Ethiopian Economy essay part 2
Ethiopian Economy essay part 1
In actuality, some behemoths of Ethiopian economy remain under control of the government, including telecommunications, financial and insurance services, air and land transportation services, and retail. In such a situation, the government still has a considerable impact on the economic development of the country and businesses have to take into consideration policies conducted by the government, while planning their business activities.
Agriculture as the main branch of Ethiopian economy
Today, agriculture comprises the largest share of Ethiopian GDP with about 85% of the labor force employed in agriculture. Historically, agriculture played the leading part in the economic development of Ethiopia (Mauri, 2010). Favorable physical conditions and rich natural resources favorable for the development of agriculture stimulated the fast development of agriculture. Moreover, agriculture comprises a large part of the national export. This is why agriculture is strategically important for Ethiopia. In this regard, the cattle farming are particularly important but the health safety of Ethiopian agricultural products has become the primary concerns at the international market because of epidemics of the cattle in Ethiopia. Nevertheless, Ethiopian agriculture still keeps progressing and plays an important, if not to say the determinant, part in Ethiopian economy.
Tourism as one of the most prospective industries in Ethiopia
Tourism is a relatively new direction in the development of Ethiopian economy. In this regard, the development of tourism matches- the development of the global tourism industry. The development of the tourism industry opens new opportunities for Ethiopian economy to stimulate the fast growth of the GDP without rapid industrialization, consistent environmental changes and technological breakthrough, which is required to close the gap between Ethiopia and developed countries in terms of their industrial development (Ofcansky & Berry, 2010). In actuality, Ethiopian tourism industry focuses on the development of green tourism. The target customer group of Ethiopian tourism companies comprises westerners and tourists from well-developed countries mainly.
American Perspective on Ethiopian Economy
The export of minerals and natural resources does not play the determinant part in the economic development and international economic relations of Ethiopia, but the US views Ethiopia as the attractive country for investments in the gold mining industry. The export of gold comprises the core of Ethiopian export of minerals. At the same time, export of gold contributes to the overall growth of international economic relations of Ethiopia. Therefore, the US companies can enhance their position in Ethiopia, in case of the further cooperation between the US and Ethiopia.
The import of knowledge from the US implies the professional training of professionals from Ethiopia, who will work in Ethiopia. Today, Ethiopia needs well-qualified professionals, who can work in different fields and accelerate the economic growth and progress of Ethiopia as a regional leader. However, the training of Ethiopian professionals abroad often leads to brain drain, when Ethiopian students just stay in those countries, where they get their training.
In such a situation, the development of the local higher education is one of the priorities for Ethiopia along with the possible involvement of foreign educators. At the same time, Ethiopia still relies heavily on the training of its professionals abroad (Zewde, 2001).
The import of knowledge is crucial for the further enhancement of the position of Ethiopia in international markets because, in the post-industrial world, Ethiopia should focus on the development of high technologies and introduce innovations which can boost not only particular business development but also and mainly the economic development of the entire country.
In such a way, the US views Ethiopia as the economy with huge potential, where American companies can develop perspective industries, such as gold mining and where they can supply machinery, equipment and knowledge, through professional training of students from Ethiopia. Moreover, the US views Ethiopia as the country attractive for American investors, who can invest in the local agriculture, industrial production, gold mining, and other sectors. In addition, American companies can move production to Ethiopia, where the costs of the labor force is much lower that will open wider access to African and Middle Eastern markets.
Chinese Perspective on Ethiopian economy
China also views Ethiopia as an attractive country for its investments. However, unlike the US, China is also concerned with the possible export of weapons to Ethiopia, taking into consideration the tense situation in neighboring states. In addition, China views Ethiopia as the target market for its export-oriented companies. The fast growth of Ethiopian economy at the moment creates conditions for the fast growth of import and Chinese companies have a chance to take the lion share of the local market. In this regard, policies of Chinese companies will be different from American ones because Chinese companies are not interested in the move of production from China to Ethiopia but they are interested in the direct export of their products to Ethiopia. In addition, Chinese universities can become alternative and European ones, where Ethiopian students can learn successfully but pay lower fees compared to western universities.
Conclusion
Thus, Ethiopian economy is growing fast. The economic growth contributes to the overall improvement of the quality of life of Ethiopians. However, Ethiopian economy still remains to be agricultural with agriculture contributing a lion share to the national GDP. This is why Ethiopian economy needs further reforms and changes, among which the development of tourism is one of the most prospective directions, especially taking into consideration that the larger part of the population comprises young, economically active people.
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