Foreign aid to Ethiopia
Encyclopedia
After World War II
, Ethiopia
began to receive economic development aid
from the more affluent Western countries. Originally the United Kingdom
was the primary source of this aid, but they withdrew in 1952, to be replaced by the United States
. Between 1950 and 1970, one source estimated that Ethiopia received almost US$600 million in aid, $211.9 million from the US, $100 million from the Soviet Union
and $121 million from the World Bank
. Sweden
trained the Imperial Bodyguard and India
at one point contributed the majority of foreign-born schoolteachers in the Ethiopian educational system
.
This aid dried up under the military regime that followed the Ethiopian revolution, except for food aid during the mid-1980s. While the Soviet Union
provided extensive amounts of aid, either directly or through its allies like East Germany and North Yemen
, this was predominantly in the form of either military aid, or ideological education; these ended with the close of the Cold War
. Large aid inflows resumed in the early 1990s aimed at reconstruction and political stabilization but declined during the war with Eritrea
. The post-2000 period, however, has seen a resumption of large disbursements of grants and loans from the United States, the European Union
, individual European nations, Japan
, the People's Republic of China
, the World Bank, and the African Development Bank
. These funds totaled US$1.6 billion in 2001.
In 2001 Ethiopia qualified for the World Bank-International Monetary Fund
-sponsored Highly Indebted Poor Countries (HIPC) debt reduction program, which is designed to reduce or eliminate repayment of bilateral loans from wealthy countries and international lenders such as the World Bank. In Ethiopia’s case, the program aims to help stabilize the country’s balance of payments
and to free up funds for economic development. A noteworthy advance toward these goals came in 1999, when the successor states to the former Soviet Union, including Russia
, cancelled US$5 billion in debt contracted by the Derg
, a step that cut Ethiopia’s external debt in half. HIPC relief is expected to total almost US$2 billion.
In November 2007 the magazine The Economist
reported that there is tangible evidence that the foreign aid given to Ethiopia reaches the people it is meant to, based on a visit to the South of the country. Roads, schools and water systems are being built and "there are few complaints about corruption, a fact that continues to make Ethiopia popular with foreign donors". However, the article also notes that, despite almost a decade of well-intentioned development policies, Ethiopians remain mired in the most wretched poverty.
In March 2010, the BBC
claimed that it had evidence that millions of dollars, earmarked for victims of the Ethiopian famine of 1984-85, went to buy weapons. Rebel soldiers apparently diverting the funding to their organisation in an attempt to overthrow the government. However, following a complaint from the Band Aid Trust, the Editorial Complaints Unit of the BBC has carried out an investigation and concluded that the reporting had no evidence to support it, and the BBC has since apologized to the Trust for the 'misleading and unfair representation it created'.
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
began to receive economic development aid
Development aid
Development aid or development cooperation is aid given by governments and other agencies to support the economic, environmental, social and political development of developing countries.It is distinguished...
from the more affluent Western countries. Originally the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
was the primary source of this aid, but they withdrew in 1952, to be replaced by the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Between 1950 and 1970, one source estimated that Ethiopia received almost US$600 million in aid, $211.9 million from the US, $100 million from the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
and $121 million from the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
. Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
trained the Imperial Bodyguard and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
at one point contributed the majority of foreign-born schoolteachers in the Ethiopian educational system
Education in Ethiopia
Education in Ethiopia has been dominated by the Ethiopian Orthodox Church for many centuries until secular education was adopted in the early 1900s. Prior to 1974, Ethiopia had an estimated illiteracy rate well above 90% and compared poorly with the rest of Africa in the provision of schools and...
.
This aid dried up under the military regime that followed the Ethiopian revolution, except for food aid during the mid-1980s. While the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
provided extensive amounts of aid, either directly or through its allies like East Germany and North Yemen
North Yemen
North Yemen is a term currently used to designate the Yemen Arab Republic , its predecessor, the Mutawakkilite Kingdom of Yemen , and their predecessors that exercised sovereignty over the territory that is now the north-western part of the state of Yemen in southern Arabia.Neither state ever...
, this was predominantly in the form of either military aid, or ideological education; these ended with the close of the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
. Large aid inflows resumed in the early 1990s aimed at reconstruction and political stabilization but declined during the war with Eritrea
Eritrea
Eritrea , officially the State of Eritrea, is a country in the Horn of Africa. Eritrea derives it's name from the Greek word Erethria, meaning 'red land'. The capital is Asmara. It is bordered by Sudan in the west, Ethiopia in the south, and Djibouti in the southeast...
. The post-2000 period, however, has seen a resumption of large disbursements of grants and loans from the United States, the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, individual European nations, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, the World Bank, and the African Development Bank
African Development Bank
The African Development Bank Group is a development bank established in 1964 with the intention of promoting economic and social development in Africa...
. These funds totaled US$1.6 billion in 2001.
In 2001 Ethiopia qualified for the World Bank-International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
-sponsored Highly Indebted Poor Countries (HIPC) debt reduction program, which is designed to reduce or eliminate repayment of bilateral loans from wealthy countries and international lenders such as the World Bank. In Ethiopia’s case, the program aims to help stabilize the country’s balance of payments
Balance of payments
Balance of payments accounts are an accounting record of all monetary transactions between a country and the rest of the world.These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers...
and to free up funds for economic development. A noteworthy advance toward these goals came in 1999, when the successor states to the former Soviet Union, including Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, cancelled US$5 billion in debt contracted by the Derg
Derg
The Derg or Dergue was a Communist military junta that came to power in Ethiopia following the ousting of Haile Selassie I. Derg, which means "committee" or "council" in Ge'ez, is the short name of the Coordinating Committee of the Armed Forces, Police, and Territorial Army, a committee of...
, a step that cut Ethiopia’s external debt in half. HIPC relief is expected to total almost US$2 billion.
In November 2007 the magazine The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
reported that there is tangible evidence that the foreign aid given to Ethiopia reaches the people it is meant to, based on a visit to the South of the country. Roads, schools and water systems are being built and "there are few complaints about corruption, a fact that continues to make Ethiopia popular with foreign donors". However, the article also notes that, despite almost a decade of well-intentioned development policies, Ethiopians remain mired in the most wretched poverty.
In March 2010, the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
claimed that it had evidence that millions of dollars, earmarked for victims of the Ethiopian famine of 1984-85, went to buy weapons. Rebel soldiers apparently diverting the funding to their organisation in an attempt to overthrow the government. However, following a complaint from the Band Aid Trust, the Editorial Complaints Unit of the BBC has carried out an investigation and concluded that the reporting had no evidence to support it, and the BBC has since apologized to the Trust for the 'misleading and unfair representation it created'.
Further reading
- Getnet Alemu, "A case study of aid effectiveness in Ethiopia: Analysis of the health sector aid architecture", Wolfensohn Center for Development: Working Paper 9, April 2009.
- Adugna Lemi, "Anatomy Of Foreign Aid To Ethiopia: 1960-2003", University of Massachusetts, Boston website