Climate Change, Foreign Assistance, and Development: What Future for Ethiopia?
Alongside the persistent challenges of poverty and rural subsistence, many low-income countries such as Ethiopia face new problems brought by climate change and surging global economic activities. This paper examines the combined impacts of global climate change and the changing nature of donor assistance in Africa on economic development broadly and food security through the example of Ethiopia. What future does Ethiopia face and which, if any, foreign actors will influence it? How drastic will the effects of a changing climate be and what are the prospects for adaptation? Will swift economic development leave the poorest behind? These are questions this report confronts.
Ethiopia is a useful case for understanding an agrarian economy in transition, faced with the threat of a changing climate and strong economic pressures to open up its economy to the global market. Located in the volatile region of the Horn of Africa, Ethiopia has long been a key recipient of foreign aid, but only in the last two decades has the pace of development and economic growth accelerated significantly. A 10 percent GDP growth rate over the previous decade is partially driven by foreign investments in infrastructure, agriculture, and industry. In addition to aid and investment flows from Europe and the United States, Ethiopia is receiving large amounts of investment from China, India, and Saudi Arabia. The fast pace of change and economic growth involving a wide range of actors and within a context of uncertainty over climate change, food security, and demographics may result in social disruptions and environmental impacts that are difficult to monitor and have serious security and human development implications.
In order to promote more equitable and sustainable development, the authors argue that the transatlantic community must engage other donors and investors to promote coordination and transparency. Moreover, they say donors and investors must follow best practices at the appropriate scales and do so with greater transparency. In particular, international efforts must be aligned with local interests, and, thus, special care should be given to the differential impacts across segments of society, particularly for the rural poor. Development and poverty must be acted upon within the context of climate change. In turn, acting at appropriate scales with transparency reinforces good governance and provides the groundwork for cooperation and coordination among actors.