327 Ethiopia has great agricultural potential because of its vast areas of fertile land, diverse climate, generally adequate rainfall, and large labour pool. Notwithstanding this potential, Ethiopian agriculture has remained underdeveloped. Drought, repeatedly affecting the country since the early 1970s, a poor economic base (low productivity, weak infrastructure, and low level of technology), and overpopulation, are factors determining poor agricultural sector performance. For instance, according to the World Bank, between 1980 and 1987 agricultural production dropped at an annual rate of 2.1 percent, whilst population grew at an annual rate of 2.4 percent. Consequently, the country faced a tragic famine that resulted in the death of nearly 1 million people, from 1984 to 1986. 328 Industrial development in Ethiopia is still in its infancy and has a narrow base, tied to the agriculture sector. The share of the industrial sector, including manufacturing, construction, hydropower, and mining, has not exceeded 14 percent of GDP on average. The manufacturing sub-sector (cottage industries, small and micro-enterprises and medium- and large-scale manufacturing industries) accounts for only about 5.5 percent of GDP, on average. Similarly, the average share of manufactured products to total exports does not exceed 5.0 percent of GDP. Nevertheless, due to an array of reforms - opening up the economy and creating a conducive investment environment in recent years steady growth in industrial production and trade has been registered. There has also been a surge in investments, sustained export growth, and increased employment generation. 329 One of the government strategies - the Industrial Development Strategy - aims to accelerate economic development and improve living standards. The strategy is based on the ADLI and has been implemented since 2001/02. The underlying objective of the strategy is to increase benefits earned from economic integration, with the ultimate goal of becoming an industrialised country; enable all industries to utilise their full capacity in order to increase production and productivity; establish and expand industries that are labour intensive and use domestic raw materials; strengthen private sector participation in the development process; and, increase the industrial sector’s share of GDP, its employment generation capacity, as well as its contribution to foreign exchange earnings. 330 This involves strengthening inter-sectoral linkages (between agriculture and industry) on the domestic front, and exploiting the potentials and opportunities of regional and global economic integration. The rural-centred ADLI - within the framework of a free market economy - is the principal driving force of this strategy. - 139 -