One key element for achieving sustainable development is the ability to broaden the source of growth as well as transforming and diversifying structural basis of an economy. Scholars agree that for an agrarian and developing economy to achieve sustainable development, it has to transform the structural basis of the economy from agriculture to industry. But the main or real question is: How could this be achieved?
Most successful Asian economies pursued an agricultural development-led industrialization pathway. In a similar fashion, Ethiopia envisions to becoming a lower middle income country by 2025 by transforming the structure of its economy and has prepared successive five year national plans to do so.
Finance and Economic Cooperation Ministry UN Agencies and Regional Economic Directorate Director Admasu Nebene says industrialization is all about transforming agriculture. “There is going to be a huge investment in agriculture to reinforce agro-processing. And the focuses [at the initial stage] are sectors including agro-processing, textile and leather. Those are the comparative advantages that the country has abundant resources on the ground,” he says responding to a question from The Ethiopian Herald during the UN Media Forum on the Global Goals for Sustainable Development (SDGs) last Monday.
The government has identified areas to build 17 agro-industrial parks across the nation. According to Admasu, the establishment of the parks is instrumental in transforming agriculture, which will be providing inputs, within 100 kms radius.
“Which means, mainly smallholders cannot, as business as usual, provide the required input to this agro-processing. So, there is going to be a focused and huge investment in transforming that smallholding agriculture in the process. Thus, when we talk about industrialization, we are talking about more investment in agriculture ─ transforming and making it ready to provide the required inputs to the industry,” he said.
On the other hand, there is common consensus among countries in Goal 9 of SDGs about the instrumental role of industrialization, innovation and technology to fully eradicate poverty. “No country achieved middle-income status without, industrialization. No middle-income country moved to industrialization without transforming agriculture,” Admasu says. “Ethiopia will be a light manufacturing hub of Africa by 2025 because besides helping the transformation of agriculture, it is labor intensive and will create millions of jobs in rural areas.”
According to him, industrialization was discussed in separation from agriculture in Africa. Yet, he says: “You cannot talk about industrialization without considering agriculture. That was the bad lesson Africa has. Now Africa is talking about both industrialization and agriculture in an integrated manner,”
National Planning Commission Commissioner Dr. Yinager Dessie on his part says even in GTP II the country is still focusing on agriculture besides focusing on achieving structural transformation. “We still focus and invest in the promotion of productivity and production in agriculture. So, we will continue that momentum in order to make sure that the industry gets the necessary input from agriculture,” he says.
Government Communication Affairs Office Minister Getachew Reda on his part said transformation is not about abandoning agriculture all together, but it’s all about decision making process. “It is about whether decision on investment is informed by what is abundant in the country. The establishment of industries is carried out by taking into account what agriculture has in store for it. But, when we talk about industrial economy, ultimately, agriculture will have to decide on the basis of what the industry wants. So, we are trying to reverse the relationship between agriculture and industry in such a way that ultimately by transforming the economy, the decision making process will be dictated not by agriculture but by industry itself.”
According him, the primary focus of the government at this point in time is to make sure that smallholder agriculture in the country, which supports over 12 million households, is given the kind of support it deserves.
“If we can achieve a situation where 12 million households will have some disposable cash or savings that will go a long way in further boosting industrialization and providing incentives in rural areas to set up agro-processing plant,” Getachew added.
“Without supporting smallholder agriculture, no amount of support and finance funneled to achieve industrialization is going to be sustainable,” he underlines.
“The most important focus is for smallholder agriculture to break the cycle of dependence. But equally important is the creation of commercialized agriculture even at a smallholder level.”
Regarding extensive commercial agriculture mainly in semi-arid areas where land is abundant, he says: “This is one area of focus for the government but the primary focus has been to make sure there is a commercialization mentality among our peasants.”
[www.ethpress.gov.et/herald/]