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Dealing with urban poverty: The answer to instability

Dealing with urban poverty: The answer to instability

Mesle A. 08-23-16

All reputed scholars and institutions recognize the double-digit GDP growth Ethiopia registered for more than a decade. This year’s drought, the worst in its history, has also demonstrated the resilience and sustainability of the economy.

However, strong economic performance by itself is not enough, as economists and development researchers emphasize. Unless growth is not accompanied by growing equity across income groups, the developmental achievements will be undermined. That is the reason that focus must be on cultivating the productive capacity of citizens and building a conducive environment for industrious engagements.

This principle is enshrined in the Constitution of the federal Democratic Republic of Ethiopia on Article 43 as the Right to Development. It stipulates that: The Peoples of Ethiopia as a whole, and each Nation, Nationality and People in Ethiopia in particular have the right to improved living standards and to sustainable development.

Ethiopia's development paradigm has been successful in that aspect. As several researches and reports confirmed Ethiopia’s has been successful in achievement inclusive growth, in terms of social, economic, spatial, and political inclusion.

Ethiopia has undertaken a far-reaching program of economic reforms, which have delivered strong economic growth. The main development agenda of the Ethiopian government has always been poverty eradication. All the country's development policies and strategies have been directed towards that goal.

Ethiopia's development plans have been guided by the overarching objective of achieving: "to become a country where democratic rule, good-governance and social justice reign, upon the involvement and free will of its peoples, and once extricating itself from poverty to reach the level of a middle-income economy as of 2020-2023."

The goal of inclusive growth has been at the center of all growth plans of the last decade, The Sustainable Development and Poverty Reduction Program (SDPRP), which has been implemented between the years 2002/03 and 2004/05, the Plan for Accelerated and Sustained Development to End Poverty (PASDEP), which was implemented between 2005/06 and 2009/10, and the Growth and Transformation Plan (GTP), which was implemented between 2010/11 and 2014/15, have all been directed towards an inclusive growth. Throughout these plan periods, outstanding accomplishments of economic growth and social development were registered.

For example, from 2010 to 2013, more than $12.7 billion of government budget was allotted to pro-poor growth sectors such as education, agriculture, and food security, water and sanitation, health and roads amounted to. Similarly, the 2012/13 data shows, the budget for pro-poor sectors accounted for over 70% of the general government spending. This allocation and spending pattern demonstrates the government's commitment to eradicate poverty in all its characteristics.

Nonetheless, as the poor in large urban centers is significant, it is important to ensure the urban centers are adequately incorporated and that development programs are designed to address urban poverty reduction.

So far, the Productive Safety Net Program (PSNP), which is currently the major safety net program in Ethiopia, was exclusively focused on rural areas. Even though, there were urban focused social protection programs, they are inadequate in terms of scope, organization and implementation.

Therefore, a new program is being rolled out to address the poor in 11 major cities including Addis Ababa and the regional capitals. That is, the Urban Productive Safety Net Program (UPSNP).

In the first phase, with a total budget of USD 300 million, the program will benefit over 1.2 million beneficiaries through a gradual role out plan throughout a five-year period. The program design estimates that each recipient will stay in the project for three years.

The program will support those living below the national poverty line through conditional and unconditional safety net transfers. Conditional transfers will benefit able-bodied persons by engaging them in public works, training programs aimed at job or self-employment opportunities, and similar conditions. Unconditional transfers will benefit the chronically ill, the elderly and people with disabilities persons.

Moreover, the program document elaborates that: "The direct support transfers will be provided to extremely poor households among the poor that have no capacity to supply labor. Appropriate safety net transfer values, which provide meaningful impact on the welfare of beneficiaries based on a thorough analysis of the market situation, will be determined. The level of both conditional and unconditional transfers will be linked to the cost of a basic food basket in urban areas. The UPSNP will closely monitor urban food prices to ensure that purchasing power is maintained and adjustments are made as necessary....."

"Technical Assistance (TA) will be designed to increase the skills required to either: (i) secure and hold wage-employment or (ii) engage in productive self-employment. TA activities to support wage-employment may include: technical/vocational training, training in key behaviors required for success in the workplace (“soft skills” such as team work, basic workplace values, organizational ethics etc.), training and facilitation in accessing labor market information, and support in getting a job. TA activities to support self-employment may include customized training in business plans formulation, implementation and monitoring; continuous coaching and mentoring; financial literacy and awareness; community savings promotion and investment; and desired basic skills development aligned to the specific livelihood option chosen by the program clients."

In numerous regards, poverty is the breeding ground for political and social turmoil that can transform into an unmanageable change. Wide based development, albeit basically a financial issue, is likewise a definitive condition for peace, stability and national security. In that capacity, it strengthens the prospects for achieving monetary development goals. Notwithstanding guaranteeing that most of the populace profits by the improvement, a need thought for wide based development is that fundamental consideration given to the circumstance of individuals who are unable to benefit from the development process.

Indeed, taking care of the urban poor is not an auxiliary work but an integral part of Ethiopia's socio-economic stride and development paradigm. After all, Ethiopia's vision is "to become a country where democratic rule, good-governance and social justice reign, upon the involvement and free will of its peoples, and once extricating itself from poverty to reach the level of a middle-income economy as of 2025."

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