Explaining the Ethiopian outmigration: Incentives or Constraints?

By Seid Hassan and Minga Negash¹

Professor Seid Hassan

Professor Minga Negash

In both theory and practice, pull and push
factors drive migrants out of their own countries of origin. The factors are
complex but they are in general categorized as: (a) demand-pull factors,
represented by better
economic opportunities and jobs in the host (new) country; (b) supply-push factors, represented
by the lack
of economic opportunities, jobs, and economic downturns, political oppressions, abuses
of human rights by home country governments, religious intolerance (constraints), war, conflict
and insecurity in the home country; (c) mediating factors that accelerate or
constrain migration which may include the existence or prevalence of opportunities
available to human smugglers, fly by night

recruitment
agencies, registered recruitment agencies operating within the legal system and
government policies encouraging/incentivizing citizens to migrate; and (d) social
network (pull) factors such as the existence of relatives, friends and
acquaintances in host countries, available opportunities for family
unifications in host countries, and success stories of diaspora migrants. The
role played by each of these factors and their relative importance and dynamics
depend on the economic, political, societal conditions and geographical
proximity between the home, transit and destination countries.  

In attempting to explain the Ethiopian outmigration, our conjuncture is
that the push factors play the dominant role in driving out Ethiopians out of
their country, prominent among them being abject poverty and bad governance. Bad
governance and economic constraints are highly correlated, for bad governance basically means the lack of rule of law, political freedom, accountability,
transparency, efficient institutions and increased corruption and insecurity. Development
economists have repeatedly shown that bad governance plays significant roles in
retarding development in addition to exacerbating economic inequality, increasing poverty, corruption, conflicts
and environmental degradation.

Development economists have also documented that economic mobility and
geographic mobility are correlated. Unfortunately, the ruling party’s ethnic
policy is known to have restricted internal migration. That is, by restricting internal migration, the
ethnic based governance and political structure, has limited the economic
opportunities of the citizens and the country’s capability to absorb migrants
internally. As Gray, Mueller and Woldehanna (2012)
show, barriers within Ethiopia indeed exist, thereby prohibiting citizens from freely
moving within regions, hence denying them the basic constitutional right of
mobility. The expulsion of “others” from the Benishangul-Gumuz, and Gura Ferda and the Ogaden regions,
considered by many to be crime against humanity
is the extreme version of it. Another political problem which has a colossal
economic impact on migration is the corruption conundrum. As Ariu
and Squicciarin argue, the prevalence of corruption within a nation tends
to drive relatively skilled workers out of their own country in part because
they distaste a non-meritocratic and nepotistic regime.

The “prolonged loss in human capital” in turn leads a country to be afflicted
by brain-drain which is known to be a major obstacle to economic growth. In the
case of Ethiopia’s opaque
system, there is a widespread perception that one can only advance one’s
career and economic opportunities using close-knit ties established through one’s
ethnic stock, family connections or through corruption. This captured state of
the Ethiopian State has been dealt in the special edition of the Ethiopian E.
Journal for Innovation and Research Foresight (Volume 5 No 1 2013).

In explaining the Ethiopian migration to the Middle East, which we
believe is largely economic, we ask two interesting questions: Firstly, why do Ethiopians leave their birthplaces en
masse when their country is alleged to have been registering double-digit real
economic growth rates for nearly a decade? Secondly, are there any overarching identifiable
factors that explain the Ethiopian exodus? Managing the variables enables
policy makers and the international community to find mitigation strategies for
the outmigration, and the resultant human tragedy experienced by the migrants.    

As
indicated earlier, the research-based literature
unanimously documents economic motives such as increased poverty playing a
prominent role in international migration. In other words increased economic
growth in the source country is a declining function of outmigration from that
country. Hence, in order to understand the Ethiopian outmigration, it is
important to briefly examine the state of the Ethiopian economy. The alleged
double-digit growth, if it is real, should have served to keep citizens to stay
put if not even serve as a magnet to attract foreign immigrants. The Ethiopian
exodus, therefore, is incompatible with a growing economy. We argue that the
fundamental determinants of economic growth and development (see Barro: 1996
and Petrakos et al: 2007, for example) and the realities on the ground do not support the
economic expansion that the Government of Ethiopia (GoE) has been claiming. Furthermore,
there are no indications that the alleged fruits of the growth are shared with
the citizenry for the country’s income disparities have been rising (Shimeles & Delelegn: 2013, Gebre-Sellasie: 2012, Leite et al: 2009).

Luckily, some
economists and commentators have been questioning the credibility of the
statistics that has been and continues to be produced by the GoE. A good example is the short commentary by Professor Daniel Teferra (2013)
who not only poked holes on the government’s claim of sustained double-digit
growth rates but also criticized multilateral institutions such as the Africa
Development Bank, the IMF, and the World Bank who happen to echo the
government’s claim in a rather scandalous proportion. The Economist magazine described
the Ethiopian inflation figures as “fiddled
with even more than those in Argentina” and “the double-digit growth rates predicted by the government of Prime
Minister Meles Zenawi look fanciful.” On a fundamental level, Professor Abu Girma Moges has shown that there is no reduction in poverty in Ethiopia as claimed
by the GoE since the base for the claim is the “recent poverty index
computation is the 2010/11 Household Income, Consumption and Expenditure Survey
(HICES) conducted by the central statistical agency (CSA, 2012) was flawed and
incorrect, “perhaps by design.”  Fortunately, still,
other observers have begun questioning the GoE’s double-digit growth rates and
sustained economic development. The GoE’s central planning which is a reminiscent
of the old USSR planning system has caught the attentions of writers on
Ethiopia. The French writer Rene Lefort, in his piece of 26 November 2012 observed
what economists of Ethiopian origin have been stating for a long time. It is only in the Ethiopian context where the ex-ante economic forecasts (budgets) are
nearly identical to the actual outcomes! Lefort
succinctly puts the ruling party’s performance evaluation
(gim’gema) system as follows:

“The first question concerns the reality of its achievements,
notably the famous ‘double digit growth’ since 2004, which the authorities
constantly extol. In fact, this figure is the product of a
vicious circle. The government sets absurdly ambitious targets. The work of
every public servant is assessed against those targets. Their careers depend on
it. And of course, they claim to have achieved them. Then the targets are
raised again. Once again, they claim to have met them. The lie becomes
institutionalized. The gap between basic national realities and the image that
the authorities perceive and communicate, from summit to base, has become so
great that it could be said that Ethiopia has turned out to be not so much a
Potemkin village, as a Potemkin country. Sooner or later, the authorities will
have to deal with the shockwave that results when the
truth inevitably comes out.”

Similar
accounts have been made by Epstein
whose finding was based on her own field-work that took her around the country
as well as by Abbink, (2009:21).   

Having
noted the incompatibility of outmigration with real growth, we now move to the
second question of identifying the economic variables that explain the
migration phenomenon. The economic variables however are affected by a number
of mediating factors. One mediating factor that exacerbates outmigration is
government ineffectiveness. We alert researchers on the Ethiopian outmigration to consider
the following conjectures/hypotheses in any way they deemed it necessary. In particular,
we observe that the existence of an organized crime, whose main purpose is reaping
the benefits from smuggling and human trafficking. This highly organized criminal activity enjoys an interlocking
relationship with the strength of the institutions of governance and the political
effort to delegitimize the Ethiopian State, ironically connected to the history
of the ruling regime itself. Furthermore, the breakdown of law and order is in
part explained by the GoE’s increasingly repressive methods of resolving dissent.
 Our observations indicate that criminal syndicates
pertaining to human trafficking have become powerful; often connected to either
the law enforcement agencies or the various armed groups that claim to have
political grievances. We also observe that the majority of migrants are coming
from rural areas; they are poor, uneducated and unskilled and hence unable to
legitimize their immigration. We therefore predict that the Saudi mass
expulsion of Ethiopians will not be the last we would observe. Nor would we see
Ethiopians stopping emigrating unless the root causes of the exodus and the
mediating factors are recognized, and appropriate mitigation policies are put
in place.  

We list a
few of the inter-related push factors that explain the Ethiopian outmigration
below.

Factors that explain the Ethiopian outmigration

As one of
the current authors illustrated earlier, the repeatedly devalued birr
(conducted without addressing the economic fundamentals of the country) which
in turn was created by politically driven monetary and fiscal policy measures,
raised prices sharply leading to a rise in the cost of living and a massive fall
in living stands. Worse, the regime unwisely adopted price caps measures, despite warnings of its damaging effects.
All the price caps measure did was create shortages
without reducing prices. It is refreshing to see Sendeq,
one of the country’s local newspapers in its November 27, 2013 edition rather
boldly articulating the rising cost of living as one of the drivers of the Ethiopian
outmigration.  

Land policy: Gebru and Beyene
document that landlessness is one of the key factors for outmigration in
Ethiopia. This fact is buttressed by the significant portion of Ethiopian
migrants to the Middle East being from rural
areas where about 80% of the population depends on farming and nomadic cattle raising for its livelihood. The abject rural poverty that
peasants are facing cannot be separated from the government’s landholding
policies (Gebresellasie,
2006). Unfortunately and as Gebreselassie noted (P.4), the GoE’s “insertion of the issue of land in the Ethiopian constitution
[has made] rural land increasingly [to] become a political affair”. By inserting the land policy in the constitution, the GoE
has effectively eliminated the possibility of flexible application of policy,
extended its control over the population and made free and fair election only a
dream. Worse, it has eliminated all meaningful debates about efficient
utilization of land (Nega and Degefe, 2000). The net effect is that instead
of curbing migration, the landholding policy is used to disown and evict
peasants from their ancestral lands.  The evictions are made in part to give way for the
government’s sugar plantations and facilitate for international agri-business
which ironically come from Saudi Arabia and Asian countries. Furthermore, the lack
of productivity in the agricultural sector is also connected to the GoE’s land
policy. According to a report published by the
Ethiopian Economic
Association (p.2), the government’s bad
land-holding policy has led to “declining farm size, tenure insecurity, and
subsistence farming practices”. 

Rapid
Population Growth and Weak Industrial Sector: Poor family planning and
population policy when coupled with problematic land policy makes the situation
explosive. As noted earlier more than 80% of the population lives in rural
areas and depends on subsistence farming. The population growth rate hovers
around 3%. The rapid growth in population has reduced the land that is held by
each farmer, making it uneconomical for the small farmer to stay in rural
Ethiopia. The effect of the land shortage is to create an influx into urban
centers, which themselves are under extreme pressure. The manufacturing and the
service sectors of the economy were supposed to absorb the rising population. This
however is not the case as government itself admitted
its disappointments about the industry sector of the economy. The fact that
population growth has been outstripping
food production, which is associated with increased land scarcity and
environmental degradation, has been proved by the last and current regimes’
attempts of repeated land redistribution schemes.

Remittances
not invested: According to some estimates the annual revenues from remittances
is close of three billion US dollars, a figure that is much higher than the
country’s revenue from exports of goods and official development assistance
(ODA). The bulk of the remittance is coming from the Middle East countries. The
remittances are spent for repayment of debts (often borrowed from
family, friends or loan sharks) and
fees for recruitment agencies. Most of the financial
flow is outside of the banking system and involves the money laundering
networks. Anecdotal evidence
indicates that income generated by migrants is rarely invested in productive
assets. The leftovers from debt and fee repayment are used to support and
alleviate family constraints and hardships. The few that is remaining is
invested in real estate, an investment sector with no multiplier effects.

Most
Ethiopian migrants to the Middle East are poor, women, uneducated and unskilled: Economic and migration theory indicate
that relatively highly skilled workers are mobile, flexible and have a better
chance of negotiating and enforcing employment contracts.  Contrary to this fact, most Ethiopians who are
migrating to the Middle East are relatively unskilled, less educated and
destitute which makes them to be vulnerable for abuse. Dawit Wolde Giorgis and David Weinberg connected the labor brokerage system in the oil rich
Kingdom to a form of modern day slavery. On the other hand the poorest
households would have greater incentives to send their children in order to
benefit from the accrued remittances. The poor households however would not
have the financial wherewithal to afford sending their household members abroad
to pay for the journey and the human smuggler or recruiter ((Taylor,
2006)). Even though the
country exports both skilled and unskilled labor, the mass migration of
unskilled manpower of the country is peculiar to the country. To make
matters worse, there was no
meaningful effort on the part of the GoE to equip the migrants even with basic
household management skills such as the operation of washing machines and
stoves. The GoE did not and probably still does not have labor counselors in
its embassies. 

Unemployment is the main driver of the outmigration: According
to Serneels of
Oxford University, Ethiopia has “one of the highest unemployment rates
worldwide, around 50% of the urban men between age 15 and 30 are unemployed.”
The official statistics for unemployment however is much smaller than what is
indicated above.  Widespread poverty,
lack of jobs and hopelessness, particularly
among the youth, disadvantageous economic and social position of women
(see also Endeshaw et al/IOM) are the driving force of Ethiopian migration. The
great majority of the deportees from Saudi Arabia and the new arrivals in Yemen
and Southern Africa are young people who are desperate about their future. They
are by and large in the 20-30 years of age. This fact further indicates the
inability of the local economy to absorb the younger and more productive
portion of the labor force. This also should negatively affect productivity and
Ethiopia’s growth capabilities. The massification of higher education and the
10+2 education policy have not helped to mitigate the problem, which in turn
has resulted in an alarming level of poor education quality and high dropout
rates, as reported by Hassan and Ahmed: 2010); Dyson:2012; Tekeste Negash:2006). This puts the country in a vicious circle.

Drought
and climate change are major problems. The country has been frequently hard hit
by drought
which exacerbates the financial constraints of households and increasing
food insecurity. The country has not been self-sufficient in food and about 20%
of the population is in donor-supported social safety net program. The massive
environmental degradation of the few virgin lands by commercial farmers when
coupled with the eviction of peasants exacerbates both the despair and the outmigration.

Labor exporting policy to mitigate shortage of foreign
currency: Exporting people is considered by the GoE as one of the best sources
of foreign currency. Unlike
in other countries, the government encourages
its citizens to migrate. The GoE’s encouragement comes
in two forms. The first is political while the second is economic. The
immigration of political opponents is seen by the ruling party as a sign of relief.
With regard to the economic reasons, Kebede notes
that the government encourages and has instituted migration policies, to the
extent of being “active in facilitating the recruitment of workers for
employment abroad (p. 22) but without adequately informing migrants about the
dangers they would face in host countries, and without negotiating with host
countries on labor conditions. The diaspora did not disappoint when it
comes to the latter, as it helped finance the ruling party’s mega projects by
buying diaspora bonds, participating in government housing construction
(condominium) schemes, building houses and increasing own family consumption expenditures.
Both the government and families of emigrants view remittance flows as an
important source of finance.

No reverse
brain drain is observed. Countries such as China, India and Korea were able to
attract their skilled members of the diaspora to help them develop their
economies because as their economies grew, the diaspora was pulled back into
these countries. The fact that Ethiopia is unable to do this suggests that the
so-called growing economy either does not exist or is incapable of absorbing
the skilled part of the Ethiopian diaspora, in part due to lack of
opportunities (Fransen and
Kuschminder (2009:23). The political tensions exacerbate the problems of
brain drain.

Voice
and accountability problems.
Ethiopia is ranked very low in most of the international and regional
governance indicators. It is also in the list of the world’s 20 failed states. Interestingly,
the alleged economic expansion started to occur immediately after the 2005 election
crisis. However, outmigration accelerated right after the 2005 election.  This may indicate two factors playing a big
role. One is the political difficulties the regime has faced since the 2005
election debacle. The second bolstering the claim made about
the nonexistence of the much trumpeted growth of GDP and/or not reaching the
majority of the people. Indication are that both maybe working together
as Nobel Laureate Amartya Sen shows that in countries where governments are
accountable, human misery is low.  The controlling nature of the ruling
party is documented by Arriola: 2005, Abbink: 2006, Epstein: 2010, Human
Right Watch: 2010 and
others.

In conclusion we surmise that Ethiopia’s
outmigration is largely explained by several interconnected push factors. According
to one of the aforementioned researchers, 71% of the
migration from Gojam and SSNPR is “related to push factors in places of origin,
and 29% to pull factors in places of destination.” The
pull factors are largely out of the control of the GoE and it may only have
limited influence. The TPLF/EPRDF had 22 years to originate and implement
policy, a job that Endeshaw
et al (IOM), the U.S.
State Department, Kebede, Teshome and
others have indicated
that the GoE has failed to do. In other words the present  crisis is yet another evidence of government
ineffectiveness. Furthermore, it is hard to imagine that such a highly
lucrative business involving huge network of migration facilitators, local
brokers and recruiters and human trafficking networks, to the extent of making
the country the hub of
human trafficking, would
exist this long without being sanctioned by the regime, particularly in a
system which controls each individual citizen with the notorious 1-to-5
bonding scheme.

—

[1]
Seid Hassan is Professor of Economics at Murray State University and Minga
Negash is Professor of Accounting at the Metropolitan State University of
Denver and the University of the Witwatersrand, Johannesburg.