The Precarious Balance of Economic productutivity and Corrupt Governance: Ethiopia Is Amongst World’s Least Competitive Countries October 29, 2013

The Corrupt Empire is uncompetitive: Ethiopia  Is Amongst World’s Least Competitive Countries

Despite its  damn statistics of massive long term paper growth  of  TPLF Ethiopia’s economy, the country is still ranked among the worst performing in the Global Competitive Index (GCI) 2013 -2014, recently released by the World Economic Forum. (see page 163 for the detail summary of the report). According to the report, Ethiopia dropped 15 places from last year’s 106th position to 121st among the 144 countries profiled.

The Global Competitive Index , which was introduced in 2004, measures how the combinations of institutions, policies, and other factors determine the level of productivity of a country. The GCI scores is calculated by putting together the 12 pillars of competitiveness, such as: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.

According to the ranking, Ethiopia is placed in the poorest pool of economic development possible (see, the following graphics). Ethiopia ranked as a “factor driven” economy which includes Nigeria, Liberia, Lao, Mali and Yemen.There are four stages of development with innovation-driven economies being the best pool of economies.

Ethiopian economic productivity is one of the poorest despite clear advantages of its internal market and economies of scale with population over 85 million compared to other African countries. Due to its population, it has a large internal market size (66 position), only next to Nigeria (the largest internal market size in Africa, also performing poor).

GCI has identified weak basic institutional requirements (118) of Ethiopia that account 60% of the index ranking: corruption, poor infrastructure, poor primary education, poor macroeconomic environment,  efficiency enhancers and technological readiness.

The GCI has noticed with Ethiopia’s economy the following among the most problematic factors for doing business:
Access to finance, corruption, inefficient government bureaucracy, inflation, policy instability, tax regulations and inadequate supply of infrastructure.
Technological readiness is also the worst performance:
Availability of latest technologies (132)
Firm-level technology absorption (139)
FDI and technology transfer (128)
Individuals using Internet, % (142)
Broadband Internet subscriptions/100 pop (131)
Mobile broadband subscriptions/100 pop (120)
Ethiopia with a population of over 85 million only produces $31.7 billion GDP with per capita income of $1 per day.
Key indicators, 2011
Population (millions) ……………………………………….85.1
GDP (US$ billions)* ………………………………..  ………31.7
GDP per capita (US$) ………………………………..  …365.2
GDP (PPP) as share (%) of world total …………..0.12
Sectoral value-added (% GDP), 2011
Agriculture ………………………………………………….      ..41.9
Industry ………………………………………………………     .12.6
Services …………………………………………………….        ..45.5
Human Development Index, 2011
Score, (0–1) best ……………………………………….    ….0.36
Rank (out of 187 economies) ……………………………174
Sources: IMF; UNFPA; UNDP; World Bank and GCI

The report noted that Mauritius has replaced South Africa (53rd) as the most competitive country in Sub-Saharan Africa.  Ranked 45th position the country moved up nine places this year.The country’s best performance  has supported by “transparent public institutions (ranked at 39th) with clear property rights and strong judicial independence and an efficient government (29th).”

Switzerland, ranked at number one is the most competitive country in the world. For top ten Sab Saharan African countries See:

http://www3.weforum.org/docs/GCR2013-14/GCR_Infographic_SubSaharanAfrica_2013-2014.jpg

Click to access WEF_Africa_Competitiveness_Report_2013.pdf

Click to access WEF_Africa_Competitiveness_Report_2013.pdf

www3.weforum.org

http://www.economist.com/blogs/freeexchange/2013/09/commodity-price-decline?fsrc=scn/fb/wl/bl/amarxisttheoryissortofright

http://oromopress.blogspot.co.uk/2013/09/un-general-assemblyethiopias-leaders.html?fb_action_ids=622733174416698&fb_action_types=og.likes&fb_source=other_multiline&action_object_map=%7B%22622733174416698%22:592920940775374%7D&action_type_map=%7B%22622733174416698%22:%22og.likes%22%7D&action_ref_map=%5B%5D

Prosperity Index 2013
Ethiopian: 126/142.
75.6% say gov’t is corrupt.
Satisfaction with gov’t efforts to address poverty: 21.2%.
The Governance sub-index dropped two places, to 118th, because of decreases in political rights, political constraints, the rule of law, and regulatory quality.
http://www.prosperity.com/#!/country/ETH

Copyright © Oromianeconomist 2013 and Oromia Quarterly 1997-2013. All rights reserved. Disclaimer.

Related articles

http://oromopress.blogspot.co.uk/2013/09/un-general-assemblyethiopias-leaders.html?fb_action_ids=622733174416698&fb_action_types=og.likes&fb_source=other_multiline&action_object_map=%7B%22622733174416698%22:592920940775374%7D&action_type_map=%7B%22622733174416698%22:%22og.likes%22%7D&action_ref_map=%5B%5D

• Global Competitiveness Report 2013-2014 (pacific.scoop.co.nz)
• A prisoner of conscience’s call for sanctions against Ethiopia | Eskinder Nega (theguardian.com)
• Tyrannic Ethiopia bans access to student’s critical article (oromianeconomist.wordpress.com)