Ethiopia Economic Sectors
In the agricultural sector, companies have been set up which, with the help of foreign capital and technology, have started rational and mechanized cultivation, most of them in the Awàš river valley, falling under the leadership of the Awàš Valley Authority (in English: Awash Valley Authority – acronym AVA), established in 1962 by the Ethiopian state for the agricultural and industrial development of the river region. There are also experimental projects of government initiative, with the participation of foreign capital and techniques too, aiming at the development of agricultural organization and techniques, with the use of mechanized means, on more or less extensive cultivation lots, also involving the credit assistance, such as: the Cilalo Agricultural Development Complex, in the Arusi province, started in 1968 with the Swedish financial aid; the analogous Walamo Agricultural Development Complex, subsequent to the previous one and begun in 1970, with ample financial support from the World Bank; the Plan with a minimum limit of participants, which must reach 10,000 farmers in each chosen area (in English: Minimum Package Program), organized with financial funds from Sweden, Denmark, the United States Agency for International Development (AID), the World Bank and FAO, started in 1971, with the aim of providing for the increase and improving the production of the poorest farmers; the relocation of Setit Humera, on the northern borders with Sudan, which also absorbs seasonal workers (about 50,000), coming from poor areas of Tigray and Eritrea, and some other minor ones. The use of mechanized vehicles in these agricultural areas has increased the demand for agricultural machinery, the imports of which have greatly increased. Equally high, in correspondence, is the increase in the demand for fertilizers.
However, the aforementioned projects have given rise to not a few drawbacks in their application, first of all that of failing, very often, in favor of tenant farmers, for which in several cases there has been an expulsion from the worked land, with consequences negative social issues. Despite the initiatives mentioned above, then, it does not seem that the area subjected to cultivation with European commercial techniques exceeds one million hectares and employs more than 500,000 agricultural workers, both permanent and seasonal, which is certainly nothing compared to the potential possibilities of the country..
According to Smber, agriculture represents about 60% of the national gross product and the first place for exports, which, in turn, still relies today, as the major profit-making commodity, on coffee, whose continuous and profitable absorption on the foreign market (70% or more goes to the United States market, to which it is linked as an outlet market) has continuously increased its cultivation (but in 1973 its incidence on the total value of exports had fallen below 50%, with less encouraging prospects for the future, for market reasons). Thus, one can better evaluate the weight of the backwardness of agricultural development on the total progress of Ethiopia, and better understand how the general rate of development of this is so low, since the agriculture does not show an annual growth of more than 2%, even if, taken in a global sense, agricultural production may have had an increase of about 30% between 1959 and 1969 and an increase of about 8% for single productions in the same period. It can be said that the contribution of livestock breeding is still null and void, which is also indicated as one of the great development potentials for trade and derived industry (in 1972 it was estimated that the current market value of Ethiopian livestock was about 2 billion Ethiopian dollars, equal to about 30 billion lire); so far no rational farms of significant size for the economy have been reached.
It is agreed that the stagnation of the Ethiopian economy is due to the lack of attention that the government has so far devoted to concrete and effective measures, by means of which the local agricultural economy can be duly advanced. Without a broad and organic reform of agriculture, any plan for the industrialization of the country cannot achieve tangible results.
To these political-social problems is added a negative factor of a natural order, very worrying for the agricultural yield of the territory, represented by the strong erosion of the fertile soil due to the geographical characteristics of the country and the violent rainfalls, to which is added the destruction of the vegetation by the residents. Specific researches have ascertained that in the Ethiopian plateau (occupying about 40% of the entire surface of Ethiopia) there is an annual loss of about 2000 tons of material for every km 2 of soil.
As has been said, the development of industry is linked to agriculture, and then also to the research of mineral deposits. For the greater part it is in fact connected to agricultural production, represented as it is, essentially, by the textile industry (of which the largest complex so far is a cotton mill located in Asmara) and by the food industry. Much smaller is the industrial development in relation to the extraction of minerals, due to the lack of an adequate study of the subsoil. The most profitable mining industry is still gold mining (whose production statistics are not easily determined); in 1972 a significant deposit of copper, zinc and other minerals was discovered (by a Japanese company) in Eritrea (locality of Debarwà, Addì Nafàs); large deposits of potassium are found in Danakil, but are not exploited due to a lack of communication routes and industrial energy (data referring to 1972). In terms of industrialization, it is worth mentioning the mineral oil refinery in Assàb, on the Red Sea, built with the help of capital and technicians from the Soviet Union and in operation since 1966. In the meantime, other mineral resources are being sought for the production of energy, and especially oil, for which the exploration tests are currently taking place in the Ogadèn region (the disputed border region with Somalia), where work began in 1969 and where natural gas seems to exist, in addition to oil, and on the coasts of the Red Sea and in the archipelago of the Dahlak Islands (in the same sea), where work has been carried out since 1963 with encouraging prospects,
The industries are mostly grouped around three urban centers (227 out of the 248 that appeared operating in 1972), which form the nucleus of three industrial zones: Asmarà (the oldest and, still recently, the most important industrial zone), Addìs Abebà and Dirrè Dawà, which are also, the first two, political centers of maximum weight. This is due to specific factors: plurality of communication routes (national roads on several important routes, airports), availability of electricity, other infrastructure systems, and, for Asmarà, being the point of convergence of traffic in the port of Massawa. Despite what has been hitherto mentioned, industrial production, even if in 1972 it showed an annual growth of 15%, has a place of little value in the economy of the country: it constitutes only 2, 5% of the national gross product, and 5% of exports, with a labor force of 1% of the total population (37.8% employed in the food industries and 32.8% in the textile industries), with a total of 60/70 thousand workers for all industrial sectors (including mining and electricity); derisory figures as you can see (the data refer to 1972). Up to now industrial workers received an average annual salary per capita of 760 Ethiopian dollars, that is 63 Ethiopian dollars per month, not having to forget, however, that the salary of the employees was clearly higher than that of the simple worker, who, however, constitutes the preponderant mass of employees of the industry, and receives monthly from 30 to 40 Ethiopian dollars, or even less than a daily dollar when it was, as was often the case, unskilled labor (data as of 1972, but also valid as of 1975; the dollar Ethiopian in 1972 was worth about Lit. 250 at the official exchange rate).
To address the problems posed by the development of the country, the government has drawn up three five-year plans of economic-financial programs (1957-58 / 1961-62, 1962-63 / 1966-67, 1968-69 / 1972-73), but the situation real has starkly contrasted the programs with the actual goals achieved. The new military government, established in September 1974, seems to be determined to cut the root, drastically, the most glaring causes that are the basis of the delayed progress of Ethiopia. For some of these decisions concerning the Ethiopian agricultural world see. as well as the History paragraph.