Ethiopia Needs Long-term National Development Plan (Part Four)

Tsegaye Tegenu, PhD

2024-05-28

In part three we have listed 41 recurrent problems facing the country. The scale, frequency, and severity of these problems differ overtime and space. The country does not have robust institutions, better governance, and more resources to address and mitigate these problems.

Besides, addressing each recurrent problem in isolation without considering its linkages to others leads to siloed approaches and poor coordination, inefficiencies, unintended consequences, and missed opportunities for creating synergistic solutions.

Moreover, addressing each recurrent problem in isolation neglects root causes. Isolated solutions address symptoms rather than root causes. Addressing symptoms without tackling root causes leads to the perpetuation of problems, as underlying issues remain unresolved and continue to generate the same symptoms over time. To achieve lasting solutions, it is crucial to adopt an integrated approach that considers the root causes and develops comprehensive strategies to address them.

Part four discusses the underlying root causes of the 41 recurrent problems of the country mentioned in part three. Underlying root causes are the broader, less immediate factors that contribute to recurrent problems. They are often multifaceted and interconnected, forming a backdrop against which issues arise. They encompass a wide range of factors, including systemic, structural, and situational elements. They include multiple layers of causation (major cause also has sub-causes) that collectively influence the recurrent problems.

When studying the underlying causes of recurrent problems, the following three components are crucial: literature review, engaging stakeholders, and expert consultation. Regarding the literature review, I have tried to read existing research and knowledge on the specific topics, mainly the publications of Ethiopian Economics Association (EEA). Their publications have provided me with evidence and helped me to place the problems in a broader context.

I have also discussed with some experts on regrouping of the recurrent problems based on systematic-structural approach. Even if there is some difference in emphasis, there is more or less a general agreement and understanding on identifying the major common underlying causes of the recurrent problems. There is, however, some difference whether a given problem can be considered as a cause or an impact. For instance, I considered the political context as an impact and not as a major cause. What I understand is that there is a challenge in differentiating between the major underlying causes and their impacts more distinctly.

Engaging stakeholders is another important issue to ensure a comprehensive understanding and effective solution formulation. Engaging stakeholders helps in identifying the real issues and priorities from the perspective of those who are directly impacted. I defer this to a future task. With such reservations, I will now outline the six major underlying root causes of recurrent problems facing the country now.

The first major underlying cause of recurrent problems in the country is related to macroeconomic and governance issues. This refers to challenges related to the overall functioning of the economy and governance structures at the national level. The sub-causes of the macroeconomic issues include high inflation rates, fiscal deficits and debt accumulation, unstable exchange rates, lack of investment in infrastructure and human capital, insufficient revenue generation or taxation.

Governance issues encompass sub causes such as corruption, weak rule of law and legal enforcement mechanisms, inadequate regulatory frameworks, and lack of transparency and accountability in government institutions.

The second major underlying cause of recurrent problems in the country is related to structural transformation and investment. This involves the need for fundamental changes in the economic structure of a country to achieve sustainable economic growth. Structural transformation aims to shift resources from low-productivity sectors (such as agriculture and informal economy) to high-productivity sectors (such as manufacturing).

The sub-causes of structural transformation of the country relates to dependency on low-productivity agriculture and informal sectors, limited specialization and diversification of the economy, lack of technology adoption and innovation, lack of business growth, and insufficient infrastructure for industrialization and urbanization.

Investment is crucial for financing infrastructure, technology, human capital, and other factors necessary for economic diversification and modernization. The sub factors contributing to lack of investment relates to inadequate public and private investment levels, lack of access to financing and credit for businesses, regulatory risks for investors, weak institutional frameworks for investment promotion and protection.

The third major underlying cause of recurrent problems in the country is related resource scarcity and livelihood strategies. Resource scarcity refers to limitations in the availability of economic resources such as land, water, minerals, energy, capital, and entrepreneurship. The sub-causes are related to the depletion of natural resources due to unsustainable exploitation, competition for resources among households, different sectors and stakeholders, inequitable distribution of resources, and environmental degradation.

Livelihood strategies encompass the ways in which households and communities secure their basic needs and generate income in the face of resource constraints. The sub-causes of livelihood strategies relate to dependence on subsistence agriculture or informal employment, limited access to education and vocational training, barriers to entry into formal labor markets, and vulnerability to shocks and disasters.

The fourth major underlying cause of recurrent problems is chronic poverty, which refers to persistent and entrenched poverty experienced by the people over an extended period. The sub-causes contributing to chronic poverty include limited access to productive assets and resources, insufficient investment in education and healthcare, lack of economic opportunities, lack of social mobility, discrimination and weak governance and corruption.

The fifth major underlying cause of recurrent problems is spatial underdevelopment. It refers to disparities in development outcomes across different geographic areas within the country and within the regions. This can manifest as uneven economic growth, inadequate infrastructure, limited access to services, and disparities in living standards between urban and rural areas or among regions.

The sub-causes of spatial underdevelopment relate to geographic factors (such as remote or inaccessible terrain, vulnerability to natural disasters, environmental degradation) and policy and investment priorities (such as neglect of rural and remote areas in infrastructure development, lack of regional development strategies and spatial planning, and disparities in public service provision and access to amenities).

The sixth major underlying cause of recurrent problems is institutional weaknesses which refers to deficiencies in the capacity, effectiveness, and performance of public institutions, organizations, and governance systems. The sub-causes include administrative capacity insufficient human and financial resources, lack of qualified and trained personnel, bureaucratic inefficiency and red tape, and weak project management and implementation capabilities). Another sub-cause of institutional weaknesses is governance deficits (corruption and rent-seeking behavior, lack of transparency and accountability mechanisms, politicization of public institutions, weak legal and regulatory frameworks, and limited citizen participation and civil society engagement).

Addressing these six major underlying causes requires comprehensive, integrated and long-term approaches, involving the formulation of vision, identification of goals, strategies, policy reforms, intervention instruments and enabling environment tailored to specific contexts and challenges. In part five we will discuss the need for more additional analysis framework necessary for the formulation of vision, goals, missions and strategies of long-term national development plan.