No.3 Xiu Shui Nan Jie
Jan Guo Men Wai
P. R. China
Before the beginning of the 1990's, Ethiopia had a centrally
planned economy with severe price distortions. The economy was dominated
by the state which controlled product and factor markets and directly
owned the bulk of the modern sector of the economy. In general, the country
had a highly regulated and closed economy. This had resulted in the marginalization
of the private sector and a decline in economic growth.
After the overthrow of the military regime in 1991, however, a significant
progress has been achieved in economic development due to sound economic
policies. First, the Transitional Government that was formed in 1991,
acted to put the private sector at the center of the Ethiopian economy.
In this regard, a number of important economic policy measures and reforms
have been taken by the Transitional Government and the elected Federal
Government that followed it. Specially, since the introduction of the
new market oriented economic policy in 1992, the following measures, among
others, were taken to change the structure of the economy and encourage
rapid economic growth.
， Deregulation of domestic prices;
， Abolishing of all export taxes (except on coffee) and subsidies;
， Reduction of inflation through budgetary and monetary controls;
， Liberalization of foreign trade;
， Devaluation of the national currency, the Birr, to reflect its market
， Privatization of public enterprises;
， Promulgation of a liberalized investment law for the promotion and encouragement
of private investments, both foreign and local;
， Issuance of a new labour law;
， Liberalization of the foreign exchange regime;
，Enhancing private sector development and private-public partnership through
providing effective industry association and creating a forum for consultation
between the private sector and government.
， Strengthening and enhancing institutional support for the export sector.