BY DANIEL ALEMAYEHU
Every step of a country is measured by the economic standards that the country fulfills. Countries that are labeled as powerful have not only military power but the most powerful weapon these countries equipped is their economy. Without strong and sustainable economic strategies and stands, the power and influence that a country has in the eyes of other countries will not be noticeable. Due to several reasons, most African countries have no such strong economy that can influence the world and become one of the prominent continents.
As Ethiopia is starting the way to organize the new parliament, the people expect many more things that can be changed for good. In the past few years, the country has faced several economic flaws that can directly affect the life style of the people. As the country’s economy is mainly based on importing and exporting goods, the people may suffer from any change in the world of commerce. That is why the policies and strategies that a government of a country decides to follow affect the future of every citizen. Due to this, Ethiopians are expecting many changes from the new government as the future is depended by them.
In recent years, there have been major economic problems that deeply challenged the country, and new parliament should give attention to. The price inflation, shortage of foreign currency, and international debts of the country are the major issues that should be solved by the new government. For the above listed economic problems, the government has been taking actions to minimize them but not to free from them.
The Ethiopian Herald has had a short stay with an Economist, Jemal Mohammed (PhD) and he said that there are things that the new government should focus on regarding the economy of the country. The new government should work on how it can achieve its long term goals. At this time, there are other things which need the government’s attention. He said: “The resource we have at hand must be utilized very carefully both by the government and the people. The new government should think of re-opening new ministries which focus on specific economic sectors. For instance, The Ministry of Trade and Industry should be divided into two and both the trade and the industry have their own ministries because these two sectors have huge responsibilities and impacts on the nation’s economy.”
As the economy of the country is depended on the import and export, the new government should be more precise and clear on the systems and procedures to be taken on this sector. We must do things aggressively on quality exporting items that can be competitive on the world’s market. We need to build better technologies with impactful researches to support our products. This kind of steps needs years to be effective as other countries like China and Korea did to their respective economy, Jemal highlighted.
As to the Economist, to take a step forward on the import and export sector, the new government should enhance the industry and manufacturing sector by creating network with the agriculture sectors and other stakeholders. The agriculture sector is one of the major raw material providers for the industry sector that needs to be modernized. For instance, in Ethiopia, there are plenty of textile industries. These industries import their raw materials, which is mainly cotton, even though there is cotton production in the country. The reason why they do not use local production is because of its substandard quality. Therefore, the government needs to modernize the agriculture sector to elevate these challenges in order to decrease its import expenses.
The new government needs to work on empowering farmers. Farmers couldn’t get appropriate price for their products though the buyers pay inflated price for the products. So as to fix this flaw, the government needs to connect the farmers and the raw material buyers to the industry sector. In addition, the government should work on the agriculture sector fostering the usage of irrigation and other agricultural alternatives, and also it needs to create network that shows what is needed on the manufacturing sector that the agriculture sector can provide, Jemal said.
Furthermore, the Economist said that small-scale enterprises play a pivotal role on import and export. As an example, countries like South Korea use small scale enterprises in supporting its bigger industries by supplying small input materials so that these countries substitute their expenses on importing to local small- scale enterprises. This experience can be compatible in Ethiopia to give a chance for local small scale enterprises to supply materials to larger industries. Above all, the new government must give special attention to create network among these enterprises and bigger industries.
Regarding the private sectors, Jemal (PhD) pinpointed that the new government should support ideas from the private sectors as they are the major contributors for import and export sector. The private sectors are the ones that can apply any change in their company to be competitive in the world. Government owned companies cannot apply dynamic changes in their companies due to various reasons. Therefore, the government must pave the way for these private owned companies to flourish in the import and export sector at large.
Jemal also forwarded his opinion on privatization. He said that this time, the government is focusing on the letting government owned service sectors to private. On one hand, it is obvious that making a company private brings income. On the other hand, neglecting the manufacturing sector is dangerous. If the new government focuses on the service sectors which have very little contribution on the import and export exchanges, these may halt the development of the country. Due to this, the government must aggressively work on enhancing the manufacturing sector as it is the main supplier to the main economic base, import and export.
Besides, the new government must put emphasis on the manufacturing sector. In recent years, industry parks have been constructed in different parts of the country to promote industrialization. Just like this, the new government should work on expanding industries and manufacturing companies to improve its exporting quality and quantity. “I think the government shifts its attention to tourism and service sectors.” It is true that tourism is not that much income generator compared with the manufacturing. Therefore, the new government must appreciate changes in manufacturing sector. The best way to enhance the manufacturing sector is that the government takes the responsibility to connect small- scale enterprises and manufacturers to work together.
Regarding the major economic challenges of the country, international debts and shortage of foreign currency, the Economist said that the new administration should take different actions. As to him, the first thing to be done is escalating the quality and quantity of exported items and de-escalating what is imported. After that, the new government must strengthen its diplomacy and having fruitful agreements with other countries, and also convince loan providers that the country is capable of paying its debts. Again, because of the current pressure that the country is experiencing, the new government must use its limited resources wisely.
All in all, the new government is expected to bring further development and prosperity to the country. In order to achieve its goal, it is better to focus on local productions and manufacturing sector as the country’s economy is depended on import and export sector. Modernizing the system related with import and export is one of the expected actions from the new government. Private companies including small-scale enterprises should take part in supplying raw materials to bigger industries so as to minimize the country’s import expenses.
The Ethiopian Herald October 3/2021
