Statement by an IMF Staff Mission on the 2013 Article IV Consultation with Ethiopia
ADDIS ABABA, Ethiopia, July 4, 2013/African Press Organization (APO)/ — An International Monetary Fund (IMF) mission visited Addis Ababa June 19-July 3 to conduct discussions for the 2013 Article IV1 Consultation. The mission met with Prime Minister Hailemariam Desalegn, Minister of Finance and Economic Development Sufian Ahmed, Governor of the National Bank of Ethiopia Teklewold Atnafu, Economic Advisor to the Prime Minister Newai Gebre-ab, other senior officials, as well representatives of the private sector, the international community, and civil society.
At its conclusion, the mission head Mr. S. Kal Wajid issued the following statement:
“The Ethiopian economy continues to experience robust growth and reduction in inflation. For 2012/13, the mission estimates real GDP growth at a robust 7 percent despite a difficult global economic environment and end-year inflation at 6.6 percent. The expansion in economic activity has contributed to poverty reduction and progress toward achieving the Millennium Development Goals. Tight monetary policy and cautious execution of the government budget have contributed to the deceleration of inflation, which also reflects slowdown in food prices. The trade balance has deteriorated but an increase in transfers and loan disbursements from abroad allowed for a small increase in gross international reserves. Sizeable investment spending of public enterprises continues to absorb a large share of domestic financing and constrain credit available to the private sector.
“Going forward, the mission recommends a cautious stance of monetary policy that keeps money growth consistent with preserving the gains on inflation and achieving robust economic growth. Raising nominal interest rates is required to activate the Treasury bill market for more flexible liquidity management and monetary policy implementation. A well functioning Treasury bill market is also a precondition for establishing a market for longer term government securities. There is scope for improving the functioning of the foreign exchange market. This may entail greater exchange rate flexibility, which is essential to maintain external competiveness and achieve the authorities’ broadly-based growth objectives. The mission supports the National Bank of Ethiopia’s objective of gradually raising foreign exchange reserves to 3 months of imports.
“The financing of the Growth and Transformation Plan should strike a balance between promoting growth and ensuring macroeconomic stability. Careful consideration should be given to the sustainability of the financing. The authorities should seek concessional external financing and avoid extensive substitution of domestic for external financing. The pacing of public investments needs to be adjusted if scaled-up external financing on manageable terms is not forthcoming.
“Ethiopia’s public sector led development strategy has delivered robust growth and rising living standards but is now at cross roads. To sustain growth and employment creation, there is a need to carefully consider the balance between public and private sectors in the economy. A vibrant private sector is essential to attain middle income status. Therefore, it would be important to foster competition in areas where public enterprises enjoy monopolies, and gradually withdrawing from sectors where they crowd out the private sector.
“The IMF Executive Board is expected to complete the 2013 Article IV consultation in September 2013.”
1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities.
Statement by the Tánaiste on developments in Egypt
The Tánaiste on developments in Egypt. DUBLIN, Ireland, July 4, 2013/African Press Organization (APO)/ — The events in Egypt overnight, which saw the removal of President Morsi and his government following military intervention and the suspension of the Egyptian constitution, are a matter of deep concern.
No one who truly holds to democratic values can view with equanimity what was, to all intents and purposes, a military takeover.
The Irish Ambassador and our Embassy in Cairo are keeping me closely informed of developing events. They are also keeping in close contact with all Irish citizens in Egypt who have registered with the Embassy. So far, we have had no reports of any Irish citizens being caught up in the protests. Any Irish citizens in Egypt who have not yet registered their contacts details with the Embassy should do so.
At this stage, in view of the serious events overnight and in recent days, my Department has recommended against all non-essential travel to Egypt, with the exception of travel to the Red Sea resorts. Intending travelers or those already in the area should closely monitor the Department’s website for any further information or advice.
It is imperative that all parties and institutions in Egypt should initiate without delay a fully inclusive process of political dialogue aimed at bringing about the swiftest possible restoration of civilian-led government following free and fair elections. All sides must also demonstrate restraint at this critical juncture and avoid any further recourse to violence.
Egypt and its people are undoubtedly experiencing a difficult transition to democracy. But fundamentally what is required is that all groups in Egypt should sit down together and, through politics, seek to overcome their differences and promote the realization of those goals of inclusivity, dignity and betterment which are at the heart of the Tahrir revolution.
Ireland and our EU partners have made clear that we will continue to fully support the Egyptian people in their legitimate aspiration for democratic and inclusive government.
BERLIN, Germany, July 4, 2013/African Press Organization (APO)/ — Foreign Minister Guido Westerwelle today (4 July) issued the following statement in Athens commenting on events in Egypt:
“This is a severe setback for democracy in Egypt. It is a matter of urgency that Egypt restore constitutional order as quickly as possible.The suspension of constitutional order and the ousting of the President by the Egyptian armed forces are grave matters. I am profoundly concerned. Such a disruption of the democratic order is not a long-term solution to the huge problems Egypt is facing.There is a serious danger that the democratic transition process in Egypt will be badly damaged. This would have far-reaching consequences not only within the country but for the entire region.I call upon all those in positions of responsibility in Egypt to act with circumspection, to come together and look for ways to end this serious crisis of state. A solution can only be reached through dialogue and political compromise.No section of society may be excluded. Violence must never be accepted as a tool of political discourse, nor must politically motivated persecution or arbi trary arrests. The achievements of the Egyptian revolution – particularly freedom of the press and freedom of assembly – must not be tampered with.Germany remains willing to support the development of a new democratic order in Egypt.”
Support for Egypt’s second chance for democracy, said Elmar Brok, Chair of the Committee on Foreign Affairs
BRUSSELS, Kingdom of Belgium, July 4, 2013/African Press Organization (APO)/ — On developments in Egypt, Elmar Brok (EPP, DE), the Chair of the Committee on Foreign Affairs of the European Parliament stated that “it is now essential for the Egyptian military to keep their commitment to facilitate a democratic transition and to restore the democratic processes as soon as possible.”
Full statement of Elmar Brok below:
“The appointment of the Chief Justice of the Egyptian Supreme Constitutional Court as head of an interim government and the promise of new Presidential and Parliamentary elections can provide an important new opportunity for Egyptian people to establish a true democracy in Egypt and to promote the much needed social and economic development of their country for the benefit of all Egyptians”.
“President Morsi, a year after his election, has not been able to deliver despite the many promises to his people. This new opportunity for the people of Egypt must lead to free, democratic elections soon and to an inclusive concept of governance based on representation of all sectors of Egyptian society”.
“Especially the urgent economic and social problems have to be addressed. The EU should be ready for support as fast as possible. Egypt’s second chance for democracy must become a success story”.
Army must ensure security and defend democracy in Egypt
OSLO, Norway, July 4, 2013/African Press Organization (APO)/ — “Norway regrets that the political process did not lead to a broadly supported solution for Egypt and that the army finally intervened, removed President Morsi from power and suspended the constitution. Norway has consistently encouraged President Morsi and the opposition to find solutions to the country’s major challenges through a broad and inclusive process. We must acknowledge the fact that they have not succeeded,” commented Minister of Foreign Affairs Espen Barth Eide.
“Norway gives its full support to the democratisation process in Egypt. It is vital that a civilian government is rapidly formed and that the process towards democratic elections is started. All groups in Egyptian society must be included in the time ahead.
“The army is now responsible for ensuring stability, safeguarding the civilian population and preventing violence. The obligation to protect the population applies to all groups. I would particularly warn against imprisoning politicians. No one is served by political repression or violent confrontations,” said Mr Eide.
Like many other countries, Norway has given its full support to the development of an Egyptian democracy and has expressed its view that the outcome of democratic elections must be respected. Over the last year, the parties have not reached agreement on fundamental aspects of democracy. Norway has therefore cooperated with both the regime and the opposition in an attempt to find a political solution to the growing conflict.
“Norway upholds the right of the Egyptian people to demonstrate in support of their views. A broad popular and democratic movement is entitled to be heard. I would warn all concerned against an intensification of the already serious situation as this could further deepen divisions,” said Mr Eide.