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Ethiopia:
World Bank Group Approves Plan To Protect
Basic Services, Improve
Governance
Interim
Strategy Emphasizes Accountability, Voice
in Transition Period
WASHINGTON,
DC: The World Bank Group Board approved an
interim country assistance strategy for
Ethiopia, emphasizing improved governance
and growth. The plan includes an immediate
program to preserve the delivery of basic
services to the population through grants
to local governments. The board decision
follows a period of intensive consultation
with Ethiopia's international partners and
with various actors within the country's
political economy. The plan comes at a
critical time for Ethiopia: contested
elections in 2005 were followed by public
protests, mass arrests, and an
increasingly polarized climate that
created continuing risks for the country's
development agenda. The World Bank and
other donors suspended direct budget
support once the political impasse set in,
but agreed to press for improved
governance, including greater civic
participation, while protecting critical
services in health, education, agriculture
and access to safe water.
The
interim strategy, which covers the next
fourteen months, carries clear
expectations for performance at the
country level. The Bank would assess
Ethiopia's progress on strengthening
governance, and, if there are measurable
improvements, would prepare a full
three-year strategy envisioning scaled-up
levels of assistance. However, if
governance conditions deteriorate, the
Bank would reduce aid over
time.
"The
program approved by the World Bank board,
and supported by Britain and the other
donors, reflects a determination to
protect the country's poorest citizens
from unnecessary setbacks flowing from the
contested elections and the ensuing period
of political uncertainty," said Ishac
Diwan, World Bank Country Director for
Ethiopia and Sudan. "Ethiopia has
registered real progress in providing
services to the poor, and in advancing the
Millennium Development Goals. Above all,
we want to prevent a backsliding-- while
stepping up the work on
governance."
A major
component of the plan is the $215 million
Protection of Basic Services Program to
support local governments in providing the
population essential services, while
strengthening measures to ensure
transparency and local accountability in
the delivery of those
services.
"Our
agreements with the Government spell out
some very specific results just in the
next fourteen months," Mr. Diwan noted.
"For example, we're committing to lower
infant mortality to 115 per thousand from
the current 127. For young children living
in malaria-affected areas, we're looking
to make bednets available for 60%, up from
25% today. For the key childhood
vaccinations, we aim to go from 40% to
60%."
In
earmarking local government grants for
essential services in health, education,
agriculture and water, the Protection of
Basic Services Program requires strict
reporting on how funds are allocated and
spent. The plan applies four tests:
fairness, to ensure that services are
disbursed without partisan or political
bias; sound fiduciary management, to
guarantee that resources support the
intended goals; "additionality," to ensure
that the Ethiopian government's ongoing
funding of basic services isn't reduced;
and accountability, so that citizens are
fully informed and allowed to participate
in decisions affecting their access to
critical services. If performance falls
short on the four tests, the Bank can halt
disbursements until corrective measures
are taken.
The
larger interim strategy for Ethiopia
carries several other programs to
stimulate economic growth and strengthen
governance. The plan calls for an
expansion of access to electricity among
Ethiopia's rural population. Another
component would fund irrigation programs
to strengthen farm productivity, while a
private sector program would support
high-growth corridors as a means of
bolstering Ethiopian enterprise. Funding
for roads and capacity-building in
financial services and agriculture are
also included in the first year of the
interim strategy. In the second year, the
Bank would continue to address the
significant infrastructure gap that holds
back economic growth in much of the
country. Other resources would support
safety nets for food-insecure households,
the fight against HIV-AIDS, and urban
housing.
The
United Kingdom is supporting the PBS
project, and the Netherlands will also
contribute. The European Commission,
African Development Bank, Canada, Ireland,
and Sweden are also considering
contributions. The PBS project earmarks
$20 million from the World Bank&emdash;and
$67 million from all PBS partners
combined&emdash;to help finance the
acquisition of critical health
commodities&emdash;including mosquito bed
nets, vaccines, malaria drugs and
contraceptives. The program also provides
funds to improve local governments'
disclosure practices and to equip civil
society organizations with skills to track
government spending and to participate in
decision-making.
In
recent years, Ethiopia has posted a
comparatively strong growth performance,
while increasing the portion of the
national budget dedicated to
poverty-reduction spending. Though
starting from a low base, the country had
begun to show progress toward achieving
some of the Millennium Development
Goals&emdash; including strong gains in
rates of school enrolment and lowering
malnutrition. The PBS program is designed
to avoid any reversal in these areas,
while providing strong incentives for
improved governance and
participation.
Contacts
In
Washington: Timothy Carrrington
(202) 473 8133
tcarrington@worldbank.org;
In
Addis Ababa: Gelila Woodeneh (251-1) 17 60
00
gwoodeneh@worldbank.org
Gezahgen Kebede
President, Ethio-American Trade & Investment Council
Honorary Consul General of Ethiopia
www.eatic.org - One World. Two Cultures. Endless Possibilities.
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