Gazeteer of Ethiopia

Background
Unique among African countries, the ancient Ethiopian monarchy maintained its freedom from colonial rule, one exception being the Italian occupation of 1936-41. In 1974 a military junta, the Derg, deposed Emperor Haile SELASSIE (who had ruled since 1930) and established a socialist state. Torn by bloody coups, uprisings, wide-scale drought, and massive refugee problems, the regime was finally toppled by a coalition of rebel forces, the Ethiopian People's Revolutionary Democratic Front (EPRDF), in 1991. A constitution was adopted in 1994 and Ethiopia's first multiparty elections were held in 1995. A two and a half year border war with Eritrea ended with a peace treaty on 12 December 2000. Final demarcation of the boundary is currently on hold due to Ethiopian objections to an international commission's finding requiring it to surrender sensitive territory. more

Economy
Ethiopia's poverty-stricken economy is based on agriculture, which accounts for half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $156 million in 2002, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001 Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 2% decline in GDP in 2003. Return to normal weather patterns late in 2003 should help agricultural and GDP growth recover in 2004. The government estimates that annual growth of 7% is needed to reduce poverty.