MAY 28: THE DAY THAT REBOOTED
Ezana Sehay 05/23/2014
Ethiopians have witnessed an incredible transformation of
their country in the last two decades spanning from 1991 – 2014; evolving from
a pathetic state to its present status as dynamic and strong nation with
considerable positive prospects.
The dichotomy of pre and post – 1991, Ethiopia, couldn’t be
more axiomatic. Not often does a country emerge from a condemned “basket case”
to become a real political and economic power in such a short time, but
apparently, nothing about today’s Ethiopia is ordinary.
What a difference 23 years can make. To have a clear
understanding of the path Ethiopia’s socio-economic sectors have taken place since
May 28, 1991, it is worth visiting, albeit briefly, the government’s policies
which brought about such transformation.
This is clearly becoming the decade of “Africa- rising” as
the continent, for the most part registers formidable economic growth. At the
heap of that pack of African countries whose common denominator is high rate of
growth and expanding economy is Ethiopia.<
Furthermore, among these promising developing countries none
exudes policy competency and consistency like Ethiopia. That is because, unlike
those of other countries’, the Ethiopian leadership has demonstrated a
willingness to engage in policy change should circumstance demand it.
Keep in mind, the country the EPRDF inherited is one that was
a bankrupt; there was no economy to speak of and all the physical and social infrastructures
were in ruins. The new government recognized the challenge of reviving the
country from its terminal decline would need herculean effort; nevertheless, it
was up to the task.
Consequently, during the first few years; in an attempt to lay
the foundation for economic growth and expansion it entertained a variety of
However, it realized some of the development policies and
strategies prescribed by neo-liberal institutions had not been in consonance
with the realities of developing economies like that of Ethiopia. Ergo at the
end of the last decade; after evaluating the strengths and weaknesses of past
performance, the government decided to restructure the economy.
Laissez-faire market oriented policies, wholesale
liberalization and the privatization of all state enterprises (including
strategic sectors, such as energy and communication), the mantra better known
as the Structural Adjustment Programs, propounded by the WB and IMF have
contributed to the further impoverishment of Africa and plunged many developing
nations in to severe debt crisis.
Consequently, circa 2010-11, the government formulated a new
pragmatic, proven and practical economic and social development vision for the
country. It called it the Growth and Transformation Plan (GTP): it is an
audacious national five year plan, which it hopes would address the
deficiencies in the neo-liberal school of thought and offer a new vision and
The GTP seeks to actively mobilize all stake holders; the government,
the private sector, the public at large, and all the resources toward the
achievement of shared goals. It is therefore, a vehicle of hope and inspiration
for a better tomorrow. Its targets are bold: food-security; universal primary
education; access to quality health services; universal access to safe drinking
water; gender equality; high life expectancy etc.
The plan is, by the end of the 3rd GTP period (2025), to
transform the Ethiopian economy from law productivity agricultural one to a
semi-industrialized economy led by modernized and highly productive
agricultural activity which will effectively be integrated and buttressed by
supportive manufacturing and service industries in the rural and urban areas.
In other words, what is envisioned is; by 2025, the Ethiopian
society will be a substantially developed one with a high quality livelihood
that Ethiopia will have graduated from a least developed country to a middle
income one with a high level of human development. For all intent and purposes;
the plan is to create an egalitarian society.
Thereupon, to facilitate the successes of the GTP, the
government has undertaken some major steps.
Good Governance: The government has demonstrated its
commitment to good-governance and public accountability. It is embarked on an
elaborate and far- reaching reform program which includes reform of the public
sector to promote effective service.
As part of its policy to promote good governance, the
government of Prime Minister Hailemariam, is committed to the war on
corruption, which has seen some major casualties from high echelon of the
government itself. By the way, that move came mainly as a response to a popular
mood, often expressed in the private media.
Through the implementation of such national anti-corruption
strategy, the government is trying to develop a culture of accountability and
The Private Sector: The government is adamant when it comes
to its promotion of the private sector investment. To achieve a viable and
vibrant private sector, it has put in place favorable policies and provides a promotive
atmosphere and incentives for both local and foreign investors.
As a result, Ethiopia now has one of the most liberal and
accommodating investment regimens in Africa.
Finance and Banking: Thanks to the economic liberalization,
public monopoly in the financial sector is now a thing of the past. There are
now more than 17 private banks. This in turn has created a fiscal stability. In
addition, the insurance market has also been opened to private, including
Energy: We know Ethiopia is blessed with energy sources;
hydro, solar, wind, geothermal, coal… the problem has been the lack of will and
resources to exploit that immense wealth. This government is determined to
change that. One of the important components of its energy policy is to elevate
the national capacity by focusing on skill development; a sinqua non - for
undertaking mammoth projects like that of the GRD.
Transportation: The government recognizes the prevalence of
good transportation infrastructure is a key ingredient that attracts
investment. Even before the launching of the GTP it has maintained and expanded
the country’s essential infrastructure. Furthermore, the planned expansion of transnational
and trans-regional expansion of rail way is going to take the country to a new
Manufacturing: The ultimate objective of the GTP is to make
the country a hub for manufacturing in as short time as possible. The
government is acting aggressively for the realization of this scheme, including
going after those potential investors (such as; the Chinese shoes manufacturing
companies and the Turkish textile sector), and persuade them to invest in the
Agriculture: Agriculture remains the largest sector in the
economy with a modest annual growth. Nevertheless, the government is working on
increasing production even more with innovative ideas and introduction of
technologies. In addition, agronomists are hard at work in soil analysis of
every region, in order to allocate suitable seed and fertilizer.
It has been four years since the government launched the
first GTP period, so it is as good as a time as any to reassess the state of
When the government launched the GTP, there were a jamboree
of armchair skeptics, who said it is too ambitious and a Tantalus cup.
To the contrary, according to the benchmark volumetric, the
GTP has led to wholesale dramatic expansion of the economy highlighted by the
increasing performances of the manufacturing and the service sectors.
At the root of the success is the balanced growth of local
consumption and export oriented investment expansion; without divulging
reasonable regulation, more leeway is accorded to market mechanisms to sustain
the growth dynamics. The mantra of this approach is a mix of import-substitute
So far the implemented policies which are fostering a
pro-business environment have lessened the country’s commodity dependence
syndrome as the government revised its approach and gave equal weight to
domestic consumption and trade. That has dramatically enhanced Ethiopia’s
stature as a choice of destination for foreign direct investment (FDI), which
are stimulating wider development objectives through links with the rest of the
The increased attention the government has given to improving
the country’s infrastructure, especially the transport and energy sectors has
in return created a favorable business climate that is beginning to attract the
kind of investment that is needed for the economy to take-off. Business
confidence remains strong, capital continues to pour in, and the dual prospect
of growing energy output and regional economic integration is heralding
Ethiopia’s arrival on the world stage.
All the while, the government’s macro engagement in the
economy is focused in building self-sustaining industry. The establishment of
amalgamations likes the Metal and Engineering Corporation (MeTEK), has enabled
it to undertake highly complex projects free of foreign constraints.
Ethiopia’s long- term development plan is indeed profound.
The economic and social development’s objective of a sustained acceleration in
the rate and pattern of growth has continued. That has ensured a strong impact
on poverty alleviation through employment creation and income generation.
The persistent global economic slowdown has had some effect;
it has led to some growth retrenchment… as a result growth, for this year has
moderated to 9.7% from double digit, but the government is not taking its
adverse impact lying down. It is countering it by good policy decisions and
strong political leadership; Wheels are put in motion to circumvent the problem
and maintain the economy’s steady growth
That has been achieved through the continuing effective
macroeconomic management, selective policy intervention to accelerate growth,
provision of public service that enhances human potential (i.e. education, health,
water, housing), efforts that ensure the economic opportunities for the poor.
This growth according to UNDP and the WB is mainly due to
improved performance in the sector of agriculture, infrastructure, manufacturing,
service and mining. According to the aforementioned regimes, such is a pro-poor
In his address to parliament, on April 24, Prime Minister
Hailemariam, stressed the economic growth is on track. He said most goals of
the first GTP will be met by the end of the period (2015), and the country is
indeed moving on the right path.
The first sovereign credit rating grade of “B” accorded to the
nation recently by the major rating firms is an important endorsement of PMHD’s
Yes, much has been achieved; most of the problems of that
dark era are in the rearview mirror. But undeniably, there is still a lot to be
done. However, experts concur that despite being an emerging economy, the
country’s potential is stronger than ever and the policies of the government
The country’s progress on several social metrics of the
Millennium Development Goals (MDG) is exemplary. The foundation for inclusive
societies, dynamic economy, improving income equity, economic mobility, vibrant
and pluralistic markets --- an essential momentum to maintain social harmony is
In short, Ethiopia is at a crossroads. Thanks to a government
strongly committed to structural economic and political reform; stimulating
domestic entrepreneurship, and attracting long-term foreign capital, it stands
a good chance of unleashing its economic growth potential even further.
More importantly, looking in to the zeitgeist of today’s
conditions such as peace, health, education, and living standards...
well-being measures; social activism, political participation, inter-personal
relationships, personal safety, public confidence, national perception, and the
arts as a reflection of contemporary life, (society’s evaluation of its
ü Economic indices, in the country
indicate the prevalence of a vibrant social capital.
No wonder Ethiopians both inside and outside the country; in
addition to displaying reverence for the milestone, are confident that their
beloved country, will not only realize its immense potential as stipulated in
the GTP , but come 2025, celebrate it at its apex – both economically and
Shout- out to Genbot 20!