As Ethiopia is a developing country with undersized economy, it needs to cement association with development partners and mobilize resources from various centers and effectively as well as efficiently allocate it to make a difference.
The country has faced various challenges, among others, macro- economic imbalance, foreign currency crunch, foreign debt, inflation, unemployment, trade deficit, obsolete logistic system, which deter its development endeavors. Hence, apart from capitalizing on homegrown spheres, strengthening relation to mobilize resources from partners is essential to tackle hurdles and move steps forward.
The government has since long back established good relation with partners entertaining bilateral and multilateral maneuvers.
The already established relation with USA, European Union, the World Bank, International Monetary Fund, China and others have brought about fruitful outcome, but maximizing the benefit through strong commitment is essential. Ethiopia has trade relation with these countries and exports agricultural products in its raw form and imports capital goods, industrial inputs chemicals and other materials. Ethiopia imports more goods than it exports to these countries, and this implies how the country finds itself in the negative trade balance and tries to fill the deficit. The nation should thus increase its exports in terms of volume and quality to overcome all these perplexities.
Instead of exporting raw materials, distributing them adding value would enhance the competency of the products in the world market. On the other hand, substituting the import goods by local products, in addition to reducing dependency on foreign products, enables to save the badly needed hard currency.
The partner countries, apart from having good relation with Ethiopia, need strongly support the country’s development endeavor. The European Union can be cited as an example in this regard the. The EU in the past provided direct budgetary support to Ethiopia in addition to providing development assistance. The United Nations development support to Ethiopia with its various institutions can also be rightly mentioned along this line.
Finance Minister of Ethiopia, Ahmed Shide, recently said that the European Union (EU) is an important strategic development partner for Ethiopia as it has been supporting the country’s development endeavors in various areas. He forwarded this idea when he met EU Commissioner for International Partnership, Jutta Urpilainen and shared a range of issues with a view to strengthening bilateral relations between Ethiopia and EU.
Briefing the media after the discussion, the minister said EU is a very important strategic development partner, which has been supporting the development of Ethiopia in various areas of growth, social development, and other support programs.
He said, “EU has been supporting Ethiopia’s development in various areas in terms of growth, competitiveness, social development and providing multi donor development programs which has been supporting Ethiopia’s growth.”
Ethiopia and EU signed a new cooperation agreement which signifies strategic importance as well as strengthening development partnership between the two parties.
They also discussed how, through the Global Gateway initiative, EU businesses will be supported to invest more in Ethiopia, which is going to be very important as Ethiopia moves forward in terms of implementation of its homegrown economy reform. Such a bold move is also a fundamental pillar in leveraging private sector growth.
Therefore, attracting more investment is very important and EU is a major source of investment for Ethiopia and trading partners.
The commissioner on her part said that she discussed bilateral cooperation between the government of Ethiopia and the European Union. She further said that Ethiopia is a strategic partner for the European Union and important steps are forwarded.
As part of the visit, Ethiopia and the EU signed a 650 million euros cooperation agreement. According to the commissioner, the agreement is an important step which enables the two sides utilizes budget support to the selective sectors in the future.
She said that human development, peace building, governance, democratization as well as the implementation of Pretoria peace agreement through the national dialogue and transitional justice are the priorities of EU in its cooperation with Ethiopia. European Union supports Ethiopia to eradicate poverty, foster inclusive and sustainable economic, social and environmental development as well as promote human rights, democracy and other elements of good governance. Development aid further contributes to increase cooperation and dialogue in the main areas of mutual interest, as identified in the EU Ethiopia strategic engagement.
Furthermore, European solidarity is being effectively and visibly ensured through prompt help and relief assistance to Ethiopian Population affected by various crises.
She also reiterated EU’s commitment to support Pretoria peace agreement. The EU Commissioner had discussed the sidelines of the 78th UNGA, in New York on September 20/2023 with Deputy Prime Minister and Foreign Minister, Demeke Mekonnen. During the occasion, the commissioner commended the progress that has been registered so far in due course of consolidating peace in Ethiopia.
She also stated that, the EU attaches special value to its cooperation with Ethiopia and appreciates the huge political commitment of the Ethiopian Government.
Obviously, Ethiopia is located in the very strategic place of horn Africa flanked by red sea, Gulf of Aden and the Indian ocean in the East. Considering the vitality of the Horn of Africa, many superpower countries including China established military base in Djibouti. The Gulf of Aden is the root which forty percent of the world petroleum is transported from the gulf countries to Europe.
It is also a populous country in the region with more than 120 million and this indicates that how the country is gifted by huge labor force which could be both productive and consumer. Being the origins of Nile water, it has been endeavoring for constructing Grand Abbay Dam, which is the largest in Africa, increased its strategic importance.
As it is understood, the government has an ambition to open the economic sectors to the private sector and took various measures among others introduced new laws, provided tax holiday and working place in a reduced price. However, the government has still a monopoly power on the economy and the role of the private sector is negligible and attaining sustainable growth is very hard in such a situation.
According to experts, liberalizing the economy encourages the private sector to invest more, work energetically, expand competition among firms and protect the economy from uncertainty.
The country, as compared to the other countries, is relatively stable and regarded as stabilizing force in the region. In fact, partner countries need to establish strategic partner and to that end they need to look the prevalence of peace, stability, good governance and rule of law thereby achieving the desired goals in Ethiopia.
The government mobilizes financial resources despite gaps due to budget deficit, and it is mobilizing resource from foreign sources for the effective accomplishment of the development endeavors.
No doubt, sustainable development is a prerequisite for poverty eradication, social development and the creation of an inclusive, strong and diversified economy.
The EU and Ethiopia engage in reinforcing mechanisms aimed at promoting decent work and the economy and social integration of vulnerable population, paying particular attention to situations of extreme poverty and social exclusion.
The two sides also look at ways of maximizing the social and economic impact of development cooperation while ensuring sustainability including through improved alignment of EU donors with the previous Growth and Transformation Plan and Ethiopia’s Climate –Resilient Green Economy Strategy.
The EU works with Ethiopia to exchange information and best practices on issues related to education, vocational education and training and capacity building.
As mentioned above, the mainstay of the nation economy is rain fed agriculture which is vulnerable to climate change and global warming. Drought and extreme weather conditions have been the recurrent phenomena for years. When rain delays, comes early or absence, crop failure occurs followed by famine and displacement. Ethiopia for long participated in climate negotiation because it is the major victim of climate change, but not the major contributor to climate change.
Since advanced countries including members of the European Union are the major carbon emitters, they should show sympathy to the developing countries in the climate negotiation and should fulfill their pledge in reducing their emission to the atmosphere and in such a way can help the poor countries reduce poverty.
BY ABEBE WOLDEGIORGIS
The Ethiopian Herald October 8/2023
