Ethiopia: why neat plans don’t guarantee the jobs developing countries need

In my Sourcing Journal article on Ethiopia, I question the wisdom of elaborate “dirt to shirt” national garment and textile strategies.

I believe such strategies all carry a common fallacy – one very similar to the “poorer countyries make better markets” fallacy and the “we’ve got terrific designers here” fallacy I reviewed a few weeks ago.

To a government planner, it sounds easy: Ethiopia’s got lots of land and lots of water (though not in quite the same places.)  Irrigated, that land could grow cotton, hydroelectricity could provide power to gin it and spin it, and everyone knows that Western garment buyers are desperate for cheap labour to make their clothes, and are bound to come and build garment factories.

What’s more, goes the Ethiopian theory: this can all by funded by the West.

Trouble is: the world’s not like that. Ethiopia’s population is growing fast, and  25 million people will join its workforce between 2011 and 2025, by when the country’s government thinks its “dirt to shirt” programme will have created 170,000 jobs.

The big job-creation success stories in Bangladesh (4.5 million garment jobs) and Cambodia (1.2 million jobs, says its government: 700,000 says the biggest garment making trade association)  come from making clothes. The Ethiopian government’s upstream plans require:

• Government-managed transfer of 7.5 million acres of potential cotton-growing land: a programme already attracting claims of forcible expropriation
• Construction of complex hydroelectric generation and transmission systems
• Building spinning mills: energy-intensive, and a hopeless strategy for creating jobs: current US programmes average almost half a million dollars of investment for every yarn-spinning job created.

It’s not my job to comment on whether all this is desirable: I’m simply saying  there areb far more barriers to implementing such a programme than Ethiopia’ds government seems to accept. And the likelihood it’ll all happen is a great deal less than they think.