ሩህ ሚዲያ – Ruh Media

Habtamu G. Demiessie

For Readers Part of this piece was published on Addis Fortune, Ethiopian Based News Paper. Readers may find it online via this link: https://addisfortune.news/rising-cost-of-living-in-addis/

Introduction

As I was wandering on Facebook pages, I met with a picture about food menu. Perhaps, it was from an average restaurant in Ethiopia, a quarter of century before. That was a reminder on my childhood memory about our economic life. I asked myself if those times were in fact good times, in terms of ease of economic life. And I found those price tags on the menu were misleading if one may take the face value, and miss important elements while comparing then and today in terms of betterment of economic life.
Even from the outsets, can we consider a price tag differential a proxy variable on cost of living differential in Ethiopia, now versus 28 years? Why? And how can possibly adjust the geometric increase in prices with almost arithmetic increase in our average income at country level? Let me opine on those and related issues.

A glance at the attached menu on food price tag from 28 years back bears in one’s mind another menu about food price tag on current price. Given food expense sweeps almost 70 per cent of an average household income in urban Ethiopia, comparison on the menus can give a rough estimate on how costlier life is today than was 28 years back.
But, without some factors worth considering, the food price differential would be all too nominal,and cannot give a real picture to give a right estimate on cost of living differential.
For a fairer evaluation of today’s economic life against 28 years back, one has to take into account important factors which depicts the right economic dynamics since. In this regard, at least in the Ethiopian context, two factors worth mentioning are: ease of earning money and scarcity premium. Hence, it takes to deflate the cost of living against those factors.
As a matter of fact, the cost (exertions) of earning one birr then (25 yes back) and today is dear in favour of the former. For instance, for a civil servant who used to be paid 600 birr by then, and is earning 2400 birr 2day, the cost of earning birr is 4 folds cheaper now (N.B the hours of work per day and per month is unchanged but salary raised four folds. ).
In addition, just to arrive a balanced judgment on the cost of living, it takes to adjust for a scarcity premium as another deflating factor. As a matte of fact, nature is much more exploited 2day than 28 years before. Hence, scarcity premium must be added on the final price of goods & services consumed.
But, one may argue the margin of exploitation of nature is compensated by technical advancement or integrating knowledge(knowhow), all contributing for an efficient and production system, hence helping lift a stress on the bounty of nature. Indeed, this argument may holds water
However, given the Ethiopia production system is far less coping what the rate of scarcity requires, we can’t relieve(be resilient of) the rising cost of living manifested by higher scarcity premium we are expected to pay. That is manifested by an average income of people lagging behind what it costs them survive a dignified life.
In my opinion, why Ethiopians are faced with costlier life today is because prevailing production system is lagging behind what is required to be in a time. The implication is clear: a resolve for rising cost of living would be rethinking the way we produce, and revisiting our conception on the essence of work.
For an average Ethiopian, understanding on work is like a classical conception on work, which attributes work much more on physical exertions than mental. And that defines the Ethiopian way of measuring the value of work, and a worker too. For many of us work is how long we spare in an office or a workshop or a field site. For us, workers are by default those who stay long hours at office. We rarely measure work ( and workers) by efficiency and productivity.
So, where is a way-out from a costlier economic life then?
As I suggest it to be, the cure from an economic headache caused by a rising cost of living is revisiting our work culture & our conception on work. That in turn results in making our production system supported by workmanship, thought and systemic. That is the only way to catch up the rising scarcity premium, hence enable us to survive economic hardships. That is what has to define the course of our future.
Otherwise, we have to prepare ourselves how best we may endure the inevitable trap, or say it a crisis, threatening us all eat one another to survive.
May God help us for a better tomorrow.