VZCZCXRO6482
OO RUEHROV
DE RUEHDS #2425/01 2820738
ZNR UUUUU ZZH
O 090738Z OCT 09 ZDK
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6444
INFO RUCNIAD/IGAD COLLECTIVE
RUEWMFD/HQ USAFRICOM STUTTGART GE
RUEAIIA/CIA WASHINGTON DC
RUEPADJ/CJTF HOA
RUEKDIA/DIA WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 02 ADDIS ABABA 002425 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EAGR ET
SUBJECT: ETHIOPIA:  PRESIDENT GIRMA PROMISES CONTINUED 
ECONOMIC GROWTH, CONTROLLED INFLATION AND FREE AND FAIR 
ELECTIONS 
 
REF: 2008 ADDIS 2802 
 
Summary 
--------- 
¶1.  (U) On October 5, Ethiopian President Girma Woldegiorgis 
presented the Ethiopian Government's (GoE) parliamentary 
agenda at the opening of the joint session of the House of 
Federation (HoF) and the House of Peoples' Representatives 
(HoR).  In traditional fashion, it was a short laundry list 
of accomplishments from the previous year such as achieving 
rapid development, controlling inflation, and easing the 
foreign currency shortage.  The President presented 
objectives for the upcoming year such as continued economic 
growth, social development, resolution of power shortages, 
inflation control, and upgrading of health and education 
services.  He promised that next year's parliamentary 
elections would be carried out in a peaceful, democratic and 
credible manner that would ensure the active participation of 
the public and the different political parties.  The 
President glossed over the serious food security issues 
currently facing the country, and completely failed to 
mention the Civil Society Proclamation (CSP) that is forcing 
thousands of NGOs to re-register prior to February 2010.  He 
also made no mention of contentious national security 
concerns such as Somalia, Sudan, or tensions with Eritrea. 
End Summary. 
 
 
Sixth Year of Economic Growth Despite Global Crisis 
--------------------------------------------- ------ 
¶2.  (U) In a twenty-minute speech on October 5, Ethiopian 
President Girma Woldegiorgis presented the government's 
agenda to a joint session of the House of Federation (HoF) 
and the House of Peoples' Representatives (HoR).  He 
emphasized Ethiopia's ability to register six consecutive 
years of annual growth rates of more than 10 percent despite 
the global economic crisis (Note:  The IMF estimates 7 
percent GDP growth in 2008-9).  The country achieved this 
success in spite of power shortages which put severe strains 
on industry.  In addition, the country maintained this growth 
while controlling inflation.  The President did acknowledge 
that not all of last year's objectives were met and that the 
goal of maintaining an annual 25 percent growth rate in 
exports was not achieved.  He attributed a 10 percent 
decrease in exports to limitations on marketing systems 
coupled with falling global trade and commodity prices.  He 
added that imports continued to grow substantially, leading 
to an imbalance in demand and supply on foreign exchange 
trade.  To address these challenges, the government took 
remedial measures including the devaluation of the birr. 
 
 
With 10 Percent Goals for Seventh Year 
-------------------------------------- 
¶3.  (U) Continuing on the economic theme, the President laid 
out the economic objectives for the coming year, promising 
continued economic growth at a rate of more than 10 percent 
for the seventh consecutive year, while controlling inflation 
at less than 10 percent.  (Note:  Average inflation for 
August was 24 percent.)  The government will also renew its 
goal of registering 25 percent or more annual growth in 
export trade.  These goals will be achieved by implementing 
polices that were successful last year such as strict control 
on government budget deficits, balancing the growth of the 
money supply, and taking measures to correct some of the 
market failures observed last year.  The President predicted 
that the completion of most of Ethiopia's ongoing power 
projects will alleviate many of the power shortage problems 
experienced in the past year and speed up industrial 
development. 
 
 
Peaceful and Democratic National Elections 
------------------------------------------ 
¶4.  (U) President Girma spent a significant amount of time in 
his speech highlighting the importance to be paid to the 
Fourth National Election which will be conducted in a 
"peaceful, democratic and credible manner" in 2010.  He 
promised the active participation of the public, an 
internationally recognized election code of conduct, and a 
mechanism for dialogue among different political parties to 
resolve problems arising in the election process.  He 
 
ADDIS ABAB 00002425  002 OF 002 
 
 
announced that parties would have opportunities to use 
government media and would be given budget subsidies. 
National and international observes will also be invited to 
participate in the election process.  He added that the 
government would be prepared to take the necessary legal 
action to prevent any unlawful and unconstitutional acts 
during the election process. 
 
 
And Health and Education Services Complete the List 
--------------------------------------------- ------ 
¶5.  (U) The President made brief passing mention of the goal 
of strengthening "ongoing social development activities" 
including ensuring quality education as well as expanding and 
upgrading basic health services.  In the education area, he 
pledged to ensure quality education in regular, technical, 
vocational and higher educational institutions by engaging 
and widely mobilizing those in the education sector as well 
as families of students.  Other than a short mention of the 
late start and early departure of the Kiremt rains in some 
parts of the country, and of the need to ensure continued 
growth in agricultural development, the President did not 
discuss the serious food security issues currently facing the 
country.  He also failed to mention other important social 
issues such as the Civil Society Proclamation (CSP) that is 
currently forcing dozens of NGOs to re-register prior to 
February 2010. 
 
 
Comment 
-------- 
¶6.  (SBU) President Girma's presentation to Parliament was 
true to its traditional form.  It was a laundry list of 
simplified and slightly overstated economic accomplishments 
of economic growth.  Although post questions the reliability 
of the GoE's growth figures given the poor harvests, flat 
export growth, and severe power outages in the past year, 
economic growth of even seven percent is indeed an 
achievement.  Reducing year-on-year inflation to the single 
digits was an accomplishment, but is mainly a testament to 
the fact that annual inflation was exorbitantly high (64 
percent) in July of 2008.  Average annual inflation remained 
at 24 percent in August 2009 and the purchasing power of the 
local currency is declining, as prices have not declined from 
2008 and the Birr continues to be devalued. 
 
 
¶7.  (SBU) Comment Continued.  The fact that President Girma 
devoted a substantial portion of his speech to the national 
elections and to how the public and political parties would 
be enabled to fully participate in the democratic and 
electoral process was noteworthy.  Whether these promises 
will be born out by action will only be clear in the coming 
months, but evidence to date is not encouraging as political 
space afforded to opposition parties and their ability to 
organize, open offices, field candidates, or meet with their 
constituencies has been persistently narrowed over the past 
year. 
MUSHINGI