Conference name, dates, place

International Conference on Development Studies in Ethiopia, July 11-12, 2003, Addis Ababa, Ethiopia

Document Type


Presentation Date



After the downfall of the military government in 1991, the transitional government of Ethiopia committed itself to implement the stabilization and structural adjustment program with the help of the IMF and the World Bank. The objective of the program was to remove cost-price distortions, improve market related incentives, promote private enterprises and exports, and liberalize the economy and to reduce the role of the public sector in the economy. The a private led competitive economy operating under a free market and prudent fiscal and monetary policy environments was optimistically expected to emerge from this. The practical experience of the last decade of the adjustment program, however, revealed that the expected results could not be obtained. This study tries to explain such failure from theoretical point of view and the practical experience of East Asian countries. To this end the paper is structured as follows: following this introduction is the macroeconomic policies and programs undertaken during 1992/93-2000/01 to encourage the private sector in particular and business activities at large. The third part reviews the performances and problems of the private sector during the same period in the country. Part four is devoted to review the practical experience of successful East Asian countries and the fifth part tries to highlight donor agencies' Private Sector Development (PSD) agenda and the link to poverty reduction. The final part concludes the study and draws a lesson for Ethiopia.