Ethiopia in the World Economy Revised - Homepages at WMU.pdf

Ethiopia in the World Economy: Trade, Private Capital Flows, and Migration1 Kenneth A. Reinert kreinert@ School of Public Policy George Mason University 9 May 2006 1 This paper draws on joint work with Ian Goldin and Andrew Beath. I have also benefited from conversations with Sisay Asefa, Gelaye Debebe, and Dave Kaplan and from comments by two anonymous referees. Ethiopia in the World Economy: Trade, Private Capital Flows, and Migration Abstract. Economic globalization can be evaluated with reference to at least three dimensions: trade, private capital flows, and migration. For each of these dimensions, pathways can be identified through which economic globalization can alleviate or contribute to poverty. This paper makes a preliminary examination of the pathways between globalization and poverty for the case of Ethiopia. As one of the world’s poorest countries, Ethiopia’s integration with the world economy takes on specific features. It is highly dependent on the exports of a few goods, has imported a large amount of arms, is largely excluded from global FDI flows, benefits from relatively large inflows of remittances, and is largely excluded from the evolving global regime of intellectual property. Despite a number of negative trends with regard to globalization and poverty, there is room for “small win” policies that would enhance the role of globalization in supporting poverty alleviation. 1. Introduction Economic globalization can be evaluated with reference to at least three dimen