China and India and Ethiopia final report - FES Ethiopia

2. Overview of the Ethiopian Economy and review of studies2.1 overview of the economyEthiopian economy has been suffering from various structural bottlenecksduring the Derge command economic management regime manifested by loweconomic growth, macro economic imbalances and negligible private (domesticand foreign) participation in the economy. Following the down fall of theregime in May 1991, the country has adopted a market economic system. Inorder to address those problems and transit to market economy, the countryhad implemented a series of Structural Adjustment Programs (SAPs) and hadstarted a set of institutional reforms since 1992/93 sponsored by IMF andWorld Bank.In order to consciously guide the development of the country, the governmentdesigned and pursued Agricultural Development-led Industrialization (ADLI)that focuses on productivity enhancement of the small holder peasants throughincreased utilization of improved seed, fertilizer and farming techniques. Withrespect to trade, the country is oriented outwardly favoring export sector.In the fight against poverty, the country has been implementing a series ofpoverty reduction strategy programs since the last 8 years and is currentlypreparing PASDEP II that covers the time period from 2010/11 to 2014/15.Owing to various policy and institutional measures, the performance of thecountry has shown significant leap in the last few years. Over the last 5 years,for instance, the real GDP grew by 11.7 %, 12.6 %, 11.6%, 11.5% and 11.8%,respectively. This growth is well attributable to a double digit growth7