Cultural Diversity in Ethiopia and its Impact on Local Economies and Biodiversity 1 0. Abstract The paper shows examples of the cultural diversity of Ethiopia and its rootedness in biodiversity and history expressed in its crafts. Two main approaches for their preservation are illustrated, ranging between subsistence oriented and market-based ones. Different kinds of products, like basketry, weaving, leather and cultural foods etc. are analysed in respect to their natural and historical rootedness and in the way in which current approaches for their promotion impact the rural economy and the natural environment and thus contribute to the creation of alternative livelihoods in drylands. A specific focus is given on the socioeconomic condition of traditional Ethiopian craft workers, which is still characterized by ostracism and impoverishment. 1. Introduction 1.1. Biocultural Diversity of Ethiopia Ethiopia is considered as the cradle of mankind and its historical monuments belong to the world’s most important reminders of Christianity. Ethiopia was the first and maybe the only country in the world where Christians and Muslims used to live in peaceful conviviality. The country is one of the Vavilov centres of genetic resources, which results from the fact that Ethiopia is a tropical country with altitudes ranging from below sea level in the Dallol Depression to over 4000m on Ras Dashen. The Ethiopian Plateau, which constitutes around 45% of the land mass, is dissected by the Great Rift Valley of Africa and deep river valleys. Rainfall varies from an annual total of over 2000 mm to virtually nil in the Dallol Depression (Million, Edwards & Fassil, 2004). There are various approaches to explain how this natural diversity evolved into the present cultural diversity patterns in Ethiopia, and it has been Levine (1974), who related it to the ecological conditions by describing it as a process of holistic specialisation. Holistic specialisation assumes that small and relatively homogenous societies occupied the various ecological niches of the Ethiopian environment, and thus created an overall pattern of a heterogenous society consisting of many different homogenous cultures, differentiated into separate small-scale societies with distinctive religions, social organizations and technologies, accompanied by the evolution of numerous languages, which 1 Ingrid Hartmann, Cultural Heritage Project Ethiopia, c/o Ministry of Youth and Sports, Mesqel Square, Addis Ababa, Ethiopia. Email: Ingridethio@yahoo.com . Private: Fregestr. 26, 12161 Berlin, Phone: +49-30-85999717