external influence in the making of development ... - FES Ethiopia

Its economic, social and political fabric is of decisive importance for a country’s success
in developing itself. These are clearly and intimately known only to the citizens
themselves. External support should focus on building internal capacity and
empowering the government and the society at large. In order to avoid the pitfalls of aid,
some possible measures include the following:
• The government needs to accomplish its home work well and identify key strategic
areas of interest. It will then have to take firm stand on these and require donors to
uphold these to the point of turning down pledges of assistance;
• Donors should aim and the government needs to facilitate for increased channeling
of resources through civil society organizations, mainly seeking local initiatives;
• Given the enormous problems the country is facing the government needs to become
active and efficient in utilizing available external resources and global opportunities;
In particular, it has to be selective, avoiding to the extent possible new loans, and
ensure the utilization of resources generated in most productive activities;
• To ensure success, significant work is needed in shaping the attitude, morale and
initiative of civil servants as well as civil society groups towards strengthened inner
drive for a change through appropriate incentive structure and mobilization for the
common goal; and
• The use of Aid to advance foreign direct investment should be given focus by
allocating the resource, for example, in infrastructure development and upgrading of
the education and skill of the labour force in the country;
With respect to integration with the outside world and exploitation of appropriate trade
regime, the government should invest heavily in developing expertise and knowledge of
the global system. Some countries have expanded their export sector and adopted exportled
strategies and managed successfully to compete in the international market. But we
should not forget the fact that Ethiopia’s society is basically rural and traditional. Except
for minority few and glimpse of modernity in Addis and major towns, the rest of society
is largely uneducated, less healthy, hierarchical, etc. indicating the basic fact that the
country is ill equipped to join the rest of the world.
According to Gebre-Michael Paulos (2004), the objectives and economic benefits of
joining the WTO, for example, should be clearly stated quantified and analyzed. This is
indeed necessary as there are risks associated with globalization. For instance, rapid
opening of the banking and finance sector, without adequate financial capacity being
built, could result in financial crises as witnessed elsewhere in Africa and Asia. The
government of Ethiopia has so far made commendable job in resisting the pressure by the
IFIs in this respect. The government has excluded key areas from foreign direct
investment. These include transmission and supply of electrical energy, postal services
(except courier services), and domestic transport and shipping. Banking and insurance
services are open only to Ethiopian nationals.
Overall, the economic and social settings in the country need to be carefully studied and
used as a base to design policies to specific conditions in the country. There are only a
few general lessons that can be drawn from the experiences of other countries.
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