In rarely strong criticism directed at the World Bank and International Monetary Fund (IMF), Prime Minister Meles Zenawi says his country’s economic performance is being called into question by the two groups because Ethiopia refuses to let outsiders dictate to them what economic policies should be put in place. “The World Bank [country] director is used to having other developing nations simply listen to his orders and is not used to nations refusing implement policy based on their wishes. He left here after we refused to let him tell us what to do and wrote this article to get back at us,” Meles said on Tuesday, rebuffing the World Bank Country Director’s published commentary in which he said Ethiopia’s economic plan is unsustainable.
In the commentary, the World Bank’s Ethiopia and Sudan chief Ken Ohashi wrote that the five year Growth and Transformation Plan (GTP) Ethiopia has been implementing since October is unrealistic and unsustainable, reiterating remarks made in multiple interviews he gave leading up to June 30 when he completed his four year assignment here and subsequently left.
As quoted by the MP who posed a question to Meles to respond to the director’s analysis, Ohashi said Ethiopia’s economy heavily relies on foreign aid and both this dependence on foreign capital to finance budget deficits and the five-year investment plan is unsustainable.
“It turns out he is retiring…so he can’t be held accountable,” Meles said of Ohashi’s assertion that he said was made only to avenge not getting what he wanted during his stay in Addis Ababa.
PM Meles also rejected the IMF’s latest economic forecast.
In a statement released on May 31, the IMF slashed this year’s and next year’s growth rate forecast of Ethiopia to 7.5 and 6 percent against the government’s official estimate of at least 11 percent.
If the IMF forecasts prove accurate, it will be a sign of utter failure of the GTP because the government envisages doubling the economy during the period– growing it between 11 and 15 percent annually.
Meles said IMF officials were upset when the government placed an order to commercial banks to buy state bonds with 27% percent of the money they mobilize to lend. Meles says the government will use the money for public investment and to finance sectors that would not get money otherwise.
“This is directing credit which is a role of a developmental state so that areas prioritized can access the finance as commercial banks are not serving them,” Meles said.
According to the PM the IMF officials were upset with the measure and as a result said Ethiopia would not be able to register the forecast growth by next year.
Meles said the two international lenders are frustrated by their inability to dictate economic policies and impose neoliberal ideology.
The Ethiopian government has a history of rejecting assessments that criticize its’ polices. International organizations including the IMF officials, especially those based in Addis Ababa, are muted from commenting on government plans or figures related to economic performance.