Archives for 2014

Ethiopia: International Borrowing and Its Consequences

By Daniel Teferra (PhD)* Governments in rich as well as poor countries borrow money from domestic and international markets.  In rich countries, government borrowing stimulates the private economy. It creates jobs, raises incomes and improves standard of living of the majority of the population. However, in poor countries, government borrowing does not generally produce the...

America’s Africa: Command- or Market-Based?

By Daniel Teferra (PhD)* There is a familiar argument that in the early stages of economic development, African countries do not need democracy. They just need command growth. Democracy will naturally follow. Southeast Asian countries, such as, South Korea are given as examples. However, command growth cannot lend itself to democracy because the two are...

Ethiopia: Inflationary Growth and Food Deficiency

By Daniel Teferra (PhD)* Ethiopia is not a land of famines despite the publicity and sentiment surrounding the famines of the 1970s and 1980s.  Ethiopia is potentially rich. Transforming just one of the fertile provinces through modern farming can feed the entire nation. It is ironic that wheat tops the list of imported food stuff...

Ethiopia in Horn of Africa

By Daniel Teferra (PhD)* Geographically, the Horn of Africa today consists of Djibouti, Eritrea, Ethiopia and Somalia. In 1936, Italian colonialists captured Ethiopia and combined it with their existing colonies of Eritrea and Italian Somaliland to form their Italian East Africa. Realizing the enormous economic potential of this region, the Italians allocated 133 million British...

Africa: From Ujamaa to Developmental State

By Daniel Teferra (PhD)* From Julius Nyerere’s Ujamaa to Meles Zenawi’s developmental state, the model of economic development in Africa has not changed much.  It is still an anti-market, socialist paradigm.  Its main argument is that the task of economic development should be handled by the state rather than the free market. The intellectual origin...