Ethiopian Economy: Ayele Chamiso, Coalition for Unity and Democracy Party (CUD)

Ayele Chamiso
Ayele Chamiso – Coalition for Unity and Democracy Party (CUD)

Q. To what extent should the involvement of state in the management of the economy go?

Economy is a base for development.  So, in order to achieve a strong economy, we have to follow liberal democracy. When looking at the economic system in place at the moment, sometimes it seems like a free market economy and at other times it becomes a socialist economy. Industries and other firms should not remain in the hands of the government.

We want a free market and free competition. If the state intervenes in the market, it will paralyse the private sector. This government owns businesses; its involvement in the market has disrupted the free market economy. The government should privatise the public enterprises it is controlling. That is why we say, the government should take itself out of the market.

The CUD will not intervene in the market unless it is to stabilise the market.

Q. How would the CUD implement the fiscal and monetary policy instruments of the economy?

There is a problem in our country when it comes to controlling the circulation of money in the economy. The CUD has a detailed plan as to the implementation of these instruments in its manifesto.

Q. Do you think there is an economic growth?

If it is economic growth that is inclusive of the whole society the answer is no.

However, there is growth. The financial transaction circulating in the country these days is very high. But, the economic growth is not reflected in the society. The society is still suffering from increase in the cost of living. There are inflated prices of goods in the market.

What we call growth is when people are given the opportunity to work and sustain their lives. There is unemployment everywhere, but the figure is different from place to place. The level of unemployment in our country is very high. There are problems in the provision of transportation service and others. But we do not blindly conclude that there is no growth, but priority should be given to human resource development.

The CUD will ensure food security, and provide the opportunity for all to participate in economic development with no discrimination.

Q. How exactly would the CUD achieve that?

For instance, when the price of oil rises it means the cost of living will increase. So the government should subsidise it. When the price of oil gets inflated every now and then, the government should work to control it. Because when you control the price of oil, it lessens the cost of living. Not only this, it will fix problems in the transport and business sectors which is a major factor .

Creating job opportunities is the other issue. The cost of living is causing problems particularly on senior retirees, disabled people and so on. The price of medicine is very high, and such should not be the case. Where necessary, medicine should be imported tax free.

Q. How would your party bring about economic growth, while maintaining low inflationary rate?

I would tell you as a layman that when supply is short, demand will be high; this causes prices to become inflated. So the government should address this first. For instance, when there is a shortage of cement, cement factories should be established or it should be imported tax free.

The government is importing sugar to regulate the market, which is good. But it should not go to the extent of telling the traders in Merkato what price to sell their wares. It can flood the market with a lower price.

Q. Do you see structural changes in the Ethiopian economy and the composition of the various sectors in the GDP?

Mechanised farming should be developed. Allowing land to be owned privately is important. Irrigation should also be developed; we see some encouraging activities in Gambella, Afar and Awash. The continuity and expansion of these kinds of activities must be guaranteed.

We have huge human resources, we particularly want to utilise the youth. But finance is obviously necessary in order to do all this. Therefore, we must strengthen ties with international partners.

Q. How would the CUD address the balance of payment crisis and the trade deficit of the country?

By creating conducive environment for investment you may attract investors. So the government should get rid of bureaucratic procedures which would frustrate investors. This would increase the amount of foreign currency.

Export should also be encouraged. We import small items like soap and edible oil, we have the resources here. We should be able to produce them here; we can then save foreign currency and create job opportunities.

Q. While trying to encourage export competitiveness, how would you address externalities like depreciation of the Birr?

Regulating the exchange rate regime should be left to the market. Reducing bank interest rates would help keep money in the hands of the consumer. But when you increase interest rates, people would be inclined to save more. So the market may devalue or revalue the Birr, but we will not have a fixed exchange rate system.

Q. What would the macroeconomic situation of the country look like with the CUD?

There have been encouraging signs from the EPRDF in recent times, but there are many things that need to be improved. But the CUD would do a better job in controlling inflation, stabilising and liberalising the market.

The CUD gives emphasis to human resource development and provides protection to domestic industries that are being affected by high import. We call upon people to give their vote to CUD .