Addis Ababa—At the end of April, the Inter-Africa Group organized a symposium focusing on the Ethiopian economy and where it was headed. Some of the stories on the symposium are summarized below.
The private paper Monitor (May 2) reported that Prime Minister Meles
Zenawi vigorously defended his government’s policy of state
ownership of land, though independent institutions criticized it as
stumbling block to food production in the country. We feel it is
not economically rational, and we don’t believe private
ownership of land is the right policy for Ethiopia,
he stated in
response to a question at the four-day international symposium to
review Ethiopia’s socio-economic performance from 1991 to
1999. International financial institutions and economists in general
say the policy remains a stumbling block to the country’s food
production in the face of cyclical drought- induced food
shortages. But Meles contended that private ownership of land would
lead the peasant farmer to abandoning home to urban areas either by
leasing or selling his holding. He said this would open up a floodgate
of migration from rural to urban areas, swelling the number of
unemployed in the country.
Writing on the international symposium, the private paper Reporter
(May 3) observed that over 55 papers were presented, and all said that
although the stark reality at hand would point to the worst scenario,
there are pictures of hope that need to be capitalized on . The rather
familiar figures were enumerated in a presentation on
poverty. Forty-five percent of the population of Ethiopia is
absolutely poor, unable to lead a life fulfilling the minimum
livelihood standard. Forty-seven percept of the rural population live
in absolute poverty, while 33 percent of the urban population is found
to be in absolute poverty. The extremely high unemployment rate in
1992 has decreased in 1993/97 back to the 1992 level. Maybe a
surprising fact. As a recommendation, it was said that promoting
dynamic agricultural sector development while pursuing a
labor-demanding, export-oriented growth path is the way to go. Health
expenditure has meanwhile declined since 1992/93, where it has reached
19% of the GDP. A fact of life is that there was one physician for
every 38,365 persons in 1994. Worse still, that had declined to 34,500
people in 1998. On the positive side, health care services in Ethiopia
are now in a better shape compared to their state in 1991. Then there
is the question of education, a sector that could help the future
generation. It is a reform that makes a difference,
said
Mazengia Mekonnen, who presented a paper on the Education Sector in
Ethiopia. He started with the positive side. Access to education has
increased to more than 45% percent, although the quality aspect of it
has not improved much. The presence of qualified teachers in lower
primary schools has increased from 85% to 93%. The negative side is
that dropouts and repetition rates are on the rise. Changing such a
flawed education system is, therefore, essential and the new education
and training policy and strategy was put in place. The policy plans to
raise primary enrollment from 3.1 to 7 million and increase financing
for education by raising public expenditure on education to 4-6% of
the GDP. There was also a paper entitled, The Financial Reform in a
Developed African Country-Lessons from Ethiopia,
presented by
Stephen B. Peterson of Harvard University. The presenter apparently
thinks that in this respect, Ethiopia has bitten more than it can
chew. It is simultaneously implementing three financial reforms -
devolution, civil service reforms and sector development programs. His
advice: Ethiopia ’s financial reform should not be to win the
international reform sweepstakes,
but to build some financial
systems through a coherent, appropriate and doable reforms.
The private paper Monitor (May 2) reported that a leading
international economist has commended Ethiopia’s economic reform
measures, which he said have resulted in a substantial reduction of
poverty and child mortality rate in the country. Ethiopia’s
transition from a controlled economy to a free market system was
quite commendable
Joseph Stiglitz, former chief economist of the
World Bank, said. Stiglitz said that Ethiopia had managed to register
a respectable six percent annual growth in GDP following the
implementation of its economic reform measures in the last six years,
despite the ongoing drought and crop-failure in the last three years,
and two years of a border conflict with Eritrea.
In related news, the private paper Reporter (May 3) disclosed that the World Bank has severed ties with its controversial former chief economist, Joseph Stiglitz, and said that he was no longer working as a special advisor to its president, Reuters reported last week. World Bank media chief Caroline Anstey said president James Wolfensohn did not need both a special advisor and a chief economist. Meanwhile, other sources said the bank was rankled by Stiglitz’s latest outbursts, when he said an arrogant International Monetary Fund had refused to listen to advice during the world financial crisis of 1997-99, and that counties ignoring IMF advice often did better than those that followed its recipes.
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