College of Finance, Management and Development

MA in Development Management

Program Regular

Module Title: Development Theories and Practices

Module code: MDM 5011

Individual assignment

Cause of Underdevelopment Ethiopia

Prepared by: Almaz

Submitted to: Dr Amanuel. (PhD)

January 2023

A.A, Ethiopia
Contents
1. Causes of underdevelopment of Ethiopia............................................................................................4
1.1 Introduction...........................................................................................................................................4
1.2 Objective............................................................................................................................................5
1.3 Methodology.....................................................................................................................................5
1.4 Termenology definition....................................................................................................................5
1.5 Reason Why Ethiopia is poor...........................................................................................................7
1.5.1 Corruption:.................................................................................................................................7
1.5.2 Poverty:......................................................................................................................................8
1.5.3 Poor government bureaucracy:..................................................................................................8
1.5.4 Insufficient infrastructure...........................................................................................................8
1.5.5 High Levels of Illiteracy:..............................................................................................................8
1.5.6 Unfavorable business environment:...........................................................................................9
1.5.7. Insufficient Skilled man power:..................................................................................................9
1.5.8. Poor project monitoring and evaluation:.............................................................................9
1.5.9. Lack of political commitment:....................................................................................................9
1.5.10. Dependence on Aid and Assistance:........................................................................................9
1.5.12. Land resource and the related problems:..........................................................................10
5. Conclusions and Recommendations......................................................................................................11
References.............................................................................................................................................12

1.
1. Causes of underdevelopment of Ethiopia

1.1 Introduction

Ethiopia has a wide variety of landscapes, from valleys and undulating plains to
high, rough mountains, flat-topped plateaus, deep gorges, and incised rivers. It is
referred to as the "roof of Africa" (Asrat, 2016) and

the "water tower of Africa" (UNEP) due to the abundance of water resources and
the presence of numerous mountains and plateaus. 2010),respectively.
With a population of roughly 114.9 million in 2020 (PRB, 2020), the nation is also
the second-most populous in Africa. With more than 80 ethnic groups represented
in the population, which practices some form of religion in the majority, there is a
very diverse population. Ethiopia has Addis Ababa University. Email:
feyeraSenbeta@aau.edu.et
It also has a variety of historical, cultural, geographic, archeological, and
ecological resources. This region, which covers an area of roughly 1 million square
kilometers, is well known for the diversity and origin of humans. It is also Africa's
tenth-largest country, and it has abundant water and land resources. The
relationship between the state and society has been marked by conflict,
disagreement, and state supremacy over the last three successive regimes, which
has ruined opportunities for national development. Ethiopia needs to improve its
social, economic, and political systems for a better future and the welfare of its
people if it is to escape poverty and underdevelopment.
Other areas of focus for future development must be unity in diversity, a good
working environment, and consistent, pro-poor policy.
The causes of Ethiopia's underdevelopment will also be covered in this essay,
along with suggestions for how the nation might be encouraged to develop. The
paper will have two main sections and a number of sub-sections. Ethiopia's
underdevelopment will be discussed in the first section, and recommendations or
potential solutions for human development in Ethiopia will be covered in the
second section. The paper's main goals were to understand underdevelopment,
identify Ethiopia's primary causes of underdevelopment, and suggest ways to move
Ethiopia toward development on all fronts. This essay will employ the method of a
literature review to examine pertinent, reputable journals, research papers, research
books, and book chapters in order to draw a conclusion.

1.2 Objective

The purpose of the term paper is to discuss the primary reasons for Ethiopia's
underdevelopment and to provide suggestions or options for the country's
overall development.

1.3 Methodology

A number of secondary data sources were used to collect the data. Review of
pertinent reputable journals, research papers, research books, and book
chapters. Information gathered from books, journals, newspapers, as well as
other publicly available documents.

1.4 Terminology definition

Underdevelopment
Underdevelopment is not just the opposite of development; rather, it is a unique
condition that emerged in the post-colonial era and prevents countries from
achieving their developmental objectives. This unique phenomenon was a result of
colonialism and neocolonialism. Almost all developing nations in the world
(including the majority of independent nations in Central and South America,
Africa, the Middle East, and Asia; the main exceptions being South Africa,
mainland China, Taiwan, and Israel) suffer greatly from underdevelopment, which
has a negative impact on their potential for growth and stability. The majority of
these nations either depended on or was colonies or semi-colonies of imperialist
powers. a state of economic affairs characterized by persistently low levels of
living along with absolute poverty, low income per capita, slow rates of economic
growth, low levels of consumption, inadequate health services, high rates of birth
and death, dependence on foreign economies, and restricted freedom to select from
a variety of pursuits that satisfy human needs. (Eleventh Edition, Todaro, 2012,
page 784).

According to Paul Baran, capitalism exploits the Third World because of its
fundamental traits. The capitalist world wants to maintain the underdeveloped
world as an indispensable hinterland. These less developed nations provided raw
materials and economic surplus for the wealthy nations. Baran asserts that the
majority of colonizers were "rapidly determined to extract the largest possible
gains from the host countries and to take their loot home" (1973: 274). Baran was
a supporter of the Marxist strategy for organizing the economy. The "lumpen-
bourgeoisie," which consists of moneylenders, real estate agents, and other
individuals who are viewed as parasitic and unproductive, was the first to waste a
large portion of these nations' surplus, and then domestic industrial producers who
were monopolistic and believed in discouraging competition.
Baran's obsession with the Soviet model of economic development compels one to
compare him to Marx and Gandhi, whose ideologies were admirable to think about
but impractical to put into practice.

Dependence on Aid and Assistance

Ethiopia has been and remains prone to drought resulting from natural and human
factors. Various sources (e.g., IIRR, 2007; Pankhurst, 1985) have indicated the
incidence of drought over the last many years. Since the early 1970s, however, the
magnitude, frequency, and impacts of drought have increased and extended to
large parts of the country (IIRR, 2007). Drought often exposed millions of people
to starvation/hunger and famine every year. Incapability to support afflicted
populations frequently forced governments to submit an appeal for international
development or humanitarian assistance. Ethiopia has been receiving aid in
different forms (Mousseau, 2005; Geda & Tafere, 2011; Hassan, 2013). Over the
years, foreign assistance has shown some successes, but they are not as great as
many thought due to the political, diplomatic, and economic interests of donors
and receivers (Geda and Tafere, 2011; Hunt, 2004; Mousseau, 2005).

Inadequate innovation, incentive and entrepreneurship its innovativeness.

Innovation is the driver of development and without innovative entrepreneurs, the

global community would not have been able to enjoy the tools and services that
provide people with a success today that far exceed its ancient predecessors. More
entrepreneurial activity is shifted toward productive entrepreneurship that
strengthens economic development (Acemoglu & Johnson, 2005).
and cultural diversity, radical transformation of power and historical
background were a major part in hindering to form meaning full land reform
and overall development, rather it resulted for different approaches in the land
tenure system at the imperial, military and FDRE regime [7]. (Getahun Hassen
18 December,2021 page-17)

1.5 Reason Why Ethiopia is poor

 Corruption
 Poor Government bureaucracy
 Insufficient infrastructure
 High illiteracy rate
 Unfavorable business environment
 Insufficient skilled man power
 Poor project formulation and evaluation
 Lack of political stability
 Dependence on aid
 Inadequate innovation
 Land resource and the related problem, etc.

There is no consensus on the reasons why underdevelopment exists. Various

explanations are offered in this regard by different scholars. However, the major
causes of underdevelopment of Ethiopia are discussed below (KATANA, 2022).

1.5.1 Corruption:

One of the biggest problems in Ethiopia today is corruption. Corruption can take
many forms, and it might be challenging to understand what counts as corruption
and what doesn’t. In this context, I mean the abuse of a position of power by public
officials for private interests or personal gain. This happens when people entrusted
with power use their authority for their benefit. They need to use their already
scarce resources on corruption, such as paying public officials salaries or funding
more projects. Ethiopia has been ruled by corrupt politicians and corruption is the
reason why ethiopia has much poverty rate (KATANA, 2022).

1.5.2 Poverty:

The poorest 10% of Ethiopia’s population has not experienced any growth in
consumption since 2005. Many of these households are chronically poor, and tend
to be larger, less educated, and have fewer productive assets than other households
(KATANA, 2022).

1.5.3 Poor government bureaucracy:

Most of government’s officials have implemented policies that prevent the

country from development. These governments have often been responsible for
economic crisis and political instability. The result is terrible management,
complex bureaucracy

1.5.4 Insufficient infrastructure:

Most area of the countries have insufficient infrastructure. This refers to roads,
railways, and airports that are not adequate to allow trade or tourism. The lack of
infrastructure in Ethiopia today is a significant obstacle to development because it
limits people’s ability to do business across borders (KATANA, 2022).

1.5.5 High Levels of Illiteracy:

Although many regional states have compulsory primary education, this does not
apply to secondary and tertiary education. Many parents do not send their children
to school because they need them to work and contribute to the economy. Many
regions also have problems with teachers who are not adequately trained or paid
enough money. Students do not receive proper lessons and can’t get a good
education. Illiteracy is common in Ethiopia today, limiting the development of
people throughout the country (KATANA, 2022).

1.5.6 Unfavorable business environment:

Many Ethiopian businesses operate under trying conditions. On the one hand,
many states have a limited stock of natural resources and business opportunities for
investors. On the other side, many companies face high taxes and high-interest
rates, poor infrastructure, and insufficient access to financial services such as loans
and credit cards easily (KATANA, 2022).

1.5.7. Insufficient Skilled man power:

Another cause of underdevelopment in Ethiopia today is the lack of skilled man

power. Most regional states do not have enough qualified teachers, doctors,
engineers, etc., so they cannot offer their services in these parts of society. There
are often too few job opportunities for well-qualified professionals to make a living
in Ethiopia today, so they must look elsewhere. This shortage also means that
education and health care in Ethiopia is often unsatisfactory.

1.5.8. Poor project monitoring and evaluation:

It is often said that beginning building a road or any project in Ethiopia is easy but
challenging to finish and maintain (KATANA, 2022).

1.5.9. Lack of political commitment:

This means that much-needed international aid money intended for development is
misappropriated and used or there may be a lack of investment in necessary
infrastructure. In addition, politicians sometimes misuse public funds when they
are holding office. This often leads to a lack of transparency and undermines good
governance (KATANA, 2022).

1.5.10. Dependence on Aid and Assistance:

Ethiopia has been and remains prone to drought resulting from natural and human
factors(Geda and Tafere, 2011; Hunt, 2004; Mousseau, 2005).

1.5.11. Inadequate Innovation, Incentive and Entrepreneurship its

innovativeness.

Innovation is the driver of development and without innovative entrepreneurs, the

global community would not have been able to enjoy the tools and services that
provide people with a success today that far exceed its ancient predecessors
(Acemoglu & Johnson, 2005).

1.5.12. Land resource and the related problems:

Land is an essential natural resource, both for the survival and prosperity of
humanity, and for the maintenance of all terrestrial ecosystems. Land resource
sometimes referred to as dry land, which is the solid surface of the Earth that is not
permanently covered by water ( Getahun Hassen 18 December,2021 page-17)

1.5.13. Women and Development

Women have a very distinct cultural role in traditional Ethiopian society.
Especially in rural communities, woman are expected to “cook, clean and do
laundry (Peace Corps, 2010).” However, that role is beginning to change as
Ethiopian woman make progress in gaining equality in Ethiopian society. In 1993,
The National Policy on Women was formulated, “aimed to create appropriate
structures within government offices and institutions to establish equitable and
gender-sensitive public policies (EthioEmbassy, 1998).” Until the 1990’s,
women’s affairs had not ever officially been addressed by the Ethiopian
government.
While women have traditionally played an important part in Ethiopian society and
economy, their efforts were not appreciated and they have been denied their fair
share of the wealth. “The democratic process is able to grow and develop
effectively when all people are given equal encouragement to exercise their
democratic rights, and when women can experience the benefits of their labor on
an equal basis with men (Ethio Embassy, 1998).” While strides towards equality
have been made, Ethiopia still has a long way to go towards women’s rights.
5. Conclusions and Recommendations
The causes of Ethiopia's underdevelopment will also be covered in this essay,
along with suggestions for how the nation might be encouraged to develop. The
paper will have two main sections and a number of sub-sections. Ethiopia's
underdevelopment will be discussed in the first section, and recommendations or
potential solutions for human development in Ethiopia will be covered in the
second section. The paper's main goals were to understand underdevelopment,
identify Ethiopia's primary causes of underdevelopment, and suggest ways to move
Ethiopia toward development on all fronts. Ethiopia's real gross domestic product
(GDP) growth slowed to 6.1 percent in 2019/20 as a result of the COVID-19
pandemic. Ethiopia's economy saw strong, broad-based growth averaging 9.4
percent per year from 2010/11 to 2019/20. The growth was primarily driven by
industry, particularly construction, and services. Agriculture's contribution to
growth in 2019–20 was slightly better than it was in 2018–19 because it was
unaffected by the COVID–19 pandemic. Demand-side growth is explained by both
private consumption and public investment, with the latter playing an increasingly
significant role.
How Can Ethiopia Address These Issues, or What Are the Possibilities or
Suggestions Made? Ethiopia's underdevelopment will end only when the regional
leaders make greater efforts to raise living standards by cooperating on political
decisions and demonstrating strong commitment to development.

Following is a list of some hypotheses or suggestions regarding the reasons for

Ethiopia's underdevelopment. Increase opportunities for national and international
investment, provide a legal and fiscal framework, support NGOs in humanitarian
activism, develop information technology and get technical support and
cooperation on poverty reduction, improve export supply capabilities from primary
commodities to value added, reform domestic trade policy, and create conducive
bureaucrat environment, Control population growth, ensure good administration,
establish strong and well-structured resource and environmental conservation
institutions that can last a long time, and maintain democratic politics by creating
an environment that encourages rural and urban land use in light of their role in
improving resource allocation, efficiency, productivity, and mobility. In this case,
everything mentioned helps to advance Ethiopia's development.
REFERENCE
Atlas. (2022). Science fiction. SCRIBD.

KATANA, A. (2022). Ten man cause of under development in africa. Nasonga Media .

PETERSON, A. (2018). Climate of Ethiopia.

Isbister, J. (2006). Promises not kept: Poverty and the betrayal of Third World development.
Bloomfield, CT: Kumarian Press.
Smith, B. C. (2013). Understanding third world politics: Theories of political change and development.

Abuiyada, R. (2018). Traditional development theories have failed to address the needs of the

majority of people at grassroots levels with reference to GAD. International Journal of

Business and Social Science 9(9):115-119.
Acemoglu, D. & Robinson, J. (2012). Why nations fail. New York: Crown Business.
Acemoglu, D., & Johnson, S. (2005). Unbundling institutions. Journal of Political
Economy 113(5): 949-995.
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Bandyopadhyaya, J: Climate and World Order: an inquiry into the natural cause of underdevelopment
Frank, Andre F: On Capitalist Underdevelopment
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