The Context

Jalal Abdel W. Latif
Inter Africa Group

Ethiopia is currently going through a critical period of transition. Having emerged from long drawn–out and devastating wars, it is making halting efforts towards establishing peace. Having suffered for seventeen years under a brutal dictatorship, it is groping for more democratic governance. Its economy having been debilitated by a stifling policy environment, it is aiming to move in the direction of greater market orientation. So long encumbered by over–centralized rule, it is now experimenting with a decentralized pattern of regional administration. These multiple tasks make the transition a particularly complex and difficult process.

It is rendered even more complex by the fact that it is taking place in a context of mass poverty and serious social dislocation. The economy is in ruins, and must submit to shock treatment if it is to be galvanized at all. Although the war is over, peace is far from secure.

Over 300,000 soldiers are demobilized with their families; about one million people are displaced throug ethnic conflicts that flared up after the fall of the Derg (1) and continue to this day; thousands have been evicted from Eritrea; hundreds of thousands more are returning from exile in neighbouring countries; there are thousands of disabled persons; additional thousands have been forced to flee resettlement sites. All are the consequences of the peace.

These social problems, superimposed on a bankrupt economy, make the tasks facing Ethiopian society truly Herculean. It is in this context of abject poverty and massive social dislocation that economic reform in general, and structural adjustment in particular, is being contemplated. As is only too well–known by now, structural adjustment is bound to involve high social costs if it is not carefully designed to mitigate against them. This is of special significance for Ethiopia, because vulnerable groups easily constitute the majority of society.

In these circumstances, the InterAfrica Group (IAG): will attempt in this paper to briefly outline the country’s progress in addressing social issues following the Social Summit. We will not, however, attempt to analyze the social dimensions of adjustment.

The Economic Reform Program

The economic reform programs’s aim is to stabilize the economy and stimulate growth, while shifting from a command economy to a market based one. Within this framework, the government identified its priority to immediately implement a major emergency reconstruction and rehabilitation program.

This program, known as the Emergency Recovery And Reconstruction Project (ERRP), is a multi–donor program totalling about USD $650 million, of which $600 million is from the World Bank, the African Development Bank, the EEC and a few other donors. The remaining funds were made available by the Ethiopian Government.

This program has helped reconstruct the country’s war–torn infrastructure, jump start the economy, provide essential pharmaceuticals, and launch a pilot social fund to support community–led rehabilitation microprojects (2) the total money committed, 43% was a production component to meet import requirements for industrial materials and spares, transport equipment, tires and spares and petroleum products. 35% was allocated for infrastructure and 22% for the social sector.

The latter involves:

* reconstruction of damaged facilities in education;

* reconstruction of damaged health facilities and provision of pharmaceuticals and medical supplies;

* rehabilitation of social infrastructure and promotion of small scale income generating activities at the community level on a pilot scale in one food sufficient area, including Addis Ababa, which has a high proportion of displaced people, and in one food deficit area with extensive war damage, including provision of assistance for reintegration of demobilized soldiers;

* provision of structural food aid in urban areas, particularly Addis Ababa (3).

The proportion of resources allocated to the social sector was significant compared to the past regime. It also was an indication of the concern that the TGE has about social issues in general.

ERRP is supposed to be the first phase in reforming the Ethiopian economy and a prelude to the Structural Adjustment Program (SAP). It is yet to be seen how committed the government is to going from the formulation of good social policies to closely monitoring the impact of adjustment on poor and vulnerable groups and formulating effective strategies to address vulnerability in the country.

Social Funds

One important component of the ERRP program was the Ethiopian Social Rehabilitation Fund. This pilot Fund ran from 1992 to 1995, making available a total of over U$D 8 million to community initiated projects in three regions. This a) pilot program was aimed at assisting community projects which would contribute to rehabilitation through building basic health and education facilities, as well as providing nutrition, adult skills development and some income generating projects.

This program is planned to be scaled up by launching a national program called the Social Rehabilitation and Development Fund.

Government Development Direction ⁽⁴⁾

Though the government stated its short–term development plan in the document "Ethipia’s Economic Policy During the Transitional Period" in November 1991, its long term development strategy was not out until late 1993 or early 1994. (5)

This strategy is) defined as Agricultural Development Led Industrialization (ADLI) –using agriculture as a spring board for the development of other sectors. Poverty eradication has been made central to this plan. The core of the strategy is to reduce the vulnerability of the rural population to famine.

Food security would be pursued through:

* efforts to increase productivity of small holder agriculture;

* strengthened food distribution arrangements including decentralized food security stocks;

* appropriately targeted safety net arrangements. (6)

The Government’s commitment to reduce its dependency on food aid by increasing food production and better targetting of food aid is also articulated in its National Policy for Disaster Prevention, and Management.

This, and subsequent policy formulations in various sectors, should be taken in good faith as a demonstration of commitment to poverty reduction. Most importantly, the 1993 report, titled "ETHIOPIA: Toward Poverty Alleviation and Social Action PROGRAM," prepared in collaboration with TGE and donor representaives, is a strong sign of the seriousness of the policy makers with regard to poverty eradication. (7)

Gender Issues

Not only has Ethiopia embarked on economic reform, the TGE also came with a new political agenda. This agenda is based on ethnic federalism with a significant devolution of power to the newly divided regions. Besides this devolution of power, the attitude towards gender issues could be characterized as friendly towards women.

While guaranteeing of women’s rights in the country’s law is a positive step, as with economic reform, the implementation of such policies needs to be closely monitored. Among these are

* whether women are special targets within the food security strategy of the country;

* to what extent the adjustment program is going to hurt rural women;

* what safety nets are planned to address women’s rights.

Since the majority of the poor population are rural and 95% of rural women are involved in agriculture, food security programs have immediate and significant impact on their livelihood. As such any attempt to reduce vulnerability in the country side and improve food production has to allow for increased participation of women through increasing their access to assets, provision of credit, and ensuring land tenure, etc.)

Ethiopia’s credit provision for the poor is dismal. Large numbers of NGOs have been activating credit programs in one form or another. Recently the government has been preparing a policy paper on how to effectively start credit systems for the poor.

Civil Society Involvement

As a result of famines in Ethiopia during the last 25 years, the country has developed a good infrastructure of NGOs engaged in relief operations. However, there are very few strong indigenous relief–oriented NGOs; the sector is dominated by International Organizations.

Though past emergencies as well as the civil war dictated the focus of most NGO operations –relief rather than development– the termination of the war brought a new challenge. Rehabilitation, rather than relief, became both the priority of the government and the reality on the ground. As such, a significant number of NGOs have begun reorienting their approach.

This effort has not been without some difficulties, since the new government has started establishing new rules and procedures that affect the civil society. While political liberalization resulted in an increase in the number of secular NGOs, associations, church groups, Moslem organizations and human right and advocacy groups, the level of dialogue, among them and with the government, is very limited.

The relationship between the government and NGOs has yet to mature. However NGOs have had wide and longstanding experience in rural Ethiopia during the last 20 years. Approaches which have proven to be useful in relation to food security include famine early warning and monitoring of price fluctuation of basic rural commodities in famine prone areas through data collection, processing and dissemination. Three NGOs, Care USA, SCF UK and Action Aid, deserve special mention in recognition of their independently developed methods and instruments for conducting surveys in rural Ethiopia. The value of this technique is its effectiveness in predicting drought situations and providing an early warning that relief plans need to be initiated.

National Budgets

While the Derg, the former military regime, totally neglected allocating resources to the social sector, the TGE strategy of ADLI states:

The objective is to ensure food and income insecurity, enhance and re–orient social sector spending to favour the poor, and rehabilitate the country’s infrastructure(.")

The Derg’s public expenditure was dominated by defense spending and state enterprises. Military expenditure as a percentage of total government expenditure was over 46% on average during the last three years of the war.

Military spending has been sharply reduced since 1991, to an average of 17% for each of the last three years. On the other hand, public expenditure on social services averaged 17% during the war and has increased to an average 24% since 1991. The Derg’s defense expenditure of over 9% of the GNP in its final years of war has sharply reduced to less than 3% The social sector has benefitted from this reallocation of resources.

Multilateral & Bilateral Aid

Immediately after the end of the civil war, since the first consultative group meeting held in early 1992, the donors’ good will was demonstrated by sustained increase in donor pledges. Since Ethiopia became eligible to participate in the Special Program of Assistance of the World Bank Group and IMF by making progress in its economic reform, it has managed to attract over US $1.2 billion for the period up to mid 1994 and US $1.1 billion for FY95.

Almost all donors agree that Ethiopia’s priority shoud be in the area of food security. However, there seem to be different approaches to defining food security. While food security may be narrowly defined as increasing food availability in the country, the government’s definition and policy emphasizes moving away from relief to more rehabilitation as one of its key development strategies.

In complementing the government’s efforts, one programme worth mentioning is the proposed USAID assistance to Ethiopia known as Ethiopian Resources for Developing Agriculture (ERDA). This initiative is a US $70 million, SEED year grant funded project. The components for this grant is US $35 million cash transfer to meet debt service and the remaining US $35 million to assist in increasing the supply of domestically produced maize.

Conclusion

Since 1991, the Ethiopian Government policy seems to have consistently aimed at social rehabilitation and development, increasing the proportion of funding allocated to social sectors which focus their resources on improvement in key areas such as food security and poverty alleviation. The increasing involvement of civil society in development and social rehabilitation, increased concern for the vulnerable sectors of society and for gender issues are all indications of a consistent, if slow, change for the better.

Notes:

1 Derg Name popularly given (Amharic: “Committee”) to the collective military dictatorship known as the Provisional Military Administrative Council (PMAC), which governed in Ethiopia from 1974 to 1987.

2 World Bank, “Memorandum of the President of the International Development Association to the Executive Directors on a Country Assistance Strategy of the World Bank group for Ethiopia”, mayo 16, 1995, p.9.

3 Lewis T. Preston, “Memorandum and Recommendation of the President of the International Development Association to the Executive Directors on a Proposed Credit to Ethiopia for an Emergency Recovery and Reconstruction Project”, p.2

4 See Transitional Government of Ethiopia, “Ethiopia’s Economic Policy During the Transitional Period”, Addis Ababa, noviembre 1992.

5 See Transitional Government of Ethiopia, “An Economic Development Strategy for Ethiopia”, February 1994.

6 World Bank, “Memorandum of the President”, 1995, p.7

7 The Institute of Development Studies, Poverty Assessment and Public Expenditure: A Study for the SPA Working group on Poverty and Social Policy, Country Desk Study, Ethiopia, September 1994.