ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE<br />The Rural-Urban Transformation in Ethiopia: <br />Implications for Developme...
Ethiopia Strategy Support Program – II (2008-2012)<br />Goal: Enhance national capacity for evidence-based policies for pr...
Plan of Presentation<br />Ethiopia’s changing economic landscape<br />Structural shifts: sectoral and spatial<br />A brand...
Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture...
Structural Transformation<br />Economic transformation (share of agriculture in total GDP)<br />Comparisons with other Eas...
Production and Real Prices of Major Cereals in Ethiopia, 2000/01 to 2008/09<br />Source: Dorosh and Ahmed (2009).<br />6<b...
Ethiopia: Economic Structure1999/00 – 2008/09<br />Source: Calculated from World Bank, World Development Indicators data. ...
Economic Transformation in East Africa:Agricultural Share in GDP, 1980s-2000s<br />Source: Calculated from World Bank, Wor...
Economic Transformation in East Africa:Agricultural Share in GDP, 1980-2008<br />Source: Calculated from World Bank, World...
Ethiopia: Industrial Output and Growth1999/00 to 2008/09<br />Source: Calculated from Ministry of Finance national account...
Topography within Ethiopia is varied and fragmented within and among regions.<br />11<br />
Annual rainfall varies across space<br />Rainfall is highest and least variable in the western part of the country and the...
Agro-ecological Zones (AEZ’s): “3 Ethiopias” split into 5 AEZs<br />Source: 2005/06 EDRI Social Accounting Matrix.<br />13...
Agricultural Value Added by Agro-Ecological Zone<br />Zone 2: Rainfall sufficient highlands (cereal – based)<br />Zone 3: ...
Agricultural Growth and Poverty CAADP CGE Baseline Scenario<br /><ul><li>Agriculture
Land cultivated for each crop follows medium-term trends: total land cultivated increases 2.6% per year, 2009-2015
Land growth varies across region (1.2% per year in rainfall sufficient areas, 3.2% per year in drought-prone areas, 3.7% p...
Crop yield increases account for one-third of the crop production growth
Overall agricultural GDP growth: 4.0%/year
Note: population growth rate is 3.0 percent/year
Non-agricultural output growth based on historical medium-term trends:
Manufacturing: 6.5% per year
Services: 6.7% per year</li></ul>15<br />Source: Dorosh and Thurlow (2009), ESSP2 Discussion Paper No. 2.<br />
Ethiopia: Impacts of Growth on Poverty<br />16<br />Source: Dorosh and Thurlow (2009), ESSP2 Discussion Paper No. 2.<br />
Ethiopia’s Spatial Transformation:Urbanization of Population and Economic Activity<br />Travel times and agglomeration<br ...
Agglomeration Index: measuring urban expansion<br />In order to standardize urbanization measurements, we use methodology ...
Travel Time and Agglomeration Index (Urbanization)<br />Euclidean Distance (straight line distance) or distance in kilomet...
Ethiopia: Urbanization<br />20<br />Ethiopia is urbanizing faster than people think!!!<br />
Ethiopia: Alternative Urbanization Estimates<br />21<br />
Urbanization in East Africa2000 to 2005<br />Source: Calculated from World Bank, World Development Report data. <br />22<b...
Ethiopia: Urban Population by City Size2007/08<br />Source: World Bank Development Report 2009, World Development Indicato...
Ethiopia: Population by City Size<br />24<br />Population (thousands) by City Size  (Cities 20k and greater)<br />
Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture...
Road Infrastructure and UrbanizationTravel Time 1984<br />26<br />
Road Infrastructure and Urbanization Travel Time 1994<br />27<br />
Road Infrastructure and Urbanization Travel Time 2007<br />28<br />
Ethiopia: Percent Population connected to Urban Agglomeration<br />29<br />Source: Schmidt and Kedir (2009)<br />
Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 1984<br />In 1984, Addis Ababa and other larger cities were ...
Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 1994<br />By 1994, Ethiopia’s cities grew, and the country’s...
Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 2007<br />By 2007, urban linkages were clearly visible throu...
Population Density and Agglomeration: 1994<br />(Increasing Urbanization in SNNPR)<br />33<br />
Population Density and Urbanization: 2007 <br />(Increasing Urbanization in SNNPR)<br />34<br />
Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture...
Ethiopia: Electricity Generation Capacity1958 to 2011*<br />36<br />Source: Calculated using CSA Survey of Manufacturing (...
Ethiopia: Electricity Generation Capacity1958 to 2011*<br />37<br />Source: Calculated using CSA Survey of Manufacturing (...
Ethiopia: Electricity Generation Capacity1958 to 2011*<br />38<br />Source: Calculated using CSA Survey of Manufacturing (...
Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture...
Ethiopia: Fixed Line and Cellular Telephones2003 to 2010<br />40<br />Sources: ITU (2009). Information Society Statistical...
Ethiopia: Fixed Line and Cellular Telephones2003 to 2010<br />41<br />Sources: ITU (2009). Information Society Statistical...
Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture...
Net Primary School Enrollment<br />43<br />Source: World Bank World Development Indicators. <br />
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Rural-Urban Transformation in Ethiopia - Implications for Development Strategies

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Ethiopian Development Research Institute (EDRI) and International Food Policy Research Institute (IFPRI), Seventh International Conference on Ethiopian Economy, June 24, 2010

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Rural-Urban Transformation in Ethiopia - Implications for Development Strategies

  1. 1. ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE<br />The Rural-Urban Transformation in Ethiopia: <br />Implications for Development Strategy<br />Paul Dorosh and Emily Schmidt<br />IFPRI ESSP-II<br />Ethiopian Economic Association Conference<br />June 24, 2010<br />Addis Ababa<br />1<br />
  2. 2. Ethiopia Strategy Support Program – II (2008-2012)<br />Goal: Enhance national capacity for evidence-based policies for pro-poor growth<br />Objectives<br />Generate policy research results to fill key knowledge gaps<br />Build a stronger and more integrated knowledge support system<br />Strengthen the capacity of Ethiopian policy research institutions <br />Contribute to the design and implementation of a national monitoring and evaluation system for the rural sector<br />Main/Major Activities<br />Joint evidence-based, policy-relevant research with EDRI and other institutions: (ex. determinants of agricultural productivity, implications of foreign exchange rationing, rural-urban transformation, watershed investments)<br />Capacity building through institutional support to EDRI, CSA, MoARD, training courses. and funding of five PhD students at international universities<br />Dissemination of research results through workshops, conferences, internet and publications<br />Donors: USAID, DFID, CIDA, Irish Aid<br />2<br />
  3. 3. Plan of Presentation<br />Ethiopia’s changing economic landscape<br />Structural shifts: sectoral and spatial<br />A brand new world for economic development<br />Research papers<br />Rural-Urban Migration in Ethiopia (Valerie Mueller and Tassew Woldehanna)<br />Trends in Household Expenditure and Welfare (Kibrom Tafere and Alemayehu Seyoum Taffesse)<br />Rural and Urban Policies Affecting Spatial and Sectoral Linkages Getnet Alemu) <br />CGE Analysis of the Rural-Urban Transformation (Paul Dorosh and James Thurlow)<br />3<br />
  4. 4. Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture)<br />Spatial (urbanization)<br />A new era for economic development<br />Infrastructure (expanding road networks)<br />Electricity generation and use (even exports?!)<br />Telecommunications (mobile phones and internet)<br />Education and health<br />4<br />
  5. 5. Structural Transformation<br />Economic transformation (share of agriculture in total GDP)<br />Comparisons with other East African countries<br />Rapid agricultural growth<br />Industrial growth<br />Growth linkages and ADLI<br />Agricultural growth and poverty reduction (CAADP Analysis)<br />5<br />
  6. 6. Production and Real Prices of Major Cereals in Ethiopia, 2000/01 to 2008/09<br />Source: Dorosh and Ahmed (2009).<br />6<br />
  7. 7. Ethiopia: Economic Structure1999/00 – 2008/09<br />Source: Calculated from World Bank, World Development Indicators data. <br />7<br />
  8. 8. Economic Transformation in East Africa:Agricultural Share in GDP, 1980s-2000s<br />Source: Calculated from World Bank, World Development Indicators. <br />8<br />
  9. 9. Economic Transformation in East Africa:Agricultural Share in GDP, 1980-2008<br />Source: Calculated from World Bank, World Development Indicators data. <br />9<br />
  10. 10. Ethiopia: Industrial Output and Growth1999/00 to 2008/09<br />Source: Calculated from Ministry of Finance national account statistics. <br />10<br />
  11. 11. Topography within Ethiopia is varied and fragmented within and among regions.<br />11<br />
  12. 12. Annual rainfall varies across space<br />Rainfall is highest and least variable in the western part of the country and the western slopes of mountains<br />12<br />
  13. 13. Agro-ecological Zones (AEZ’s): “3 Ethiopias” split into 5 AEZs<br />Source: 2005/06 EDRI Social Accounting Matrix.<br />13<br />
  14. 14. Agricultural Value Added by Agro-Ecological Zone<br />Zone 2: Rainfall sufficient highlands (cereal – based)<br />Zone 3: Rainfall sufficient highlands (enset – based) – most of SNNPR<br />Zone 4: Drought prone<br />Source: 2005/06 EDRI Social Accounting Matrix.<br />14<br />
  15. 15. Agricultural Growth and Poverty CAADP CGE Baseline Scenario<br /><ul><li>Agriculture
  16. 16. Land cultivated for each crop follows medium-term trends: total land cultivated increases 2.6% per year, 2009-2015
  17. 17. Land growth varies across region (1.2% per year in rainfall sufficient areas, 3.2% per year in drought-prone areas, 3.7% per year in pastoralist areas)
  18. 18. Crop yield increases account for one-third of the crop production growth
  19. 19. Overall agricultural GDP growth: 4.0%/year
  20. 20. Note: population growth rate is 3.0 percent/year
  21. 21. Non-agricultural output growth based on historical medium-term trends:
  22. 22. Manufacturing: 6.5% per year
  23. 23. Services: 6.7% per year</li></ul>15<br />Source: Dorosh and Thurlow (2009), ESSP2 Discussion Paper No. 2.<br />
  24. 24. Ethiopia: Impacts of Growth on Poverty<br />16<br />Source: Dorosh and Thurlow (2009), ESSP2 Discussion Paper No. 2.<br />
  25. 25. Ethiopia’s Spatial Transformation:Urbanization of Population and Economic Activity<br />Travel times and agglomeration<br />Urbanization: Ethiopia and East Africa<br />Ethiopia: City Size<br />17<br />
  26. 26. Agglomeration Index: measuring urban expansion<br />In order to standardize urbanization measurements, we use methodology developed by Uchida and Nelson (2009):<br />Urban areas are identified spatially using specific thresholds:<br />A population density greater than 150 people per km2; <br />Populations located within 1 hour travel time to a city of at least 50,000 people.<br />City centers of at least 50,000 people<br />18<br />
  27. 27. Travel Time and Agglomeration Index (Urbanization)<br />Euclidean Distance (straight line distance) or distance in kilometers may not take into account specific localized biophysical factors <br />In order to measure travel time to a major city:<br />Estimation of Travel Times <br />A series of GIS layers are merged into a ‘friction layer’ which represents the time required to cross each pixel<br />Road type and class<br />Paved – all weather<br />Paved – dry weather<br />Gravel – all weather<br />Gravel – dry weather<br />Earth<br />Waterbodies<br />Landcover<br />Slope<br />19<br />
  28. 28. Ethiopia: Urbanization<br />20<br />Ethiopia is urbanizing faster than people think!!!<br />
  29. 29. Ethiopia: Alternative Urbanization Estimates<br />21<br />
  30. 30. Urbanization in East Africa2000 to 2005<br />Source: Calculated from World Bank, World Development Report data. <br />22<br />
  31. 31. Ethiopia: Urban Population by City Size2007/08<br />Source: World Bank Development Report 2009, World Development Indicators.<br />Note: Average agglomeration for 2000 is calculated using 2005 population weights.<br />
  32. 32. Ethiopia: Population by City Size<br />24<br />Population (thousands) by City Size (Cities 20k and greater)<br />
  33. 33. Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture)<br />Spatial (urbanization)<br />Infrastructure (expanding road networks)<br />Electricity generation and use (even exports?!)<br />Telecommunications (mobile phones and internet)<br />Education and health<br />25<br />
  34. 34. Road Infrastructure and UrbanizationTravel Time 1984<br />26<br />
  35. 35. Road Infrastructure and Urbanization Travel Time 1994<br />27<br />
  36. 36. Road Infrastructure and Urbanization Travel Time 2007<br />28<br />
  37. 37. Ethiopia: Percent Population connected to Urban Agglomeration<br />29<br />Source: Schmidt and Kedir (2009)<br />
  38. 38. Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 1984<br />In 1984, Addis Ababa and other larger cities were primarily confined to its city administrative boundaries.<br />There were only a few cities with greater than 50,000 people<br />Limited road networks and more dispersed population characterized the demographic landscape.<br />30<br />
  39. 39. Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 1994<br />By 1994, Ethiopia’s cities grew, and the country’s transportation network expanded<br />Urban corridors formed between Addis Ababa and Nazaret<br />Shashamene and Awasa also formed an urban network between Oromia and SNNP regions.<br />Jimma urbanization is also expanding along key road networks<br />31<br />
  40. 40. Urban Expansion: Greater Addis Ababa<br />Agglomeration Index 2007<br />By 2007, urban linkages were clearly visible throughout Oromia, SNNP, and Amhara regions. <br />Addis Ababa expanded to connect Sebeta and Bishoftu, and Asela in the South. <br />Addis Ababa also connected to Ambo in the west, and DebreBerhan in the east<br />Jimma had grown into a southwestern hub with opportunities to link with Nekemte to the north.<br />32<br />
  41. 41. Population Density and Agglomeration: 1994<br />(Increasing Urbanization in SNNPR)<br />33<br />
  42. 42. Population Density and Urbanization: 2007 <br />(Increasing Urbanization in SNNPR)<br />34<br />
  43. 43. Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture)<br />Spatial (urbanization)<br />Infrastructure (expanding road networks)<br />Electricity generation and use (even exports?!)<br />Telecommunications (mobile phones and internet)<br />Education and health<br />35<br />
  44. 44. Ethiopia: Electricity Generation Capacity1958 to 2011*<br />36<br />Source: Calculated using CSA Survey of Manufacturing (various years) and Ethiopian Electric Power Corporation data. <br />Notes: Figures for 2008-10 based on additional capacity from Tekeze I (300 Mw) in 2009; and TanaBeles (460 Mw) in 2010. 2011 figures is 2010 figure plus Gile Gibe II (420 Mw) for which the tunnel collapsed in December, 2009.<br />
  45. 45. Ethiopia: Electricity Generation Capacity1958 to 2011*<br />37<br />Source: Calculated using CSA Survey of Manufacturing (various years) and Ethiopian Electric Power Corporation data. <br />Notes: Figures for 2008-10 based on additional capacity from Tekeze I (300 Mw) in 2009; and TanaBeles (460 Mw) in 2010. 2011 figures is 2010 figure plus Gile Gibe II (420 Mw) for which the tunnel collapsed in December, 2009.<br />
  46. 46. Ethiopia: Electricity Generation Capacity1958 to 2011*<br />38<br />Source: Calculated using CSA Survey of Manufacturing (various years) and Ethiopian Electric Power Corporation data. <br />Notes: Figures for 2008-10 based on additional capacity from Tekeze I (300 Mw) in 2009; and TanaBeles (460 Mw) in 2010. 2011 figures is 2010 figure plus Gile Gibe II (420 Mw) for which the tunnel collapsed in December, 2009.<br />
  47. 47. Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture)<br />Spatial (urbanization)<br />Infrastructure (expanding road networks)<br />Electricity generation and use (even exports?!)<br />Telecommunications (mobile phones and internet)<br />Education and health<br />39<br />
  48. 48. Ethiopia: Fixed Line and Cellular Telephones2003 to 2010<br />40<br />Sources: ITU (2009). Information Society Statistical Profiles 2009 - Africa, International Telecommunication Union (ITU). <br />Ethiopian Telecommunications Corporation (ETC). ETC Strategic Plan. http://www.ethionet.et/aboutus/visionmission.html<br />
  49. 49. Ethiopia: Fixed Line and Cellular Telephones2003 to 2010<br />41<br />Sources: ITU (2009). Information Society Statistical Profiles 2009 - Africa, International Telecommunication Union (ITU). <br />Ethiopian Telecommunications Corporation (ETC). ETC Strategic Plan. http://www.ethionet.et/aboutus/visionmission.html<br />
  50. 50. Ethiopia’s Changing Economic Landscape<br />Structural shift of the economy <br />Sectoral (declining share of agriculture)<br />Spatial (urbanization)<br />Infrastructure (expanding road networks)<br />Electricity generation and use (even exports?!)<br />Telecommunications (mobile phones and internet)<br />Education and health<br />42<br />
  51. 51. Net Primary School Enrollment<br />43<br />Source: World Bank World Development Indicators. <br />
  52. 52. Ethiopia Food Security Index<br />44<br />Source: Household Income Consumption Expenditure Survey, and the Demographic and Health Survey from 1999/2000 and 2004/05<br />*The calculated calorie-based undernutrition for Ethiopia is based on the undernourishment cutoff of 1,990 kilocalories per day<br />**Proportion of underweight children less than five years of age is calculated as a weight-for-age was less than two standard deviations <br />
  53. 53. Plan of Presentation<br />Ethiopia’s changing economic landscape<br />Structural shifts: sectoral and spatial<br />A brand new world for economic development<br />Research papers<br />Rural-Urban Migration in Ethiopia (Valerie Mueller and Tassew Woldehanna)<br />Trends in Household Expenditure and Welfare (Kibrom Tafere and Alemayehu Seyoum Taffesse)<br />Rural and Urban Policies Affecting Spatial and Sectoral Linkages Getnet Alemu) <br />CGE Analysis of the Rural-Urban Transformation (Paul Dorosh and James Thurlow)<br />45<br />
  54. 54. Rural – Urban Migration<br />46<br />Source: de Brauw et al., (2010). <br />
  55. 55. Rural – Urban Expenditure and WelfarePoverty Incidence<br />47<br />
  56. 56. ERHS: Self-Reported Perceptions of Poverty<br />48<br />
  57. 57. Land Policies and Migration<br />Regional governments' proclamations restrict access to rural land by prescribing the need to be a rural resident in that particular region as a condition for acquiring rural land free of charge.<br />No right to transfer land right on sale or in exchange with another property<br />No easy transferability of land rights: transfer of use right in the form of inheritance and donation is allowed only to the right holder's family members who are residing in the rural kebele and are engaged or wish to engage in agriculture.<br />These policies inhibit migration from rural areas.<br />49<br />
  58. 58. Implications for Development StrategyCGE Analysis<br />Implications on accelerated rural-urban migration<br />Analysis of alternative investments<br />Large urban centers<br />Small urban centers<br />Rural<br />50<br />
  59. 59. Conclusions: Development Strategy<br />Sectoral allocation of public investments<br />Agriculture Development Led Industrialization (ADLI) or greater emphasis on urban investment?<br />Land and Migration Regulations:<br />Easing of regulations?<br />Prohibition of sale of land, loss of land rights for those who leave rural areas<br />Registration requirements for new migrants<br />Reliable empirical economic analysis can shed light on these issues<br />Hopefully, these papers will spur this research. <br />51<br />
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