)

earn income sufficient only for 1-3 months, 9 households or 25.7

per cent earn income to cover 4-6 months and a similar percentage

earns its livelihood for 6-9 months whereas 10 or 28 per cent

covers family requirements of 10-12 months from farm incomes. From

this, it can be stated that more than 75 per cent of the case

households live in sustainable poverty. They, at least, are food

insecure. However, poverty is not only about difficulties in

getting enough supply of food but also has to deal with personal

identity, dignity, psychological integrity, as well as the

fulfillment of individual and societal needs.

28

Under the present scenario, life for rural families in Ethiopia

seems gloomy, complicated by lack of facilities, drought and

famine, prolonged civil and cross-border wars, population

pressures, and development policies less directed towards

employment creation, discouraging center-periphery relations, and

so on. In effect, millions of mothers and children suffer from

chronic malnutrition; for elderly household heads, the “good old

days” of self-sufficiency, when they could provide their family

members with at least two meals a day, are gone; for the youth,

the late-arrivals in the world of work and life, not only the

present but also their future proves frustrating. The old sponge

of the family farm is over-saturated; and the non-farm sector is

not yet promising to provide alternative employment opportunities;

the possibility of building employability skills is both limited

and very distant; and in effect, poverty appears to be their final

destination, at least, in the coming few decades unless

institutional, environmental and resources constraints are tackled

very early.

Concluding remarks. Despite the fact that present rural income and

employment opportunities tend to be narrow on account of the

various constraints discussed in the foregoing sections, the

future of the rural population cannot be completely bleak given

Ethiopia’s potentials. The country has ample arable land since

about 65 per cent of the total surface area is said to be suitable

for cultivation though the population concentration is uneven

(Ethiopian authorities, 1999); and most of the non-arable semi-

arid regions are the largest cattle producing areas. The problem

of poverty may be transitory if the country works to efficiently

utilize its resources. At present, of the total cultivable areas

land brought under exploitation is somewhere between 9 and 12 per

29

cent for rain fed agriculture, and only 3.1 per cent out of a

potential of 3 million hectares is brought under irrigation. In

terms of animal resources, Ethiopia stands first in Africa and

10th in the world, which means a considerable source of income not

only for the rural sector but also for the urban areas. These

potentials can be tapped given individual and government

determination, ingenuity and sincere adherence to the principles

of family development, not mere relief efforts as and when crisis

sets in. Crisis-response, a common feature of national and

international concern with rural communities should not be a

substitute for the development of the stakeholders, individuals

and families for whom the crisis-response or relief assistance

either comes too late or is non-existent at all. It should be

underlined that the problem of the rural as well as urban

population of Ethiopia is not one of resources and labour

scarcity, but of institutional and structural constraints at the

local, national and international levels all of which constrain

employment opportunities, weaken household incomes, and perpetuate

poverty.

As solutions for both the short and long-run problems of

employment and poverty in Ethiopia, the potential areas for

action should lie in (1) targeting individuals and households

rather than regions, areas or communities whose definitions are

vague and outcomes intangible; (2) balancing the distribution of

investment and development projects and positioning them in the

rural areas; (3) enhancing farm productivity through ensuring

households' access to inputs and subsidizing weaker households

until they produce enough income to cover their food requirements,

input necessities and others; (4) providing all rounded training

in basic and community skills so that the unemployed and

30

underemployed youth could engage in self-employment activities;

(5) accelerating the development of infrastructures and linking

the rural areas with major economic, political and research

centres; (6) promoting information flow to the rural areas at the

micro level, and to the country at a macro level. In a world

characterized by “excess information consumption”, the Ethiopian

populace is, inter alia, information-famined since communication

networks are limited both in the urban and rural areas though the

effect of this on the latter is very disappointing; (7) building

up rural financial, marketing and storage facilities. No doubt

these same areas have been given thought by government and non-

government organizations, the academic and the research

communities, but they are not yet developed to anyone's

satisfaction and they still should be reinforced.

Endnotes

31