Flag of Ethiopia
Decades of mismanagement, war and Marxist rule have left Ethiopia an economic disaster. One of the poorest countries in the world is also one of the more resource rich. The present, post-communist government of Africa's largest nation is working with regional and global markets to rectify this glaring contradiction. In 2001, the Regional Executive Forum on National Export Strategies laid out Ethiopia's activities in using her potent resource base to develop the country.
Ethiopia's Export Strategy
It does not matter how potentially rich a country is. Only a rational plan, government reform and incentives for business can take potential wealth and make it realized wealth. Ethiopia's strategy rests on four major pillars. First, agricultural improvements will be financed by the state and international aid agencies. Second, the focus will be on high-value and high-demand agricultural products, which is probably Ethiopia's best bet to make a dent in world markets. Third, the surplus created by increased agricultural production and high-value agricultural products will be reinvested in light manufacturing that will take advantage of one of the country's most important resources: a massive supply of cheap labor. Finally, Ethiopia's government will finance the continued search for mineral wealth as another source of earning foreign exchange.
Ethiopia's Export Sector
The official Ethiopian Exporters Institute has stressed Ethiopia's agricultural products as its main export. The country, as the Institute reports, is well placed to take advantage of the Western world's interest in agricultural products that are organic, that is, do not use chemicals in their production. In this case, Ethiopia has been able to turn its poverty into a potential benefit. Ethiopia's huge agricultural sector uses organic methods because it cannot afford modern chemicals and processing methods. Therefore, the country's number one export --- coffee --- is now marketed as totally organic.
Additional Exports
The export strategy states that revenue from organic exports will be used to invest in light industry. Since the textile industry is the country's largest, this will naturally be the main beneficiary of government export revenue. Abundant labor guarantees that products will be cheap. Ethiopia has Africa's largest livestock heads, with 27 million head of cattle and 24 million sheep. Her highland sheepskin gloves are popular in Africa and the Gulf States such as Saudi Arabia, Oman and Bahrain. In addition, Ethiopia's tea has increased in popularity, at least partially based on the concept that the weeding process uses no chemicals, unlike most tea-producing states. The country's abundant labor means that it is just as cheap to use manpower to pull weeds than it is to spray them.
Government Policy
These exports are clearly advantageous because of the mode of advertising, its organic production and the cheap labor of the country. The fact that Ethiopia is deep into the wealth Gulf States market means that she already has a leg up on the broader world economy. Ethiopia sits right on the Arabian and Red seas, meaning her geographical position is ideal. In addition, from 1990 to 2000, the government has lowered taxes on imports, liberalized domestic prices and lowered the value of the national currency, the Birr, meaning her exports are now more competitive. As a result, this time period has seen a doubling of the country's global exports.
