UNIDO Forum expresses cautious optimism on Ethiopia’s econ strides

6 Nov

Posted by The Ethiopia Observatory (TEO)
by Julia Rainer, IPS

    – Good try Mr. Secretary-General Ban Ki-moon. At the opening of the Second UN Conference on LLDCs on November 3, 2014 in Vienna he resorted to giving vacuous comfort to the 31 landlocked least developd countries. Twelve of these are in AFRICA – Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Ethiopia, Lesotho, Malawi, Mali, Niger Rwanda, Swaziland, Uganda, Zambia, Zimbabwe. He renamed them ‘landlinked’ countries.

    Nonetheless, it should be noted that none of these states is as much hurt and damaged as Ethiopia. It is a country so rendered in 1993 by its own – those that since have held power in the country, as that was the price, so they thought at the time, for them to remain in power unchallenged. They did not realize that there will always pay a price with rejection and the legitimacy they have been denied ever since. That is why our country has to continue paying with its constrained development and future prospects.

    – “An East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical [about Ethiopia’s economic prospects], partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.”

    – Ethiopia’s noticeable shift in industrialization strategy from Chinese approach to South Korean, carefully choreographed by UN Secretary-General, World Bank president and UNIDO’s Director-General.

    – “The ambassadors of China, Japan and Italy to Ethiopia – Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe Mistretta respectively – as well as business stakeholders and development banks assured their continued support in helping Ethiopia take the path towards inclusive and sustainable industrial development, mainly through UNIDO.”

    – Why has announcement by India of its support for Ethiopia’s industrialization effort become mute at the UNIDO Forum?

UNIDO Director General LI Yong opened UNIDO’s 2nd ISID Forum together with UN Secretary-General Ban Ki-moon, Hailemariam Desalegn, Prime Minister of Ethiopia and Mahammed Dionne, Prime Minister of Senegal (Credit.UNIDO)

VIENNA, Nov 5 2014 (IPS) – With annual economic growth rates of over 10 percent and attractive investment conditions due to low infrastructural and labour costs, Ethiopia is eagerly trying to rise from the status of low-income to middle-income country in the next 10 years.

Ethiopia, with some 94 million inhabitants, is the second most populous country in Africa after Nigeria, but it remains a predominantly rural country. Only 17.5 percent of the population lives in urban areas, mainly Addis Ababa.

It is also one of the continent’s fastest growing economies. Between 2015 and 2018 growth is expected to average 7.3 percent, according to a recent study by the United Nations Industrial Development Organisation (UNIDO).

While economic growth since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011, government sources admit that eradication of poverty remains a compelling issue.

“There is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector” – UNIDO Director General Li Yong

The official target of rising to a middle-income country is considered to be realistic, but an East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical, partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.

According to UNIDO, these are mainly related to border-logistics. Djibouti, the main import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa, which makes the cost of land transportation a critical factor.

It is against this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot country for its ambitious inclusive and sustainable industrial development (ISID) programme, which aims to achieve industrialisation in developing countries in order to eradicate poverty and create prosperity.

According to UNIDO Director General Li Yong, “there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector”.

What distinguishes the ISID programme is that “current modes of industrialisation are neither fully inclusive nor properly sustainable”, he added. UNIDO is therefore not merely promoting industrialisation but trying to approach the needs and challenges of the globalised world that demand future-oriented concepts.

Promoting the sustainability that should be inherent to industrialisation, UNIDO says that the ISID programme takes into account environmental factors together with its partner countries and organisations.

It also fosters an industrialisation that is inclusive in sharing the benefits of the generated prosperity for all parties involved, thereby promoting social equality within populations as well as an equal distribution between men and women to ensure that nobody is excluded from the benefits of growth.

To show how these objectives can be met and to promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

The Secretary-General, who is a strong advocate of the sustainable development agenda, also said that in order to achieve this objective, “industrial development must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources.”

Prime Minister Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal – representing the two pilot countries chosen for ISID – commended UNIDO for implementing a partnership programme, and Ethiopia’s State Minister of Industry, Mebrahtu Meles, emphasised that building industrial zones will accelerate industrialisation, as has been done by Asian countries such as China.

Forum participants expressed optimism about Ethiopia achieving economic growth through inclusive and industrial sustainable development provided that leadership and vision focused on the country’s comparative advantages while improving infrastructure.

They said that regional integration could be key for the development of the country, and called for further exploration of UNIDO’s role as a catalyst of transformational change.

In particular additional efforts were required to enhance the productivity in existing light industries such as agro-food processing, textiles and garments, leather and leather products. There was also a need to diversify by launching new industries such as heavy metal and chemicals and building up high-tech industries like packing, biotechnology, electronics, information and communications.
 

Related articles:

UNIDO officials call for new industrialization strategy for developing states

Manufacturing faces bright future in investors’ haven Ethiopia, if only citizens not pushed down by inequality, politics of unrepresentative, repressive state

Secretary-General’s remarks at UNIDO Forum on Partnerships to Scale Up Investment for Inclusive and Sustainable Industrial Development

Djibouti is more free/independent today than landlocked Ethiopia – Fikreselassie

HAI Helen appointed as UNIDO Goodwill Ambassador
 

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