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"We would not cross swords on this": PM Meles

ISSUE 269
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Eighteen butchers get six months in prison for demonstrating against Mayor Ji'ir

Swedish Gov’t To Treat Somaliland As Self-Governing Entity

African Press Needs Help Against Oppression

Arab League To End Somaliland’s Isolation

Candle Light Vigil For Eight Remaining Ethiopian Captives, Free Europeans Leave For Britain

Should The World Legitimize The Independence Of Somaliland?

Accidental Blast Kills 9 Near Mogadishu - Police

Another Journalist Arrested In Hargeysa

"We would not cross swords on this": PM Meles

Mission Report on the Trial Observation of Detained Human Rights Defenders
in Somaliland

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U.S. Citizen Jailed By Ethiopians

Up To 40,000 Civilians Flee Mogadishu

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Iran to Sell Oil in euros and other currencies

The liberal war on democracy

Greek coast guard finds further bodies after refugee boat tragedy

Why is the US press silent on Brzezinski’s warnings of war against Iran?

Khalid Sheikh Mohammed: The Official Legend of 9/11 is a Fabricated Setup

Murder of Human Rights Activists Prompts UN Condemnation

FEATURES & COMMENTARY

Somalia: Back to perpetual war

PRECIS: OBSTACLES TO PEACE IN SOMALIA

Smoldering In Somalia

Somalia - James Swan To The Baltimore CFR

Oromo Manifestations challenge Abyssinian Dictator Meles Zenawiy

Food for thought

Opinions

BBC Somali Section Head – Yusuf Garad Is The Remaining Warlord

Mr. President, Back Off From Your Self-Defeating Mission: And Reform Your Leadership and Administration

Dear Mr. President: Please Release My Father!

Somaliland Needs Salvation, What Should Be Done To Save It?

Progress in Somalia: A Myth or Reality?

If Ghana Dares To Recognize Somaliland, Will Southern Politician Scream?

What A Nightmare Scenario!

Petition For Impeachment Of Dahir Rayale Kahin

 

Addis Ababa, 17 March 2007 - In his press conference to both local and foreign journalists last Monday, Prime Minister Meles said that this time around his government and the IMF had agreed on the facts, while there is a slight disagreement about future policy stances.

Responding to a question that gave emphasis to the ideological differences between the IMF liberal economic agenda and the government's developmental state, Meles said that fortunately this was not an ideological debate. This was an assessment of the fact and the figures. "The IMF is not interested in breaking the good growth that we have," he said, adding that they are not trying to stop the growth or bring about recession in Ethiopia. "Talking about a little tweak here, a little tweak there, we would not cross swords on this," he said.

With regard to the economic growth and the IMF's suggestion to slow the growth in order to address and resolve the alarming situation of the existing inflation rate, the Prime Minister said that the IMF does not come up with specific recommendations as far as the fiscal situation is concerned. They recommended that there should be a bit of fiscal tightening, reduction of the budget deficit. "We will see what can be done about reducing a budget deficit. It does not mean cutting back on budget or infrastructure investment. It means, perhaps, reducing the budget deficit. We will see if there are alternatives of doing so."

However, he said, he does not believe clamping down on growth is a solution at all. Sustained and further growth is the ultimate solution to the inflation problem the country has. "I think the IMF broadly agrees with that. They suggested there should be a little bit tweaking here, and a little bit tweaking there. We are not going to dwell on that too much."

Meles noted that the IMF, like everyone else, recognizes the facts about Ethiopian economic growth during the last three years. But as far the projection of the future growth is concerned, the IMF has always had a different projection of future growth. This time around, Meles said, the IMF projection for the current budget year's growth is very closer to the government's projections. "As regards to future policy issues again, the differences between us and IMF have not been totally eliminated but they have become very limited."

According to Meles, the IMF understands that the government has serious challenges of inflation as the government does. IMF understands that the government is trying to tackle this. "But naturally, because the IMF has standard set of tools in dealing with such matters, they have included these tools as part of its recommendation without necessarily rejecting our preferred alternatives in dealing with this matter."

Regarding debt trap, Meles believes that there was talk of Ethiopia going back to debt trap after the debt cancellation. The IMF has seen the data and come to the conclusion that this is essentially idle talk. "As you might have noticed they said that by 2026 we might run the risk of crossing the threshold. That is some twenty years from now. My understanding on the statement is that they are confronting that within the next five to ten years. There is no such risk."

In the words of Meles, there might be some risk 20 years down the line but not in the next five to ten years. And it will be a very courageous economist who would predict the outcome. Predicting the outcome of five to ten years by itself is a very hazardous game. "So the fact that they confirmed that there is no risk of going back to the debt trap is very reassuring to us. On the whole I think our views and assessments of the situation, the views of the IMF and ours have come closer more than any time before."

The Prime Minister, who is optimist of the future, also said that the current budget year's growth will be about 10.1 percent. The IMF projection is that it will be around 9.5 percent. "We will see which one is closer to the truth when the data is finally compiled," he added.

By a Staff Reporter

Source: Ethiopian Reporter

 


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