Back to Front Page

Ethiopia tops yet another rank

Ethiopia tops yet another rank

By Bereket Gebru

08-16-16

With neo-liberal policies becoming the mainstream economic guidelines for states around the world, the inequality between people has progressively increased. As revealed by Oxfam earlier this year, just 62 individuals own the same wealth as half of the world’s population. That is a shocking reality clearly depicting the staggeringly unjust and acutely skewed distribution of wealth among the people of the world. The sad truth, however, is that the trend is set to go on stronger in the coming years. Oxfam’s prediction, made ahead of the Davos summit in 2014, that the 1% would soon own more than the rest of us, actually came true in 2015 - a year earlier than expected.

This international reality is a reflection of the national reality in states, including the most developed ones. In November 2014, the guardian reported that the top 0.1% of the U.S. population owned as much wealth as the bottom 90%. The report stated:

Wealth inequality in the US is at near record levels according to a new study by academics. Over the past three decades, the share of household wealth owned by the top 0.1% has increased from 7% to 22%. For the bottom 90% of families, a combination of rising debt, the collapse of the value of their assets during the financial crisis, and stagnant real wages have led to the erosion of wealth.

With such extreme disparities in access to resources, the use of GDP per capita as a viable parameter is fast becoming outdated as it equally distributes domestic product between people. Although there have been some alternatives, the venture to come up with a more representative parameter seems to be just heating up.

One of the most recent of these attempts measures the conversion of economic growth into the improvement of well-being of citizens. Put forth by the Boston Consulting Group (BCG), the parameter defines well-being as having three elements that comprise ten dimensions. A BCG publication explains that the first element is economics, which gauges a country’s performance in generating balanced growth through income, economic stability, and employment. It states: “that balanced growth provides a basis for the country to invest in the other two elements.”

The second element, the publication states, is investment which includes health, education, and infrastructure. It explains: “these items – major items in any government budget – encompass short and long term investments that help drive improvements in both economic growth and well-being over time.”

The third element identified by BCG is sustainability. Their publication explains that the term “sustainability” is usually associated with the environment but it can encompass issues related to social inclusion. Included in this element are the dimensions of income equality, civil society and governance. The publication states: “a robust score in this element typically reflects sound policy decisions rather than large budgets.”

BCG then uses indicators for each dimension to generate scores that reflect a country’s current level of and recent progress in well-being. The score is then expressed in the “wealth-to-well-being-coefficient” that determines the level of well-being in a country. A recent article by Nurith Aizenman explains that the score is based on their ranking on 44 indicators in the 10 categories, including the quality of their health care, education, infrastructure and environment, the stability of their economy, their success at employing people and the degree to which they've avoided problem like income inequality, corruption and violence.

Accordingly, the 2016 Sustainable Economic Development Assessment (SEDA) by BCG that ranks countries’ current and recent progress in well-being indicates that Western European countries top the current well-being rank with Norway standing on the first spot. The good news for African countries comes in the greatest strides taken towards well-being. In yet another accolade Ethiopia has come to earn in recent years, it has been identified as the country with the highest recent progress score.

The report states: “the country with the highest recent progress score is Ethiopia, whose gains have been particularly strong in income and health. Ethiopia’s performance is emblematic of the gains in Sub-Saharan Africa as a whole: 15 countries in the region are in the top quintile of recent-progress scores.”

As has been clearly stated in the report, Ethiopia’s most impressive progress is especially associated with income and health. In general though, the rapid economic growth since the turn of the new millennium has pushed the well-being of citizens into unchartered waters for the country. Its categorization with the fastest growing economies like China and India along with projections that it is set to take them over considering current trends show that its growth is becoming unmatched at the international level.

As the report considered data between 2006 and 2014, let’s consider the kind of changes that unfolded during that time in the country in terms of income and health. Accordingly, opendataforafrica.org indicates that Ethiopia’s GDP per capita was 197.4 USD in 2006. By 2014, the website states, the per capital income rose to 548 USD.

With a Gini-coefficient of 0.3%, Ethiopia is one of the most equal countries in terms of income distribution. The considerable leap in income within the decade taken into account by the report would obviously change the lives of citizens for the better as income is distributed relatively fairly in the country.

The health sector in Ethiopia has also enjoyed tremendous improvements since the turn of the new millennium. The country achieved the Millennium Development Goal of reducing child mortality by two-thirds in 2013 - two years ahead of the deadline. Improvements in reducing maternal mortality were also commendable within the MDG period. Vast efforts to control the deadliest diseases in the country like Malaria and Tuberculosis also paid off. The health extension program was also vital in preventing and controlling diseases as the extension workers imparted much needed advice and treatment to the rural population. All the major achievements in the health sector have, however, been possible as a result of the expansion of health service coverage throughout the country.

The success in the health sector has also been replicated in the educational sector with the country achieving universal coverage in primary school enrolment. The infrastructural development in the country has also been immense with the people enjoying increased access to water, electricity, telecommunication and roads.

Ethiopia’s achievement of an accolade as the top converter of national wealth into the well-being of its people is a clear indicator of the country’s right path to development besides serving as a motivation to advance the successes registered so far. It can also serve as an aid in governance related ventures by clearly demonstrating to the people that the government is indeed the best distributor of wealth in the world.  

 

 

 

 

 


Back to Front Page