The surprise devaluation of the Ethiopian birr on August 31, 2010 was apparently undertaken to boost export performance and bring about structural change in the economy. This was a bold and important move because it indicates recognition by the Ethiopian government that its policy setting had been a factor in inhibiting Ethiopia’s external performance and industrial development.
Developing country members of the WTO benefit from special and differential treatment, a flexible application of WTO principles and rules according to their developmental needs and capacities. However, there has been widespread criticism that special and differential treatment is not granted to acceding countries – almost all of which today belong to the group of developing countries. If anything, it is argued, these countries receive an “inverse” special and differential treatment as a result of which they are compelled to offer further reaching liberalisation commitments than WTO members themselves.
This study seeks to identify and estimate the relative importance of supply- versus demand-side constraints on Ethiopia’s exports. Ethiopia has tried radically different trade strategies in the past, including a strategy of import replacement/protection for infant industries during the Imperial period, a heavily state-managed trading system during the military government era, and a market-oriented liberalized approach supported by the international financial institutions in the most recent period. It is presently engaged in various trade initiatives, including accession to the World Trade Organization, negotiations with the European Union on an Economic Partnership Agreement and with African regional partners towards a Tripartite Free Trade Area (TFTA).
The establishment of a Tripartite Free Trade Area (TFTA) which would combine the members of three existing regional economic communities, i.e. the Common Market of Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC), was decided at the 2008 Tripartite Summit. The purpose of the TFTA will be to harmonise trade arrangements among SADC, COMESA and EAC, improve the movement of persons within the region, facilitate the joint implementation of infrastructure projects and enhance co-operation of members.
The project "Fostering the Development of PPP Models in the COMESA Region" helped COMESA Members improve infrastructure service provision though the increased and more systematic use of public private partnership (PPP) arrangements. The project’s four key objectives were to:
- Capture and synthesize critical elements of an overarching policy and vision for effective PPPs in infrastructure sectors;
- Analyse and lay out critical elements of an enabling legal framework for effective infrastructure PPPs;
- Analyse critical elements of an effective, coordinating institutional framework for PPPs in infrastructure sectors; and
- Analyse where a regional approach to PPPs can be helpful, and how COMESA members should pursue such a regional agenda.
This study, published as part of BizClim's Best Practices series, provides an overview of relevant good practice for a legal and institutional enabling environment for PPPs in infrastructure sectors in COMESA. It also begins to consider how a regional approach can contribute to the growth of infrastructure PPPs (including those of a crossborder nature), as well as the sharing of knowledge across Member Countries, and the building of capacity within them. The adoption at a regional level of common principles for the development of PPP projects and similar mechanisms for their implementation could also contribute to the emergence of domestic private investors in the COMESA region.