Prepare a Report on Tecnological Enviroment and Its Impact on Ethiopian International Trade Competitiveness.

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PRELIMINARY COUNTRY PAPER
OF
ETHIOPIA
ON
COMPETITION REGIME: CAPACITY BUILDING ON COMPETITION POLICY IN SELECT COUNTRIES OF EASTERN AND SOUTHERN AFRICA (7UP 3 PROJECT)

BY GEBREMEDHINE BIREGA[1]
AHa ETHIOPIAN CONSUMER PROTECTION ASSOCIATION
(AHa ECoPA)

TEL. 251-1-57 09 58
CELL 251-9-63 89 05
FAX 251-1-57 56 22
P.O.BOX 27906
ADDIS ABABA, ETHIOPIA
E-mail : gebremedhinbirega@yahoo.com
General Background

Ethiopia is one of the oldest independent countries in the world - at least 2,000 years old, and has historical origins as the empire of Ethiopia, founded according to legend by Menlik I, son of King Solomon and Queen Sheba.

1.1Geographical Location on the Globe
The current Federal Democratic Republic of Ethiopia (FDRE), with Addis Ababa its capital city, is located on 3' N and 14' 8" N Latitude and 33' E and 48' N Longitude, in the Horn of Africa, eastern part of the continent. Ethiopia as a land locked country, shares borders with Sudan in the west and North-west, Kenya in the south, Somalia in the east and southeast, Eritrea in the North and Djibouti in the east. Ethiopia holds a total area of 1.14 million square kilometers (423,828 square miles).

1.2Size and present population
According to the July 2004 estimation, Ethiopia has a population of 71 million, out of which 35.66 million (50.22%) are female leaving the balance 35.34 million (49.78) for male. Overall productive population is estimated at 35.6 million. With an annual population growth rate of about 2.7 percent, Ethiopia is the third most populous country in Africa, after Nigeria and Egypt.

1.3Present GDP
According to 2003 estimations, total GDP at Current Market Price was 54,585.9 Million Birr, while in terms purchasing power parity it was $ 46.81 billion, with real growth rate of -3.8%. Although GDP per capita is roughly about $100, the GDP Per Capita, PPP is $ 700. Agriculture contributes 46% of GDP, while service and industry contribute 12.6% and 41.4% respectively.

1.4Present literacy rate:
Out of total population (71 million), about 42.7% are literate (can read and write). In terms of gender aggregation, 53.3% of male and 35.1% of female are literate.

1.5Present unemployment rate:
Although actual number of unemployed is not available, unemployment manifests itself mainly in the form of underemployment. Open unemployment is concentrated in urban areas. Youth unemployment has been a major social problem.

1.6Brief analysis of Socio-politico-economic history:
Ethiopia's economy is based on agriculture, which accounts for half of GDP, 60% of exports, and 80-85% of employment. The immature market economy, which had been started during imperial period, was halted during the command economy of the military regime. Since the current government took power in 1991, Ethiopia pursued a market-oriented development strategy and implemented policies that began the shift from a state-controlled to a free market economy. The government has embarked on a cautious program of economic reform, including trade liberalization, privatization of public enterprises and streamlining the bureaucracy. Ethiopia's reform program has achieved some success in stabilizing the economy and aiding the transition to a free market system.

The country's development strategy has focused on agricultural development as the catalyst for economic growth. It has eliminated discriminatory tax, credit, and foreign trade treatment of the private sector and tried to simplify bureaucratic regulations and procedures. From 1998-2002, the country achieved an annual average economic growth rate of about 4.2% and annual inflation rate averaged – 0.4%. In FY 2002/03, GDP fell by 3.8 percent and inflation rose by 15.1 percent, mainly due to decline in agricultural output by 12.2 percent caused by a severe drought. Agricultural output had recovered somewhat during...
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