San José State University
Department of Economics
Thayer Watkins
Silicon Valley
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Political and Economic History of Ethiopia


Ethiopia is a nation with a long, venerable and complex history. Although located in the tropics its high altitudes give much of it a temperate climate.

Although the ancient, aboriginal population of what is now Ethiopia were Cushitic language speakers, the culture that came to be identified with Ethiopia came from Arabia, probably as early as 1000 B.C. These Semitic language speakers adopted Christianity in the fourth century A.D. The particular version of Christianity adopted by the Ethiopians was called monophysite because it maintained that Jesus of Nazareth was of a single nature rather than of two natures, divine and human, as maintained by the Roman Catholic and Greek Orthodox churches. The other monophysite Christian organizations were the Coptic church of Egypt, the Syrian church and the Armenian church. Now the monophysite churches are accepted as orthodox but in the Middle Ages these theological issues were considered vitally important.

With the advent of Islam there was a political upheaval as well as a religious one in the region. The Christians of Ethiopia initially had good relations with the converts to the new religion of Islam. A party of converts to Islam in Arabia fled persecution across the Red Sea. They sought and received refuge from the Ethiopian Christians. Jesus is a revered figure in Islam, having the status of a Prophet. The Koran mandates tolerance for the People of the Book; i.e., Jews, Christians and Zoroastrians. So initially there was no friction between the Muslims and the Christians. But later political rivalries manifested themselves as religious conflicts.

(To be continued.)

The Geography of Ethiopia

The climate of Ethiopia is created by the moisture-laden winds from the southwest interacting with the mountains and high plateau. The lowlands to the east beyond the mountains get relatively little rainfall as shown in the map below.

The Rainfall Pattern
of Ethiopia and Eritrea

The rainfall of the high plateau comes mainly in the summer from mid-June to mid-September. A secondary rainy period occurs in late spring in April and May. This rain comes from the winds of the northeast intersecting the winds from the southeast. These rains, known as the balq, are lighter than those of the main rainy season of the summer.

Another seasonal phenomenon is the passage in January of high pressure systems from Asia over the Red Sea. This passage brings some moisture to the coastal lowlands but very little to the highlands of Ethiopia.

A very important aspect of the climate of Ethiopia is the variability of the rainfall. The average rainfall level may allow a buildup of vegetation, cattle herds and the human population which is devastated when the rainfall falls below average. Thus the climate of Ethiopia leads to sporatic episodes of hardship and famines.

Haile Selassie

When one considers the extraordinary career of Ras Tafari, later known as Haile Selassie, one wonders whether a writer of fiction would dare to create a character who had such an improbable life. Ras Tafari (the Ras is an honorific roughly meaning prince) was the son of Ras Mekonen of the eastern city of Harer. His line was descended from a king of Shewa, the region around what is now the capital, Addis Ababa. Shewa was to the south of the traditional homeland of the ruling class, the Habesha, and many felt that the Shewa nobility were not pure Habesha but a mixture of Habesha and Oromo. This was a factor in the dynastic politics of Ethiopia.

The southern areas of what is now Ethiopia were conquered in the late 19th century by the Emperor Menelik II who created the new capital of Addis Ababa (new flower) in Shewa. This conquest brought non-Habesha people, primarily the Oromo, into the empire and created a distinction between the north and the south in terms of people and institutions.

When Menelik II died in 1917 the line of succession was not clear. Menelik II did not have a son and the title of emperor was given to his nephew Lij Iyasu. Lij Iyasu was only thirteen at the time and the real power fell into the hands of Lij Iyasu's father, Ras Mikael. Ras Mikael was an Ormo who had converted from Islam to Christianity. When Lij Iyasu converted to Islam there was understandable concern that his father's conversion to Christianity had not been real. This ethnic/religious issue along with Ras Mikael's involvement of Ethiopia in the external power politics of the time led to the excommunication of Lij Iyasu and his loss of the throne. Menelik II's daughter, Zauditu, was declared empress, but many did not accept the leadership of Zauditu. Some generals of Menelik II claimed the right to lead Ethiopia. In the power struggle Ras Tafari emerged as a leading contender for the throne. During the 1920's there was a period of dual leadership with Empress Zauditu, who was not powerful enough to suppress Ras Tafari, and Ras Tafari, who was not powerful to take the throne. To some extent there was cooperation between the two.

Ethiopia applied for membership in the League of Nations in 1919 but was initially denied because of the survival of slavery in Ethiopia. After Empress Zauditu and Ras Tafari issued proclamations making slave trading a capital offense the League of Nations immediately (1919) accepted Ethiopia as a member. The sanctions against slave trading did not abolish slavery but it was a significant step in that direction. In 1924 slavery itself was abolished by edict in Ethiopia.

During the 1920's Ras Tafari established schools and promoted education. He was clearly the major policy innovator for Ethiopia during that time. But the power in Ethiopia did not reside in the monarchy in Addis Ababa but instead was held by the traditional nobility in the countryside. Throughout his career Ras Tafari tried to the break the power of regional and local gentry and consolidate and centralize Ethiopian power. He wanted to modernize Ethiopia but only if that could be done without limiting his personal power. It was difficult to determine whether his quest for power was personal or for the Ethiopian state. Ras Tafari probably identified himself and the Ethiopian state as one so there was no distinction between the two in his mind.

In 1924 Britain and Italy tried to define spheres of interest in the region of the Horn of Africa that put Ethiopia in the Italian sphere. Ras Tafari took the matter to the League of Nations and under the threat of a public airing of the British-Italian division of that part of Africa both Britain and Italy issued statements that they never intended to impinge upon the sovereignty of Ethiopia. Ras Tafari was achieving a status of an international statesman.

In 1928 Ras Tafari had himself declared negus, a higher level of nobility than ras. In 1930 a few months after the death of Empress Zauditu Ras Tafari assumed the title name of Haile Selassie and the title of Conquering Lion of Judah, Elect of God, and King of Kings of Ethiopia, in effect, Emperor. In 1931 Haile Selassie promoted a constitution which made Ethiopia a constitutional monarchy.

In the 1930's Ethiopia once again confronted an aggressive Italy. In the late 19th century Italy acquired control of the territories of Eritrea on the Red Sea coast and Somali on the Indian Ocean. The Red Sea coastal area had been under the control of Ethiopia but it was Islamic and not strongly tied to the highland kingdom of Ethiopia so it was relatively easy for Italy to acquire control. In the 1890's Italy tried to link its Eritrean and Somalian territories by conquering Ethiopia but the Italian invasion was defeated by Menelik II's forces at Adian. Italian pride never forgot that defeat and under Mussolini in 1935 the Italians invaded Ethiopia once again. The war lasted seven months despite a one-sided advantage of the Italians in terms of military technology and training. Haile Helassie went into exile rather than lead a resistance to the bitter end. He had had hopes that the League of Nations would counter the Italian invasion but the League was a rather ineffectual organization that had little but rhetoric in its arsenal.

During the Italian occupation there was significant elements of modernization undertaken in terms of transportation. But the occupation was terrible for the people of Ethiopia in other ways. When in 1937 there was an attempted assassination of the Italian military commander in Ethiopia the Italian army carried out a campaign of reprisals that left 30,000 young Ethiopian men executed.

The end of the Italian occupation came after Mussolini joined Hitler in the invasion of France and brought Italy into conflict with Britain. Britain organized the liberation of Ethiopia from Khartoum in the Sudan using British Empire troops from Africa (South African primarily). Haile Selassie journeyed to Khartoum to join in the British effort and coordinate the Ethiopian resistance forces with the British forces. With liberation effective control of Ethiopian internal affairs was with Haile Selassie with the British forces controling actions concerning the war. But Haile Selassie was able with his diplomacy to maintain a facade of Ethiopian sovereignity. For example, Haile Selassie was able to get the British to label their decrees as Public Notices while his were labeled Proclamations.

After the end of World War II Ethiopia returned to full sovereignty but with a dependence upon American economic aid. Haile Selassie continued his lifelong struggle with the regional and local aristocracies for centralization of power, a struggle that ultimately he lost. But internationally Haile Selassie was a revered figure of courage and shrewdness. As new African leaders such as Kwame Nkrumah of Ghana began to speak for Africa Haile Selassie did so as well.

Probably the strangest episode in Haile Selassie's life was the emergence of a religious movement of the RasTafarians in Jamaica that was named for him and made him as a descendent of Solomon the representative of God on Earth.

Within Ethiopia however there were those who were impatient with his lack of success in breaking the power of the local gentry and his inadequate efforts at modernization. This led to the revolution of 1974 in which he lost power and in August of 1975 Haile Selassie, Lion of Judah, Elect of God and King of Kings of Ethiopia died powerless and was buried secretly. Some Ethiopians believe that Mengistu buried Haile Selassie in his (Mengistu's) own house. Haile Selassie's death was the end of an era of not only Ethiopian history but also of world history.

Land Rights

The institutional structure of the northern areas which have been under Amhara and Tygrean occupation and control for millenia is quite different from those of the south which was conquered only in the late nineteenth century. In the south there was an Oromo population under the control of Amhara administrators.

In the North

Amhara and Tygrean farmers in the north held rist rights to land. This means that a farm family had a right to a share of family clan parcel of land. At some distance a man was given the rights to some portion of land by the emperor or one of his hierarchy. The descendants of that man inherited not a specific parcel of land but instead a right to an allocation of original parcel. The allocation was administered by the clan elders.

Along with the rist rights there were gult rights which meant that the ristright holders had to pay a tax, often a portion of the produce, to those who held the gult rights.

In the South

The southern areas of Ethiopia are areas inhabited by Oromo people which were conquered in the late nineteenth century. The Oromo farmers did not have rist rights to the land and largely became tenant farmers. As such they had to pay the Amharan and Tygrean owners of the land a rent or a share of their crops and also pay a tax to those who held the gult rights to the land. This led to a more pervasive demand for land reform in the south than there was in the north.

The Rolling, Roiling Revolution in Ethiopia, 1974-

There was an attempted coup d'etat in 1960 while Haile Selassie was out of the country on a trip, but it failed. The fourteen years from 1960 to 1974 achieved little in the way of reform despite the good intentions of Haile Selassie's regime. In January of 1974 army units in the south mutinied in protest of the inadequacy of the food and water rations. At the same time the government was raising fuel prices, lowering the pay of government employees and reducing support for education. The groups adversely affected by the government changes in policy took to the streets in protest. With significant elements of the military and the police joining in the demand for higher pay there was a great danger of a complete breakdown in public order. The Airborne Corps commander, Colonel Alem Zewd, formed a Coordinating Committee of the Armed Forces, the Police and the Territorial Army to maintain order. However the Committee soon started arresting some military officers and members of the former government. Strikes were forbidden by the Committee. Elements of the old government tried to secure the release of people arrested at the orders of the Committee. This led to a confrontation and the formation of a new Committee at the end of June 1974 under the leadership of Majors Mengistu Haile Mariam and Atnafu Abate. Mengistu was of non-Habesha origins, some said he was the descendent of slaves. In a society as caste-conscious as Ethiopia this was a significant accusation. But Mengistu as a young officer had the cunning and resourcefulness to survive and dominate the revolutionary upheavals.

Lieutenant Colonel Mengistu Haile Mariam in July 1977

The Committee was commonly called the Derg, meaning the Committee. Mengistu was chairman and Atnafu vice chairman. Prime ministers continued to be appointed but the real power resided in the Derg.

By July the Derg was in complete control. The original organizer of the Committee, Colonel Zewd, fled. By September the Derg formally deposed Haile Selassie and placed him under arrest. On September 15th a new council, the Provisional Military Administrative Council (PMAC) was formed with General Aman as chairman. General Aman was an Eritrean and major commander of Ethiopian forces during the war against Somalia. Aman tried to block the issuance by the Derg of new laws mandating capital punishment for political offenses against the Derg.

Some students and members of the labor union confederation protested the rule of Ethiopia by the military. On October 7th the PMAC arrested its members who supported the protesters as well as the protesters themselves. On November 15th General Aman and two other members left the PMAC and sought refuge in his own home. On November 28th the PMAC killed Aman and his two supporters in a shootout at his home. Aman and his supporters were not the only ones to die November 28th. Two former prime ministers and Colonel Zewd along with over fifty other political prisoners were executed that day, afterwards known as Bloody Saturday. Also on that day, Bloody Saturday, a new chairman of the Derg was elected, Brigadier General Teferi Banti. Majors Mengistu and Atnafu retained power as the first and second vice chairmen of the Derg. As First Vice Chairman, Mengistu functioned as the prime minister of the government.

Less than a month later, on December 20th, the Derg issued a proclamation of Ethiopian Socialism. On January 1, 1975 all banks and insurance companies in Ethiopia were nationalized. On February 3rd 72 major industrial and commercial enterprises were nationalized. The government took majority ownership of 29 other enterprises. The government did not take control of retail and wholesale trade nor the import and export industries.

Although there was not necessarily wide support for socialism per se there was general acknowledgement of a need for land reform. The global experience with land reform is that the results are usually disappointing as far as achieving the intended results. Nevertheless the Derg on March 4, 1975 declared:

The nationalization of rural land was extended to urban land in July of 1975. At the same time all apartments and rentable houses were also nationalized. Urban dwellers were to be organized into cooperatives called kebeles The government intended these kebeles to have extensive administrative powers but not much came of them except that they served the government as execution squads. The kebles adopted the practice of other Marxist regimes of making the families of the executed pay for the cost of the bullets used in the execution.

In south there was support for the Derg's land reform because it was the local Oromo people who were to benefit from it at the expense of the landlords who were largely Amharans and Tigrans from the north. In the north there was much less support for land reform and organized resistance broke out.

In the heartland of the Habesha, the provinces of Gonder, Tigray, Gojam and Welo, a grandson of a former emperor organized the Ethiopian Democratic Union.

The Derg was already experiencing armed opposition in the peripheral territories of Eritrea and Ogaden. Eritrea had developed a separate culture from the highlands of Ethiopia in centuries past because it had become predominantly Muslim. Also in the nineteenth century Eritrea had come under Italian control. The name Eritrea derives from the Latin name for the Red Sea. The people in Eritrea accepted Italian control as a lesser evil than control by the highland Christians.

After living under Italian control for decades before the defeat of Italy in World War II the United Nations accepted Haile Helassie's contention that Eritrea was an integral part of Ethiopia but specified that the political assimilation of Eritrea into Ethiopia was to be a federal union. In practice however the administrators appointed from Addis Ababa were Hebesha Christians. The language of administration in Eritrea became Amharic rather than Arabic.

Eventually insurrection broke out under the Eritrean Liberation Front (ELF). This organization was largely nationalistic although the people in the organization being tribalistic in mentality looked upon socialism favorably. Over time as Christian leftists joined the ELF the socialist stance became stronger. However the socialism of the ELF was not strong enough for some and a separate force called the Eritrean People's Liberation Front (EPLF) was formed. The armed struggle against political control from Addis Ababa commenced in the early 1960's and by the late 1960's major military engagements were occurring. The revolution of 1974 simply enhanced the sentiment for political separation.

The southeast area of Ethiopia, the regions known as Ogaden and the Haud, were acquired by conquest under the Emperor Menelik II in the late nineteenth century. The occupants of those areas are largely Muslim Somalis. When British and Italian Somalilands were incorporated into an independent Somaliland in 1960 there was immediately disputes with Ethiopia over control and access to those regions. The disputes developed into guerrilla movements within Ethiopia and an outright war between Somaliland and Ethiopia.

Within Ethiopia even among the Marxists there developed opposition to the PMAC regime of Mengistu. Some Marxists felt that it was not proper for the military to be running the country even if it called itself Marxist-Leninist. In 1975 these anti-Mengistu Marxists formed the Ethiopian People's Revolutionary Party (EPRP) and in 1976 began opposing the PMAC with urban terrorism.

With secessionist rebellions in the north and south, a war with Somaliland, and urban terror the prospects for Mengistu's PMAC might not have looked promising. Mengistu called in the aid of the Soviet Union. The Soviet Union provided military equipment and directed Castro in Cuba to supply military personnel for the fighting. The fact that the Soviet Union had been supporting Somaliland in its disputes with Ethiopia did not cause much of a problem in the world of international power politics. Ethiopia was a much more valuable plum of a client state for the Soviet Union than Somaliland was so its support was transferred to the other side. The Soviet and Cuban support then brought military success for Mengistu's government.

The Chairman of the Derg
Mengistu Haile Mariam

When Soviet and Cuban support was withdrawn the internal forces defeated Mengistu's regime in 1991. The withdrawal of Soviet military aid was part of the same process that led to the withdrawal of Soviet troops from Afghanistan.

The core of the effective military opposition to Mengistu's regime was two separatist movements. One was the Eritrea separatist movement consisting of the ELF and EPLF mentioned previously. The other was the Tigrayan People's Liberation Front (TPLF). This separatist movement grew out of the Marxist-Leninist League of Tigray headed by Meles Zenawi. There has been an ancient resentment of the political domination of Ethiopia by the people of the Shewa Province which surrounds Addis Ababa. Tigray had its ethnic origin in an Arabic migration that was separate from the one that established Axum. The language of Tigray was Semitic but somewhat different from the Amharic language. The Tigrayans accepted the Amharic speakers of the north as Habesha but harbored a lingering sentiment that Tigrayans had a superior lineage. But the Amharic speakers of the Shewa Province were resented as upstarts who were not really pure Habeshan, being mixed with the Oromo. So there was a real nationalistic support in Tigray for separation. When the TPLF achieved military successes its leadership encouraged the formation of similar regional-ethnic party organizations such as the Oromo People's Democratic Front, the Amhara National Democratic Movement, and the Southern Ethiopian People's Democratic Front. It then created a coalition organization for these regional-ethnic party organizations called the Ethiopian People's Revolutionary Democratic Front (EPRDF) but the real power remained with the TPLF and Meles Zenawi.

During this era the Derg attempted to counter the insurgency in the north by a program of forced resettlement to the south. The public justification for this resettlement was to remove agriculturalists from the drought-stricken, land-short north to the more amply watered land to the south. The real reason for this resettlement was to deprive the rebels in the north of support from the farm families. The resettlement was however haphazard and uncoordinated. Sometimes the resettlees were simply people the army conscripted from the market places. Women would be taken from the market place and sent south without even the opportunity to say goodbye to their children. In the south the resettlement camps were poorly organized and the resettlees left without the necessary resources to survive.

When the rebel forces of the EPLF and TPLF surrounded Addis Ababa in 1991 the Ethiopian army collapsed as a military force. Mengistu fled to Zimbabwe, one of the few countries which would grant him asylum, with a considerable fortune.

True to the conditions for the cooperation of the EPLF the leadership of the new regime of the EPRDF in Addis Ababa allowed Eritrea to become independent in 1993. But the defeat of Mengistu's Marxist-Leninist government did not mean Ethiopia had abandoned socialism. The EPRDF was ideologically committed to Marxist-Leninist socialism but it was desperately in need of foreign aid and the aid-givers said, "No democracy, no aid." Meles and the Tigrayan core of the new regime moderated their Marxist-Leninism but from time to time it breaks out again. For the election of 1995 the regime banned regional-ethnic parties which were not part of the EPRDF coalition. In April of 2001 when university students demonstrated for academic freedom the regime shot about one hundred.

When Eritrea achieved de jure independence in 1993 (It had been de facto independent for years) the precise border line was not specified. The area of western Badme which is ethnically mixed became the bone of contention. As the dispute festered Ethiopia expelled Eritreans from Ethiopia and Eritrea expelled Ethiopians from Eritrea. About three hundred thousand people from each country were displaced with all the entailing hardships of that displacement. Thus the old allies , the independent Eritrean government and the Ethiopian government of Meles, fought a war over a sliver of land. Each impoverished government managed to find hundreds of millions of dollars to finance armament purchases, tanks from Bulgaria and fighter bombers from Russia and the Ukraine.

The hostilities commenced in February of 1999 and ended only in December of 2000. The United Nations and the Organization of African Unity, among others, did what they could to facilitate a ceasefire and peace treaty. When members of the inner core of the regime in Addis Ababa objected to the agreement that ended the war they were expelled from the regime by Meles, showing where the real power of the regime was strongest.

The Economy of Ethiopia

During the period of the revolution it is remarkable that Ethiopia had any economy. The basic economy was agricultural. Upwards of eighty percent of the population is directly or indirectly dependent upon agriculture for their livelihood. Although an overwhelming proportion of the population are engaged in agriculture, agricultural production accounts for only about 50 percent of Gross Domestic Product (GDP). Most of the farming (two thirds to three quarters) is for the subsistence of the rural population and consists primarily of subsistence crops such as grains and pulses. The 1976-77 productions were:

Crop Production
millions of tons
Teff* 1.12
Corn (maize) 0.99
Barley 0.82
Sorghum 0.67
Wheat 0.56
Millet 0.20
Horsebeans 0.33
Chick-peas 0.11
Field peas 0.10
Lentils 0.05
Haricot beans 0.03
Other Crops
Sugarcane 1.12
Coffee 0.19
Cotton 0.12
*Teff is grain native to Ethiopia used in
making the pancake-like injera

Teff, wheat and barley are cultivated in the high altitude areas and corn (maize), millet and sorghum in the lower altitude areas. Pulses are the primary source of protein in the diet of the rural Ethiopians. In addition to the crops shown above there were about 50 thousand tons of various oil seeds grown. Their consumption is important for the times when religious observances prohibit the consumption of animal fats. The false banana is another crop that provides substantial amounts of starches for the Ethiopian diet. The plant does not produce edible bananas but its roots provide large amounts of starch.

A small portion of agricultural production is for export and almost all of this comes from the small commercial farms. The most important export crop is coffee. Coffee-growing probably originated in Ethiopia. Production levels in the 1970's were in the range of 150 to 200 thousand tons per year but only about one half was exported. Just as Ethiopian farming is at the mercy of the rainfall so the Ethiopian export economy is at the mercy of the international market price of coffee.

Ethiopia also grows a substantial amount (100 thousand tons per year in the 1970's) of cotton and processes it into fabric for clothing.

Sugarcane production on a commercial scale was developed by Dutch business interests after they lost production sites in the formation of Indonesia. Production rose to the level of 1.1 million tons per year before the revolution of 1974. The cane fields were nationalized after the revolution and the future of the sugarcane industry in Ethiopia has been in doubt since then.

Ethiopia has the largest numbers of livestock of any country in Africa. There are large numbers of zebu cattle (26 million in the late 1970's) which are used for draft animals in the highlands and provide milk and blood for the sustenance of lowland nomads. Very little Ethiopian cattle meat is marketed but hides are second only to coffee in value for exports. Sheep and goats are the primary source of meat in the rural areas. In 1976 there were 40 million of them, primarily in the highlands. At that time there were almost seven million horses, donkeys and mules. These were used primarily for transportation. Also there were one million camels which were also primarily used for transportation.

Ethiopia has the potential for vastly increased agricultural production but at present a relatively small portion of the area of Ethiopia is developed for crop production. The distribution of land use is as follows:

Land Use Category Proportion
including fallow
and woodlands
Swamps 5%
and wasteland

In the 1970's irrigated land constituted about 5 percent of total cultivated land and less than one percent of the total land area.

While Ethiopia has approximately 8.8 million hectares (22 million acres) of land that is classified as forested most of this, 5.0 million hectares (12.5 million acres) is scrub woodland of the drier areas of the plateaus and margins of the deserts. Nevertheless the 3.0 million hectares (7.5 million acres) of broadleaf evergreen forest of the mid-altitudes and the 0.8 million hectares (2.0 million acres) of higher altitude evergreeen coniferous forest are a substantial potential economic resource for Ethiopia. Before the revolution of 1974 about half of the forest land was in private ownership and the other half owned by the government.

The potential for development is shown by the high productivity of the eucalyptus plantations that were established in the late nineteenth century in the vicinity of cities to provide raw material for poles, furniture, tools, fibreboard and particle board. These uses are supplied from the relatively small acreage of about 150 thousand (50 thousand hectares).

Ethiopia also has some historical interesting forest products such as gum arabic, frankincense and myrrh. Gum arabic is still a commercial product in world's markets. Frankincense and myrrh were in great demand in ancient times for incense in religious ceremonies and as medicines. The forests are also the source of fuel for much of the rural population, although cattle dung is an alternate source.

Mining of precious metals in Ethiopia is now a relatively small industry, perhaps because the deposits were worked out over the century. Gold production is less than a ton per year and platinum an insignificant 15 pounds per year. The mining of rock Salt in the Denakil Depression in the north coastal area is an important local mining operation. Production is on the order of 100,000 tons per year. There are some iron ore deposits which could be developed. The governments of Ethiopia over the years tried to get foreign companies to develop these ore deposits but the political instability of Ethiopia has interfered.

The effect of the political turmoil of Ethiopia on the functioning of the economy can be read in the statistics below on the value of exports in 1978 as compared with 1974. There was catastrophic declines in the value of exports for most commodities. Coffee production did increase substantially and, fortunately for the Ethiopian people, the price of coffee went up so much that it offset the collapse of the rest of the economy.

The Value of the Principal Exports of Ethiopia, 1978
Commodity Value in 1974
(millions of Birr)
Value in 1978
(millions of Birr)
Coffee 151.9 502.9
Pulses 101.9 17.3
Oilseeds 95.9 12.2
Hides & Skins 47.1 66.3
Incense 22.7 2.8
Canned & Frozen Meat 14.6 0.7
Live Animals 13.3 1.0
Fruits & Vegetables 11.8 3.3
Oilseed cakes 8.6 3.9
Chat* 5.5 5.8
Sugar 4.5 0.0
Spices 3.2 1.9
Beeswax 2.9 5.3
Others 60.8 8.1
Re-exports 8.9 1.3
*Plant leaves containing a mild stimulant
similar in effect to caffeine

Manufacturing plays little role in the economy of Ethiopia. What little manufacturing there is is for the domestic market and was largely a result of foreign investment. Ethiopians with capital to invest put it into the real estate market. The Ethiopian government under the various regimes tried to create manufacturing through state enterprises but had the usual lack of success of socialist ventures. The Mengistu regime nationalized the major enterprises in 1975 thus converting a weak manufacturing sector into a moribund one.


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