This study reviews economic development, reform programs, and poverty reduction strategies in Ethiopia. The country remains amongst the poorest in the world. Compared to the rest of sub-Saharan Africa, Ethiopia is performing relatively well in economic growth and expansion of basic services, but the country's economy is highly dependent on agriculture and foreign assistance. Recently, with the expansion of infrastructures, hotels, and tourism, the service sector is taking the lead in economic growth. Resource mobilization and human capital development need to be the priority policy areas in Ethiopia. It is also important to improve both the access to and the quality of each service. Moreover, it is mandatory for Ethiopia to develop strategies to control the alarming increase in population growth.