Ethnic diversity and economic prosperity: What Australia can learn from Ethiopia

There are two schools of thought when it comes to the economic value of ethnic diversity.

On one side, some see diversity as a threat to the security of majority groups and the job security of local workers. On the other, ethnic diversity is seen as an engine of economic growth, social tolerance, higher rates creative capital and job generation.

Dr Yonatan Dinku, a researcher at the Australian National University and co-researcher PhD Candidate of the University of Otago Dereje Regasa, looked at the two sides of the argument in their research paper ‘Ethnic Diversity and Local Economy’.

In that, the pairs has compared and analysed the local economies of Ethiopia’s 709 ethnically diverse districts, and their research appears to indicate that diversity is a driver of economic performance.

Dinku and Regasa’s research findings on the influence of ethnic diversity on economic performance say, “Ethnic diversity is a significant determinant of local economic performance in Ethiopia. A 10 per cent increase in the ethnic diversity index is associated with a 23 per cent increase in night-time lights.”

As one of the most ethnically diverse nations in Africa, Ethiopia has a population of more than 108 million people who speak 83 languages and 200 dialects. Since the end of the monarchy in 1974, and the fall of the military government in May 1991, the Ethiopian People’s Democratic Front (EPRDF) has cemented ethnic-based federalism in Ethiopia’s society.

The identity politics of ethnicity paved the way for the rise of ethnic nationalism in Ethiopia’s past, causing conflict over territory and resource ownership, which resulted in more than three million people being internally displaced and lower economic growth.

The researchers affirm a more diverse society is now helping rather than hindering the economic growth in Ethiopia.

In stating their research result, they say “our findings suggest that, if properly managed, diversity can provide a fertile ground for the complementarity of skills and enhance economic prosperity.”

Lessons for Australia?

Here in Australia, ethnic diversity is different to Ethiopia’s ethnic mosaic. As a young immigrant nation, Australia has built its industrial strength on contributions from an ethnically and culturally diverse society.

Even though migration is reshaping demographics and economic make-up, the devotion to ethnic diversity is an ongoing theme in Australia.

As a result of Australia’s economic growth, the need for unskilled and highly qualified specialists has attracted economic refugees and foreign professionals. But, at the same time, the level of migration has become a platform for political debate on national security, multiculturalism, international migration policies and even infrastructure.

Dinku tells SBS Amharic he is concerned by the politicisation of immigration.

“Despite knowing the fact that medical doctors, engineers, and carpenters are arriving as migrants, some far-right politicians illustrate migrants as illegal, uneducated, traumatised job stealers, and welfare dependents.”

Dinku also says that like Ethiopia, there are many marked positive contributions of culturally and linguistically diverse communities in Australia.

“The reality is the Australian government has different visa categories to bring skilled workers from different countries to Australia to reduce skill shortage.

“Other than that migrants bring knowledge with them. If you go to the food court you will find different types of nutritious foods for example – that is an important contribution to Australia’s diverse food culture and for any refugees host countries.”

While two opposing side of the argument around links between ethnic diversity and economic prosperity continue to argue, Dinku and Regasa have a suggestion for government.

“All levels of government, civic societies and other stakeholders should be committed to fostering an inclusive and open society so that members of all ethnic groups will get opportunities to share their knowledge, values and cultural heritage to contribute to building local economies.”