In the middle of the afternoon, most of Addis Ababa is in the dark. Waiters scurry around dimly lit restaurants informing customers that there will be no hot drinks. Because of a massive power deficit the country has implemented a rationing scheme that leaves most areas of Ethiopia without electricity every second day.
The country was ranked 169 out of 177 on last year's UNDP Human Development Index and is facing what the World Bank has called the triple threat of increasing food and fuel prices combined with tough times in the international economy. Ethiopia must import food to meet its needs and has tiny domestic fuel resources. Although international prices have eased, the country remains vulnerable. With an annual Gross Domestic Product per person of around US$1,000 (Dh3,600), any rise in prices could be disastrous. The country lacks foreign currency and US dollars fetch significantly more on Addis Ababa's black market than the rates posted in bank windows.
It is not just irrigation for agriculture that is needed here, but also massive hydroelectric projects. Last month the Ethiopian Electric and Power Corporation announced that power rationing would continue across the country. Development is hindered by electricity shortages. In some Addis Ababa offices, employees sit idle every second day unable to run computers or other office equipment. Ethiopia faces the challenge of developing other industries and relieving the nation's dependence on rain-feed agriculture, without enough electricity to fuel machinery and equipment. Larger businesses have the funds to run costly generators, but many smaller companies grind to a halt when the blackouts kick in.
Ethiopia suffered for decades under centralised, dictatorial rule, which some blame for the magnitude of famines in the 1980s. In 1991, the Ethiopian People's Revolutionary Democratic Front took control of the country. The new government has faced criticism for alleged ethnic favouritism and suppressing political dissidence but has decentralised the government and led ambitious development plans.
However, given the fragile, water-dependent economy, Ethiopia's GDP will continue to fluctuate alongside the rains. National policy is left at the whim of weather and external funding. "One of the major issues to develop this water is to attract finance from banks, from the World Bank, or the African Development Bank," says Asfaw Dingamo, Ethiopia's minister of water resources. The country lacks the funds to embark on large-scale water projects alone. "These banks are still forcing the country to have no objection from riparian [riverside] countries and sometimes it's very hard to get no objection from our trans-boundary partners."
Much of the country's water is in the Nile basin and the contentious, trans-boundary nature of the river has made it difficult for the country to exploit this resource. Any major damming of the Nile would probably bring objections from Cairo. Depending on the frequency and abundance of rain, the flow to Egypt could be reduced for 10 years as the dam filled. Steep geography makes the Ethiopian highlands and Blue Nile basin ideal for hydroelectric generation, a non-consumptive use of river resources as water passes the dam and flows back into the river with minimal amounts lost to evaporation.
Ethiopia has tamed the Nile before, diverting as much as 75 per cent of the water from Blue Nile Falls for hydroelectric production. The once-mighty falls now trickle over the cliffs near the town of Tis Issat, the rest passing through a hydroelectric plant and rejoining the river further downstream. But this is not enough for a nation of about 80 million people. Ethiopia has drawn up a master plan for irrigation and hydroelectric development throughout the country - including several of the rivers and tributaries that now flow into the Nile.
"Ethiopia wants to utilise water resources for food production, energy production, hydropower development, and other economic needs like developing fisheries or tourist sites," says Yacob Arsano, dean of the college of social science at Addis Ababa University, who has written extensively on Nile issues. He considers the policy of international donors a double standard as they do not force downstream states to consult with upstream states.
In the northern tourist town of Bahar Dar, on the shores of Lake Tana, shops selling souvenirs pull flashlights from behind the counter to display their goods for guests from abroad. Ethiopia, with its millennia-old fortresses set against rich landscapes, diverse culture, and low crime rates and low prices, has the potential to become a popular destination for European holidaymakers. But limited electricity means cold showers and no macchiatos - the country's favoured coffee drink - with lunch.
The country also lacks adequate transport infrastructure, although there have been improvements in the past few years. This has made the movement of people, food and other goods difficult. A European firm is now surveying for a nationwide railway system and the country has received $1.1 billion in grants and loans from the World Bank to upgrade roads. "Even in America, there was some drought but no famine. In Australia, there was drought but no famine because they have already reserve capacity," says Mr Dingamo. "Their economy is developed."
* The National