Gov't defends economic policy

The Ethiopian government has defended its agricultural-led development strategy – the cornerstone of its economic policy for combating poverty.

In a statement, the information ministry stated that “rural-centred development" is the key to breaking the cycle of poverty that is gripping country.

But it also acknowledged that eventually it would turn to the industrial sector to reinforce economic growth in the impoverished country.

“It is important to note that without industrial development it is hardly possible to secure a fair share of benefits for our country from the global economy,” the statement pointed out.

Agriculture is the backbone of the Ethiopian economy, accounting for half the country’s GDP and also nine tenths of exports.

Coffee is the major foreign exchange earner and the country has the largest livestock population – at over 80 million animals – in Africa.

But major hurdles remain. Annual agricultural production is less than the population growth in the country, and already-small land holdings are shrinking.

Agricultural-led development aims to increase food production in the country – where each year some four million are dependent on aid – and in turn boost economic growth. According to experts, by stimulating farm incomes the demand for local industrialised goods will increase.

But critics have warned that the scale of rural poverty in Ethiopia – where most people live on less than US $1 a day – means the policy is unlikely to kickstart an already weak economy.