As the son of Ethiopian immigrants, it pains me to see what is currently being implemented in the country's economic plan. The current plan attempts to get the country out of debt, but is actually sinking it deeper. This counterintuitive action is implemented through the decision that Ethiopia should rely on purchasing imports for an infrastructure-based economy instead of building an economy that relies on the country's rich resources. Leulseged Lemma, a respected Ethiopian economist, said: “Since infrastructure is the precondition for economic take-off,” Ethiopia has relied on an infrastructure-driven economy. But Lemma also says the current economic plan is creating a “huge trade deficit” that is causing more harm than good within the country. Dependence on Ethiopia's own assets will provide the country with adequate tools to climb out of the financial hole it currently finds itself in. This will happen not only at the national level but at the independent level of everyday workers who can be provided with better resources. and income. The government of Ethiopia has ignored their lucrative natural resources, thus continually plunging the nation into debt and contributing to the destruction of the nation's quality of life. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Ethiopia has a myriad of resources that make the country special when considering potentially lucrative sectors. Some variations of natural resources are used in their respective industries. Ethiopia has various resources, from iron, of which there are deposits of at least 20 million per year, to salt, of which at least 300,000 tonnes are produced per year. Ethiopia also has many deposits of minerals such as copper, potash and gold of which at least 1 million tons are found per year. Fossil fuels such as oil and natural gas are found in addition to hydropower from the Blue Nile River, 1% of which contains 110 billion cubic meters used for irrigation and hydropower. Although these resources have not been fully exploited, the country continues to earn between $300 and $500 million per year. These resources include gold, which at the same time is the most profitable but untapped resource in Ethiopia. With gold mines like Assosa still to be mined, Ethiopia could easily become a top 5 gold exporting nation. Gemstones and opal contribute strongly to Ethiopia's overall export economy, as both make up 98% of the overall economic value of exported goods. These two precious minerals are exported in their raw form due to the lack of adequate cultivation equipment in Ethiopia, but once this problem is solved, the country will be able to obtain even more from those minerals. Aquamarine, tourmaline, amethyst, emerald, garnet, peridot and sapphire are among other potentially very profitable deposits that have yet to be fully utilized to make the country more money. Oil and gas are also very profitable resources that have yet to be fully exploited due to regional tensions, particularly those found in the Ogaden Basin of the Somali Regional State. The basin is 135,000 square miles and potentially contains a huge amount of crude oil and natural gas. Ethiopia has repeatedly had to invite international companies to drill and excavate the reservoir due to a lack of equipment and knowledge for cultivation. This lack of usage within the country as wellin the form of a profitable export product, is negatively impacting the country's population and ecosystems. Most Ethiopians relied on wood as fuel for fire, which is used for a variety of things, but as the forests within the country are depleting, people have resorted to using dung as fuel for fire fire. In a world where innovations are being made in terms of energy sources, something is wrong with a resource-rich country that is relegated to using dung-fueled fires for cooking and heating. Now that there is a better understanding of what Ethiopia has to offer and a little more is known about the current situation in the country, a question arises: “Why is this the case? and where does it come from?" One of the main reasons is that China is trying to make Ethiopia its infrastructure-based model and Ethiopia's efforts in this strategy of starting with infrastructure as the basis for growth have not been d 'help.An infrastructure-based economy is unlikely to succeed when it comes to poorer countries like Ethiopia China continually invests more and more money in these projects, putting Ethiopia further into debt as it continues to accept them. There has been an increase in demand for goods and resources that only China offers to Ethiopia. Ethiopia continues to rely on aid of China in an effort to have the financial stability needed to repay the Asian country. Ethiopia, in a sense, is sinking deeper and deeper into debt through its efforts to have the ability to get out of this ever-deepening debt. Further confirming the unhealthy relationship Ethiopia has with its importers, import costs exceed exports by 400%, increasing debt to reach the $26 billion benchmark. Under the current plan, Ethiopia will pay only 60% of this cumulative sum. A substantial part of this comes from Ethiopia's dependence on China on assets and further borrowing for these assets to build a list of infrastructure facilities. In fact, Ethiopia's debt to China alone has increased in recent years to around $12 billion. necessary for a complete picture. Foreign countries and collectives have attempted to offer financial assistance to Ethiopia since before the Second World War, but whenever efforts have been made, these attempts have ultimately failed; so Emperor Haile Salesie I decided to create a financial surplus by looking at his country and what it had to offer. This decision would prove positive for his country and its finances. His implementation of the plan to export Ethiopian resources through the creation of adequate materials and knowledge took place through three five-year plans, of which a fourth was postponed indefinitely by the Derg takeover in 1974. These five-year plans would develop the infrastructure and l the country's economy. the government (including the negative trade balance between imports and exports), although it never achieved its intended goals due to a lack of experienced personnel. The first five-year period lasted from 1957 to 1961, this plan focused on connecting rural regions with more urban and modernized regions through roads. There was also regulation for the creation of a skilled or semi-skilled working class of Ethiopians trained in modern industries to reduce dependence on imported goods. The second five-year period lasted from 1962 to 1967 in which the objective was to diversify the industries in which Ethiopia had a role as a nation. This resulted in the introductionof modern manufacturing methods to create universal economic growth across the nation. The Third Five-Year Plan was the final financial plan presented by Emperor Selassie and lasted from 1968 to 1973. The plan continued the push for the incorporation of modern production methods within the agricultural economy towards an agro-industrial economy. This plan became unique from those that preceded it because it allowed the spread of education by relying more on domestic industries and resources and selling more goods to other countries. After the imperial government was overthrown by the communist Derg regime in 1974 and with this came a massive economic change that would further lead to the current economic problems. The economy under the Derg is divided into four individual phases. The first four years, from 1974 to 1978, were years of stagnation for the economy, during which the government was too busy quelling riots and internal disputes to make any national economic push. The economic situation worsened with soaring inflation and rising debt deficits. This changed in the aftermath of the end of the Ogaden War in 1978 because, with the end of the war, much of the rebel activity in the country also defused. The Development Through Cooperation Programme, also called zemecha in the country, was a program that helped educate all Ethiopians, rural and urban, thus helping improve the national economy. With the climate helping crop growth, resources in the agricultural sector were booming for the second phase which lasted from 1978 to 1980. The military was built during this period to help protect a country that was cutting itself off from international investment and trade. This brevity would come back to bite the Ethiopian government during the third phase, which lasted from 1980 to 1985. Within this phase, each fiscal year resulted in a decline in GDP, with the exception of the 1982-1983 fiscal year, which led to end of the drought. GDP has also collapsed. This does not discount the fact that millions of Ethiopians were starving in addition to trying to support the huge army amassed by the government. In the fourth phase (lasting from 1985 to 1990), the drought dissipated but its effects were still felt. The agricultural sector never got back to the point of repaying the national debt deficits which led to GDP continuing its fall while debt service continued to rise. This negative spiral would directly create the current economically destructive situation. Assefa Tsegaye, former director general of the Commercial Bank of Ethiopia, perfectly sums up the above regimes and the financial situation within them. He said: “In the above-mentioned decades of the 1950s, 1960s and the latter part of the 1970s, especially during the imposition of Emperor Haile Selassie, there was a good level of economic development in the country. The economy was market-driven, financial stability was maintained, ownership of the Ethiopian dollar was monetarily fixed to the US dollar… In the 1970s, Ethiopia was one of the very few countries that had reserved import coverage for a year” . When the Dergue took over, the Reserve was exhausted and used for weapons against Somalia because the USSR took over all the support, financial and military, leaving Ethiopia without many necessities such as medicine. This shift from the self-sufficient economic plans of the imperial era to the dependence on larger powers such as the USSR for financial and physical security of the communist era led to a destabilization within Ethiopia that is still felt today. The only difference is that instead of the USSR being the country relied upon, the current occupant of the position is primarily theChina. Just as then, dependence on others has left Ethiopia impoverished and left with less than it came in with. The progress of the country's democratic governance has a direct role in improving the economic foundation of the country. As the country continues to transition from commercial sectors and communist-style general government, the privatization of businesses and enterprises has had a positive impact on the national GDP and the opportunities afforded to everyday Ethiopians. Since the nation adopted the mixed economy, the GDP growth rate has varied between 8% and 11% off the 5.4% deficit in the 2014-2015 fiscal year. The Growth and Transportation Plan, which will be completed by 2025, has become the main potential economic plan. This plan has an expected growth of 20%. The Growth and Transportation Plan used the country's internal resources to create assets. It has been proven that this is how Deputy Prime Minister Demeke Mekonnen introduced the Second Growth and Transformation Plan (GTP II) in the country. This plan will exclusively utilize domestic resources and opportunities within the nation, creating more jobs of all classes and is expected to triple the GDP and simultaneously cut the poverty level in half over the next few years. The Ethiopian government, indeed, derives from its own history of governance, but there are also other factors and causes external to the Ethiopian government. Case in point, the aid and internal pressure sent from the Western world exerts influence on the government of Ethiopia. European aid in Ethiopia has spent nearly $2.5 billion on aid projects over the past decade. Once the short-term goals were achieved, most projects did not do much, if any, good for Ethiopia except spend money and put Ethiopia further into debt. This creates a donor-recipient relationship between Ethiopia and the Western countries they help. This relationship requires a donor who has factors such as a clear set of parameters that are met with the utmost responsibility and commitment. Recipients must also commit to a number of aspects, such as fighting corruption, respecting internal and external standards, creating clear distinctions of power and responsibility within government, and maintaining a good and beneficial relationship with the donor. European aid does not work properly because there is a lack of goal-oriented projects with longevity in mind. Most aid projects work momentarily before collapsing shortly thereafter. What is becoming evidently clear is that continued administrative authority over these projects would help them, as the lack of it in previous initiatives has shown negative results. Skilled workers must be trained and placed in appropriate positions for any help to be provided. Not only is this aid stagnant and proving to be a burden, but it has also proven to be a possible weapon to be used by both Western and other countries. the government of Ethiopia. For example, the European Union recently threatened to withdraw aid if Ethiopia did not govern as it saw fit. This not only harmed Ethiopia as a whole but proved to be in vain as the issue was resolved on a larger scale by the Ethiopian government. In another example from a little further back, previous Ethiopian regimes have been documented using external aid as a weapon against opposition groups. This cannot be stopped by stopping international aid, but once the accumulation of Ethiopian finances is grown or cultivated in every region of Ethiopia, the exploitation and use of money as a weapon can bedrastically limited. These reckless and harmful aid programs have left Ethiopia with far less than the country should have, namely services and opportunities for its people. The average Ethiopian civilian's home, approximately 70%, has no direct access to public services. This highly negative number is not limited to families, there are schools without services, 76% in Ethiopia and 70% of all Ethiopian clinics without services. Most Ethiopians, both rural and urban, do not have access to fully operational services, not only homes or residential buildings, but also clinics and schools. And it's not limited to electricity: only 24% of the population has access to clean water and sanitation is accessible to only 13%. The electricity grid covers 80% of the country, but only 33% of those living in rural areas can and do use electricity. In urban areas, accessibility to electricity is not improving, with only 44% of urban Ethiopians able to use electricity. The reforms implemented are not enough, as the lack of experience and adequate equipment has discouraged many investors and companies. These concerns have been somewhat met by increased infrastructure construction and the education of more Ethiopians in the country's trade. The combination of government reforms and upgrading of the nation's knowledge and equipment in the sector has strengthened confidence in Ethiopia's mining industry and encouraged more investors and companies to take a deeper look and interest. It all boils down to properly educating Ethiopians to manage and manage their own assets and resources instead of relying solely on foreign aid that only lasts a short period of time. Due to the lack of training and education for necessary jobs in Ethiopia, not only To support the country but lead to financial prosperity, many Ethiopians are unemployed or working menial jobs. The effects of high unemployment rates are recorded in news outlets across the country. Between 16% and 26% of Ethiopians are jobless, with the worst situation affecting the younger worker demographic, especially recent graduates. This has led to dissent in the minds, selves and communities of many of these unemployed youth. Depression, riots due to political/socio-economic discontent, as well as suicides and murders have all resulted from this widespread problem in Ethiopia. Recurring alcoholism and lack of self-esteem due to lack of stable employment plague area youth leading to high percentiles of unaddressed depression and, subsequently, suicide. High unemployment, especially in rural Ethiopia, has led many lives to deteriorate and ultimately end abruptly. Communities as a whole have collapsed socially and mentally due to the lack of opportunity and diversity in local employment. Between the mid-to-late 1990s and the 2010s, Ethiopia's youth working population in these years declined from 35% to 28% as education was prioritized in this age group. Work existence and diversity for these young educated Ethiopians is very low in urban and rural areas for all, but particularly for women, with female unemployment being 14% higher. Therefore, the number of Ethiopians receiving higher education is increasing, but there is a shortage of job opportunities for these Ethiopian graduates. These job seekers are the first to suffer from the negative physical and psychological effects of unemployment. The emotional depression experienced by individual workers and communities is simply a reflection of depressionof the Ethiopian economy within the nation itself. As of 2015, Ethiopia's national debt was US$17.94 billion, which increased to US$21.84 billion in 2016. The following fiscal year, 2017, had an accumulation of debt totaling $26.86 billion; this debt grew to $34.13 billion in 2018, while the growth of the national debt continued in 2019 with $39.43 billion. According to Ethiopian economists, the next fiscal year 2020 will see the national debt grow to at least $47.61 billion and the fiscal year 2021 national debt will grow to at least $59.33 billion. If the current economic plan continues to be implemented into the next decade, this trend is also expected to continue and, as a result, the fiscal year 2025 national debt will reach at least $85.9 billion. With government debt rising by another $4.46 in the last fiscal year, Ethiopia's economic situation does not appear to be improving. In the last fiscal year alone, the debt owed to each Ethiopian living in the nation was $477 per capita. This is obviously not the best reflection of the national GDP which suffered a decline of 3.51% in the respective fiscal year. Although debt as a percentage of GDP evolution has steadily declined over the past two decades or so, national debt in terms of millions of dollars has been rising steeply since 2010. Ethiopia's national debt is only a precursor to the country's international debt . The country has piled on with its flawed economic plan. Ethiopia is deeply indebted to other countries, particularly China. The country, which already owes $12 billion to its Asian donor, has had to make a change when it comes to interest on Chinese loans. Starting in the spring of 2019, Chinese loans extended to Ethiopia have had interest rates included in every loan agreement entered into, furthering Ethiopia's already growing debt to China by causing the debt deficit to grow at a faster pace. As Ethiopia has begun to make strides to repay China, it has become very worrying to believe that the country can repay all its accumulated debt within the agreed timeframe without risking a drastic economic surge. The current economic plan in Ethiopia is an infrastructure-based plan. economic, and although it has short-term benefits on the employment rate, in the long run there are more negative effects of an infrastructure-driven economy. Infrastructure and related resources can be allocated and focused in the wrong contexts, fueling the fallacy of an infrastructure-driven economy, especially in a poorer African country. In any case of “success” (whether monetary or fleeting), only wealthy countries like the United States, Japan, and China can afford an infrastructure-based economy that is profitable. The Japanese economy, already developed, has invested 6.3 billion dollars, equal to 4.7% of GDP per year, in infrastructure and sublease areas. But this large amount of investment produced only 0.5% annual GDP growth. After about 3 years in the United States, the benefits of an infrastructure economy, such as 2.3 million jobs, will be exhausted. Careful planning and action is required by these well-developed countries since an infrastructure-driven economy works in favor of its user only for a specific period of time and in specific financial situations. A clear example of the harmful effects of lack of planning in Ethiopia can be seen in the recent decline in GDP. In the short term it showed a constant positive growth of 3,767 insideof the national GDP. Even within the GDP there was a constant trend of 0.230. As time passed, however, there was a steady decline of -4,329. As this economy continues, a constant and the trend drops to -6.235. The short-term relationship between the Ethiopian economy and an infrastructure-driven economy has been successful before, but as time passes and infrastructure-driven economy is continuously applied, economic growth ceases and turns into economic decay . The problems of the country's economy are evident and have been for some time and its harmful effects are increasingly seen throughout Ethiopia. Now, all hope is not lost as there is a clear way to improve this situation. The first step is to understand and fully utilize Ethiopian resources as this can greatly boost the national economy through several resources such as gold and other mineral products, all of which have not been fully utilized. From the northern region of Tigray and the southernmost region of Oromia, there are extensive mineral deposits yet to be evaluated and cultivated for national financial benefit in Ethiopia. Gold and other mineral materials can be found in large quantities in 74% of the country, but gold makes up only 10% of total exported materials. There is a high chance that this sector could multiply the amount it is producing now, as a bonus, a parallel potential to create at least another million jobs in this sector, even if partially utilised, is evident. Ethiopia only uses less than 1% of all these goods for international trade. The effects of this issue are reflected in the fact that it produces less than 1% of GDP, 14% of exports and 1% of government revenues. This is attributed to the lack of strong guidelines and a national ministry to efficiently monitor and optimize financial gains. Therefore, there is a need for regulation and parameters in this potentially prosperous industry sector. Once this regulation is implemented, the country will be able to create competition for these mining hotspots, increasing their value and profitability. Ethiopia is capable of easily growing 32.8% in the mining sector in the next few years with these tiny steps of improvement. The opening of new sectors such as the aforementioned mining sector will give Ethiopia new foundations to become a strong and internationally respected country (and not a respect based solely on what the country once was). As a step to modernize Ethiopia's economy, new reforms are being implemented that will allow it to more easily pay off debt owed to China. One such reform, launched by the Ethiopian prime minister, Abiy Ahmed, to privatize public companies, found a sympathetic audience with the American capitalist government and other Western superpowers. This is refuting and undoing the numerous communist doctrines and policies of previous governments. The diversity of financial aid that Ethiopia relies on has, in theory, increased the positive linkage of Ethiopia's relationship with these superpowers. As Ethiopia remains on this positive path, more and more people will find jobs that will increase their skills, allowing them to build financial stability and invest more money in the capitalist system. According to previous doctrines, about 80% of Ethiopians travel to the country's few urban areas (about 19% of the country's territory), there is a need for more job opportunities in the remaining 81% of the country's territory. This self-care reform allows rural Ethiopians to find more opportunities within prosperous regional sectors such as the agricultural, livestock and food production sectors. The.