SaveSave story

The world's fastest growing economy, in one of its poorest nations

An Ethiopian policeman looks at his mobile phone while people dry their clothes in Lalibela, Ethiopia. Photo: Eric Lafforgue/Art in All of Us/Corbis via Getty Images

The world's fastest growing economy is not India (6.7% in 2017) or China (6.8%), but Ethiopia, according to a World Bank estimate that puts the East African country's 2017 growth at 8.5% and projects 8.2% growth in 2018, ranking second only to Ghana (8.3%).

The big picture: With 102 million people, Ethiopia is the 2nd most populous country in Africa and the 12th most populous on earth. It's also one of the world’s poorest countries —sitting just above Haiti and below Afghanistan in terms of GDP per capita — and its rapid growth has brought millions out of extreme poverty. But ethnic violence, a government crackdown and high unemployment are putting "one of Africa’s brightest success stories" at risk, per Eurasia Group's Signal newsletter.

A sustained boom

  • The rapid growth isn't new. Ethiopia's economy grew by an average of 10.5%/yr. between 2005 and 2015.
  • As of 2000, 56% of Ethiopians lived on less than $1.25 per day, the highest rate in the world at that time, per Quartz. That percentage dropped to 31% by 2011 and has continued to fall.
  • Ten years ago, mobile phones were virtually non-existent in Ethiopia despite being fairly common in some parts of Africa. Now there are 50 cell phones for every 100 Ethiopians — low compared to more developed countries but high when you consider only 24% of the country had access to electricity as of 2013, the most recent available statistics.
  • Agriculture still dominates the economy, with coffee as the leading export, but half of Ethiopia's GDP growth from 2004 to 2014 "came from services, like hospitality and transportation, which was mostly a result of country’s urbanization," per Quartz.

China's Role

  • When the African Union built its $100 million headquarters in Addis Ababa, Ethiopia's capital, it was funded by the Chinese.
  • China built Addis Ababa's airport, the ring road around the city and a major highway. China has also invested in energy and rail projects in Ethiopia.
  • Per a 2010 Irish Times piece: "Besuited Chinese businessmen can be seen discussing deals in Addis hotel lobbies, while engineers and others fresh from working on road and telecommunications projects or building power stations and water supply systems haggle for souvenirs in the city’s sprawling Merkato before flying home to Beijing."

Troubling trends

From the Signal newsletter:

"Ethiopia is now burdened with severe wealth inequality, high unemployment, particularly for young people, and deadly ethnic unrest. In response to intensifying protests, the government declared a state of emergency in October 2016 and in the ensuing months arrested 29,000 people, according to the country’s defense ministry. The emergency order was lifted in August 2017, but protests have continued."

Khorri Atkinson 3 hours ago
SaveSave story

NYT: Mueller witness tried to influence White House on Gulf states

Interviews and previously undisclosed documents revealed that a witness in Robert Mueller's probe had worked for over a year to convert a Republican fundraiser into a White House influencer to help usher in deals on behalf of Saudi Arabia and the United Arab Emirates, the New York Times reports.

The backdrop: George Nader, a political adviser of the U.A.E. and Elliott Broidy, the RNC's deputy finance chair, reportedly urged the White House to dismiss Secretary of State Rex Tillerson's support of combative approaches to Iran and Qatar. In another case, Nader promised Broidy over a $1 billion in contracts for his private security company in exchange for deals.

David Philips 5 hours ago
SaveSave story
Expert Voices

Russian obstruction on Syria at UN Security Council demands response

United Nations High Commissioner for Human Rights Zeid Ra'ad Al Hussein speaking during a press conference at the UN Offices in Geneva.
UN High Commissioner for Human Rights Zeid Ra'ad al-Hussein. Photo: Fabrice Coffrini / AFP via Getty Images

Russia used a procedural vote on Monday to prevent UN Human Rights Commissioner Zeid Ra’ad al-Hussein from presenting on human rights conditions in Syria to the UN Security Council (UNSC).

Why it matters: To date, Russia has vetoed nine resolutions aimed at intensifying pressure on Syria’s Bashar al-Assad, moves that not only counter U.S. interests but undermine the international system.