Briefing on the 2007 Annual Ministerial Briefing on the 2007 Annual Ministerial Review of the Economic and Social Council Review of the Economic and Social Council

(ECOSOC) of the UN(ECOSOC) of the UNon on

Emerging Ethiopia: Strengthening Efforts to Emerging Ethiopia: Strengthening Efforts to Eradicate Poverty and Hunger, including through Eradicate Poverty and Hunger, including through

the Global Partnership for Developmentthe Global Partnership for Development

Mekonnen ManyazewalMekonnen ManyazewalState MinisterState Minister

Ministry of Finance and Economic Development (MOFED)Ministry of Finance and Economic Development (MOFED)Federal Democratic Republic of EthiopiaFederal Democratic Republic of Ethiopia

July 3, 2007July 3, 2007

OutlineOutline The National Development Policy Framework (NDPF);The National Development Policy Framework (NDPF); Integrating MDGs in to the NDPF;Integrating MDGs in to the NDPF; The Medium-term Plan (PASDEP) & the Ethiopian MDGs;The Medium-term Plan (PASDEP) & the Ethiopian MDGs; The Pillar Strategies of the PASDEP;The Pillar Strategies of the PASDEP; The Framework for Financing the PASDEP;The Framework for Financing the PASDEP; Overview of Progress in Implementation of the PASDEP;Overview of Progress in Implementation of the PASDEP;

• Macroeconomic Performance;Macroeconomic Performance;• Highlights of Key outcomes for poverty-oriented Sectors by Highlights of Key outcomes for poverty-oriented Sectors by

the end of 2005/06;the end of 2005/06; The M&E System of the PASDEP and hence MDGs;The M&E System of the PASDEP and hence MDGs; Challenges and Opportunities in Implementing the PASDEP and Challenges and Opportunities in Implementing the PASDEP and

hence Ethiopia’s MDGs Plan;hence Ethiopia’s MDGs Plan; The Key Messages; The Key Messages;

The National Development Policy Framework (NDPF)The National Development Policy Framework (NDPF) From the outset, Ethiopia's overriding development policy agenda is From the outset, Ethiopia's overriding development policy agenda is

to fight and eradicate poverty;to fight and eradicate poverty; Medium term Plans/Programs such as the SDPRP and PASDEP are Medium term Plans/Programs such as the SDPRP and PASDEP are

primary vehicles for overall socio-economic transformation and primary vehicles for overall socio-economic transformation and achieving the MDGs;achieving the MDGs;

The SDPRP launched in 2002 following wide-ranging public The SDPRP launched in 2002 following wide-ranging public consultations in 2001 was built on Agriculture, rural development & consultations in 2001 was built on Agriculture, rural development & food security (Agriculture Development Led Industrialization-ADLI), food security (Agriculture Development Led Industrialization-ADLI), decentralization and empowerment, capacity building in the public decentralization and empowerment, capacity building in the public and private sector,and private sector, reforms in both the justice system and the civil reforms in both the justice system and the civil service;service;

The PASDEP is a five-year (2005/06-2009/10) strategic The PASDEP is a five-year (2005/06-2009/10) strategic framework that builds on the directions pursued under framework that builds on the directions pursued under SDPRP SDPRP

The PASDEP also embodies some bold new directions The PASDEP also embodies some bold new directions including a major focus on growth with particular including a major focus on growth with particular emphasis on commercialisation of agriculture, private emphasis on commercialisation of agriculture, private sector development, and the scaling up of resources to sector development, and the scaling up of resources to achieve the MDGs. achieve the MDGs.

Integrating MDGs in to the NDPFIntegrating MDGs in to the NDPF The need to depart from proceeding with business-as-usual so as to be The need to depart from proceeding with business-as-usual so as to be

able to seize the opportunity to move up to a different development able to seize the opportunity to move up to a different development pattern was recognized immediately following the launching of pattern was recognized immediately following the launching of Ethiopia’s first generation PRSP (SDPRP);Ethiopia’s first generation PRSP (SDPRP);

The poverty reduction effort of the Government of Ethiopia has taken The poverty reduction effort of the Government of Ethiopia has taken a longer-term view with the MDGs in perspective;a longer-term view with the MDGs in perspective;

The PASDEP as a continuation of the SDPRP has been aligned to the The PASDEP as a continuation of the SDPRP has been aligned to the MDGs through the conduct of a comprehensive MDGs Sectoral MDGs through the conduct of a comprehensive MDGs Sectoral Needs Assessment which culminated with Ethiopia’s Ten Years Needs Assessment which culminated with Ethiopia’s Ten Years MDGs Indicative Plan(2005/06-2014/15);MDGs Indicative Plan(2005/06-2014/15);

The PASDEP is the First Five Year Phase of Ethiopia’s Ten-Years The PASDEP is the First Five Year Phase of Ethiopia’s Ten-Years MDGs Plan(2005/06-2009/10);MDGs Plan(2005/06-2009/10);

The Draft PASDEP widely discussed at all levels of Government as The Draft PASDEP widely discussed at all levels of Government as well as with non-state actors and finally endorsed by the House of well as with non-state actors and finally endorsed by the House of Peoples Representatives (Ethiopian Parliament) in May 2006;Peoples Representatives (Ethiopian Parliament) in May 2006;

This set the stage for implementation of the PASDEP which is now in This set the stage for implementation of the PASDEP which is now in its second year of implementationits second year of implementation

The Pillar Strategies of the PASDEP: Road Out of The Pillar Strategies of the PASDEP: Road Out of PovertyPoverty

Building Capacity(with particularly with focus at sub-national Building Capacity(with particularly with focus at sub-national levels(to create capable state & private sector actors);levels(to create capable state & private sector actors);

Massive Push to Accelerate Growth & create jobs (Private Sector Massive Push to Accelerate Growth & create jobs (Private Sector Development and Commercialization of Agriculture, Industry & Development and Commercialization of Agriculture, Industry & Exports, Urban Development)Exports, Urban Development)

Addressing the Population Challenge;Addressing the Population Challenge; Unleashing the Potentials of Ethiopian Women;Unleashing the Potentials of Ethiopian Women; Strengthen the Infrastructure Backbone of the Country;Strengthen the Infrastructure Backbone of the Country; Improve Human Development;Improve Human Development; Managing Risks;Managing Risks;

These Pillars re-enforce each other and help us to These Pillars re-enforce each other and help us to optimize synergy-hence strong outcomeoptimize synergy-hence strong outcome

The Framework for Financing the PASDEPThe Framework for Financing the PASDEP The Total Cost Requirement for the PASDEP period The Total Cost Requirement for the PASDEP period

projected at 332 Billion ETB with the public component projected at 332 Billion ETB with the public component including projected at 232 Billion ETB;On average 46.4 including projected at 232 Billion ETB;On average 46.4 Billion ETB per annum or an equivalent of about $5 Billion Billion ETB per annum or an equivalent of about $5 Billion USD per annum;USD per annum;

On the basis of business as usual assumption external grant On the basis of business as usual assumption external grant budgeted at 7221 Million ETB & loans (external, net) budgeted at 7221 Million ETB & loans (external, net) budgeted at 2083 Million ETB. Altogether, 9304 Million budgeted at 2083 Million ETB. Altogether, 9304 Million ETB or about $1 Billion USD or an equivalent of 8% of ETB or about $1 Billion USD or an equivalent of 8% of GDP in ODA budgeted;GDP in ODA budgeted;

Fiscal Deficit including grants budgeted at about 6 % of Fiscal Deficit including grants budgeted at about 6 % of GDP;GDP;

Domestic Borrowing budgeted at 4782 Million ETB(4.1 % Domestic Borrowing budgeted at 4782 Million ETB(4.1 % of GDP)of GDP)

The outturn [see below on overall fiscal performance]The outturn [see below on overall fiscal performance]

Progress on PASDEP Implementation Progress on PASDEP Implementation A: Supply Side: Real GDP Growth (% Change) A: Supply Side: Real GDP Growth (% Change)

Sector Sector 2005/062005/06 2006/072006/07

PASDEP PASDEP TargetTarget

OutturnOutturn PASDEP PASDEP TargetTarget

Pre. EstimatePre. Estimate

Agriculture & Agriculture & Allied ActivitiesAllied Activities

6.46.4 9.69.6 6.36.3 10.910.9

Industry Industry 12.312.3 7.47.4 11.911.9 10.910.9

ServicesServices 6.96.9 9.29.2 6.96.9 9.69.6

GDPGDP 7.47.4 9.69.6 7.37.3 11.711.7

General InflationGeneral Inflation 8.68.6 12.312.3 8.28.2 17.3 (End May 17.3 (End May 2007)2007)

B: Demand Side GDP Components as a Ratio to GDP @ cmp B: Demand Side GDP Components as a Ratio to GDP @ cmp (%)(%)

ItemItem 2005/062005/06 2006/072006/07

PASDEP PASDEP TargetTarget

Outturn Outturn PASDEP PASDEP TargetTarget

EstimateEstimate

Gross Domestic Gross Domestic Capital FormationCapital Formation

22.022.0 20.020.0 23.023.0 22.022.0

Consumption Consumption ExpenditureExpenditure

93.893.8 94.894.8 93.093.0 92.092.0

Export of Goods & Export of Goods & Non-Factor ServicesNon-Factor Services

16.216.2 15.015.0 16.916.9 17.017.0

Import of Goods & Import of Goods & Non-Factor ServicesNon-Factor Services

32.132.1 33.033.0 32.932.9 35.035.0

Resource GapResource Gap -15.9-15.9 -18.0-18.0 -16.0-16.0 -18.0-18.0

Domestic SavingDomestic Saving 6.26.2 5.25.2 7.07.0 8.08.0

C:Trends in Spending on Pro-poor Sectors as %of Total C:Trends in Spending on Pro-poor Sectors as %of Total Public Spending(%)Public Spending(%)

Sector Sector 2001/022001/02 2002/032002/03 22003/0422003/04 2004/052004/05 2005/062005/06

(Estimate)(Estimate)

2006/072006/07

(Budget)(Budget)

Agriculture & Agriculture & Rural Rural Development, Food Development, Food SecuritySecurity

9.29.2 8.18.1 13.413.4 16.316.3 16.816.8 16.416.4

EducationEducation 14.214.2 16.116.1 20.420.4 19.719.7 21.821.8 16.516.5

HealthHealth 5.95.9 4.94.9 4.34.3 4.84.8 4.64.6 6.16.1

RoadsRoads 10.710.7 9.99.9 9.69.6 11.311.3 14.814.8 12.712.7

Water & SanitationWater & Sanitation 2.82.8 2.92.9 2.02.0 4.54.5 4.44.4 6.96.9

TotalTotal 4343 4242 5050 5757 6262 6060

D: The Outturn for the 2005/06 Resource EnvelopeD: The Outturn for the 2005/06 Resource Envelope

ItemItem Average Average Growth RateGrowth Rate

(2003/04- (2003/04- 2005/06)2005/06)

Performance Performance Against PASDEP Against PASDEP Targets(%)Targets(%)

Performance Performance Against Against Budget(%)Budget(%)

Performance Performance Against Against 2004/05 2004/05 Outturn(%)Outturn(%)

Domestic Domestic Revenue Revenue

2121 8787 9090 125125

Tax RevenueTax Revenue 2020 8888 9191 114114

Non Tax RevenueNon Tax Revenue 2626 8585 8585 169169

External GrantsExternal Grants -5-5 5252 5252 8282

Domestic Domestic Revenue and Revenue and GrantsGrants

1414 7878 8080 115115

Total ExpenditureTotal Expenditure 32.032.0 25.425.4 34.034.0 31.931.9

Poverty-oriented Poverty-oriented Expenditure Expenditure

20.020.0 16.016.0 24.524.5 19.119.1

E: External Sector(% of GDP)E: External Sector(% of GDP)

ItemItem 2005/062005/06 2006/072006/07

PASDEP PASDEP TargetTarget

OutturnOutturn PASDEP PASDEP TargetTarget

Pre. Pre. Estimate Estimate

Merchandize ExportMerchandize Export 7.97.9 8.08.0 8.78.7 8.38.3

Merchandize ImportsMerchandize Imports 30.130.1 34.034.0 30.930.9 33.933.9

Trade Balance Trade Balance -22.2-22.2 -26.0-26.0 -22.2-22.2 -25.6-25.6

Growth Rates (% Change over previous year)Growth Rates (% Change over previous year)

ItemItem 2003/042003/04 2004/02004/055

2005/062005/06 AverageAverage

Merchandize Export (Value in Merchandize Export (Value in USD)USD)

24.424.4 41.141.1 18.118.1 28.028.0

Merchandize Imports (Value in Merchandize Imports (Value in USD)USD)

39.339.3 40.440.4 26.426.4 35.035.0

F: Highlights of Key Outcomes for poverty-oriented SectorsF: Highlights of Key Outcomes for poverty-oriented SectorsIndicatorIndicator 1999/001999/00 2004/052004/05 2005/062005/06 PASDEP PASDEP

TargetTarget

The Macro economyThe Macro economy

Real GDP Growth Rate(%)Real GDP Growth Rate(%) 5.45.4 10.510.5 9.69.6 7.07.0

Per Capita Real GDP Growth Rate(%)Per Capita Real GDP Growth Rate(%) 2.42.4 8.08.0 7.17.1 4.44.4

Agriculture, Rural Development & Agriculture, Rural Development & Food SecurityFood Security

Overall Poverty Head Count Index(%)Overall Poverty Head Count Index(%) 44.244.2 38.738.7 3535 2929

Food Poverty Head Count Index(%)Food Poverty Head Count Index(%) 42.042.0 37.837.8 3535 2828

Stunting (%)Stunting (%) 5757 4747 4545 3535

Wasting(%)Wasting(%) 1010 88 6.56.5 5.45.4

EducationEducation

Gross Enrollment Rate(%)Gross Enrollment Rate(%) 61.061.0 79.879.8 91.391.3 109.7109.7

Grade 5 Completion Rate(%)Grade 5 Completion Rate(%) 48.048.0 5757 63.063.0 136.6136.6

Grade 8 Completion Rate(%)Grade 8 Completion Rate(%) 27.027.0 3434 4242 62.762.7

Girls/Boys RatioGirls/Boys Ratio 0.450.45 0.840.84 0.900.90 0.970.97

----Highlights of key Outcomes for poverty-oriented Sectors----Highlights of key Outcomes for poverty-oriented SectorsIndicatorIndicator 1999/001999/00 2004/052004/05 ProgressProgress

To DateTo Date

(2005/06)(2005/06)

PASDEPPASDEP

Target Target

Health Health

DPT3 Vaccination (%)DPT3 Vaccination (%) 5050 6161 7979 8080

Utilization of Health Facilities(%)Utilization of Health Facilities(%) 2727 3030 76.476.4 100100

Polio VaccinationPolio Vaccination 4646 5555 5757 7070

Proportion of Households in Malaria-prone areas with Proportion of Households in Malaria-prone areas with two bed nets(%)two bed nets(%)

-- 11 4343 100100

Proportion of Mothers with access to family planning Proportion of Mothers with access to family planning services(%)services(%)

88 1515 3636 8080

Health Extension Workers to PopulationHealth Extension Workers to Population -- 1:250001:25000 1:78001:7800 1:25001:2500

WaterWater

% of Population with access to clean water% of Population with access to clean water 2424 3535 47.347.3 84.584.5

RoadsRoads

Road Density(km/1000 sq.km)Road Density(km/1000 sq.km) 29.029.0 33.233.2 36.036.0 54.154.1

Roads in Good ConditionRoads in Good Condition 4848 6464 6868 8484

Time Spent (hours) to reach an all weather roadsTime Spent (hours) to reach an all weather roads 77 55 4.84.8 3.23.2

G: Highlights of Required Rate of Change and Recent G: Highlights of Required Rate of Change and Recent Trends to Meet MDGsTrends to Meet MDGs

IndicatorIndicator Past TrendsPast Trends Recent TrendsRecent Trends

2005/06-2006/072005/06-2006/07

Required Rate of Required Rate of

Change to reach Change to reach MDGs (% pa)MDGs (% pa)

(1995-2000) (1995-2000) (% pa)(% pa)

Recent TrendsRecent Trends

(2000-2005 (% pa)(2000-2005 (% pa)

Real GDP Growth Real GDP Growth Rate(%)Rate(%)

4.94.9 5.55.5 10.710.7 7.07.0

Per Capita Real GDP Per Capita Real GDP Growth Rate(%)Growth Rate(%)

1.91.9 2.62.6 7.07.0 4.44.4

Poverty Head CountPoverty Head Count -0.73-0.73 -2.5-2.5 -3.9-3.9 -3.8-3.8

Food Poverty Head CountFood Poverty Head Count -2.4-2.4 -3.4-3.4 -3.0-3.0 -3.2-3.2

Gross Primary EnrollmentGross Primary Enrollment 12.412.4 5.05.0 9.09.0 3.83.8

Under 5 Child MortalityUnder 5 Child Mortality -1.0-1.0 -5.0-5.0 -6.5-6.5 -7.0-7.0

Access to Clean WaterAccess to Clean Water 1.01.0 6.56.5 7.07.0 6.56.5

The M&E System of the PASDEP and hence MDGsThe M&E System of the PASDEP and hence MDGs The M&E System for the PASDEP and hence MDGs is built on The M&E System for the PASDEP and hence MDGs is built on

Existing Structures/systems;Existing Structures/systems; The development of Statistics is guided by the Medium-term The development of Statistics is guided by the Medium-term

National Statistical Program jointly formulated by the MOFED National Statistical Program jointly formulated by the MOFED and CSA and has been implemented since 1994;and CSA and has been implemented since 1994;

The Welfare Monitoring System Program (WMSP) has been in The Welfare Monitoring System Program (WMSP) has been in place since 1996;place since 1996;

The M&E Action Plan Jointly formulated by MOFED and CSA is The M&E Action Plan Jointly formulated by MOFED and CSA is a continuation of the WMSP; a continuation of the WMSP;

The M&E System has been guided by the M&E Action Plan The M&E System has been guided by the M&E Action Plan supported by the DAG since 2005;supported by the DAG since 2005;

The M&E System is forward looking taking the MDGs in The M&E System is forward looking taking the MDGs in perspective;perspective;

The M&E Action Plan is complemented by Sectoral M&E The M&E Action Plan is complemented by Sectoral M&E Systems;Systems;

‘‘What can not be Measured Can not be Done’What can not be Measured Can not be Done’ The fact that Ethiopia has received an award for The fact that Ethiopia has received an award for

best practices in establishing and institutionalizing best practices in establishing and institutionalizing a well integrated, home grown and forward-looking a well integrated, home grown and forward-looking (with MDGs in perspective) M&E system at the (with MDGs in perspective) M&E system at the Third International Roundtable Conference on Third International Roundtable Conference on Managing for Development Results (MfDR) held in Managing for Development Results (MfDR) held in Hanoi, Vietnam, from February 5-8, 2007 is a Hanoi, Vietnam, from February 5-8, 2007 is a recognition of the country's advanced status in recognition of the country's advanced status in integrating the MDGs in to the national integrating the MDGs in to the national development planning processes.development planning processes.

Challenges, Opportunities & Key MessagesChallenges, Opportunities & Key Messages

A: The ChallengesA: The Challenges The assessment of performance to date clearly shows The assessment of performance to date clearly shows

substantive progress being made by Ethiopia. However, substantive progress being made by Ethiopia. However, we believe that we still need to enhance progress as there we believe that we still need to enhance progress as there is different level of performance among Ethiopia’s is different level of performance among Ethiopia’s regional states;regional states;

There is issue of capacity to implement particularly at There is issue of capacity to implement particularly at sub-national levels;sub-national levels;

Ethiopia’s Private Sector Capacity is also limited;Ethiopia’s Private Sector Capacity is also limited; Finance is also a constraint on implementation at a scale Finance is also a constraint on implementation at a scale

that is required;that is required; Ethiopia is also exposed to risks-weather induced and Ethiopia is also exposed to risks-weather induced and

trade related;trade related; These are broadly our challengesThese are broadly our challenges

B: OpportunitiesB: Opportunities Despite the above cited challenges, there are a number of Despite the above cited challenges, there are a number of

developments that could result in more progress being made than is developments that could result in more progress being made than is currently expected. They consist of both encouraging developments in currently expected. They consist of both encouraging developments in the recent past, and possible new developments that could eventuate the recent past, and possible new developments that could eventuate in the next few years.These include the following:in the next few years.These include the following:

Implementation of the-ongoing National Capacity Building Program;Implementation of the-ongoing National Capacity Building Program; Existence of successful on-going sector development programs;Existence of successful on-going sector development programs; The success of the domestic resource mobilization effort which is currently The success of the domestic resource mobilization effort which is currently

underway;underway; The momentum effects of past investments on human development and physical The momentum effects of past investments on human development and physical

infrastructure;infrastructure; The opening up of the environment for private investment and business activity;The opening up of the environment for private investment and business activity; Global initiatives for scaling up aid to LDCs and debt relief ;Global initiatives for scaling up aid to LDCs and debt relief ; The Development potential of the country in terms of natural resource endowments, The Development potential of the country in terms of natural resource endowments,

the large untapped domestic market and labor force all of which are under the large untapped domestic market and labor force all of which are under exploited;exploited;

The potential impact of agricultural transformation agenda and on-going food The potential impact of agricultural transformation agenda and on-going food security programs which have already started to pay-off ;security programs which have already started to pay-off ;

Key MessagesKey Messages Development interventions will only be effective if they are guided Development interventions will only be effective if they are guided

by long and medium-term home grown development strategies and by long and medium-term home grown development strategies and plans internalizing the MDGs;plans internalizing the MDGs;

To eradicate poverty and end hunger, high and sustained growth is To eradicate poverty and end hunger, high and sustained growth is critical for Ethiopia. We know there is no room for complacency & critical for Ethiopia. We know there is no room for complacency & Ethiopia has to sustain the recent high growth rate for attaining the Ethiopia has to sustain the recent high growth rate for attaining the MDGs and lasting impact on poverty;MDGs and lasting impact on poverty;

We believe that this growth should be broad-based.Hence the We believe that this growth should be broad-based.Hence the continued focus on rural growth re-enforced by strong rural-urban continued focus on rural growth re-enforced by strong rural-urban linkages. Our rural growth agenda do also pay particular attention to linkages. Our rural growth agenda do also pay particular attention to environment and natural resource management;environment and natural resource management;

For a long time, macroeconomic stability has been a positive feature For a long time, macroeconomic stability has been a positive feature of the Ethiopian economy. We still intend to have this stance, but in a of the Ethiopian economy. We still intend to have this stance, but in a way that provide sufficient space for public investment particularly in way that provide sufficient space for public investment particularly in human development and infrastructure;human development and infrastructure;

----Key Messages----Key Messages Medium-term programs such as the SDPRP and its successor plan (the PASDEP) Medium-term programs such as the SDPRP and its successor plan (the PASDEP)

are important vehicles towards reaching the MDGs. Taking note of the good are important vehicles towards reaching the MDGs. Taking note of the good performance to date and given the ambitious and still well thought out programs performance to date and given the ambitious and still well thought out programs being implemented in the areas of food security and rural development, Health being implemented in the areas of food security and rural development, Health Extension Package (HEP), Urban Housing Programs, Universal Access Program Extension Package (HEP), Urban Housing Programs, Universal Access Program for Water Supply, rural roads, electricity, telecommunication, women and youth for Water Supply, rural roads, electricity, telecommunication, women and youth packages, and MSE development; the Government believes that Ethiopia’s packages, and MSE development; the Government believes that Ethiopia’s development effort is well grounded and has a good chance of meeting the development effort is well grounded and has a good chance of meeting the MDGs during the remaining years. What is needed is a big push;MDGs during the remaining years. What is needed is a big push;

Given the size, topography, diversity of the country; infrastructure investment Given the size, topography, diversity of the country; infrastructure investment expansion needs to be seen from the standpoint of enhancing and sustaining pro-expansion needs to be seen from the standpoint of enhancing and sustaining pro-poor growth, which is a necessary condition for poverty reduction and its poor growth, which is a necessary condition for poverty reduction and its ultimate eradication. Given also that Ethiopia is required to diversify exports, the ultimate eradication. Given also that Ethiopia is required to diversify exports, the need for being competitive in the international market calls for infrastructure need for being competitive in the international market calls for infrastructure expansion to reduce per unit transport and delivery costs of export commodities. expansion to reduce per unit transport and delivery costs of export commodities. Accordingly, investment expansion in those areas (human development and Accordingly, investment expansion in those areas (human development and infrastructure expansion) is seen as a top priority given that the country’s human infrastructure expansion) is seen as a top priority given that the country’s human and physical capital has not yet reached its critical minimum. The Government and physical capital has not yet reached its critical minimum. The Government believes that the current growth momentum could not be maintained with out believes that the current growth momentum could not be maintained with out enhancing our human and physical capital;enhancing our human and physical capital;

----Key Messages----Key Messages

Enhancing trade particularly expanding and diversifying exports is also Enhancing trade particularly expanding and diversifying exports is also critical.We are taking necessary actions to make use of opportunities critical.We are taking necessary actions to make use of opportunities offered to us through market access such as EBA through EU and offered to us through market access such as EBA through EU and AGOA through USA ,China, etc;AGOA through USA ,China, etc;

Enhanced use and management of our water resources is another critical Enhanced use and management of our water resources is another critical area of emphasis given that our economy is susceptible to weather risks area of emphasis given that our economy is susceptible to weather risks given that the bulk of our agriculture is rain-fed.Utmost use of our water given that the bulk of our agriculture is rain-fed.Utmost use of our water resource potential through water harvesting, small scale irrigation ,and resource potential through water harvesting, small scale irrigation ,and medium and large scale irrigation is a way out to insulate our medium and large scale irrigation is a way out to insulate our agriculture from weather related risks(rain failures);agriculture from weather related risks(rain failures);

Building partnership with research and higher education institutions Building partnership with research and higher education institutions and think-tanks is of paramount importance to utilize local expertise and think-tanks is of paramount importance to utilize local expertise (build national capacity) and thereby strengthening in-house analytical (build national capacity) and thereby strengthening in-house analytical

capacity of government institutionscapacity of government institutions

----Key Messages----Key Messages Ethiopia has made significant improvement in Ethiopia has made significant improvement in

business and investment climate to create a dynamic business and investment climate to create a dynamic private sector and contribute to economic private sector and contribute to economic transformation. The recent vibrancy in the private transformation. The recent vibrancy in the private sector (both domestic and foreign) including sector (both domestic and foreign) including increasing trade, investment, employment and increasing trade, investment, employment and income growth clearly shows that the private sector income growth clearly shows that the private sector is making its contribution to Ethiopia's is making its contribution to Ethiopia's development. PASDEP intends to deepen the development. PASDEP intends to deepen the business and investment environment for business and investment environment for accelerating and sustaining private sector led growth accelerating and sustaining private sector led growth in Ethiopia;in Ethiopia;

----Key Messages----Key Messages Ensuring gender equity is also another critical issue that is Ensuring gender equity is also another critical issue that is

being addressed in order that Ethiopia accelerate growth being addressed in order that Ethiopia accelerate growth to achieve the MDGs and eradicate poverty. Since the to achieve the MDGs and eradicate poverty. Since the 1990’s, Ethiopia has moved firmly to promote and protect 1990’s, Ethiopia has moved firmly to promote and protect the rights of women to participate in the political, the rights of women to participate in the political, economic and social processes of the country- from the economic and social processes of the country- from the constitution to passing and revision of various laws, constitution to passing and revision of various laws, proclamation of rural development, education, health etc. proclamation of rural development, education, health etc. Further, advances are still required in implementing the Further, advances are still required in implementing the various gender equity initiatives particularly the National various gender equity initiatives particularly the National Action Plan for Gender equity;Action Plan for Gender equity;

In the Ethiopian context, designing and implementing the In the Ethiopian context, designing and implementing the economic transformation agenda in synergy with state economic transformation agenda in synergy with state transformation agenda through devolution and transformation agenda through devolution and empowerment and civil service reform is central for empowerment and civil service reform is central for peace, democracy and development, hence eradicating peace, democracy and development, hence eradicating poverty;poverty;

----Key Messages----Key Messages The on-going implementation of public sector capacity building The on-going implementation of public sector capacity building

program including civil service reform, district level decentralization program including civil service reform, district level decentralization programme is intended to build a capable, accountable, and effective programme is intended to build a capable, accountable, and effective state. The priority focus is to empower and build-up the capacities of state. The priority focus is to empower and build-up the capacities of the lowest echelons of regional governments- the lowest echelons of regional governments- woredas woredas and and kebeleskebeles by by building effective democratic and public institutions. This will building effective democratic and public institutions. This will enhance democratic participation, governance and hence improve the enhance democratic participation, governance and hence improve the delivery of services and contribute to poverty eradication;delivery of services and contribute to poverty eradication;

The Government has recognized that financing is a critical challenge The Government has recognized that financing is a critical challenge in implementing the PASDEP and attain MDGs.Realizing that in implementing the PASDEP and attain MDGs.Realizing that enhancing development is our responsibility, Ethiopia is making enhancing development is our responsibility, Ethiopia is making positive progress in domestic resource mobilization first; positive progress in domestic resource mobilization first; implementation of the comprehensive tax reform program, second; implementation of the comprehensive tax reform program, second; mobilizing private savings and investment as well as social mobilizing private savings and investment as well as social mobilization and civil society resources;mobilization and civil society resources;

----Key Messages----Key Messages Partnership for development through external finance is also Partnership for development through external finance is also

complementing our effort. We have benefited from debt relief. complementing our effort. We have benefited from debt relief. However, aHowever, as s has been witnessed during the first two years of has been witnessed during the first two years of implementing the PASDEP (2005/06 and 2006/07), external finance implementing the PASDEP (2005/06 and 2006/07), external finance (ODA) that passes through the budget has been levelling off even (ODA) that passes through the budget has been levelling off even compared to the trend (business as usual) as projected in the PASDEP;compared to the trend (business as usual) as projected in the PASDEP;

By way of enhancing development partnership, the Government has By way of enhancing development partnership, the Government has set up a Dialogue Architecture-at policy level-the High Level set up a Dialogue Architecture-at policy level-the High Level Forum(HLF) and various sectoral forums. We have also established Forum(HLF) and various sectoral forums. We have also established Joint Government-Partners Harmonization Task Force to take forward Joint Government-Partners Harmonization Task Force to take forward the Paris Declaration. A number of multi-lateral partners(World Bank, the Paris Declaration. A number of multi-lateral partners(World Bank, EU, and AfDB) and bilateral (UK, Ireland, Canada) have moved to EU, and AfDB) and bilateral (UK, Ireland, Canada) have moved to supporting budgets and sector programs using public finance system. supporting budgets and sector programs using public finance system. The UN Country Team are also harmonizing and aligning with The UN Country Team are also harmonizing and aligning with PASDEP, a good example being the current United Nation PASDEP, a good example being the current United Nation Development Assistance Framework (UNDAF II), spanning theDevelopment Assistance Framework (UNDAF II), spanning the period, period, 2007-2011; 2007-2011;

----Key Messages----Key Messages As As Ethiopia enters in to the third year of implementing the Ethiopia enters in to the third year of implementing the

PASDEP (2007/08), there is an urgent need to scale up PASDEP (2007/08), there is an urgent need to scale up ODA towards full-scale implementation of the PASDEP ODA towards full-scale implementation of the PASDEP and hence MDGs consistent with Monterrey, Gleneagles, and hence MDGs consistent with Monterrey, Gleneagles, and Blair’s Commission Report;and Blair’s Commission Report;

On a per capita basis Ethiopia’s ODA is half of that of the On a per capita basis Ethiopia’s ODA is half of that of the SSA average. We expect doubling of our Per Capita ODA SSA average. We expect doubling of our Per Capita ODA to help us accelerate progress towards the attainment of to help us accelerate progress towards the attainment of MDGs; MDGs;

In conclusion, can Ethiopia pull off? Yes, It can. Progress to In conclusion, can Ethiopia pull off? Yes, It can. Progress to date, and opportunities for a big push. More importantly, the date, and opportunities for a big push. More importantly, the Ethiopian people has spoken. They want and are determined Ethiopian people has spoken. They want and are determined to make poverty history. This “I can do” attitude is the to make poverty history. This “I can do” attitude is the greatest asset and value to attain the MDGs and ultimately greatest asset and value to attain the MDGs and ultimately to eradicate poverty;to eradicate poverty;

Thank YouThank You