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Economy of Ethiopia Economy—overview:
Ethiopia's poverty-stricken economy is based
on agriculture, which accounts for half of GDP, 85% of
exports, and 80% of total employment. The agricultural
sector suffers from frequent drought and poor
cultivation practices, and as many as 4.6 million people
need food assistance annually. Coffee is critical to the
Ethiopian economy with exports of some $260 million in
2000. Other important exports include qat, live animals,
hides, and gold. The war with Eritrea in 1999-2000 and
recurrent drought have buffeted the economy, in
particular coffee production. In November 2001 Ethiopia
qualified for debt relief from the Highly Indebted Poor
Countries (HIPC) initiative. Under Ethiopia's land
tenure system, the government owns all land and provides
long-term leases to the tenants; the system continues to
hamper growth in the industrial sector as entrepreneurs
are unable to use land as collateral for loans. Despite
this limitation, strong growth is expected to continue
in the near term as good rainfall, the cessation of
hostilities, and renewed foreign aid and debt relief
push the economy forward.Disputes—international:
most of the southern half of the boundary
with Somalia in the Ogaden region is a provisional
administrative line; in the Ogaden, regional states have
established a variety of conflicting relationships with
the Somali Transitional National Government in
Mogadishu, feuding factions in Puntland region, and the
economically stabile break-away "Somaliland" region;
Ethiopia agreeed in 2002 to demarcate its entire
boundary with Sudan; Eritrea and Ethiopia have expressed
general approval of the April 2002 arbitration
commission ruling re-delimiting the boundary, the focus
of their 1998-2000 war; United Nations Mission in
Ethiopia and Eritrea (UNMEE) will monitor activities
within the 25-km wide temporary security zone in Eritrea
until demarcation and de-mining are complete |
