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inputs in the same regions. Further, some of these areas, especially Shoa, form the industrial backbone of Ethiopia. This is due, of course, to Addis Ababa and its strong gravitational pull on new industries. The danger with such extreme concentrations is that they tend to soak up a wide range of scarce resources. Indeed, from a short run point of view, allocational choices could further exacerbate the position. The availability of a reliable and relatively efficient infrastructure would no doubt invite planners to place important new industrial enterprises in this heartland, just as the need to extract a high marketed proportion from incremental agricultural output would further divert scarce chemical fertilisers to the already developed and high income agricultural regions. And inexorably small-scale industries also prosper in these developed areas. Thus, of the total number 1,485 private manufacturing establishments, 1,164 are located in Addis Ababa, Shoa and Eritrea; these account for 82 per cent of the 15200 persons employed. It is also clear that some agriculturally prosperous regions score well on certain nutritional indicators, while highly industrialised ones do better than most on other indicators which are dependent on urban services. Those which are neither fare poorly. These data also point out the abysmally low general levels of these indicators across the board (see Saith [1983: Tables 2, 3]). One major source of regional disparities lies in the variations in geo-natural conditions. Areas with variable weather are not conducive to agricultural or local industrial growth. The scattered and semi-nomadic populations of Wollo, Hararghe and Sidamo are thus subjected to frequent disasters through droughts which decimate both people and livestock. It has been argued in the case of Wollo and Hararghe that the famines of 1974/5 were due to exchange entitlement failures (see Sen [1981: Chapter 7]). While the stricken population certainly lost most of its purchasing power, this should not hide the fundamentally fragmented nature of the Ethiopian regional economy. This implies a lack of market integration of an extreme kind. Very considerable grain movements would be required in normal times to compensate for the wide regional variations in the degree of self-sufficiency in foodgrains [Ghose, this volume: Table 7]. In theory, the flow of such movements would be governed by regional price variations which would invite food inflows up to a point where the disposition of supplies would equilibrate prices after adjusting for transport costs. Reality appears to follow a rather different course. Tables 1 and 2 reveal remarkably high price differentials across the board. The average quotations are taken from important markets at awraja or woreda levels in October 1981, and hence can be used as an index of market integration. Gojjam displays the lowest variability in intra-regional prices for most crops, while Tigrai, Wollo, Gamo Goffa and Bale seem highly volatile. The food deficit areas expectedly show higher prices, but the differentials are remarkably high, as a comparison of Hararghe and Tigrai with Gojjam and Gondar reveals. The variability is generally greater in the case of the four inferior crops on which the poorer population depends. Thus, teff and wheat have the lowest coefficients of variation, and sorghum the highest. Relative prices of the different crops also alter ranks frequently. Detailed data indicate a remarkably dissimilar price structure and growth rates even between contiguous, well-connected awrajas of the same province, with
DOI link for inputs in the same regions. Further, some of these areas, especially Shoa, form the industrial backbone of Ethiopia. This is due, of course, to Addis Ababa and its strong gravitational pull on new industries. The danger with such extreme concentrations is that they tend to soak up a wide range of scarce resources. Indeed, from a short run point of view, allocational choices could further exacerbate the position. The availability of a reliable and relatively efficient infrastructure would no doubt invite planners to place important new industrial enterprises in this heartland, just as the need to extract a high marketed proportion from incremental agricultural output would further divert scarce chemical fertilisers to the already developed and high income agricultural regions. And inexorably small-scale industries also prosper in these developed areas. Thus, of the total number 1,485 private manufacturing establishments, 1,164 are located in Addis Ababa, Shoa and Eritrea; these account for 82 per cent of the 15200 persons employed. It is also clear that some agriculturally prosperous regions score well on certain nutritional indicators, while highly industrialised ones do better than most on other indicators which are dependent on urban services. Those which are neither fare poorly. These data also point out the abysmally low general levels of these indicators across the board (see Saith [1983: Tables 2, 3]). One major source of regional disparities lies in the variations in geo-natural conditions. Areas with variable weather are not conducive to agricultural or local industrial growth. The scattered and semi-nomadic populations of Wollo, Hararghe and Sidamo are thus subjected to frequent disasters through droughts which decimate both people and livestock. It has been argued in the case of Wollo and Hararghe that the famines of 1974/5 were due to exchange entitlement failures (see Sen [1981: Chapter 7]). While the stricken population certainly lost most of its purchasing power, this should not hide the fundamentally fragmented nature of the Ethiopian regional economy. This implies a lack of market integration of an extreme kind. Very considerable grain movements would be required in normal times to compensate for the wide regional variations in the degree of self-sufficiency in foodgrains [Ghose, this volume: Table 7]. In theory, the flow of such movements would be governed by regional price variations which would invite food inflows up to a point where the disposition of supplies would equilibrate prices after adjusting for transport costs. Reality appears to follow a rather different course. Tables 1 and 2 reveal remarkably high price differentials across the board. The average quotations are taken from important markets at awraja or woreda levels in October 1981, and hence can be used as an index of market integration. Gojjam displays the lowest variability in intra-regional prices for most crops, while Tigrai, Wollo, Gamo Goffa and Bale seem highly volatile. The food deficit areas expectedly show higher prices, but the differentials are remarkably high, as a comparison of Hararghe and Tigrai with Gojjam and Gondar reveals. The variability is generally greater in the case of the four inferior crops on which the poorer population depends. Thus, teff and wheat have the lowest coefficients of variation, and sorghum the highest. Relative prices of the different crops also alter ranks frequently. Detailed data indicate a remarkably dissimilar price structure and growth rates even between contiguous, well-connected awrajas of the same province, with
inputs in the same regions. Further, some of these areas, especially Shoa, form the industrial backbone of Ethiopia. This is due, of course, to Addis Ababa and its strong gravitational pull on new industries. The danger with such extreme concentrations is that they tend to soak up a wide range of scarce resources. Indeed, from a short run point of view, allocational choices could further exacerbate the position. The availability of a reliable and relatively efficient infrastructure would no doubt invite planners to place important new industrial enterprises in this heartland, just as the need to extract a high marketed proportion from incremental agricultural output would further divert scarce chemical fertilisers to the already developed and high income agricultural regions. And inexorably small-scale industries also prosper in these developed areas. Thus, of the total number 1,485 private manufacturing establishments, 1,164 are located in Addis Ababa, Shoa and Eritrea; these account for 82 per cent of the 15200 persons employed. It is also clear that some agriculturally prosperous regions score well on certain nutritional indicators, while highly industrialised ones do better than most on other indicators which are dependent on urban services. Those which are neither fare poorly. These data also point out the abysmally low general levels of these indicators across the board (see Saith [1983: Tables 2, 3]). One major source of regional disparities lies in the variations in geo-natural conditions. Areas with variable weather are not conducive to agricultural or local industrial growth. The scattered and semi-nomadic populations of Wollo, Hararghe and Sidamo are thus subjected to frequent disasters through droughts which decimate both people and livestock. It has been argued in the case of Wollo and Hararghe that the famines of 1974/5 were due to exchange entitlement failures (see Sen [1981: Chapter 7]). While the stricken population certainly lost most of its purchasing power, this should not hide the fundamentally fragmented nature of the Ethiopian regional economy. This implies a lack of market integration of an extreme kind. Very considerable grain movements would be required in normal times to compensate for the wide regional variations in the degree of self-sufficiency in foodgrains [Ghose, this volume: Table 7]. In theory, the flow of such movements would be governed by regional price variations which would invite food inflows up to a point where the disposition of supplies would equilibrate prices after adjusting for transport costs. Reality appears to follow a rather different course. Tables 1 and 2 reveal remarkably high price differentials across the board. The average quotations are taken from important markets at awraja or woreda levels in October 1981, and hence can be used as an index of market integration. Gojjam displays the lowest variability in intra-regional prices for most crops, while Tigrai, Wollo, Gamo Goffa and Bale seem highly volatile. The food deficit areas expectedly show higher prices, but the differentials are remarkably high, as a comparison of Hararghe and Tigrai with Gojjam and Gondar reveals. The variability is generally greater in the case of the four inferior crops on which the poorer population depends. Thus, teff and wheat have the lowest coefficients of variation, and sorghum the highest. Relative prices of the different crops also alter ranks frequently. Detailed data indicate a remarkably dissimilar price structure and growth rates even between contiguous, well-connected awrajas of the same province, with
ABSTRACT