Ethiopian Review

Addis Ababa — Economists recently gathered at a conference to discuss the health of Ethiopia’s economy and the effects of the global financial crisis on it.

The largely agricultural base of the Ethiopian economy makes it vulnerable to exogenous shocks, such as adverse climate change, said Neway Gebre-Ab, Chief Economic Advisor to the Prime Minister on June 25 at the 7th international conferences on the Ethiopian economy – a three day event organised by the Ethiopian Economic Associations (EEA).

He also said that the downwards revision of GDP growth from 11.2 per cent to 10 per cent is because of the current power cuts.

During the conference more than 15 research papers were presented. One of the research papers by Dr. Berhanu Adinaw indicated that each and every sector will be affected by the current power shortages.

The EEA did not give an assessment of how the current economic crisis will affect Ethiopia in the long term. However, according to Wolday Amaha, President of EEA, right now the crisis is having both a direct and indirect impact on the national economy.

Neway said that the role of civil society and think tanks in the development process of the country is recognised and appreciated by the Government, whose strategy cannot be realised without the active participation of civil society organisations.

Wolday also said that during the outbreak of the financial crisis, the EEA did not have specialists who could calculate the effect of the crisis on the national economy. But now, it is clear that the country has been affected by the crisis.

Ethiopian Economic Association fact file

EEA works closely with ministries, including the Ministry of Finance and Economic Development (MoFD), the Ministry of Tourism and Culture (MoTC) and the Ministry of Agriculture and Rural Development ( MoARD) to conduct research in every sector of the economy.

The association was established with the objective of not confronting the Government, but rather preparing and presenting research papers.

It is a professional association, and it also regularly produces publications, such as working papers; an economic focus magazine; proceedings of the annual conference; annual reports of the Ethiopian economy, etc.

The association also constructed its own multipurpose building at a total cost of 26 million birr, out of which 9.5 million birr was a loan from the Commercial Bank of Ethiopia. Currently the association, in addition to using the building for its purposes, also rents it out.

It has reached a strong financial position, as its assets grew from 7.8 million birr in 2003 to 40 million birr by the end of 2008. It earns income from research activities, membership fees, sales of publications etc.

- By Addis Mulugeta | Capital Ethiopia