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Africa: How moving beyond GDP may help fight poverty February 2, 2015

Posted by OromianEconomist in Africa Rising, Economics, Poverty, The extents and dimensions of poverty in Ethiopia, Youth Unemployment.
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???????????Growth and Resource Deplation

 

‘GDP is a highly inappropriate measure to gauge progress in Africa and moving beyond GDP will open up creative opportunities to fight poverty and achieve sustainable wellbeing. GDP does not capture informal economies, the contribution of subsistence farming, non-commercial agriculture and other localized forms of production and consumption. Through the introduction of new progress indicators that focus on human wellbeing, health and education, decent work and natural welfare, African countries may be encouraged to promote a different development paradigm . A networked economy, founded on localized forms of self-production and consumption would empower the millions of people that are at the moment left out of the apparent African economic miracle.’

‘Moreover, as an aggregate figure (or as an average, in the case of GDP per capita) it hides unequal distribution of income.  Against this backdrop, it becomes clear that there are important structural reasons why one should be suspicious of the ‘Africa rising’ mantra. Most fastgrowing African economies are heavily dependent on exports of commodities. This means that when commodity prices drop at the global level, African economies languish. More dangerously, it means that the ‘growth’ we have seen in the past few years is largely the result of a statistical mirage. Most natural resources in Africa are not renewable: once they are taken out of the ground, they do not grow back. GDP does not measure the ‘loss’ of selling out the most precious resources African countries possess. What would the picture look like if such losses were deducted from GDP? The World Bank in 2013 adjusted net savings statistics, which subtracts natural resources depletion and environmental damage from national income, gives us the following: African countries have been reducing their wealth at the tune of 1.2% a year. Rather than growing, our continent’s economies have been shrinking.’

https://sustainabledevelopment.un.org/content/documents/5938How%20moving%20beyond%20GDP%20may%20help%20fight%20poverty%20in%20Africa.pdf

 

 

GSDR 2015 Brief How moving beyond GDP may help fight poverty in Africa

 

By Lorenzo Fioramonti*, University of Pretoria

 

The gross domestic product (GDP) is the world’s most powerful statistical measure. Its underlying economic principles have contributed to splitting the planet into two worlds: the ‘developed’ and the ‘developing’ countries and/or the North and the South. Paradoxically, the GDP mantra was imposed on poorer nations in spite of its creators’ conclusion that its approach should not be applied to countries largely dependent on informal economic structures, as these are not considered by income accounts, which are threatened by policies designed to increase GDP (Fioramonti 2013). The economist Simon Kuznets, one of the architects of the GDP system, is also known for having demonstrated how income inequality rises in times of fast GDP growth. His famous ‘curve’ shows how relative poverty is exacerbated, especially in under-industrialized countries, leading to a concentration of resources and income in the hands of a few. This brief makes the argument that GDP is a highly inappropriate measure to gauge progress, especially in the so-called developing world. It will therefore focus on Africa to show how moving beyond GDP may open up creative opportunities to fight poverty and achieve sustainable wellbeing. How the GDP measure is misleading Africa In May 2013, even the billionaire turned philanthropist Bill Gates, who is a fervent supporter of metric-driven approaches to development, publicly contested the validity of GDP: “I have long believed that GDP understates growth even in rich countries, where its measurement is quite sophisticated, because it is very difficult to compare the value of baskets of goods across different time periods,” but this problem is “particularly acute in Sub-Saharan Africa, owing to weak national statistics offices and historical biases that muddy crucial measurements” (Gates 2013). GDP does not capture informal economies, the contribution of subsistence farming, non-commercial agriculture and other localized forms of production and consumption (Jerven 2013). According to estimates published by the IMF in 2002, informal economies accounted for up to 44% of economic output in developing nations, 30% in transition economies, and 16% in the OECD countries (Schneider and Enste 2002), which fall outside the GDP net. Moreover, as an aggregate figure (or as an average, in the case of GDP per capita) it hides unequal distribution of income.  Against this backdrop, it becomes clear that there are important structural reasons why one should be suspicious of the ‘Africa rising’ mantra. Most fastgrowing African economies are heavily dependent on exports of commodities. This means that when commodity prices drop at the global level, African economies languish. More dangerously, it means that the ‘growth’ we have seen in the past few years is largely the result of a statistical mirage. Most natural resources in Africa are not renewable: once they are taken out of the ground, they do not grow back. GDP does not measure the ‘loss’ of selling out the most precious resources African countries possess. What would the picture look like if such losses were deducted from GDP? The World Bank in 2013 adjusted net savings statistics, which subtracts natural resources depletion and environmental damage from national income, gives us the following: African countries have been reducing their wealth at the tune of 1.2% a year. Rather than growing, our continent’s economies have been shrinking. Sierra Leone has experienced net losses of about 20% of its entire GDP, Angola of 40%, Chad of 50% and the DRC of over 57%. The Bank confirms that “in poorer countries, natural capital is more important than produced capital,” thus suggesting that properly managing natural resources should become a fundamental component of development strategies, “particularly since the poorest households in those countries are usually the most dependent on these resources” (World Bank 2006: p. XVI). The real costs of GDP growth in Africa are the elephant in the room of the world’s economic debates. The current GDP paradigm sacrifices nature, which must be commoditized to become productive. It also neglects important components of the real economy, such as the informal sector, because they are not part of the formal market system. Policies that are designed to support GDP growth thus replace the informal (e.g. street vendors, subsistence farming, flea markets, family businesses, household production) with the formal (e.g. shopping malls, commercial farming, large infrastructure). While some can take advantage of this concentration of wealth, many are left behind. The OECD has confirmed the intimate link between rising inequality and GDP growth across the world (OECD 2011). This is further amplified in those countries where the informal economy provides a fundamental safety net to many poor households, as is the case throughout Africa. Why going ‘beyond’ GDP may create new opportunities The GDP model of growth privileges the formal at the expense of the informal, the big at the expense of the small. While complacent politicians, economists and the media celebrate Africa’s GDP ‘miracle’, there is another part of the continent rising. Disillusioned with the limited gains of market society, many Africans are raising their collective voices, whether through service delivery protests (as is the case in South Africa) or through permanent mobilizations (as we have seen in North Africa). This could very well be the beginning of a new era, in which more and more citizens repudiate an economic model that is losing traction also in the West, to explore new forms of human progress. Going beyond GDP in Africa may open a myriad of possibilities to redefine progress in the continent. Through the introduction of new indicators that focus on human wellbeing, health and education, decent work (rather than superficial counting of ‘employment’) and natural welfare, African countries may be encouraged to promote a different development paradigm. Various elements of Africa’s local cultures, from the widely heralded (and often abused) concept of Ubuntu to traditional experiences with cooperative schemes of production and consumption as well as communitydriven governance, may provide a fertile ground for localized and decentralized forms of development, in which enhancing human capabilities will overtake nominal income as the key objective of economic progress. Moreover, the abundance of solar energy should make it possible for entire communities to become energy independent through small-scale offthe-grid solutions, thus reinforcing a transition to a citizens-driven development model, rather than an economic paradigm based on exploitation of nature and mass consumption. A networked economy, founded on localized forms of self-production and consumption, in which the distinction between producers and consumers becomes increasingly fuzzier (this is a concept encapsulated in the idea of ‘prosumers’) would challenge the GDP conceptualizations of production and asset boundary, thus resulting in lower rates of nominal growth. Yet, it3 would empower the millions of people that are at the moment left out of the apparent African economic miracle. It would for instance allow for alternative forms of governance of natural resources, in which local communities would need to identify the best ways to interact with their ecosystems in a sustainable fashion, rather than resorting to the structural exploitation we have seen throughout the continent in times of state-led or market-driven accelerated growth. It would mean respecting the commons for what they are, rather than subjecting them to marketization and commodification as dictated by the GDP mantra.

 

* Lorenzo Fioramonti is the director of the Centre for the Study of Governance Innovation at the University of Pretoria, South Africa (www.governanceinnovation.org). He is one of the leading voices in the ‘Beyond GDP’ debate and the author of the bestselling books Gross Domestic Problem: The Politics Behind the World’s Most Powerful Number (2013) and How Numbers Rules the World: The Use and Abuse of Statistics in Global Politics (2014), both published by Zed Books. The views and opinions expressed are the authors’ and do not represent those of the Secretariat of the United Nations. Online publication or dissemination does not imply endorsement by the United Nations.

Read more at:

https://sustainabledevelopment.un.org/content/documents/5938How%20moving%20beyond%20GDP%20may%20help%20fight%20poverty%20in%20Africa.pdf

 

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Econ Ch 4-5 February 2, 2015

Posted by OromianEconomist in Economics, Uncategorized.
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O

 

 

 

‘Money flows clockwise and goods flow counterclockwise.’

Pepperdine Summary Notes

Money flows clockwise and goods flow counterclockwise.

Equilibrium is the point at which the demand and supply curve meet. If the market price is above this, there is a surplus. If it is below there is a shortage. Eventually the shortage and surplus will decrease and go back to equilibrium.

Untitled

When there is a shortage, consumers bid the price up to comet for goods until the price goes back to equilibrium.

An increase of demand causes a shortage until equilibrium is reached at a higher price and quantity.

1

When there is a decrease in demand, there is a surplus. The excess goods decrease the price until a new equilibrium is reached.

2

A shift in supply and and demand causes a change in the quantity and price. One is always the indeterminate.

3

Price ceiling:

4A price ceiling sets the maximum price that can be charged for a good, like rent control…

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Ogaden: Repression of Dissent Intensifies with Approaching May 2015 Ethiopia’s Sham Elections February 2, 2015

Posted by OromianEconomist in Africa, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Ethnic Cleansing, Ogaden.
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Ogaden: Repression of Dissent Intensifies with Approaching May 2015 Elections

According to the latest Human Rights Watch report, the Ethiopian Government has been reinforcing its campaign of arrests, persecution and unlawful violence as a strategy of silencing peaceful political dissent. In addition to the political under-representation of minorities in Ethiopia, journalists and dissenters face widespread Government censorship. All are hoping for greater political rights and freedoms in the period leading up to the May 2015 general elections.  

Below is an article published by allAfrica:

The Ethiopian government during 2014 intensified its campaign of arrests, prosecutions, and unlawful force to silence criticism, Human Rights Watch said today [29 January 2015] in its World Report 2015.

The government responded to peaceful protests with harassment, threats, and arbitrary detention, and used draconian laws to further repress journalists, opposition activists, and critics.

“The Ethiopian government fell back on tried and true measures to muzzle any perceived dissent in 2014,” said Leslie Lefkow, deputy Africa director. “Journalists and dissenters suffered most, snuffing out any hope that the government would widen political space ahead of the May 2015 elections.”

In the 656-page world report, its 25th edition, Human Rights Watch reviews human rights practices in more than 90 countries.

In his introductory essay, Executive Director Kenneth Roth urges governments to recognize that human rights offer an effective moral guide in turbulent times, and that violating rights can spark or aggravate serious security challenges. The short-term gains of undermining core values of freedom and non-discrimination are rarely worth the long-term price.

Ethiopia’s dismal rights record faced little criticism from donor countries in 2014. Throughout the year, state security forces harassed and detained leaders and supporters of Ethiopian opposition parties.

Security personnel responded to protests in Oromia in April and May with excessive force, resulting in the deaths of at least several dozen people, and the arrests of hundreds more. The authorities regularly blocked the Semawayi (Blue) Party’s attempts to hold protests.

Media remain under a government stranglehold, with many journalists having to choose between self-censorship, harassment and arrest, and exile. In 2014, dozens of journalists fled the country following threats.

In July, the government charged seven bloggers known as Zone 9 and three journalists under the abusive Anti-Terrorism Proclamation. In August, the owners of six private publications were charged under the criminal code following threats against their publications. The government blocks websites and blogs and regularly monitors and records telephone calls.

The authorities have been displacing indigenous populations without appropriate consultation or compensation in the lower Omo Valley to make way for the development of sugar plantations. Villagers and activists who have questioned the development plans face arrest and harassment.

The government showed no willingness to amend the Anti-Terrorism Law or the Charities and Societies Proclamation, despite increasing condemnation of these laws for violating basic rights.

Authorities more rigorously enforced the Charities and Societies Proclamation, which bars organizations from working on human rights, good governance, conflict resolution, and advocacy on the rights of women, children, and people with disabilities if the organizations receive more than 10 percent of their funds from foreign sources.

“The government’s crackdown on free expression in 2014 is a bad sign for elections in 2015,” Lefkow said.

 

Read more at:

http://unpo.org/article/17912

Tyrannic Ethiopia: Flagrant Human Rights Abuse against Oromo Nationals Continues, HRLHA Urgent Action February 2, 2015

Posted by OromianEconomist in Africa, Amnesty International's Report: Because I Am Oromo, Ethnic Cleansing, Groups at risk of arbitrary arrest in Oromia: Amnesty International Report, Human Rights Watch on Human Rights Violations Against Oromo People by TPLF Ethiopia, The Tyranny of Ethiopia, The Tyranny of TPLF Ethiopia.
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ETHIOPIA: Flagrant Human Rights Abuse against Oromo Nationals Continues

HRLHA FineHRLHA Urgent Action

Feb 01, 2015

For immediate Release

It is cruel, brutal and inhumane to hang any person for any wrongdoing particularly in Ethiopia, a country that claims democracy is its core principle of governance. The execution of Ketama Wubetu and his friend by Ethiopian solders- by hanging on a fence- on December 09, 2014 in Salale zone of Dera District in the regional State of Oromia was barbaric.  If the hanged men were members of an opposition group fighting against the government, once they were captured they should have been brought to justice.

Sadly enough, the government soldiers shamelessly displayed the bodies of these two Oromo nationals to the public- including children. This kind of inhuman and fascistic action will not solve the political crisis in the country. Rather, it will complicate and escalate it to another level. The fascistic action committed against the two Oromo nationals by the government army clearly shows that justice in the country is dysfunctional and symbolic.

Gootota Oromoo Wayyaaneen Qaltee Bakka gabaatti fannifte-Gocha faashistii xaaliyaanii fi hayila Sillaasen kan Wal fakkaatu-1.25.15By doing this the Ethiopian Government has blatantly violated international humanitarian law and international human rights law principles including international human rights standards.

The Human Rights League of the Horn of Africa highly condemns the federal armed force, as well the Oromia regional state militia, for their fascistic acts against these two individuals and calls upon the Ethiopian government to bring the killers to justice. The Government of Ethiopia should also explain the situation to the world community particularly to the UN Human Rights Council that it is a member of.

The HRLHA calls upon regional and international donors, UN member states and Organizations to take measurable steps against the Ethiopian TPLF/EPRDF government for its persistent brutal, dictatorial, and suppressive actions against civilians. It also urges all national, regional and international diplomats, donor countries and organizations and human rights groups to join hands in putting pressure on the Ethiopian government so that it invites immediately neutral body to investigate the human rights situation in the country.

BACKGROUNDS:

The Human Rights League of the Horn of Africa (HRLHA) has reported (May 1st and 13th, 2014, urgent actions, www.humanrightleague.org) on the heavy-handed crackdown of the Ethiopian Federal Government’s Agazi Special Squad and the resultant extra-judicial killings of 34 (thirty-four) Oromo nationals, and the arrests and detentions of hundreds of others. Amnesty International in its most recent report on Ethiopia – “Because I am Oromo – Sweeping repression in the Oromia region of Ethiopia” – has exposed how Oromo nationals have been regularly subjected to arbitrary arrest, prolonged detention without charge, enforced disappearance, repeated torture and unlawful state killings as part of the government’s incessant attempts to crush dissent.

RECOMMENDED ACTION: Please send appeals to the Ethiopian Government and its concerned officials as swiftly as possible, in English, Amharic, or your own language expressing:

  • explanation for its brutal and fascistic action against citizens and invite immediately nutria body for investigation
  • the Ethiopian authorities to ensure that the killers are brought to justice immediately

Send Your Concerns to:

  • His Excellency: Mr. Haila Mariam Dessalegn – Prime Minister of Ethiopia

P.O.Box – 1031 Addis Ababa
Telephone – +251 155 20 44; +251 111 32 41
Fax – +251 155 20 30 , +251 15520

  • Office ofOromiya National Regional State President Office

Telephone –   0115510455

  • Office of the Ministry of Justice of Ethiopia

PO Box 1370, Addis Ababa, Ethiopia Fax: +251 11 5517775; +251 11 5520874 Email: ministry-justice@telecom.net.et

Copied To:

  • Office of the UN High Commissioner for Human Rights

United Nations Office at Geneva 1211 Geneva 10, Switzerland Fax: + 41 22 917 9022 (particularly for urgent matters) E-mail: tb-petitions@ohchr

  • Human Rights Treaties Division (HRTD)
    Office of the United Nations High Commissioner for Human Rights (OHCHR)
    Palais Wilson – 52, rue des Pâquis
    CH-1201 Geneva (Switzerland)
    : +41 22 917 97 06
    Fax: +41 22 917 90 08
    E-mail: cat@ohchr.org
  • Secretariat contact details

Secretariat of the Subcommittee on Prevention of Torture
Office of the United Nations High Commissioner for Human Rights (OHCHR)
Palais Wilson – 52, rue des Pâquis
CH-1201 Geneva (Switzerland)

Mailing address
UNOG-OHCHR
CH-1211 Geneva 10
Switzerland

Tel:  +41 22 917 97 44
Fax: +41 22 917 90 22

E-mailopcat@ohchr.org
Internethttp://www.ohchr.org

  • Committee on Enforced Disappearance (CED)
    Human Rights Treaties Division (HRTD)
    Office of the United Nations High Commissioner for Human Rights (OHCHR)
    Palais Wilson – 52, rue des Pâquis
    CH-1201 Geneva (Switzerland)

Mailing address
UNOG-OHCHR
CH-1211 Geneva 10 (Switzerland)

Tel.: +41 22 917 92 56
Fax: +41 22 917 90 08
E-mail: ced@ohchr.org

  • Office of the UNHCR

Telephone: 41 22 739 8111
Fax: 41 22 739 7377
Po Box: 2500
Geneva, Switzerland

  • African Commission on Human and Peoples‘ Rights (ACHPR)

48 Kairaba Avenue, P.O.Box 673, Banjul, The Gambia.
Tel: (220) 4392 962 , 4372070, 4377721 – 23 Fax: (220) 4390 764
E-mail: achpr@achpr.org
Office of the Commissioner for Human Rights

  • Council of Europe

F-67075 Strasbourg Cedex, FRANCE
+ 33 (0)3 88 41 34 21
+ 33 (0)3 90 21 50 53

  • U.S. Department of State

Laura Hruby
Ethiopia Desk Officer
U.S. State Department
HrubyLP@state.gov
Tel: (202) 647-6473

  • Amnesty International – London

Claire Beston
Claire Beston” <claire.beston@amnesty.org>,

  • Human Rights Watch

Felix Hor
“Felix Horne” <hornef@hrw.org>

 

Source: http://ayyaantuu.com/human-rights/ethiopia-flagrant-human-rights-abuse-against-oromo-nationals-continues/