Document Type

Article

Source

The International Journal of Management Sciences and Business Research

ISSN

2226-8235

Volume

1

Issue

11

First Page

87

Last Page

103

Publication Date

11-2012

Department

Barowsky School of Business

Abstract

Using the conceptual framework of a developmental state, forwarded by the Economic Commission for Africa, it was found that Ethiopia’s democratic developmental state is unique and operates differently from the Malaysian developmental state model. Economically, Ethiopia has recorded staggering economic growth since it adopted the developmental state. The Malaysian developmental state was developed to be market-oriented and as a result Malaysia’s GDP grew at 5.23 percent from 2005-2011. Malaysia’s incidence of poverty declined from 49% in 1970 to less than 5% in 2000. Ethiopia has focused on a planned developmental state, without speeding the direction of industrialization, and has achieved an average 9.9 percent growth rate in GDP from 2005-2011. With economic growth, the poverty reduction measured by poverty head count in Ethiopia has declined from 41.9 in 2005 to 29.6 percent in 2011. Although Ethiopia’s Human Development Index (HDI) has increased by 16% from 2005 to 2011, its HDI score is about 22% less than the average score of sub-Saharan countries. The poverty ratio of people living on less than $1.25 a day in Ethiopia is very close to about 30 percent. It means that those with low incomes have not benefitted from the staggering economic growth that much of the country has achieved in the last seven years. The theory of a developmental state model proposes that professional bureaucratic elites design, manage, and run autonomously the short and long range plans of a country. In the Ethiopian “Democratic Developmental State” the short and long term plans are controlled by the ruling party, EPRD. The public and private sectors are minimally involved in the planning process. The economic growth rate which Ethiopia achieved from 2005 to 2011 doesn’t operate in a fully market-friendly environment. Far from operating in a developmental state, Ethiopia operates under a centralized system. Also, in an era of economic globalism, the Malaysian type of developmental state model is outdated and is no longer relevant for Ethiopia. Therefore, to achieve optimal sustainable development, and thereby feed its people, Ethiopia must focus on an integrated, environmentally sensitive, and cooperative agriculturally-based type of development model.

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Copyright: © 2012 The Author(s)

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Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

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