Enhancing resilience and promoting development in the horn of africa

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1 ENHANCING RESILIENCE AND PROMOTING DEVELOPMENT IN THE HORN OF AFRICA - AN EXPLORATION INTO ALTERNATIVE INVESTMENT OPTIONS Derek Headey, Alemayehu Seyoum Taffesse, Liang You International Food Policy Research Institute (IFPRI)

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Ethiopian Development Research Institute and International Food Policy Research Institute (IFPRI/EDRI), Tenth International Conference on Ethiopian Economy, July 19-21, 2012. EEA Conference Hall

Transcript of Enhancing resilience and promoting development in the horn of africa

Page 1: Enhancing resilience and promoting development in the horn of africa

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ENHANCING RESILIENCE AND PROMOTING DEVELOPMENT IN THE HORN OF AFRICA -

AN EXPLORATION INTO ALTERNATIVE INVESTMENT OPTIONS

Derek Headey, Alemayehu Seyoum Taffesse, Liang YouInternational Food Policy Research Institute (IFPRI)

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The Horn of Africa has witnessed recurring and devastating droughts, seemingly with more frequency

But vulnerability to drought is only part of the problem – there is an interplay between shocks and underlying stresses (population growth, climate change, shrinking grazing lands)

This interplay is not controversial, yet it’s also not well understood which factors matter most

1. Background

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19701973

19761979

19821985

19881991

19941997

20002003

20062009

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

Rough estimates of the number of people affected by droughts in the Horn of Africa: 1970-2010

Ethiopia Kenya Somalia

Num

ber o

f peo

ple

"affe

cted

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dro

ught

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This context has produced some very polemical views: sedentarization vs. preservation of pastoralism

Can either view draw on a strong evidence base? IFPRI was asked by USAID revisit that evidence base in

the context of some tough questions:1. Can pastoralism be sustained in the face of these

stresses and shocks?2. What role should other sectors play in promoting a

more resilient development path? In addition to “What to do?” there is “How to do?”

1. Background

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2. Pastoralism: characteristics, constraints, potential

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• ASAL population not necessarily poor in relative terms, but very vulnerable

• Wealth stems from livestock, but where does vulnerability come from?

2. Pastoralism

S.N.N

.P

Oromia

Amhara

Ben.-Gumuz

Tigray

Gambela

Afar (ASAL)

Somali (ASAL)

0%

10%

20%

30%

40%

50%

60%Malnutrition prevalence in Ethiopia 2010

Chronic (stunting) Acute (wasting)

Regions*

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• Superficially, livestock mortality is the main cause of vulnerability in ASAL regions, and drought is the main cause of livestock mortality

• But why don’t pastoralists destock prior to drought and restock afterwards?

• Lack of early warning? Poor access to markets? Cultural attachment to livestock?

• Dominant theory is missing markets for destocking, restocking, insurance & credit

• So pastoralists hold on to animals more than they would if markets worked

2. Pastoralism

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Figure 4. Herd size threshold effects that push households out of pastoralism

Source: Lybert et al. (2004).

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• So the superficial answer is that drought renders pastoralists vulnerable, and has pushed many out

• But looking deeper, is it shocks that cause this or the interaction of shocks with various stresses?

1. Climate change? Some evidence of drier conditions from warming of Indian Ocean (Funk et al. 2009)

2. Rapid population growth? 2-3% per year3. Mobility restrictions? Yes, but could also be related to

population growth as well as policies & institutions• So while pastoralists may be rational and efficient,

indefinite population growth is not sustainable

2. Pastoralism

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• What do these facts imply about pastoralism & resilience?1. Pastoralism is too big to fail – in the medium term it is

impossible to create enough viable livelihoods in other sectors (and livestock has strong potential)

2. Diversification is also essential – resilience of pastoralism can be improved by both better land & water management, but also by diversification

3. Critical to understand commercialization: opportunities, constraints, engagement with the poor

4. Improve drought management: destocking, restocking, insurance, interactions with commercialization

2. Pastoralism

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• The share of pastoralism in ASAL incomes is thought to have been declining for some time

• Recent snapshots also tell us that there is variation across space, and significant populations are engaged in sedentary farming (irrigated and non-irrigated) and firewood/charcoal production, smaller shares in trade, various types of labor, shopkeeping, etc.

3. Non-pastoralist livelihoods

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Activity types Birr/month

% HHs engageda

Most & least lucrative activities

Birr/month

Most lucrative activitiesTrading 615 3.8% 1. Contraband trader 1,607Rents 502 <2% 2. Construction worker 1,307Labor 447 2.4% 3. Carpentry/metal-worker 873Services 300 10% 4. Khat trader 868Food /drink proc. 244 8% 5. Selling meat 853

Livestock 216 69.9% Least lucrative activitiesCrop farming 210 50-55% 60. Charcoal seller 100Small industry 182 6.3% 61. Firewood collector 88Begging 123 <2% 62. Basket/mat maker 88Natural products 117 25-30% 63. Selling eggs 79

64. Beekeeper 77

Table 4. Average income by livelihood category, and by highest and lowest returns: Somali region 2005

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• Similar picture in Borena region and north-eastern Kenya

• Upshot is the following ranking of livelihoods: 1. Urban livelihoods pay best2. Irrigated livelihoods second best3. Pastoralism third4. Agro-pastoralism (rainfed farming) distant fourth5. Firewood/charcoal pa a very distant fifth• So seems a good idea to promote urbanization and

irrigation – but in both cases there are capacity constraints over the medium term

3. Non-pastoralist livelihoods

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• For irrigation, it’s important to look back and look forward

• Behnke et al. (2010) look at mature irrigation schemes in Afar, since these are the most mature in the region

• Several irrigation schemes performed poorly, but sugar generates major income for govt (pastoralism doesn’t)

• Looking forward, we use a recent GIS model to estimate profitable irrigation potential for ASALs

• Then use these area estimate to calculate some crude back-of-the-envelope estimates of potential job creation

3. Non-pastoralist livelihoods

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Figure 6. A map of profitable irrigable areas by lowland and highlands of eastern Africa

Source: Authors construction from data and methods described in Liang et al. (forthcoming).Notes: Lowlands (highlands) are defined as areas below (above) 1500 meters in altitude. This is a standard definition in Ethiopia, but may perhaps be too high in Kenya. IRR refers to internal rate of return.

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Table 6. Profitably irrigable area in the ASALs of eastern African countriesa

Source: Authors’ estimates based on the data and methods described in Liang et al. (forthcoming).

Cost scenariosc

Countries Profitable increase in area (Ha)b

Rural ASAL population in

2020 (millions)

% of 6-person rural HHs that could work 1

irrigated hectaree

%of 6-person rural HHs that could work 0.5 irrigated hectarese

Low Ethiopia 217,060 22.7 5.7% 11.4%cost Kenya 291,486 19.7 8.9% 17.8%

Djibouti 7 0.2 0.0% 0.0%

Somalia 14,297 7.3 1.2% 2.4%

Total 522,850 49.9 6.3% 12.6%

Medium Ethiopia 159,568 23 4.2% 8.4%

cost Kenya 152,869 20 4.7% 9.4%

Djibouti 7 0 0.0% 0.0%

Somalia 8,245 7 0.7% 1.4%

Total 320,689 50 3.9% 7.8%

High Ethiopia 156,030 23 4.1% 8.2%

cost Kenya 108,762 20 3.3% 6.6%

Djibouti 0 0 0.0% 0.0%

Somalia 1,293 7 0.1% 0.2%

Total 266,085 50 3.2% 6.4%

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• What about urbanization and migration?• Both ASAL data and surveys from other developing

regions tend to show that education is a requirement for successful migration

• Education also important for improved governance, reducing fertility rates and female empowerment

• The question is how best to deliver these services: boarding schools, mobile schools, distance learning, etc

3. Non-pastoralist livelihoods

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Figure 7. A map of literacy status in Ethiopia by pastoralist and non-pastoralist woredas

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• Other interventions could benefit both pastoralist and non-pastoralist livelihoods

• Infrastructure important, but in low population density environments investments need to be very strategic.

• On the positive side, roads have been transformative in Borena, Garissa, and other parts of the region

• But roads in lowland areas have sometimes been criticized for low rate of usage (low benefit-cost ratios)

• Also, there is an argument for more strategic use of space in general. Where should infrastructures be clustered? Where are there dangers of over-clustering?

3. Non-pastoralist livelihoods

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• An economic interpretation of the evidence suggests that a balance development strategy is needed.

• Pastoralism has significant advantages, but major risks – Can commercialization enhance resilience? Can it be pro-poor? What does that package entail?

• Resilience of pastoralists & ASAL population as a whole will also require some pastoralists to exit, ideally into urban livelihoods and irrigation

• Education and infrastructure most likely the big ticket cross-cutting investments, but innovative service delivery will be key

4. Summing up