Balance of Economy During Industrialization

When a developing country such as Ethiopia is trying to move out of poverty and become amongst the middle income countries of the world, it could take many options. The idea for achieving this goal seems to be the industrial parks that are sprouting up across the country. These big scale projects would aid the development as well as create jobs, however, the small scale local businesses should not be overlooked.

In almost all cases, when a country decides to venture into a new project it must look at the basic economic laws. The law of supply and demand bonds together almost all economic values in one way or another. Practically in the economy, supply and demand pull against each other until the market finds a level ground and is balanced. However, multiple factors affect both supply and demand, causing them fluctuate especially when megaprojects are being brewed up.

In this regard, the establishment of industrial parks at different towns and places is a positive step to take for various reasons.

The industrial parks will help the country achieve its goal of becoming a middle-income country. For this reason, industrialization has been given priority in Ethiopia. Since the country is around 85pc agrarian, it will take a lot to change it to an industrial hub. It starts with converting the raw materials available to marketable items that could be exported and sold on the global market.

In order to achieve this, the development of the economy of the country is vital. The government has been focusing its attention on this matter. Since the implementation of the first and second edition of the Growth & Transformation plan the country has witnessed an economic turnaround and registered a double-digit growth.

The potential of job creations these industrial parks stands out. They will open doors for those looking for employment opportunities. The situation of high unemployment in the country is not a new storyline. Many Ethiopians especially the youth are suffering from unemployment which has led some to flee the country through dangerous routes to reach Europe or the Middle East.

This was also one of the problems that were raised when the unrest took place last year and many youths were out on the streets protesting.

But these manufacturing hubs or the thought of having an industrial park can be realized in the absence of the basic economic services we should have. Utilities such as a constant flow of electric power, water or communications systems are essential prerequisites to ensure beforehand.

But these are not always made available for one reason or other. These are not only essential for the flow of constant energy and water supply but also for the exchange of further coordination. Even if it is not on the big scale level, job creation and entrepreneurship need to be applied to support the economy. Small businesses need attention too.

Local industries or small scale manufacturing plants can thrive out of these opportunities of growth. A recent comparative study by the Ministry of Education stated that there are over 28 million students in schools all over the country. These schools require desks and tables for students as well as book shelves for the libraries in these schools. These desks and tables have also cumulative effects for generating more finance and employment accordingly. The schools need to be constructed as per the architectural designs and appropriate supervisions. Black boards and chalks may also be needed for these 28 million students divided by the number of each class. This is just one aspect of creating employment opportunity.

Constructing industrial parks can also attract foreign and local investors. It is, however, also possible to develop the potentials already existing in our traditional local small scale manufacturing capacities. We can take the Ketchene (as it is commonly known) local park for instances. In this area, there are weavers of national costumes and dresses. They also recycle old pots and broken clay ovens and recycle it by pounding it. Out of which new coffee pots and other kitchen utensils can be produced. They also have pottery available, which starts from selecting the right type of clay soil by digging the dust and putting it inside the mortar. The next step would be making clay crockeries including coffee pots or stew pots and other utensils.

The economy will benefit from the large scale businesses as much as the small ones if they are supported well. The demand would dictate where more of the focus is, but that should not stop the country from striving and reaching the equilibrium.


Published on Apr 29,2017 [ Vol 18 ,No 887]



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