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Interdisciplinary Project

The influence of foreign

companies on food security in

Ethiopia

Case study: Lake Ziway & Sher, Afriflora

Vincent van Dalen - Political Science (10707344) Danielle Davidson – Biology (10734694)

Sascha Nijdam - Earth Sciences (10785299)

Prof. Dr. Marc Davidson & Koen van der Gaast MSc.

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Table of Contents

0. Abstract ... 2 1. Introduction ... 3 2. Case study ... 4 2.2 Sher Ethiopia ... 5

2.3 Aid For Trade ... 5

3. Methodology ... 6

4. Trend Analysis ... 8

4.2 Accumulation of Toxic Chemicals ... 9

4.3 Land Use Change ... 11

4.4 Economic Development ... 12 4.6 Population Growth ... 13 5. Driver Analysis ... 15 5.2 Mercantilist Perspective... 18 5.3 Land Degradation ... 21 6. Scenarios ... 23

Scenario 1 – ‘Fair trade development’ ... 23

Scenario 2 – ‘Ethiopian Tragedy’ ... 25

Scenario 3 – ‘Ethiopian Spring’... 26

Scenario 4 – ‘Protectionist disaster’ ... 27

7. Evaluation & Policy Recommendations ... 29

8. Discussion ... Fout! Bladwijzer niet gedefinieerd. 9. References ... 30

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0. Abstract

This interdisciplinary research engages in the current food shortage that the African country of Ethiopia is facing and the possible ways in which this might manifest in the future. By means of scenario planning analysis, policies are made for the Ethiopian government in order to reduce the prevailing food insecurity. The driving forces that influence this are considered to be the economical market perspective in association with land degradation. Four diverse scenarios are elaborated based on the relation between Dutch industrial activities and agricultural development in the region of Ziway and on different trends such as decreasing water quantity, increasing population growth and unemployment rate.

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1. Introduction

The African country of Ethiopia has a very young and explosively growing population. The population grew from 33.5 million in 1983 to nearly 100 million inhabitants in 2015. According to the U.S. Census Bureau (2011), Ethiopia will count 278 million inhabitants in 2050. This tremendous population increase is of big concern because in Ethiopia, one of the poorest countries in the world, 44.2% of the population lives below the poverty line (UNDP, 2015). Food security in particular is an important issue: 32% of the Ethiopian citizens are undernourished and many inhabitants struggle to provide themselves with food and water on a daily basis (FAO, IFAD and WFP, 2015). Millions of small-scale Ethiopian farmers, most of whom own less than one hectare of land, produce food in highly difficult circumstances. The agricultural land generally has low productivity and the consequences of high temperatures, scarce and irregular rainfall, make it hard to produce efficiently. Therefore, the yield is particularly low and food insecurity is a big issue (Di Falco & Chavas, 2009).

In order to improve the food security in Ethiopia it is of great importance to understand the driving forces that influence it and how these forces arise. This paper will focus on the influence of foreign investments, particularly the Dutch related company Sher, also known as Afriflora. This multinational organization (MNO) produces flowers for the world market on a large scale in the Lake Ziway area and hence influences the very same region. This densely populated and rural region of Ziway is located close to the capital of Ethiopia, Addis Ababa. Lake Ziway, as one of the few freshwater lakes in Ethiopia, is a highly important water source for agricultural production in the local area. Meanwhile, the Ziway region has increasingly become subject to various ecological and economic pressures. In 2014, Ethiopia was together with Kenya the biggest exporter of cut flowers on the world market (Oxfam, 2016). Foreign companies extract scarce resources, like fresh water, and thereby influence the regional agricultural based economy.

This paper will investigate the following question: ‘What is the foreign influence, in particular of the Dutch company Sher, on food security in the Ethiopian region Lake Ziway and to what extent can the food security be improved?’. It is important to elaborate the exact meaning of food security: “Food security exists when all people, at all times, have physical and economic access to sufficient safe and nutritious food to meet their dietary needs and food preferences for a healthy and active life.” (FAO, 1996) In order to answer this question from an interdisciplinary approach, a scenario planning methodology is adjusted to construct extreme scenarios based on trends, which are scientific facts. Furthermore, two main driving forces are considered to be the economical market perspective in association with land degradation. The objective of this research is to construct clear manageable policies that will help the Ethiopian government influence an increase in food security around Lake Ziway, in order to improve the life quality of locals that are directly or indirectly influenced by nearby

economic activities such as the company Sher.

First, the study area will be elaborated after which the relations of the Dutch company Sher to Ethiopia will be explained. Then, a general explanation of the methodology will be provided, after which the most important trends will be discussed. Once these have been clarified, the key drivers will be given and subsequently the scenarios will be represented. A paragraph of evaluation with discussion will follow and finally policy advices will be given which indicate a solution to the research question.

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2. Case study

2.1 Study Area

Ethiopia is landlocked in the eastern Horn of Africa, which means that it is enclosed by other countries and that there is no direct access to open water. As a consequence, lakes and rivers are relatively more important than in most other countries with direct access to seas and oceans. When it comes to drinking water supplies and agriculture purposes, Ethiopia is highly dependent on freshwater lakes such as Lake Ziway, lying in the densely populated district of Ethiopia’s Rift Valley (Yohannes et al., 2014). The area is characterized by a semi-arid to sub-humid climate and is inhabited by different tribes. This regional population traditionally lives from their land and waters and do not have an organized economy with a monetary system or structured institutions (Al Jazeera, 2014). Lake Ziway is situated in an area with many cultivation movements with minimalistic efforts to protect and conserve the soil. In addition, intensive farming near the lake and waste discharges are sources of pollution of ecosystems (Hengsdijk & Jansen, 2006).

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2.2 Sher Ethiopia

The combination of a fertile soil, presence of fresh water and very low land prices make the region of Ziway highly attractive to businesses. According to an Al Jazeera documentary (Ethiopia - Land for Sale, January 30, 2014), both domestic and foreign investors are increasingly occupying land that was previously inherited by the local and regional population. Amongst the foreign investors is the Dutch steered company Sher, which operates under the umbrella of the world’s largest rose production company named Afriflora. The Dutch family Barnhorn already set up a flower producing company in Kenya before and started to settle in Ethiopia in 2004, because land in Ethiopia is relatively cheap to rent for foreign investors compared to other African countries. On a scale of 450 hectares or around 1300 football pitches next to Lake Ziway, around 3 to 4 million roses in total are processed on a daily basis (Afriflora, 2016). Approximately 14 million litres of water is needed per hectare for the flower production, which comes down to circa 7 litres per rose (Zembla, 2016). Sher approximately created 13.000 jobs in 2014 and became the biggest farm in Ethiopia (Hortidaily, 2014). With the aim of ‘sustainable farming’ and ‘corporate social responsibility’, they also have built a ‘Sher Ethiopia School’ for around 4000 children, a ‘Sher hospital’, a police office and a law court. In addition, they carry certification such as Fair Trade to prove their methods being sustainable and socially responsible. However, according to a Dutch documentary (Hollandse Handel, May 18, 2016) there are several critiques on the aims and reputation of Sher. In the first place, the pesticides, which are used to produce the flowers, are considered to be harmful to the employees and environment. Secondly, employees anonymously state that their working conditions are hard and that their loans are insufficient to live from. Finally, according to a tax expert, Boudewijn Janssen, Sher seems to use tricks and gimmicks to avoid Ethiopian taxes in order to maximize profit (Zembla, 2016). In addition, former minister of development aid Mr. Pronk argues in his book that it should not be the task of a private company to organize the infrastructure, an educational system and a juridical structure, but the task of a state that represents its population (Pronk, 2015).

2.3 Aid For Trade

The Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO) have published a report together with other international parties, including the World Bank, on the development of the program called Aid for Trade, which was launched in 2005. According to the WTO, this program ‘’helps developing countries, and particularly least developed countries, trade. The Netherlands also joined this program and is one of the main supporters to combining aid and trade and involving the private sector and non-governmental organizations (NGOs) (Government of the Netherlands, 2013). The crux of this program is that parts of the budget for Official Development Aid (ODA) shifts to budgets for the private sector in order to help these countries trade (Triodos Facet BV, 2013). Consequently, there are now 89 Dutch companies operating in Ethiopia, compared to three in 2003. As mentioned before, one of these companies is Sher. According to Oxfam, almost 30 companies and projects have received around 6.2 million euros in subsidies from the Dutch government between 2003 and 2010 as a result of this program. In a response to questions of members of the Dutch parliament, Minister of development aid Mrs. Ploumen aims that subsidies to Dutch companies in developing countries are provided in order to ‘’improve production methods, increase production, strengthen their capital position (...) and to help farmers trade’’ (Government of the Netherlands, 2016). Strikingly, the private sector itself is, with the cooperation of the NGO EUCORD, allowed to do the monitoring research on how many farmers are factually helped with this policy (Government of the Netherlands, 2016).

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3. Methodology

This research practices the methodology of scenario planning, which helps with making flexible long term plans and connecting different perspectives of different stakeholders due to the consideration of drivers with multiple trends. Awart et al. (2004) state that the key challenge of complex issues is to examine the range of plausible future pathways of combined social and environmental systems under conditions of uncertainty, surprise, human choice and complexity. Schoemaker describes scenario planning as a good way to catch a whole range of possibilities in rich detail (1995). Another advantage of scenario planning is that it creates awareness for upcoming social and scientific challenges, like food insecurity in Ethiopia. Figure 2 is an illustration of an iceberg which stands for the complexity of food insecurity around Lake Ziway with its related drivers and trends, which are thoroughly explained in further paragraphs.

FIGURE 2:THE TIP OF THE ICEBERG: DISTINCTION BETWEEN EVENTS, TRENDS AND DRIVERS.

The emphasis of scenario analysis lies in understanding complex systems, including the provision of information to help social actors to develop transition strategies. In order to develop these strategies this paper follows a roadmap developed by the Institute for Interdisciplinary Studies

(2015). The roadmap consists of four phases;

3.1 Phase 1 - Trend analysis

In this first phase, visions of the future are formed by means of examinations on trends that influence the topic of food (in)security in Ethiopia. These examinations are made through different outlooks, namely: political, biological and earth-scientific. The different perspectives use each other's creativity by building on each other's trends, which allows for a better understanding of a complex

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3.2 Phase 2 - Driver analysis:

In this second phase two main drivers are chosen which are actually underlying trends that are highly uncertain and have a great influence on the scenarios. The drivers are selected accordingly in relation to the existing trend bank and will be used in a scenario template.

3.3 Phase 3 - Scenario developments

Each of the four scenarios is a force field between the two key drivers on the axes, guided by the different trends. A scenario template is formed and can be distributed in four quadrants of four extreme scenarios, which are developed independently from each other. Furthermore, it is important to emphasize the fact that the scenarios made in this research are merely speculations of possible futures. However, these speculations are based on facts, as elaborated in section 4 “Trend Analysis”.

3.4 Phase 4 - Evaluation & Policy recommendations

This last phase is for reflection. Here, scenarios are evaluated by means of ‘back casting’, a backwards reasoning from the endpoint until the present. This is done by a research on how the extreme ends of the scenarios have been reached. Furthermore, policy recommendations are set which ought to help the different stakeholders concerning food security around Lake Ziway, such as

local citizens, Sher and the Ethiopian government.

This scenario method allows extreme scenarios to be formed in a structured way. By means of these scenarios, oriented policies can be made which include all extremes. In the following paragraphs, the four phases are carried out.

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4. Trend Analysis

Trends can be seen as active or passive consequences of dominant driving forces. As a result of trends in a specific environment or society, all kinds of events or developments occur. Within sketches of the four scenarios, it is important to provide a number of key trends in order to make concrete and helpful predictions for the future. It is important to bear in mind that trends could develop in line with predictions, but also move spontaneously in other directions. In other words, it is important to stress that trends are estimations of an unpredictable future. Nevertheless, with the help of a scenario method, we try to cover as much information as possible in relation with both the driving forces and trends.

4.1 Water Quantity

The lake is being intensively used as a source of drinking water (Hengsdijk & Jansen, 2006), which could be a problem because lately, there has been a massive increase in population pressure and various economic activities that put a rising claim on the scarce fresh water of Lake Ziway for irrigation use. In addition, the job opportunities that come associated with these big companies are expected to attract even more people from other parts of Ethiopia to the area surrounding the lake (Hengsdijk & Jansen, 2006). This

can lead to an overuse of the lake as a water source.

Floriculture, performed by the company Sher, utilizes big amounts of water (Hengsdijk & Jansen, 2006). Fertilizers and pesticides for crop protection are being used in very high amounts, causing negative impacts for the environment. In addition, Lake Ziway is one of the most intensively fished lakes in Ethiopia with an estimated yearly yield of 3000 t in the 1970's (Ayenew, 2004). Because of the high water use for floriculture, there is a risk that the large scale groundwater absorptions will be so immense, resulting in a decreased groundwater level and lead to changes in groundwater flows. This may impact the rural drinking

water supply (Hengsdijk & Jansen, 2006).

One of the aims of Hengsdijk & Janssen (2006) is to clarify the issue of water scarcity in relation to the growing agricultural developments. Table 1 (Hengsdijk & Jansen, 2006) indicates that the outflow

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9 exceeds the inflow of the water in Lake Ziway. This means that the water level of the lake is declining with a difference of -74 million m3 between inflow and outflow, resulting in an average annual drop in the water level of 15 centimeters.

Alongside surface water, it is important to know that groundwater is an important water supply as well. The ecosystems around Lake Ziway suffer from the high human pressure, resulting in a decreased biodiversity (Feoli & Zerihun, 2000). Also, increased erosion and corresponding sedimentation can lead to negative effects on the regional hydrology (Hengsdijk & Jansen, 2006). Hengsdijk & Jansen (2006) submit in their article numbers which give a better idea of the water quantity. The surface the lake is 43400 - 48500 ha. The maximum depth of the lake is 9 meters with an average depth of only 2.5 meters. The lake volume is approximately 1.1 billion m3.

4.2 Accumulation of Toxic Chemicals

The water in the lake can be very dangerous to human health because it is exposed to large amounts of pesticides (Yohannes et al., 2014). Furthermore, Lake Ziway is not only consumed by humans but also by different organisms, such as vegetables on arable land or fish in the lake itself. For this reason, the presence of pesticides in the lake water can be indirectly dangerous to human health as well. The amount of chemical pollutants in this lake may exceed the acceptable daily intakes (ADI’s) (Yohannes et al., 2014). This can lead to wretched results as the largest part of the total intake of pesticide residues by humans is through food consumption (González-Rodríguez et al., 2011). Fish are capable of storing chemical components originating from pesticide use in their mass (Mackay and

Fraser, 2000), which are passed on to people when consumed.

Yohannes et al. (2014), expertized in toxicology, aim in their research to evaluate the accumulation of different OCPs in fish of Lake Ziway that are being consumed by humans and the corresponding potential health risks. The methods of the research are being clearly explained and seem reliable, which makes the results trustworthy. The following results have been found:

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TABLE 2(YOHANNES ET AL.,2014)

The ∑CCPs ranged from 1.41 to 63.8 ng g−1 ww, with a mean concentration of 7.72±6.90 ng g−1 ww. These concentrations were reviewed with international existing limits of ADI’s recommended by the Food and Agriculture Organization and the World Health Organization (FAO/WHO). As a result, it has been found that the estimated daily intakes (EDI) of OCPs from the four species were far below the ADIs. This means that apparently, the fish are not dangerous to consume. However, besides the terms of toxicity, Yohannes et al. point at an alternative danger to human health, namely cancer risk. The hazard ratios (HRs) of different OCPs indicate that daily exposure to these pollutants may results in an increased cancer risk. In figure 3, carcinogenic hazard ratios for daily consumption of fish from Lake Ziway are visualized. The horizontal line represents the hazard ratio of >1, and any ratio higher than that indicates a risk. OCPs such as HTPs and DDTs seem to be the most harmful.

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FIGURE 3(YOHANNES ET AL.,2014)

Yohannes et al. (2014) did not take other kinds of local water use into account, such as the consumption of water, vegetables and meat. Because of this, the health risks for locals can be much higher.

4.3 Land Use Change

Meshesha et al. (2010) researched land use and crop change in the Ethiopian Rift Valley. They have used Geographic Information Systems (GIS) and remote sensing to investigate if there is a change in the way the land is used and in what way. Table 3 shows the land use in 1973, 1985 and 2006. It is visible that the forest area has declined tremendously, so deforestation is a real problem. This can also be seen in Table 2: degraded land has increased with 200.7%. The forest is transformed in intensive cultivation areas. In addition, cultivated land has been degraded and is no longer suitable for intensive cultivation. Meshesha et al. (2010) also concluded that the lake area is declining with 15.4% which can be seen in figure 4.

Land Use Increase (%)

Water - 15.4 Forest - 66.3 Woodland - 69.2 Cultivation 34.5 Mixed cultivation/woodland 79.7 Degraded land 200.7 Marsh area 25.4

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FIGURE 4LAND USE CHANGE BETWEEN 1973 AND 2006(MESHESHA ET AL.,2010)

4.4 Economic Development

As pointed out in the section 5 ‘Driver analysis’, the concept of economic development is not only an extensively broad one but also heavily discussed in academic and societal debates nowadays. It furthermore indirectly or directly touches many societal disciplines. More accurately, in this study the concept of economic development in Ethiopia is defined in three ways, Gross Domestic Product (GDP), employment rate, and the Human Development Index (HDI). This is for two main reasons. Firstly, in a non-western country that in many ways is so entirely different from western countries, it is hard to find accurate statistics of the national or regional authorities itself. Secondly, Ethiopia is a country in transition and this development is most dominantly measured by statistics of international organizations. With the help of amongst others the IMF and the WTO, Ethiopia is in transition from a command economy to a free market economy (Triodos Facet BV, 2013). To put that in a more relevant perspective, Ethiopia has accepted loans from the IMF accompanied by structural reforms in terms of ‘’allowing new players on the market in order to enhance competition.’’ (IMF, 1998; Economic History Association).

The first two indicators, especially GDP, are strongly connected to the free market perspectives. Whereas there is discussion about whether the assumptions of the HDI indicator are fundamentally different, this third indicator indeed measures alternative and non-market activities (Karns, Mingst, & Stiles, 2015). At the moment, there hardly exists any major mercantilist or protectionist approach, such as tariffs, export subsidies or restrictions for foreign investors, in order to control the domestic economy. In our view, it is therefore important to make use of both the traditional GDP and the alternative HDI indicator in order to provide a broad and clear picture on how Ethiopia, and especially the region of Ziway, is developing economically from a rather free market perspective.

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13 To start with the first indicator, GDP is the most widely used indicator with international standards for its calculation (Fitoussi, et al., 2009). The GDP per capita increased every year from 2006 to 2016, as figure 7 demonstrates, and currently is around 486 US dollars per capita. Whereas the increase of GDP exhibits a clear positive line of economic development, it is important to bear in mind that this indicator does not demonstrate anything about the distribution of the quantity in US dollars. In other words, GDP is in this case not the answer to the question who exactly profited from this economic growth. Neither it provides us with a context of the content of the commodities that are produced and consumed.

FIGURE 7 GDP PER CAPITA ETHIPIA (WORLD BANK, 2016)

As a second indicator, 80% of the total employment rate is accounted for by the agricultural sector (United Nations, 2016). In other words, Ethiopia has an agricultural based economy and is hence largely dependent on development in that specific sector. In addition, the rural areas have the highest unemployment rate with 34% unemployed on the countryside compared to 26% unemployed in cities (United Nations, 2016). As one can notice in table 1, the unemployment rate increased from 2005 to 2011. According to the HDI, the unemployment rate is currently 21 % of the total labour force. The different numbers demonstrate that legal statistics are relatively hard to gain in Ethiopia, because of amongst others a lack of infrastructure to gain the knowledge. Nevertheless, one can state that the unemployment rate in Ethiopia must be between 20% and 30% of the total labor force.

As a third indicator, Ethiopia is currently 174th on the list of the HDI. The HDI consists of several indicators. For example on health in terms of life expectancy (64 years in 2016), on education in terms of literacy rate (39% of the population in 2016), and on income inequality in terms of the GINI coefficient (0.334 on a scale of 0 to 1, with 0 representing absolute equality and 1 representing

absolute inequality).

4.6 Population Growth

The amount of people worldwide is growing in an exponential rate. The current world population of 7.3 billion is expected to reach 8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100, according to a new UN DESA report, “World Population Prospects: The 2015 Revision” (2015). The Ethiopian population is growing too, which can be seen in figure 6.

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5. Driver Analysis

There is an entire underlying structure of driving forces, which consequently lead to events in society. Most of the societal events and trends are a tip of the iceberg. It is therefore important to provide an interdisciplinary overview on the political-economic driving forces in our method on the vertical axis, and the biological and earth scientific driving forces on the horizontal axis. Moreover, it is both relevant and important to provide a clear overview and background for the theories that are used in this research paper.

5.1 Free Market Perspective

In the following paragraph, the concept of the free market perspective is thoroughly described with the help of four sub-questions. Firstly, what is the free market perspective? Secondly, when does or did this perspective dominate in the (global) political-economic sphere? As a third, what are the key concepts and the means of measurement of this perspective? As fourth and last, how is this perspective academically and politically viewed nowadays?

What is the free market perspective?

To begin with a definition of the free market perspective, this theoretical concept must in this case be seen as part of a broader political economic theory named neoliberalism. In order to come up with an accurate description of neoliberalism and its genuine symptoms in society, it is important to bear in mind that already here there is no academic consensus about how to interpret this concept. Many users of the term neoliberalism in both the public opinion and the academic world tend to determine it as a complete political philosophy or ideology and do not consistently distinguish neoliberalism from economic liberalism (Thorsen, 2010). Noam Chomsky, for instance, writes in his book ‘Profit over People: Neoliberalism and Global Order’ about neoliberalism as “the defining paradigm of our time” (Chomsky, 1999, p. 7). He argues that in this type of paradigm the free market is to be advanced as “the only rational, fair and democratic allocator of goods and services” (Chomsky, 1999, p. 8). Furthermore he states that, with the aim of neoliberals to minimize the position of the (nation) state and enlarge the position as well as maximize the influence of the market in society, “neoliberalism is the immediate and foremost enemy for genuine and participatory democracy, not only in the United States but across the planet (…)” (Chomsky, 1999, p. 11). Rather than a political philosophy or an ideology, Thorsen claims neoliberalism to be just a loose set of ideas on how the relationship between the state and its external environment could or should be best organized. Hence in his opinion, it must not be seen as influential as many criticasters do (Thorsen, 2010). According to the Oxford English Dictionary, however, neoliberalism is described as “a modified or revived form of traditional liberalism, *especially+ one based on belief in free market capitalism and the rights of the individual’’ (Oxford English Dictionary). Whereas there is an on-going debate on how to exactly define neoliberalism, it is in this case important that there exists an academic consensus about the phenomenon that the free market approach in both economics and politics is one of the key-elements as soon as neoliberalism comes into play. To the contrary, it is not necessarily true that a free market perspective automatically is connected with a neoliberal view, because it also appears in, for example, many forms of economic

liberalism (Thorsen, 2010).

According to many in this debate, the free market perspective fundamentally derives its content from influential thinkers of classical economics like Adam Smith and David Ricardo back in the 18th and 19th century. With respect to both, liberalization of trade would lead to a positive-sum game in which trade could benefit all parties involved. At the same time, the role of the state should be as

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16 minimal as possible in order to let trade and market forces go (Stilwell, 2011). With the free market perspective in mind, the political focus nowadays is on so-called ‘new public management’. This is, in other words, an effort to limit the capacities of the state by policies of fiscal authorization, privatization and deregulation that is not only ought to enlarge the economic sphere, but also to create more markets to trade on (Robinson, 2006).

Period of dominance

With reference to neoliberalism and its free market perspective, Thorsen (2010) reveals that the concept was used for the first time in the late nineteen century and thus is not necessarily new. However, almost all theorists agree that the free market perspective gained common ground again after the Second World War with amongst others the establishment of the Bretton Woods institutions. After a rather chaotic economic situation during the World Wars in the early 20th century, the fundamental structure for a new economic order was launched in the form of the Bretton Woods system in 1944. Back in those days, the architects of the Bretton Woods Agreement in the personification of John Maynard Keynes and Harry Dexter White, envisioned institutions that would oversee the international monetary system, exchange rates and international payments to enable countries to purchase goods and services from each other. In other words, both national and international trade was actively supported in this case. As a consequence, the International Monetary Fund (IMF) and the World Bank, also known as the Bretton Woods institutions, came into existence. A couple of years later, the General Agreements on Tariffs and Trade (GATT) also emerged in 1948, and was eventually replaced by the World Trade Organization in 1995. The implementation of these institutions has influenced, and still influences the economic structure of today’s world economy. Headquartered in New York, the IMF aims amongst others to ‘’foster global monetary cooperation, secure financial stability (…) and reduce poverty around the world.’’ (IMF, 2016). In addition to financial assistance, the IMF also provides member countries with technical assistance to create and implement effective policies, particularly economic, monetary, and banking policy and regulations (Carpenter & Dunung, 2011). The World Bank is headquartered in Washington DC and currently involved in more than 1,800 projects in virtually every sector and developing country. This institution currently holds its focus on six strategic themes. One of these is poverty reduction and sustainable growth in the poorest countries, especially in Africa. The World Bank provides low-interest loans, interest-free credits, and grants to developing countries and is directed to

make loans for projects but never to fund a trade deficit.

Whereas the IMF primarily functions as a cooperative institution, the World Bank is more a development institution (Carpenter & Dunung, 2011). Referring to the third institution, the WTO exists of 167 member states with over 97% of the world trade covered (World Trade Organization, 2015). This institution functions as a global platform with one of the core tasks to liberalizing trade by eliminating trade barriers and help developing countries in joining free trade in the global economy. However, both on the IMF and the World Bank are some fundamental critiques. Especially on the conditions of its loans, its lack of accountability, and its willingness to lend to countries with bad human rights records (Carpenter & Dunung, 2011). In addition, Chang argues that global institutions, such as IMF and the World Bank, are focused on western interests, because they have been set up and are led by the dominant western powers with the forming of the Bretton Woods institutions, for instance. Moreover, the fundamental structure is biased with a western view on economics and finance, which consequently kicks developing countries away the ladder of development in most of the situations. This phenomenon of kicking-away the ladder of economic development is in some ways paradoxical to Chang. Whereas most of the New Developing Countries (NDC) namely have joined a protectionist phase in its industrialization process, the developing countries nowadays are not able to close national or regional markets in order to build up a solid and industrialized economy. In other words, allowing the developing countries to adopt the policies (and institutions) that are more suitable

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17 to their stages of development and to other conditions, it will enable them to grow faster (Chang, 2003).

Whereas the biased assumptions and influences of the Bretton Woods institutions are highly debatable, it is important that theoretical scientists agree about an extensive upraise in the use of the free market terminology since the 1970s, in this case more and more attached to the concept of neoliberalism (Robinson, 2006). Especially when US president Ronald Reagan and British prime-minister Margareth Tatcher functioned as the face and personification of implementing free market-oriented politics in the 1980s and 1990s. With reference to the institutionalization of free market policies, many theorists agree that the Washington Consensus in 1989 has played a relatively large role. Referring to Washington, the initiator of this term, John Williamson, did not only mean the politically important capital of the USA, but also the international institutions, such as the IMF and the World bank, with its major influence in the political heart of America (Krugman, 1995). With their study on the Washington Consensus from a Latin American perspective, Birdsall et al. (2011) state that, regardless of the political stance, this consensus was a ‘’damaged brand” both for its advocates and its opponents. Because rather than a consensus on economic freedom and development, this period in history launched an on-going debate on what some would call market fundamentalism (Stiglitz, 2004) or even free market religion as a new face of global capitalism (Krugman, 1995). For the criticasters, for instance, “Williamson‘s article rode on a global wave that transformed the conventional wisdom in favor of free market economics, which included the rise of neoclassical economics and the rational expectations revolution among academic macroeconomists” (Birdsall, et al., 2010, p. 2). Not surprisingly, many academic and political theorists have since then tried to come up with a solution for this debate or, as Stiglitz (2004) would call it, a ‘Post Washington Consensus Consensus’.

Means of measurement and todays’ view

When it comes to the means of measurement of neoliberal economics and politics, the free market approach can be seen as part of that theory. Furthermore, within the free market approach itself there are methods of measuring economic growth or societal progress and development. The most dominant discourse in this case is that of economic growth, measured by the Gross Domestic Product (GDP) as an indicator. GDP simply measures all the goods and services produced in a specific country per period and thus results in a number referring to the economic activity in that particular country (Bergh, 2009). According to Baumol, productive entrepreneurship and the rule of law are also distinguishable and important features of a capitalist or free market economy. The main and fundamental difference in comparison with other types of economies that the world has known so far is the “extraordinarily superior growth performance of free market economies” (Baumol, 2002, p. 15). It is important to mention that, here again, is an on-going debate on what indicator is best to measure what country. When it comes to the economic growth approach, which is so dominant in the free market perspective, one can notice that there is upcoming resistance against the narrow focus of the GDP indicator. According to an influential report ‘on the measurement of economic performance and social progress’, it is increasingly important to move beyond the traditional GDP indicator in order to shift away from material production to (immaterial) wellbeing as well as to emphasize non-market or non-financial activities (Fitoussi et al., 2009). More radically, Constanza (2014) states that it is “time to leave GDP behind”. His main argument is that GDP namely measures market transactions and ignores social costs, environmental impact and income inequality. In short, the economic focus on an unconstraint expansionary model, which is inherently based on materialistic growth, is impossible to sustain on a planet with finite natural resources. Furthermore, he no longer sees an excuse to avoid or ignore other more qualitatively focused indicators, because the psychology of the human being can nowadays be surveyed comprehensively (Costanza, 2014). In addition, there is some critique on the neoliberal view of economics and its

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18 perspective on free trade. Chang, for example, argues that free trade in itself cannot exist, because it is always subject to political, social or cultural regulation. Take for example slave trade or child labour, which is at least theoretically and morally abandoned as a consequence of societal combats. However, according to the free trade ideology there is no moral restriction in what commodities can or cannot be sold. This means that there is always political restriction with respect to free trade, and that it varies per country as different countries have its different moral and political compass (Chang, 2012). What is important in this case, is that this theory provides the insight that the content or additional value of trade matters.

5.2 Mercantilist Perspective

In this paragraph, the concept of the mercantilist perspective is described with the help of exactly the same four sub-questions. This is to provide a clear structure in order to compare and contradict both perspectives. Hence at first, what is the mercantilist perspective? Secondly, when does or did this perspective dominate in the (global) political-economic sphere? As a third, what are the key concepts and the means of measurement of this perspective? As fourth and last, how is this perspective academically and politically viewed nowadays?

What is mercantilism?

To start with a description of mercantilism, the history of this theoretical concept is more than three centuries old. In the academic world, it is well known that the initial appearance was in 1763, when the French economic philosopher Marquis de Mirabeau’s came up with the term système mercantile in his book Philosophie Rurale (Magnusson, 1994). However, Heckscher argues that mercantilism is a system of economic, regulative, administrative and political thinking, which derives its fundamental content from town policies in the medieval period and shortly after that. He shows, with for instance the ‘’staple’’ policies in sixteenth-century towns like Hamburg, Antwerp and Amsterdam focused on provision of goods, that the initial form of mercantilism was dominated by the view of merchants and traders (Heckscher, 1936). However, it is in this case hard to speak about a theoretical school of thought, because there are no major mercantilist theorists to be found. Most sources in this respect are retrieved from the pamphlets and letters written by merchants and influential figures in politics (Vaggie & Groenewegen, 2003). Nevertheless, it is only with Adam Smith that the term mercantilism, often used in his work as an unwelcome example for an economic system, became broader accredited. Since the 16th century the concept has evolved and many different intellectuals, particularly from France and Britain, have tried to change and improve the very concept of mercantilism. Until the late 19th century, a rather dogmatic and orthodox theoretical view was dominating the mercantilist approach on the economy. Mostly retrieved from Smith, mercantilism in its first two centuries referred to a commercial system in which commercial trade became more and more important, but was most often in the benefit of powerful interest groups and not of the public

and consumers (Magnusson, 1994).

This period can also be seen as the very first of two periods in the history of mercantilism, which is better known as the period of ‘bullionism’ (Vaggie & Groenewegen, 2003). In this phase, gold and silver as increasingly important precious metals – or together called bullion – were dominating trade and political economic discourse. It did not only function as the definition of both private and national wealth, but also “guaranteed the command over goods, resources and labour all over the world.” (Vaggie & Groenewegen, 2003, p. 16). In this period it was clearly the case that what was good for the merchants, was good for the state finances as well. However, the extension of manufacturing activities and the need to protect the newly established markets from competitors elsewhere marked the end of the bullionism era (Vaggie & Groenewegen, 2003).

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19 With a first push from the German historical economist Gustav Schmoller, the focus in the theory about mercantilism shifted from commercial markets to a state-driven process in the second stage of mercantilism. Schmoller retrieved his knowledge from historical development studies on territorial bodies and pointed out that the nation state was the strongest and most important political body in the economic system (Magnusson, 1994). It is in this period that the current dominant discourse of favourable balance of trade, with the purpose to realise more exports than imports, seems to appear. To put it differently, mercantilism evolved from a commercial provision-oriented view, ‘’love of goods’’, to a state-driven protectionist view of ‘’fear of goods’’ (Heckscher, 1936). Nonetheless, according to Heckscher it was in both periods the case that ‘’the ultimate ends of mercantilists were to strengthen the external power of the state.’’ (Magnusson, 1994, p. 34). However, the modern definition, as pointed out by the Oxford English Dictionary, explains mercantilism as an “economic theory that a nation's wealth, esp. its ability to amass bullion, is increased by a favourable balance of trade, and that a government should encourage such a balance by promoting exports (esp. of manufactured goods) and restricting imports.” (Oxford English Dictionary). Whereas also this concept of the economic theory of mercantilism is contested, there exists academic consensus about both the dominant role of the state and its actions to establish a favourable balance of trade.

Period of dominance

The mercantilist approach ruled in especially European countries during the 16th, 17th and 18th century and has experienced the longest life span in political economic systems so far (Vaggie & Groenewegen, 2003). Along with the emergence of nation states in Europe, countries like France and

Great Britain dominated in this economic approach.

With the European discovery of the ‘New World’ America and the establishment of colonies specifically in Southeast Asia, merchants allied themselves closer to the rulers of nation states and took a decisive role in the increasingly important role of international trade. This is explicitly expressed in the establishment of the Dutch and British East India companies (Vaggie & Groenewegen, 2003). The competitive struggle of the nation state in Europe and its scramble for colonies around the world are both important in the history of mercantilism. The Navigation Act of 1651 in England for instance established a system that all trade between Great Britain and its colonies had to take place on English vessels. The same counts for the mandates to ‘De heeren XVII’ as the board of the Dutch ‘Verenigde Oost-Indische Compagnie’ (VOC) given by the Dutch government to approve for instance use of war in the colonial districts. This both shows that the mercantilist approach of provisioning commodities was narrowly viewed from a European nation state stance without the recognition or respect of the sovereignty of other countries or societies in the world. As pointed out before, the history of mercantilism can be divided in two periods. Initially, one would speak of a mercantilist approach in political economics rather than a mercantilist school of thought, which evolved later with the contribution of many theorists and intellectuals.

Means of measurement and todays’ view

The role of the state is profoundly dominant in case of mercantilism. Some key elements in protecting the national economy consist of trade barriers and export subsidies in order to protect domestic markets or infant industries, as pointed out before. In short, the strategy comes down to create a favourable balance of trade by exporting more goods and services than importing them in order to

improve the national wealth (Vaggie & Groenewegen, 2003).

In the seventeenth century, it was the French Minister of Finance under Louis XIV Colbert who gave his name to the policies that were designed to protect its domestic industries: Colbertisme as protectionism avant la lettre (Vaggie & Groenewegen, 2003). According to Krugman (1995), the overall measurable costs of protectionist strategies are not as large as many advocates of free trade and free

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20 markets would mostly argue. “The costs of protection, according to the textbook models, come from misallocation of resources: protectionist economies deploy their capital and labour in industries in which they are relatively inefficient, in stead of concentrating on those industries in which they are relatively efficient, exporting those products in exchange for the rest” (Krugman, 1995, p. 31).

When it comes to the current view on mercantilism, one can recognize mercantilist influences in today’s on-going debates about economic systems. The ‘East Asian Tigers’, such as South Korea, Singapore and Thailand, are commonly used as a successful example of a state-oriented mercantilist approach. These countries were economically successful with state driven subsidies to domestic key sectors in order to enhance international competitiveness (Karns, Mingst, & Stiles, 2015). In contrast to the Washington Consensus, there is in this case a political economic phenomenon that some would call the Beijing Consensus, referring to China’s swift and state-driven growth as economic model. Whereas there does not exist a precise definition so far, it is in this case important to note that state-owned or state-managed corporations are successfully used to invest capital in both domestic and foreign markets (Karns, Mingst, & Stiles, 2015). In line with the mercantilist approach, Gerschenkron focuses on the role of the state and state institutions as key players of economic development. In effect, Gerschenkron argued that states had to take positive action to create a ‘town’ in their own economy. Furthermore, Gerschenkrons theory is important when it comes to explanations of late economic development in the economies of specific countries. He namely argues that the world market sets up substantial obstacles to the emergence of modern industry in backwards countries. But he does not necessarily define that as a problem. Instead, Gerschenkron invests the state with a much wider role in and ability to correct the market failure in backward economies than for example the school of neoliberal economics, as mentioned before (Schwarz, 2009). In short, Gerschenkrons theory can be summarized with respectively one simple principle: the later a country industrializes in comparison with the hegemonic power or more developed countries, the more state intervention it will need to catch up with developed countries.

All in all, it has become clear that with reference to both perspectives ant its key aspects, the role of the state as well as economic actors play a dominant role. Whereas in the free market perspective the role of the state should be minimalized and the economic sphere should be as privately steered as possible, the mercantilist perspective argues precisely the opposite. Hence through mercantilist glasses the market is ideally both organized and protected by the state with the strategy of creating a favourable balance of trade. In short, protecting national or regional markets artificially with, for example, trade barriers, is according to the free trade theory considered to be harmful for economic development on a national as well as a global scale. The free market perspective currently operates through its main features as an influential and one of the most dominating narratives of the global economic and political order in the past few decades. It has become clear that these key aspects consist of an economic growth model, indicated by GDP, as main driving force and that its language and policies echoes in many different forms in both national and global politics, for example with the institutionalization of the IMF and the World Bank. However, it is hard to find academic consensus about the concepts of both neoliberalism and mercantilism, about what indicator is best to measure economic development or societal progress in countries and about whether the effects of free market policies are rather negative than positive for society in general.

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21

5.3 Land Degradation

FIGURE 8 LAND DEGRADATION WALL ACCORDING TO STOCKIN & MURNAGHAN (2001)

Land degradation is a broad concept that includes different processes and concepts. Stocking and Murnaghan (2001) showed this diverseness in the land degradation wall which can be found in figure 8. Processes such as salinization, drought and erosion cause the degrading of land. Improper use of irrigation can lead to salinization of the soil, which makes it less fertile for crops. The salinity of the water that is used for this irrigation is one cause of salinization. The water will evaporate and/or taken up by crops and salt minerals will precipitate in the soil. These minerals can form crusts, and the soil becomes impermeable for plant roots. This process can be enhanced by overuse of water. Second, when water is used for irrigation, the groundwater level will rise. The average groundwater level before irrigation in the area of Lake Ziway was 10-15m below ground surface in the late 1980s (Legesse & Ayenew, 2006). It has risen to 1 meter below ground surface according to Hailu et al. (1996). This process will lead to capillary rise, so more water is likely to evaporate and more salt minerals will precipitate. In the Ethiopian Rift Valley, the land use is changing and the biggest change is the increase in intensive cultivation area (Meshesha et al, 2010). This influences the amount of land degradation, because the cultivated land has periods of time in which no crops are growing on it. Meshesha et al (2010) state that in this period the soil is likely to encounter erosion. When the topsoil is removed, the soil becomes less fertile which means less crops can grow. This process of erosion is enhanced by a growing population. More people means more cultivated area. In addition, when the population grows the amount of cattle increases too. The animals walk on the land and disturb the topsoil, which becomes more vulnerable (Meshesha et al., 2010). The authors also state that when the soil is less fertile, the crop yield will decrease and in that case the farmer will sell the crop residues and any trees that are left on their ground. This is another reason for land degradation to take place, because the soil becomes more exposed to external factors. The sediments that are removed from the topsoil can be transported to the lakes and will fill up the lakes.

Because of the increase in cultivated area, forests had to be chopped down in order to make place for agriculture. This process of deforestation increases the amount of bare land and this makes the land

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22 In 1970 large scale irrigation started with the extraction of water from the catchment of Lake Ziway and its two main rivers (Meki and Ketar) (Legesse & Ayenew, 2006). According to Ayenew (2004) approximately 28 million m3 of water originating from lake Ziway is used for irrigation. Improper use of irrigation can lead to salinization of the soil, which makes it less fertile for crops. The salinity of the water that is used for this irrigation is one cause of salinization. The water will evaporate and/or taken up by crops and salt minerals will precipitate in the soil. These minerals can form crusts, and the soil becomes impermeable for plant roots. This process can be enhanced by overuse of water. Second, when water is used for irrigation, the groundwater level will rise. The average groundwater level before irrigation in the area of Lake Ziway was 10-15m below ground surface in the late 1980s (Legesse & Ayenew, 2006). It has risen to 1m below ground surface according to Hailu et al. (1996). This process will lead to capillary rise, so more water is likely to evaporate and more salt minerals will precipitate. Salinization will lead to a degradation of land.

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6. Scenarios

In figure 9, the scenario template is illustrated. On the vertical axes is the perspective of a free market and on the counter the mercantilist perspective. On the horizontal axes a degree of high land degradation stands across from a degree of low land degradation.

FIGURE 9FOUR DIFFERENT SCENARIOS FOR ETHIOPIA

Scenario 1 – ‘Fair trade development’

In this scenario the drivers are the free market perspective and a low land degradation. The Paris Agreement Sustainable revolution Equilibrium

2016 2019-2020 2040

The first steps to a sustainable future were made on 5 October 2016, which 131 of 196 countries have ratified. This had a lot of positive influences on Ethiopia as a country and Sher as a company.

A water treatment plant was installed near Lake Ziway. This decreased the amount of pollution that entered the lake. Since the installation it was also possible to recycle the water that Sher uses during their cultivation of the roses. Together with the arrival of a new rose species, the water use

In the year 2040 a sustainable equilibrium was achieved. The population growth had stabilized and there were enough possibilities to grow crops. The food security was no longer decreasing and the living conditions increased.

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24 was able to decrease

substantially.

Land degradation in Ethiopia has continued to occur since 2016. It came to a point that most of the population around Lake Ziway was at the edge of starvation. It has become harder and harder to cultivate enough crops to sustain their dietary needs. Luckily, a lot has changed since 2020. Ethiopia was in the process of entering the World Trade Organization, and after a few years of discussing and negotiations, their applicant has been accepted. With the help of the IMF and the WTO, Ethiopia was able to transit from a command economy to a free market economy. This brought a lot of benefits for the local population, as well for Sher. This included the possibility of selling their products more easily to other countries and it also brought more job opportunities. In 2016 the Paris Agreement was signed and this started a transition towards a more sustainable way of farming around the world. Together with the acceptance to the WTO and the Paris Agreement, Sher entered a period of flourishment in both production capacities as in sustainable farming.

After the Zembla documentary “Hollandse Handel” was broadcasted on the Dutch television, Fair Trade started an investigation on the company Sher. The research concluded that Sher did not follow the rules stated by Fair Trade correctly and they withdrew the Fair Trade stamp. The director of Sher did not agree with this act and started a series of meetings. After a few months of negotiations Fair Trade came up with clear requirements for Sher so they were able to keep their stamp. This included better education for their employees, a switch to non-harmful pesticides and better wages.

Whereas other international stakeholders are involved in the ownership, Sher still is officially run by the Dutch, so it qualified for a subsidy from the Dutch government. The requirements were that they had to have a positive influence on the Ethiopian economy and they had to create job opportunities. After the Paris Agreement the Dutch government added a new requirement: they had to become a sustainable enterprise. This, together with the negotiations with Fair Trade, stimulated a sustainable revolution for Sher.

In 2019 the first steps were made. Sher installed a water treatment plant near Lake Ziway. Because the company consumed so much water from the lake, the lake was in danger of drying out completely. With this water treatment plant, Sher is now able to recycle their water and the extraction of water has decreased with almost 50% by 2021.

Another benefit of the transition towards sustainability was that Sher hired different biologists experienced with high-tech plant breeding. One of them was able to breed a new rose species which uses half the amount of water in comparison to the conventional rose. As soon as this rose became payable for Sher, they transited to the cultivation of the “Rosa Aqua Salutem”.

Because Sher had to quit using harmful pesticides, new methods were implemented. One of the biologists that was hired came up with the idea of Integrated Pest Management. They switched to the use of different organisms, such as ladybugs, to exterminate the pests that form a danger to the roses. In 2025 a new program was started. The employees were able to enter a sustainability course in the schools that were run by Sher. Different projects had started since the Paris Agreement. Charities organised different courses together with students from multiple universities in the Netherlands. The classes were offered for free.

As a consequence of the ban of harmful pesticides, the working conditions of the employees have increased. In addition, the water was recycled to the possible toxins in the water were removed. This has

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25 decreased the amount of toxins that flow into Lake Ziway. The fish in the lake take in much less of these dangerous toxins and this has had a positive influence on the HR ratios in the fish.

All these changes, caused the intensity of land degradation to decrease. Because of the big population, land degradation still occurred.

After the entrance of Ethiopia to the WTO, the country became more interesting to foreign companies. This caused an increase in the employment rate and a higher GDP. The economic circumstances around Lake Ziway changed in a positive way and the population was able to grow. However, the population that is not connected to Sher experienced harder times. They did not have the benefits that Sher had created for their employees. The rest of the population was still dependent on their common land areas. The presence of Sher made it more difficult for them, because the company confiscated big areas of arable land in order to expand. However, in 2040 the overall population growth reached an equilibrium and the food security was also able to stabilize, especially around Lake Ziway. Enough crops could be cultivated to sustain the dietary needs of the population. In addition, the import of goods increased and thus the availability of products as well.

Scenario 2 – ‘Ethiopian Tragedy’

This scenario is based on the free market perspective and a high land degradation.

World Trade Organization Lake disaster Famine

2018 2029 2030

After years of negotiations between the government of Ethiopia and the World Trade Organization, Ethiopia finally joined the WTO. This had a positive effect on the trade and employment rate around Lake Ziway. In the years following, Sher was able to expand.

Because of the expansion of Sher, together with the increase in companies around Ziway, the water use had doubled in 10 years. As a consequence, Lake Ziway completely dried out in 2029.

As an effect of the desiccation of the lake, the harvests failed and there no longer was enough food to sustain the population. The amount of hunger increased and at the end of 2030 a famine has occured.

It is lunch break at Sher’s rose greenhouse in Ziway. The employees are having a conversation about their jobs. A discussion forms, and they all share their dissatisfactions. “I cannot even buy a proper meal for my children”, “The rent of my house has increased. I think I will not be able to pay my rent any longer”. There is a lot of anger amongst the employees towards Sher and their living conditions.

In 2018 Ethiopia joined the World Trade Organisation and because of their entrance the country became more interesting for companies and trade was blooming. Because of low production costs, Ethiopia was an attractive land to foreign companies. The trade liberalization and open borders made it easy for Sher to export internationally and due to poor government control Sher still managed to avoid most of the taxes, meaning maximum profit for the company and minimal gain for Ethiopia. After 5 years, many companies were situated near Lake Ziway. This has increased the employment rate with almost 200%. Ziway became a very favorable living area for Ethiopians. The GDP experienced growth and job opportunities kept on rising. This made the city so densely populated that food and water insecurity constitute life-threatening circumstances and low quality of life.

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26 In 2020 Sher finally expanded their company with many new greenhouses, after years of planning. They could expand due to an increase in their sales volume in the past few years.

Increased economic activity created more chemical waste, which most of the companies simply dumped in the lake because there were no strict rules in waste management. By 2025, the accumulation of toxins in the lake water has increased so much that they have exceeded the ADI’s. In 2026, it became clear that the polluted water has caused many illnesses and by the year of 2030 the first people were diagnosed with cancer. Research has concluded that this cancer was caused by the accumulation of toxins in the human body. These toxins were derived from fish, water and meat that were locally produced.

Outflow of water from Lake Ziway has doubled, because the water is not only used by Sher, but also by local farmers. They used it as irrigation water, but because their poor knowledge about the consequences of wrong use of irrigation, salinization became an increasing problem. This caused the yields to drop and it became harder to produce enough food for export and for the populations’ own need. Panic arises among the locals living around the lake, because of the fear of the direct consequences of water shortage. A lot of their cattle were not able to survive, because there was simply not enough water to feed them. Fire is set at the factory of Sher due to anger among the locals, just like 2015 when it happened to other Dutch companies. After years of extracting the water from the lake, the last drops of water were used in 2029.

Together with the soil being degraded due to improper water use, with salinization as one of the consequences, and the increased erosion due to deforestation, the soil has become less fertile and crop yields have decreased. Also the water shortage has a big impact on the crop yields. The yield decreases in such a rate that the farmers are no longer able to sustain themselves and the cause is a famine at the end of 2030.

After the massive increase in population in the city of Ziway, the amount of people experienced a big drop due to the famine. Sher was no longer able to produce their roses with profit because of lack of employees and water. In 2032 Sher is declared bankrupt.

Scenario 3 – ‘Ethiopian Spring’

This scenario is driven by the Mercantilist Perspective and a low rate of land degradation.

World Trade Organization Bann on foreign companies Decrease land degradation

2019 2024 2026

The WTO had decided, after a long period of discussions, that Ethiopia was not able to enter the organization. In 2022 the state decided that they did not need economical help from other countries or organizations. A set of rules against foreign companies were applied.

In 2024 the state implemented the rule that Ethiopia would no longer accept foreign companies, because they thought that local companies needed more opportunities to grow.

Because Sher was no longer able to stay in Ethiopia, a big pressure on Lake Ziway was released. The water use had declined and the local farmers were using new forms of irrigation. This had a positive influence on the rate in which land degradation occurred. In addition, deforestation was also able to decline because of economic growth.

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