. Discuss the economic system in Ethiopia over the recent three regimes (EPRDF, Derg

Question

and imperial regime)�

Answer 1

The economic system in Ethiopia has undergone significant changes under the three regimes: the imperial regime, the Derg regime, and the Ethiopian People's Revolutionary Democratic Front (EPRDF) regime.

Under the imperial regime, which lasted from 1930 to 1974, Ethiopia followed a largely feudal economic system. Land ownership was concentrated in the hands of the aristocracy and the church, while the majority of the population were subsistence farmers. Cash crops, such as coffee and oilseeds, were the main focus of agriculture, with little investment in modern farming techniques. The economy was characterized by low levels of industrialization, limited infrastructure development, and a reliance on foreign aid.

In 1974, the Marxist-Leninist Derg regime overthrew the imperial regime and implemented a command economy. The Derg nationalized all major industries and collectivized agriculture, aiming to redistribute wealth and create an egalitarian society. However, this centralized economic model failed to deliver the desired results, leading to widespread famine, economic stagnation, and political instability. The lack of market incentives and inefficient planning led to chronic food shortages and a decline in living standards.

In 1991, the EPRDF, consisting largely of rebels from the northern region of Tigray, took over the government after the fall of the Derg regime. Under the EPRDF, Ethiopia transitioned to a mixed economy with elements of socialism and capitalism. The government implemented market-oriented reforms, liberalized key sectors such as agriculture and industry, and encouraged private investment. The EPRDF focused on agricultural development, promoting smallholder farmers through the provision of improved seeds, fertilizers, and extension services. They also prioritized infrastructure development, including road networks, telecommunications, and electricity.

The EPRDF's economic policies have shown some significant successes, with Ethiopia experiencing strong economic growth over the past two decades, averaging around 10% annually. This growth has been driven by the expansion of agriculture, manufacturing, services, and infrastructure investments. However, critics argue that the government's control of key sectors and lack of political and economic freedoms hindered true market liberalization and private sector growth.

In summary, Ethiopia's economic system has evolved from a feudal system under the imperial regime to a command economy under the Derg regime and eventually to a mixed economy under the EPRDF regime. While the EPRDF's economic policies have led to remarkable economic growth, challenges remain in terms of equity, political freedoms, and the need for further market liberalization.