Prime Minister’s government performance report to Parliament
On Tuesday this week, Prime Minister Meles presented the government’s regular eight month performance report to Parliament. His speech concentrated on the successful progress of implementation of the Growth and Transformation Plan announced last year. The Plan envisages annual economic growth of between 11 and 15 percent; and the forecast for the current year was 11.2 percent. The data available so far suggested the overall output of the main meher harvest would show an increase of 8%; and the agricultural sector had registered a 12 ½ percent growth during the previous eight months. The Prime Minister did, however, note that the final figures would not be known until later in the year. Among recent measures to improve exports, offset the continued growth of imports and achieve a more favourable trade balance, he mentioned devaluation of the Birr. Following this, exports had grown by nearly 50 percent over the last eight months while imports had only increased by 14 percent. It was an encouraging trend. The devaluation also meant an increase in foreign exchange reserves. These were now sufficient to cover 2.4 months of imports, more than the National Bank of Ethiopia had planned for.
The Prime Minister detailed the progress in infrastructural development. Significant road construction had been carried out, the survey for the main railway lines under the planned new railway network had been completed, and new power projects were developing well including new hydro and wind projects and the provision of power transmission and distribution lines. He emphasized that construction of the Millennium Dam had begun during the week. This would eventually generate 5,250 megawatts, a significant element of the government’s plans to increase power generation to between 8, 000 and 10,000 megawatts. Overall, in fact, the economy was growing at a satisfactory rate.
The other main focus of the speech was on the government’s efforts to deal with ‘rent seeking’, a matter which gets special attention in the Growth and Transformation Plan. The Prime Minister noted that ‘rent seeking’ encouraged people to accumulate wealth without assisting in development. It originated from and resulted in favouritism, corruption and related crimes, and was a major source of problems in governance. These added to the difficulties caused by lack of expertise and competence or limitations in organization and methodology now being addressed by the civil service reform program.
The government had therefore embarked on the major task of identifying and addressing ‘rent seeking’, paying particular attention to urban land administration, an issue raised during the last election, and tax collection. Following investigations, the government had taken back illegally acquired land. Investors involved were given the opportunity to pay fines without further legal process provided they admitted their faults and committed themselves to legal behaviour in future. Civil servants involved would be taken to court. The process had nearly been completed in Addis Ababa and was now being extended to other cities. Using the skills of expatriate professionals a new coordinated structure based on transparency and accountability was being drawn up and should be completed next year. The problem hadn’t been confined to urban land. Similar problems, the Prime Minister said, had also been found in rural areas. The Federal Government had reached an agreement with regional states to transfer undeveloped and vacant lands in excess of 5000 hectares to the Federal Government to make these available to investors. The proceeds would be channelled back to the states. The Ministry of Agriculture had set up a department to handle this transparently and accountably. A system for public disclosure of all lands leased to investors had been created, together with a process to evaluate the way leased lands were utilized and providing for corrective measures where necessary. The government was also drafting rules and regulations to ensure investors meet basic standards of environmental protection and workers’ rights.
Weaknesses in the tax collection system and tax evasion also contributed to ‘rent seeking’. The government was now introducing various measures to institute a more transparent economic system. These would allow for the accurate disclosure of the wealth and income of every citizen and taxpayer. The Prime Minister said the introduction of personal Tax Identification Numbers (TIN numbers) and fingerprint-based identification cards could be mentioned. Encouraging progress had been made but the government would be making additional efforts to strengthen the system. The government was also organizing extensive training to get rid of corrupt and illegal practices and build up an efficient and strong tax collection structure. This would be aligned with the best practices of other countries. Regular evaluations, based on feedback from the public, would be carried out to make sure all corrupt and illegal practices were weeded out. The Prime Minister emphasized that public participation was vital to identify corrupt individuals and called on the general public to assist. Tax collection, he said, could not function properly unless the general public and tax payers acted legally and paid their taxes. The government was therefore launching a media campaign to explain the importance of paying taxes. A quarterly forum had been set up to get public suggestions for improving tax processes; this would be extended to the regional states.
Another area that had suffered from ‘rent seeking’ was the wholesale trade. Some business people had been engaging in tax evasion and unreasonable price rises. The government had now issued two proclamations to deal with these problems. One covered Commercial Registration and Business Licensing, replacing the previous system with a country-wide central data-base; preparations to implement the new registration system throughout the country were now being finalized. The second proclamation (Trade Practices and Consumer Protection) aimed to encourage competition and introduce measures to protect the rights of consumers. This would involve action to mitigate activities such as the effects of price increases introduced by some traders following the recent pay rise for civil servants. Consultations had been held with business people to prevent further unreasonable price rises, and the government had intervened to improve the distribution of various commodities. The Prime Minister said further steps would also be taken to end ‘rent seeking’. State-owned companies were going to be reorganized and charged to intervene in the market-place, supplying local or imported products to deal with artificial shortages. Thousands more wholesale operators would be set up to give the sector sufficient competition and free it from ‘rent seeking’.
The Prime Minister made it clear that the government would not be distracted from its determination to get rid of ‘rent seeking’, nor would it revise its policies. Anyone involved in ‘rent seeking’ whether in business, the civil service or elsewhere, would, he insisted, be exposed and punished. Until now the government had used education and persuasion, but this could not continue forever. It was the government’s duty to remove and wipe out such malpractices. The aim, however, was not to demoralize the business community. It was to strengthen the hands of those who want development, who could provide the engine of growth for the government’s strategy to accelerate development and good governance.
A few days earlier, when laying the foundation stone for the Millennium Dam at Guba in Benishangul Gumuz Regional State, the Prime Minister said the building of the dam, the largest engineering project ever attempted in Ethiopia, would represent an incomparable addition to the national plan for expanding power production. It would also convey two messages: one was that the people of Ethiopia had the capacity to build such a project and the resolution to do so; and secondly that exercising those rights in their determination to eradicate poverty involved no malice towards any of Ethiopia’s neighbors. Indeed, quite the reverse. The Prime Minister noted the advantages the dam would provide to Egypt and Sudan as well as to Ethiopia, in regulating the flow of the River, preventing problems of silting and of flooding, increase agricultural resources and provide power. He made the same point when responding to questions after his presentation to Parliament on Tuesday. “Our wish is that the Egyptian people understand we Ethiopians are not against their interest…we have no agenda against Egypt.”
The Prime Minister also answered opposition questions on why opposition supporters had been arrested in the Oromiya Regional State. He said recent arrests in Oromiya Regional State were of members of the Oromo Liberation Front, operating under cover of a legal opposition party. He accused some opposition parties of allowing themselves to be used as a platform for anti-peace elements, and issued a warning that the government would not tolerate anyone plotting illegal demonstrations or terrorist attacks. The OLF is one of the terrorist organizations based in Eritrea. Answering other questions on the activities of the Eritrean regime, the Prime Minister said Eritrea had changed its tactics and was now plotting to carry out attacks on areas where people congregated in large numbers as well as continuing its attempts to destabilize the country by backing rebel groups. The primary response of the government would continue to be to try to persuade Eritrea to refrain from its activities, but another option was to support the people of Eritrea in their efforts to change the regime in Asmara. He added that in addition to employing diplomatic and economic measures, the government of Ethiopia would respond proportionally to every attack directed against the country.
Korea’s Foreign Minister visits Ethiopia
Mr. Kim Sung Hwan, Minister of Foreign Affairs and Trade of the Republic of Korea paid an official visit to Ethiopia this week. During his visit the Foreign Minister held talks on bilateral relations with a number of ministers and exchanged views on bilateral and international issues with Prime Minister Meles. During their discussion, Prime Minister Meles told Minister Hwan that Ethiopia had learnt much from the success story of Korea’s development. The Korean Developmental State Model had motivated Ethiopia to introduce the Growth and Transformation Plan. Prime Minister Meles also invited the Korean Government and Korea’s private sector to participate in road and railway construction in Ethiopia. He requested Korea’s support in several areas including the power, agriculture, metal and engineering sectors, and made it clear he would like to see Korean government cooperation in encouraging joint promotions and the attraction of investment to Ethiopia.
Minister Hwan also had bilateral talks with Ato Hailemariam Desalegn, Deputy Prime Minister and Minister of Foreign Affairs. Present were the Ministers of Finance and Economic Development, Industry, and of Trade, and the State Ministers of Agriculture and Mining. The discussions covered a comprehensive review of bilateral cooperation in such areas as agriculture, mining, industry, trade and investment. Ato Hailemariam described Minister Hwan’s visit as historic and a demonstration of the growing friendship between the two states. The talks would, he said, deepen and expand existing relations. Both parties viewed the visit as confirmation of the expanding relationship between their two countries. They also confirmed intentions to further strengthen cooperation and encourage the Korea-Africa Cooperation Forum to become a strong foundation for an effective partnership between Korea and Africa.
Ato Hailemariam expressed appreciation of the development cooperation extended to Ethiopia by the Government of the Republic of Korea, but he also called on Korea to strengthen its development assistance, particularly in view of the tasks laid out in Ethiopia’s five year Growth and Transformation Plan. The Ethiopian Ministers present provided details of development activities and the pillars of the Growth and Transformation Plan as well as the possibilities for increased agricultural, trade, investment and mining sector cooperation. The Ethiopian side expressed a strong desire to see greater engagement by Korean companies in trade and investment in various development projects mainly in manufacturing, industry, mining, agro-processing and leather.
The Korean Minister, who welcomed and appreciated Ethiopia’s efforts to develop its economy, announced his Government’s intention to further extend development support to Ethiopia which he said was a priority country for Korea’s overseas development assistance. He expressed interest in joint exploration of Ethiopia’s mining resources, welcomed the idea of agricultural cooperation, and said that the Korean Business Center would recruit Korean investors for Ethiopia. For his part, Ato Hailemariam welcomed the initiatives taken by the Government of Korea and particularly the pledge to increase development assistance and the decision to make Ethiopia a priority country.
To further enhance cooperation the two sides agreed on the need to conclude a number of agreements: a Comprehensive Economic Cooperation Framework Agreement as well as Agreements in Science and Technology, Investment Promotion and Protection and Avoidance of Double Taxation, and a Memorandum of Understanding on agriculture cooperation. It was also agreed that the Korean Institute of Geosciences and Mineral Resources and the Ethiopian Geosciences Institute should forge a partnership to enhance cooperation in the mining sector.
During his two days stay in Addis Ababa, among other sites, Mr. Kim Sung Hwan visited the Korean Patriots Memorial Park, the Korean Patriots Elementary School, and the Korean Hospital.
Next week’s consultative meeting on Somalia
A high level consultative meeting on Somalia, hosted by the Special Representative of the United Nations Secretary-General, Ambassador Augustine Mahiga, will take place in Nairobi on April 12th and 13th. It will be followed by a meeting of the International Contact Group on Somalia in Kampala in the first week of May. Ambassador Mahiga has called on all Somali authorities to participate. He said it was his obligation under the Djibouti agreement to facilitate dialogue among the Somali institutions and authorities. He therefore urged all Somali leaders “to demonstrate their commitment to advancing the peace process by taking part in this meeting”. He described the main objective of the meeting “to reinvigorate dialogue among Somali authorities to establish a common vision for moving forward”. He emphasized that “this is a consultative meeting, no decisions will be taken”. Ambassador Mahiga said the international community would be present only as observers, not as participants, to show support and to obtain clear ideas “on the tasks of the respective Somali institutions on how to end the transition within the current framework, based on the Transitional Federal Charter and the Djibouti Agreement.”
The meeting is an opportunity for Somali leaders to share information on how regional partners and the international community can support the transitional activities. It is also expected to pave the way to reactivate the High Level Committee, a component of the Djibouti Agreement for advancing Somali dialogue, outreach and reconciliation under the co-chairmanship of the Special Representative. There has been some disagreement over the meeting. The Galmudug administration and the Ahlu Suna wal Jama’a administration of Galgudud have confirmed participation. Puntland and Somaliland have yet to confirm they will participate. There are also some divisions within the TFIs on how best to move forward with the planned meeting and whether or not to attend.
In the meantime, cabinet ministers and members of Somali parliament have, this week, visited Dhoblai District in Lower Juba Region, recently liberated from Al-Shabaab’s control by government forces. The delegation which earlier visited Belet Weyne in Hiiraan region is led by Abdirashid Muhamed Hidig, the TFG’s Deputy Minister of Defense. It went to Dhoblai to encourage and support the government forces which had engaged Al-Shabaab there and had driven them out of the town. The delegation is expected to stay in the region until the entire Lower Juba Region falls into the hands of government forces.
One effect of the recent defeats of Al-Shabaab in different areas has been the increased number of defections. The Shebelle Valley Regional Administration which has some troops in Hiiraan Region in central Somalia announced 15 Al-Shabaab fighters have defected to its forces. The Information Minister of the Shebelle Valley Regional Administration, Mahmud Nur Aga-jof, told Radio Shebelle that the defectors were all between 15 and 18 years old. Al-Shabaab has refused to make any comment on the reports. This week, however, sources in Kismayo say that close to 25 foreigners have landed there in the last few days, including some from Middle Eastern countries as well as Eritrea. These foreigners divided themselves into groups to join Al-Shabaab forces in different areas, in Bay and Lower Shebelle regions and in Mogadishu.
Meanwhile, the leadership of Ahlu Sunna wal Jama’a held a meeting in Dire Dawa, Ethiopia this week under the auspices of the IGAD Facilitator’s Office for Somali Peace and National Reconciliation. The meeting considered issues of security in the central regions, political developments in Somalia and the changing dynamism on the ground. It also considered ways and means of strengthening the regional administration in the central regions, and how to solicit support from inside and outside Somalia to enable the administration address some of the challenges of governance and defend itself from the terrorist activities of Al-Shabaab. Those attending also discussed Ahlu Suna’s relationship with the Transitional Federal Institutions, the various regional administrations, the Somali Diaspora and the wider international community.
Sudan’s post-referendum security negotiations
The Parties to Sudan’s Comprehensive Peace Agreement (CPA) held a special session on post-referendum arrangements last weekend at the Kuriftu resort in Ethiopia, where there had been earlier talks on other post-referendum issues. The NCP delegation was led by the Chief of the Joint Staffs, Lt.-General Ismat Abdel Rahman Zain Al Abdin and the SPLM delegation by the Honourable Paul Mayom Akech. The meeting was chaired by former President Buyoya on behalf of the AU High level Panel on Sudan. He opened the session by noting the meeting was a technical meeting to consider four agenda items that included the name and the definition of the security zone along the border; the issue of an extension of the mandate for UNMIS and third party support for this; the Joint Integrated Units and the matter of SPLA forces in and from South Kordofan and Blue Nile; and Southerners associated with the Sudanese Armed Forces (SAF). Participants discussed these four items in two working groups, on border management and the Two Areas. It was the first time some of these had been discussed between the two sides. Regarding the name and definition of a security zone along the border, the parties developed a joint position paper on border security, and will continue to discuss how best to adopt this. President Buyoya encouraged both parties to build on this significant progress and move forward in further negotiations.
There were different positions over the extension of UNMIS’ mandate and on third party support. They will need to engage in further negotiations on the best way to handle the issue. The two parties agreed to participate in a workshop to be convened by the facilitation for the Joint Technical Committee on security. This will further discuss a security risk matrix and a technical assessment of the necessary requirements for joint border management. This is expected to provide the parties with further clarity on some of the issues that need to be addressed in this area.
On other issues, the discussions were constructive and significant points of agreement were reached. It was accepted that the future of those SPLA members from the Two Areas (Southern Kordofan and Blue Nile) belong in those areas, and agreed that significant efforts should be made to integrate them into the Sudan Armed Forces (SAF) and other security organs of the Republic of Sudan. Strong commitment to the principle of two viable states and the territorial integrity of Sudan was expressed. Regarding the JIUs and SPLA forces in and from Southern Kordofan and Blue Nile, following clarification and development on the issues there was considerable agreement on the need for a Joint Command Mechanism. The Parties agreed on the necessity of this to implement post-referendum security agreements for the Two Areas, including arrangements between the two Parties concerning the future of SPLA forces from the Two Areas, planning for designated assembly areas, integration into the SAF or other security institutions and the civil service, and any other security matters agreed by the two Parties.
Regarding Southerners associated with the SAF, and Southerners serving in the integrated JIUs, the Parties made considerable progress since this was the first time that they had discussed security in the Two Areas, but more discussion and clarification is needed. The two Parties will now report back to their respective Ministers of Defense and decide when to resume negotiations. The African Union Commission in a statement issued at the end of the meeting said the Parties had addressed the issues in a constructive spirit, and made substantial progress on all four agenda items. They had agreed to meet again shortly to discuss any outstanding issues. The Parties will also be holding another meeting over this coming weekend to consider the economic issues that the parties need to address before the end of the CPA in July.
The AU assessment team in South Sudan
As ‘A Week in the Horn’ noted last week, a technical experts committee is currently on an assessment mission in the Sudan. This is the technical team for the African Union Commission’s Ministerial Committee on the Post-Conflict Construction and Development. It went to the Sudan on March 28th with a mandate to make a systematic needs assessment in the socio-economic field, identify capacity building gaps in human resource and institutional structures and come up with recommendations. The Ministerial Committee is chaired by South Africa and it consists of Ethiopia, Sudan, Kenya, Gabon, Nigeria, Senegal, Egypt and Algeria. Among other things, the Committee has been tasked with identifying possible areas where African governments might be able to assist two Sudanese states to remain viable entities after July 9th, and able to contribute to the region and beyond. The technical committee has received extensive briefings from the Ministry of Foreign Affairs and the Ministry of National Planning and Finance of the Republic of the Sudan. In its visit to the South it has also had meetings with Vice-President Rick Machar Teny, and the Minister of Regional Cooperation of the Government of South Sudan, Deng Alor Koul.
Its discussions have been held in an atmosphere of mutual understanding and reached overall agreement of possible areas for intervention by the AU. After talks with the authorities the team visited the headquarters of UNMIS’ sectors three and four. It was briefed on the situation along the common border between the North and the South and on the current position in South Kordofan and the Nuba Mountains. During its visit to the South, the committee divided into four groups to make assessments in Upper Nile, Eastern Equatoria and Western Equatoria States. After completion of its visits to the regional states it is being briefed in Juba by the African Union High Level Implementation Panel, headed by former President Thabo Mbeki, on the current situation of the CPA’s Post Referendum Arrangements.
The technical team is expected to produce its report, together with recommendations, to the AU Ministerial Committee. This will then organize an International Solidarity Conference for the Post-Conflict Reconstruction and Development of the Sudan which will be able to solicit support for the construction and development of the Sudan. The technical team may also request the Ministerial Committee to ask the AU to issue a communiqué on the current security in the South, in order to help ensure the sustainability of peace in the Sudan.
The Millennium Dam: the Peoples’ Response
The government of Ethiopia has set itself a number of ambitions in the last two decades in the area of general socio-economic and democratic development. One of the most laudable is the aim to extricate the country from poverty and to bring about a state of affairs in which Ethiopians will be able to hold their heads high in dealing with the world. The economic, social, political and other policies that have been put in place are all geared towards making this elusive dream a reality. The successes registered so far are not only impressive considering the level of debilitating poverty from which the country has been suffering for so long, they also provide a clear indication of the sustainability of the path the country has now chosen. Ethiopians today are more confident than ever that they will be able to reassert their country’s all-round independence, and most of all its independence from dependency. There is every reason to believe that the wish of Ethiopians to reclaim their nation’s rightful place in the world is becoming real, and that Ethiopia’s renaissance is here to stay.
The Millennium Dam project is the latest of these reasons. Ethiopia is embarking on the largest ever engineering project in its long existence as a state. If anything has ever been the most enduring dream of generations of Ethiopians it has been the prospect of building a dam over the Nile. In fact, successive leaders of Ethiopia have grappled with the dilemma of whether to exercise the right to use resources to rid the people of hunger and poverty on one hand, and the incapacity to realize that dream on the other. At the same time, there has been the challenge of convincing all stakeholders, and neighbors, to accept the idea of a common, equitable and reasonable utilization of trans-boundary resources. Despite the long series of efforts to put in place a just and equitable framework that ensures just and equitable utilization of common resources among the Nile Basin countries, the lower riparian countries have so far shied away from any pragmatic and win-win arrangements.
Equally, Ethiopia’s wish to see a project like the Millennium Dam built on the Nile has been hampered by its inability to cover the costs of such a huge undertaking. In addition, there are at least two other reasons as well as poverty, behind this. Indeed, as Prime Minister Meles said recently, there are two small but influential constituencies which have always been opposed to any Ethiopian governments’ resolve to carry through such a project. On the one hand, there are the hypocrites who have made it their business to oppose the financing of such projects on ideological, and in fact, irrational grounds. Then, more importantly, the lower riparian countries, and in particular Egypt, have always made it their concern to scuttle any such project among the upper basin countries, using intensive diplomatic campaigns aimed to close all doors on Ethiopia’s efforts to secure funding for its development endeavours.
The launching of the Millennium Dam project has ushered in a new era in Ethiopia’s endeavours in more ways than one. What makes this project all the more important is that it marks a clear break from the past in terms of Ethiopia’s ability to undertake such projects without the need of external assistance for its completion. This is going to be an entirely Ethiopian-funded project for reasons to do with the small-minded campaigns mentioned above. Certainly, the enormity of the challenge is far too obvious to miss, but at the same time this is also a blessing in disguise. The project will, at the very least, demonstrate the commitment of the peoples of Ethiopia to the project, and underline their ownership. Indeed, it has already done so. The response of Ethiopians in every walk of life has been to show their willingness and their resolve to do everything to see the construction of the dam through to the end. The government’s expectations were largely focused on the purchase of bonds, but indications already are that many millions of Ethiopians are more than willing to contribute their share without bothering to purchase any bonds. It is a demonstration of the strength needed to bring the project to completion and a display of distinctly Ethiopian resolve.
The message it sends is very clear. There will be no turning back from the grandest of all projects, namely to pull Ethiopia out of the quagmire of poverty. At the same time this will also create an opportunity for those who have all along refused to be involved in any meaningful and cooperative framework to think again. The Millennium Dam is, and will be, a monument to the government and peoples of Ethiopia, and to their lasting commitment to both the eradication of poverty and to a win-win strategic framework of cooperation among the countries of the Nile Basin.
Federal Democratic Republic of Ethiopia
Ministry of Foreign Affairs