An Independent Review of World Bank Support to ... - DAG Ethiopia

complete state transformation (including the need for both skilled human resources andinstitutional incentive structures required to retain skilled staff in more remote locations).The Ethiopian Government's Development Policies and Programs2.11 The main thrust of the economic policy in the early 1990s was AgricultureDevelopment Led Industrialization (ADLI). Policies were expressed in: (i) Ethiopia’sEconomic Policy during the Transitional Period (November 1991); (ii) An EconomicDevelopment Strategy for Ethiopia (February 1994), and (iii) the EPRDF Five YearNational Development Program 1995-2000 (May 1995), which emphasized the role ofthe private sector in agriculture, transport, and exports, as well as the provision ofeconomic and social infrastructure such as schools, health posts, roads, and clean watersupply. Through most of the 1990s, there were annual Policy Framework Papers (PFPs)agreed with the Bank and the IMF, focused on macro-economic stabilization, reforms ininvestment and banking, and structural reforms including privatization of selectedindustries and opening of the economy to foreign investment. Further elaboration of thesepolicy priorities along with an increased emphasis on public sector reform and capacitybuilding were set out in an Interim PRSP in 2000 and Ethiopia’s first full PRSP in 2002,as discussed in more detail below.2.12 In the roads sector, the government views the 1996 Road Sector DevelopmentProgram (RSDP) as a priority in meeting the challenges of poverty reduction. Upgradingand extending Ethiopia’s poor and sparse road network is crucial for overall developmentand integration of the country given its dependence on agriculture and widely dispersedpopulation. The 10-year RSDP placed its priority during the first phase of five years onrehabilitation and completion of a core trunk road network (8600 km) connecting thecapital, Addis Ababa, with all major regions and high potential areas as well as with themain seaports for exports and imports. This was accompanied by institutional measuresaimed at strengthening the capacity of the Ethiopia Roads Authority (ERA), responsiblefor development and maintenance of the trunk road network. Implementation of a roadmaintenance initiative would involve a comprehensive road maintenance program to befinanced by user fees (mainly fuel levies). These funds would be channeled through aRoad Fund, administered by a Board including representatives of the road users.2.13 Other priorities included the development of the capacity of domestic contractorsto participate in construction and maintenance works and of the new Regional RoadsOrganizations to develop and maintain rural roads. But these latter two objectives werenot given equal emphasis during implementation—the first due to slow progress inopening up the economy for private sector development and the second due to loweremphasis on rural roads development compared to rehabilitation of the trunk roadnetwork. The proposed cost of RSDP phase I was some $2.8 billion over five years.2.14 In the education sector, the Government’s 1994 Education and Training Policyand Strategy formed the basis for the 20-year Education Sector Development Program(ESDP). During its first five-year phase, the ESDP I aimed at increasing access (notablyby increasing primary enrolment rates from 30 percent to 50 percent, increasing girls’enrolment relative to boys’, and rural enrolment relative to urban), improving efficiency5