My Weblog: kutahya web tasarim umraniye elektrikci uskudar elektrikci umraniye elektrikci istanbul elektrikci satis egitimi cekmekoy elektrikci uskudar kornis montaj umraniye kornis montaj atasehir elektrikci beykoz elektrikci
Think about how much the city has changed since the Millennium. All over you can see the new condominiums and roads. Walking by Lidetta today and looking at the new condos standing in what used to be a dilapidated area full of ramshackle houses, and guest houses that charged 35 birr for a “short,” I was struck by all that had changed.
Soon there will be light rail and the hydroelectric dam. It seems that the double digit economic growth (11.5pct) is a reality.
The question arises does as one famous US president once said a rising tide lift all boats.
The UN would argue that it does not. They say three million Ethiopians will need direct food aid this year.
In his address to the joint ordinary session of the House of Peoples’ Representatives and the House of Federation on Monday, October 8, President Girma Wolde-Giorgis reiterated that in the first year of the implementation of the Growth and Transformation Plan (GTP) the country has achieved 11.7 percent economic growth. “The next year there was a minor decline and the growth continued with 11.2 percent. We expect to register a similar figure of no less than 11 percent in the years to come,” the President said.
Recently the International Monetary Fund, (IMF) projected that Ethiopia’s growth would slow to 6.5 percent in this fiscal year unless there is more private-sector involvement in infrastructure projects. The IMF statement released on October 1 reads as follows: “Real GDP growth will slow down to 6.5 percent in 2012/13 and over the medium term.”
The IMF Directors encouraged the authorities to persevere with their fiscal reforms. “In particular, they saw scope for further improvements in tax administration and revenue mobilization,” the statement added. Additional public financial management reforms and development of a medium-term debt management strategy encompassing both domestic and external debt help achieve the fiscal objectives under the Growth and Transformation Plan (GTP) and maintain fiscal sustainability. The IMF has called on the Ethiopian government to implement new efforts to boost the country’s private sector or face a slowdown of economic growth.
This is about the 2012/2013 fiscal years. There has always been a difference in the economic growth figure between the government of Ethiopia and the IMF in the past, too. When the IMF submit its annual report reducing the rate of growth from 6.5 to 7.5, the late Prime Minister Meles Zenawi argued that the IMF report was politically motivated. The government counterattacked by releasing details of economic growth data’s. What President Girma addressed on Monday was a repeat of that.
“The agricultural sector is fast growing, various activities are undertaken to develop the industrial sector, to reduce unemployment the government has created 1.1 million new jobs, inflation has gone down from the previous 40 pct to 21pct this time and the number of people livening below the poverty line slashed from 38. 7 to 29. 6pct. To develop infrastructure we plan to build 70,000Km in the coming three years,” the Presented noted
The President’s address came weeks after the IMF statement. As it was in the past, it seems that the government is responding to the IMF report without mentioning its name. In fact the president projected over 11 percent growth this fiscal year. It sounds that this address is a direct reply to the global body.
Despite the double digit economic growth claim, when the late Prime Minister asked about the growth that didn’t reach people who were down trodden, he admitted that it takes some time for the economic growth to satisfy the interest of the people in a way they want.
Figures in economics are easily manipulated. The economic measurement lacks the instrument to identify between the actual rate of growth that a country registers and the official percentage given by governments. Knowing this, third world countries are in love with unverifiable economic figures. They usually denote a high economic growth rate. When the international bodies reject what they claim, most of the time the end result is a fierce battle.
Poor countries like Burkina Faso, Chad, and Central African Republic give an inflated figure of economic growth. That figure is helpful for domestic consumption. Unlike poor countries, in rich countries governments are careful not to release misleading figures which usually back fires if they do so. In their countries (rich countries) they have more or less objective measurement to prove what is released by the government statistics office.
Ethiopia does have verifiable positive facts. There is much evidence that there is in fact economic growth. The problem here lies in the growth rate. Due to this the IMF figure denotes that the Ethiopian growth rate has always been by half less than to what was said by the government. The same is true in the prediction for this fiscal year. The government says it works for double digit economic growth in the 2012/2013 budget year while IMF predicts that the Ethiopian economic growth will slow to 6.5 percent. What is added in the IMF projection is the request for the involvement of the private sector.
It is true that there has been sustained economic growth in the 21 year tenure of the EPRDF. True also, the newly introduced free economy 21 years ago in place of the old stubborn command economy brought real change in the economic performance of the country. The private sector has actively participated in the economic activities despite the call of the IMF for more private sectors involvement.
The involvement of the government in the economic activities has been huge. In terms of employment, the government’ share is extremely high. For a sustained economic growth, it is advisable, to combine the two forces, the government and private, in Ethiopia. We must also know that the private sector is in a very rudimentary stage. Considering this the suggestion of the IMF to encourage the private sector is plausible. It is also plausible to encourage the government to work hard to implement the GTP.