Name of Group Three(3) members
Name---------------------------- ID. No
1.Yohannis Tilahun …UGR/8567/12
2.Sengi Niguse…………UGR/ 8991 /12
3.Negeso Kedir…………UGR/2375 /12
4.Muzahir Ahmednur…UGR/ 9930/12
5. Temesgen Teshale....UGR/1687/12
6. Odaa Halake………… UGR/6758/ 12
7.Selam Talele…………..UGR/2744/12
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ACKNOWLEDGEMENT
The first we would like to say thank you from the bottom of our heart goes to Dr.
Tsegabirhan who created and provoked our passions to open our eyes to get a look and
understand the problems our mother land faced and efforts to come up with solutions
To answer these questions, try to incorporate with major problems of our
mother lands/Ethiopian is facing and it is very important to consider about the
problems and challenges that the country is struggling with these days and may
continue to do so if not treated and handled carefully and the major bondage of
developmental economics that make undermine our country economy runs from
these diagnostic problems. Why most developing country is nothing with
innovation and creativity? all our group members indicate that the Master secret
of transforming our country economy from “innovation and creativity “We
all Group members agree that Ethiopia is nothing/ lowest level of creativity,
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innovation and low level intellectual and research movement center even we
don’t have these major and crucians center of enlightenments. these issues are
directly and indirectly it touches all sectors and millions of people, which only
possible transforming Ethiopian economy if changes come from indigenizing
innovation and also when education curriculum which is strongly interlinked with
the institutionalism, innovation, structuralism and practical based learning rather
than importing theory of a white peoples its possible transforming Ethiopian
economy completely. Otherwise continuing as “modern slavery” of develop
world, because this education sector strongly affects all sector. Compare Ethiopia
before education and after education came into map. the successful understanding
of the past achievements and failures, the current dynamism and future
prospective help to answer these questions.
 Before modern education system come into curriculum (remained gada
system, calendaring system, and small cottage industry etc. our country
indigenous innovation and creativities.
these problems arise because of above
scenario or education curriculum of our country is not freely target innovation,
not freely targeted creativity, not freely targeted problem solving and not freely
targeted on practical learning process, it has no strong institutions and
undermining all indigenous knowledge and old institutions like Gada system,
shimigllen system, chafe chambalal , calendaring system of Ethiopia and etc. so
why Ethiopia is one of the poorest countries in the world. Instability, both the
absence of peace and economic instability like sky-rocket inflation and
unemployment be recurrent phenomena these days in the country. Living in the
era of globalization, the country’s global competitiveness is being challenged, all
thing we learn, all thing we think, all thing we use are import. The group asserts
that it is impossible or at least very difficult for the community to sustain with the
existence of poverty, food insecurity, food insecurity, inequality (social, cultural,
and gender inequalities), conflict, unemployment, chronic inflation, climate
change, failing or weak institutions, corruptions, market failures, and the absence
of peace, love, justice, freedom, fraternity, fairness, tolerance, good governance.
It is the aforementioned problems hindered and still impeding the nation to move
forward. It is possible to change these challenges into perspective and build a
great powerful and prosperous nation with satisfied citizens, but all these could
be possible with great and special attention and emphasis toward indigenous
knowledge, indigenous creativity and indigenous innovation. This all problems
because of wrong education curriculum! Re again we use this word we all are
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“modern slavery” always we care the theory of western world and digs the
theory of wester world and we waste our much time with theory of western world
without any value gain.
if our education structure is not change toward
innovation and if our education structure is not change toward indigenous
knowledge. Country transforming is impossible.
 Remained the important and big things “the environment of our country
differs from USAs.” So why we always waste our time with the theory of
white people. Nothing value add for us.
It is a common proposition and an agreement for the whole group members on
the severity of these challenges of the Ethiopian economy and transforming of
Ethiopian economy as a general by constructing strong education institution,
practical based learning and by structurally changing of our country education
systems toward indigenous knowledge-based creativity and innovation.
However, there are a lot of controversies among the group members on which
theory or a blend of theories is capable of explaining and transforming of our
country economy’s.
Why and how all sector encompassed under education sectors? what is the effects
of effective and efficiency education systems for to completely transforming
economy? Simple we start analysis from methodological issues perspective we
done on the assignment two, Dahlgaard-Park’s Trinity Motivation Model. The
trinity model of human needs biological needs food, spiritual needs and
psychological needs are major important to balance for innovations interlinking
to solve any problems around us. because the driving forces of people
motivation. People’s action /activities are driven in order to satisfy the three
essential human needs – biological/physical, mental/psychological and
spiritual/moral needs. Take simple example our country education systems or our
education curriculums are only based on biological needs not includes
psychological needs as well as spiritual needs. So that is why our country
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innovation is lower culture of creativity and innovativeness without these triple
needs impossible talking about innovation transforming. human needs
understood in their dynamism.
their economic strategies in the face of
unprecedented challenges, including an exponentially faster rate of technological
change, meaningful and relevant changes in education are urgently needed to
achieve more inclusive and sustainable development for all, not just for the
privileged few. Ethical questions about how to harness the knowledge and skills
we possess to create new products and opportunities loom large. To shorten the
period of “social pain” and maximise the period of “prosperity” for all, education
systems need to undergo transformative change from the strong education
changes toward of greatness. Here one thing we remained “education is a
compass of economic development and economic transformation if and only if
strong interlink with innovation, creativity and practical based learning methods
and by giving more values for indigenous institutions because more effective than
modern that is possible transforming our economy. To released themselves from
“modern slavery” systems we must realize our potential freedom in holistic
manner education based on practical learning and targeted more means of
freedom realizing our full potential.
From our first assignment to We didn’t experience for a single day such
exaggerated freedom in history as human being. We can improve the situation of
our problems to enjoy freedom but we cannot eliminate them. Therefore, policies
should aim at reducing the obstacles that hinder the realization of full human
freedom. To enhance freedom to realize full potential for everyone the countries
should follow the policy that insure the development of every citizen in the
country without any discrimination and exclusion. The policy measure by
countries and government bodies should give the way for marginalized groups
and those left behind because of different reasons like war, poor economic
performance, political unrest, backwardness, geographical location, lack of
democratic governance, crime and terrorism, unnecessary external interference,
colonial dominance and other challenges. The main role of government is
preparing ladder to lead every human being to development in all sphere. The
ladder they prepare should be suitable for everyone fairly. It has to depend on
potential individual person has. The ladder to development for those was
discriminated should be more attractive than for those was in conductive
opportunity. So that is why we said strongly education a compass of everything
a compass of liberty and freedom. A compass of life, a compass of creativity and
a compass of any guides and police we follow.
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Line of Argument two (LA-2)
Theory of Structural transformation strongly supported by have members of the
groups agree on the structural transformation leads to understanding and
transforming our country economy. Because Ethiopian economy face many
structural problems political, social, and economical. All these problems are
affecting the economy of the country. However, Ethiopia is gifted with abundant
natural resources of adequate land mass, fertile soil, favorable climate, water,
wildlife and others. Many of these resources are not properly identified, well
managed, and fully exploited. Even though she is rich by natural resources she is
still can’t use her resources in the proper manner.
Structural transformation is essential as not only a source of higher
productivity growth and rising per capita income, but also a mechanism that helps
to achieve greater diversity of the economic structure, which creates a
country’s resilience to vulnerability to poverty and external shocks. Structural
transformation is underpinned in large part by institutions and policies that
promote the development, adoption and use of technologies to change what an
economy produces and how it does the movement of labour. and other productive
resources from low-productivity to high-productivity economic activities. As we
mentioned above all sectors strong corelated to education of creativity-based meaning that
transforming Ethiopian Economy from multi perspective that is structurally change education
system of Ethiopian. directly interlinked to other many sectors. By given high attention to
develop “research canter, intellectual movement canter and high enlargement enlightenment
canter to expert more and important thing is must be found the innovation and creativity canter
all other sector is undergone of education. Justice immune from education through
Balanced Growth Model
All sectors are important to the development, transformation and
sustenance of a nation and world. The essence of balanced growth model is,
‘the economic development of one country grows if all sectors all together
developed in balanced. all sectors of economy like agricultural sectors, industrial
sectors, formal and informal sectors, developing in innovation and technology,
development in urban and rural relation etc. If all of these economic sectors are
developed in balanced way, the true development comes up. Since the existence
of one sector is contribution for other sectors, therefore for it is must to develop
all sectors on parallel ways. If one sectors developed and other is not it is very
hard to overcome the problem that a sector faces. Since the absence of one sector
have very effect on other sectors. All economic activities are important.
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If we specialize in one sector and that sector may fail as world, we live is full of
uncertainty. In that case we lose all what we have and even we fail in the danger’s
poverty trap. But when we diversify our economic sectors, the failures of one
sector have little impact on development since there is another sector that
substitutes the failed one. For example, institutional theory says the core of any
solution is development in institution and teaches only how to build up the good
institution. Can institution be an economic sector, or be the governing body of the
economic sector?
Why Balanced Growth Model to transform Ethiopia?
Ethiopian economy needs a simultaneous investment on and development of
all sectors, depending on their current status. This is for all sectors are relatively
underdeveloped, but the degree differs. Productivity of agricultural sector is
generally lower than other sectors. The industrial sector is relatively less
performing than the service sector in Ethiopia, all sectors; however, perform less
than in developed countries. One justification to this is the agricultural sector in
Ethiopia takes the lion’s share of labor, more than 70% of the total labor force,
but contributes only between 30%-40% of the annual GDP of the country. The
industrial sector is also backward as major industrial outputs are imported; the
country’s industry is still at its infant stage. As a result of the ‘failure’ of these
two sectors, the country is import-dependent and exposed to international shocks.
Service sector too is relatively less productive. For instance, the country’s labor
force educated or trained the higher education institution are not efficiently
trained at their potential. For instance, Chinese construction workers are imported
non-tradable services.
In his theory, Nurkse asserts that a rise in demand in one sector is an incentive
for other sector to increase its demand for the products of the former sector. This
is a typical fact we can observe in an economy. For example, if the demand for
industrial products increases, so does the demand for agricultural products,
because the rise in demand for industrial products increases income of the sector
and its agents which is followed by the rise in demand for the agricultural
products; a rise in the nutritional contents/balanced diet and increase in the level
daily consumption of food, shifting from twice or once per day to trice or more
per day which are crucial in contributing positively to productivity of labor. He
also mentioned about expanding the size if the market i.e. expansion in terms of
total demand and supply which are the key to the success of investment. Why is
China the biggest foreign direct investment? There are many answers by various
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writers; one of the answers is because the country is the holder of the biggest
labor supply in the world and home for one of the biggest market demands in the
world. This is just to show that the size of the market matters: It is not to justify
the importance foreign direct investment. For Nurkse, therefor, the market is an
economic resource, does to Ethiopian economy.
Improving productivity, one of the main problems of our country, is another thing
that makes the theory preferable than other theories. Ethiopia has large number
of labor, but less productive. Thus, an increase in productivity finally leads to
economic growth and development. Nurkse also argue that investment should be
financed domestically which has many implications; the country free from
repayment of the debt to foreigner the principal with /without interests, and
sovereignty of the nation is safe. He also recognized the importance of the role of
government intervention, typically true in almost all economy
Line of argument Three (LA-3)
Institutional theory
As obviously known agriculture is the back bone of Ethiopian economy. It
contributes a lot to gross domestic product (GDP) and foreign earning and
supplies food to the majority service sector. Apart from these direct contributions,
growth in agriculture can have a lot of contributions, in stimulating other sectors
of the economy through a variety of multiplier effects. However, contrary to what
it in economy, Ethiopian agriculture sector is highly stagnated, less profitable,
and less attractive to entrepreneurs and totally it is highly risky. Millions of
Ethiopians are born poor, live and die poor, hungry illiterate and malnourished.
In a country where more than 70% of the population is participating in the
agricultural sector, food insecurity is one of the main lagging factors of the sector.
Even if this complicated and vicious circle problem in agricultural sector is
emanated from different sources, lack of appropriate institution is problem stated
on the firs list. Even though different theories such as neo classical, new trade
theory, New-new trade theories are contributed a lot to economics as a discipline,
I believe above all institutional matter is the major bottleneck in agriculture and
rural development.
1. Political institutions
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Because in reality, when there is no peace, there is no motivation at work, there
is no waiting for change, there is no positive mentality, the pessimism of people.
In the presence of above problems, where lawlessness becomes law, honest
citizen becomes cheats, crooks and thieves I believe not transforming the whole
agricultural sector and enhancing development, even changing the problems of
individuals who eats hand to mouth is also difficult. Therefore, to make any
change in any sector those ideas discussed above are what political institutions
adhere to first. Not only formal, but also informal institutions (Abba
Gedas/’Mangudo’, ‘Shimagiles’ and others) that is responsible for keeping peace
and stability.
Another role of effective institutions is protecting the environment, both formal
and informal take the lead in protecting the environment from climate changes,
land erosion and degradation, water, sound and air pollutions.
2. Economic institution.
Economic institutions are a set of constraints that govern the relations among
individuals or groups in economic activity. The economic activity could be
production, allocation, distribution or exchange. Economic institutions make up
the economic system the framework that regulates economic activities. As well
as Institutions are, therefore, critical to determining economic performance by
influencing the cost of production, the mode of allocations and the costs of
transactions.
Economic institutions understood as proving the incentive structure that
encourage agents to behave in certain way instead of other way. They may be
broadly grouped into two categories: those that define the forms of ownership, of
the means of production, and those that define the mechanisms for resource
allocation and co-ordination of economic activity. Markets can thus be considered
as one form of institutions coordinating economic activities.
In the economic exchange of goods and services, then, institutions act as a set of
constraints that govern the relations among individuals or groups in the process
of economic exchange. For instance, institutions facilitate sharecropping
economic activity by create stable and predictable behavioral patterns by
providing set of constraints and incentive structures. Institutions thus help human
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beings to form expectations of what other people will do. Markets are only one
type of social device for settling the terms of transactions.
Effective institutions of economic exchange play the following role: coordinate
exchange, facilitate low cost exchange (transaction costs), shape perception and
provide the necessary incentives for agents.
3. Financial institutions
Financial institution like banks, insurance companies, microfinances (‘iqub’ and
‘edir’ in Ethiopia) if well developed and well-organized, have indispensable roles
in facilitating capital, facilitate transitions with less costs; providing insurance
during difficulties for their subscribers. One of the main problems that our
economy is affected with is lack of capital. A well designed, founded efficient
and effective microfinance institutions are highly needed in facilitating ways for
agricultural transformation.
Everyone has a right to develop. To develop and bring about changes in
agriculture, where the lack of capital is highly manifested in, one needs credits
and loans to undertake productions, and insurance to protect him/her from crop
failure and price fluctuation, risks. Therefore, why not government gives farmers
credits and loans? The government, thus, is not protecting the human right, by the
theory of Human Rights Approach to Development.
In general the cumulative of these above institutional inefficiency,
ineffectiveness, incompetency, inadequacy leads vicious circle problem which
we cannot break simply. In addition, even if nominally institutions are exist in
any level, they are biased and corrupted. There is no network and integration
among and between existing institutions, even to use the existing institutions
there is a huge gap of social awareness and there is no follow up for those who
give services, to encourage how they use, what they use, and etc. simply they are
nominal in some places and reluctant to serve society. Most of the time rather
than serving and increasing people’s productivity and breaking poverty channel
they aggravating problems in society. For instance some micro finance
institutions give a loan for society without giving them enough awareness and
how they save and repay their debt. Ultimately they cannot succeed in both
increasing their productivity and repaying loan they had taken. Consequently, the
are obliged to pay debt by selling resources what they have, even including their
home.
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