ethiopiantimes

July 8, 2014

The Asians at the Labor market in Ethiopia

Filed under: Midroc — ethiopiantimes @ 12:02 pm
Tags: , , , , ,


In a country where 80 percent of jobs for youth are within the informal sector, as the formal sector has not been a dynamic engine for growth, creating more jobs should be the first among the many government priority lists. Unfortunately, the opposite has been happening in Ethiopia, and many believe that the MIDROC Ethiopia Project Office (MEPO) plan will be another factor negatively affecting the labour market–creating further job insecurity in an already weak economy. Recent studies by the World Bank estimate urban unemployment rates at around 21 percent based on the population age 10+. The rates vary in different urban setups. In Addis Ababa, for instance, the unemployment rate is 24 percent. This rate is even higher for woman, at 34 percent.

On a week day before three year, the street along De Gaulle Square, Piassa, was crowded with people. In the center stood five Chinese men, the crowd was amazed by what they saw and heard. The Chinese men were neither tourists nor artists, but street traders attempting to sell used items. In broken English, they called the prices aloud, “Thirty Beeer, Twenty Beeeer!” for used umbrellas, raincoats and many other household items. The scene clearly was a tragedy staged in a public place. Only few hundred meters away, police were busy disbanding and arresting local vendors selling second-hand goods and low-quality materials produced in China.
However, as if the economy was in short supply of unskilled labour, government officials did not respond to this market development. Interpreting their silence and indifference as a good opportunity, many more Chinese people began to engage in other service sectors as vendors, chefs, waitresses and technicians. In Ethiopia today, Chinese laborers some of who are allegedly prisoners–increasingly fill these and many other occupations.

Another story with a similar undertone came to the fore before two year.  According to the weekly English newspaper, The Reporter, the MIDROC Ethiopia Project Office (MEPO) is planning to recruit approximately 5000 Filipino workers to their construction sites in Ethiopia.


These Filipinos are day labourers, with no special skills that might qualify them above their local rivals. As common to construction work, the majority of the workforce is unskilled. One of the very reasons that governments and policymakers encourage the expansion of this sector is because it can create short term, decent-paying job opportunities for the mass of unskilled force in the market.
Considering the government’s proclamation of an increase in technical and vocational schools throughout the country, the labour market of the nation should certainly be capable of providing any amount of unskilled or even semi-skilled day labourers
However, the trend stands contrary to this claim of semi-skilled labour force creation. Due to the unchecked high population growth rate and a very low job creation capacity, a more unskilled generation is, in fact, entering the market.

In a country where 80 percent of jobs for youth are within the informal sector, as the formal sector has not been a dynamic engine for growth, creating more jobs should be the first among the many government priority lists. Unfortunately, the opposite has been happening in Ethiopia, and many believe that the MEPO plan will be another factor negatively affecting the labour market–creating further job insecurity in an already weak economy.

Recent studies by the World Bank estimate urban unemployment rates at around 21 percent, based on the population age 10+. The rates vary in different urban setups. In Addis Ababa, for instance, the unemployment rate is 24 percent. This rate is even higher for woman, at 34 percent.

In general, excluding the disguised unemployed in the rural area, unemployment in Ethiopia seems to be an urban phenomenon. Particularly, the high growth rate of youth entering the labour market makes the unemployment situation worse. According to research, reducing unemployment in the country today is very difficult as a result of new developments. A rising skill profile of the urban work force, changes in the educational composition of employment (which includes both those who completed Grade Four and those who graduated from Technical and Vocational Education Training schools), an increased level of urban labour supply due to high internal migration and many more characteristics of the labour market present significant obstacles to reducing unemployment.
Despite many constraints on enhancing employment, economists have been advising the government to focus on industries that are highly labour-intensive. Such industries, such as agro-processing, are assumed to help the economy by providing employment to the unskilled and semi-skilled work force both in urban and rural areas.

However, in a country in which the politician’s daily rhetoric plays a dominant role over the expert’s advice, it is not uncommon to see such oddities in everyday life. The intension to recruit 5000 Filipinos is one indicator. The irony is beyond comprehension. Anyone who walks along the road to Gerji can see thousands of unemployed Ethiopians lining up outside the gates of a construction company or site where only three daily labourers are needed.  Thousands of youngsters in Wolayita continue to wait by the side of the main road for someone who may or may not come to take them for a job of any kind.

Bringing these 5000 Filipinos into the work force does not only affect the unemployed competing for the same opportunities. It will also affect those who have been working under the MEPO on different construction sites, as the construction industry is very sensitive to marginal labour increases and seasons. Casual workers might be evicted from their positions and forced to face the challenges of the ever-rising cost of living. As these terminated labourers would then increase the general pressure on the labour market in the entire construction industry, sector wage rates may be reduced. This, in turn, will surely affect thousands of labourers and their families.
The government has not yet issued a statement on the issue, and so it remains unclear how they intend to deal with it. Yet we can rest assured that a news story will inevitably be released from the state media: “5000 Filipinos significantly contribute towards the success of the Growth and Transformation Plan.

Guest Writer

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