Planning and Development Commission (PDC) reveals that COVID 19 forced it to redefine its Ten Year Perspective Development Plan that was expected to be tabled for consultation two months ago.
It is recalled that the government under PDC is conducting a strategic plan that will be implemented in the coming decade.
The plan targeted to attain crucial and tangible changes in the economy, social and political arena in the coming years.
Fitsum Assefa, Commissioner of PDC told Capital that COVID 19 has given a lesson to redefine the six strategic pillars stated in the Ten Year Perspective Development Plan.
“In every plan we are forced to redefine our targets. For instance we gave emphasis on technology and innovation, research and development, and develop resilient system,” she told Capital.
“We have been working to reforming data system to change it in real time and improve the frequency and relevance but COVID 19 showed us to work on it more,” she explained how the pandemic forced them to refocus on the strategy.
“We need to allocate appropriate investment on research and development, and real time data development to give fast decisions for any challenges and come up with concrete solution,” she added.
She also indicated that because of the outbreak investments on some sectors like tourism will be revised and reoriented.
“We are discussing on tourism, which is still a major focus areas under the plan, to reschedule investment on the sector and transfer to other areas until the outbreak effect calm down,” she added.
She said that some of the reforms not the plan are rescheduled; “now we are focused on saving life than going to the reform.”
The Ten Year Perspective Development Plan is different compared with the recent past similar plans and also looking in detail the failure of the previous development plans and continuing the high growth trajectory, according to the Commissioner.
For the last two years 12 different studies have been conducted as an input for the ten year development plan.
Sectors augmented by PDC have been engaged by themselves to come up with their own plan. Several discussions with stakeholders for every sector were undertaken from inception level for drafting the ten year development strategy.
High standard and independent consultants and experts were involved on commissioning the studies. “When we see the Growth and Transformation Plan (GTP) I and II most of them were developed in PDC, meanwhile sectors to some extent were involved. But on the latest case PDC set the macroeconomic framework, which is our mandate, and the rest under the bottom up approach; relevant government bodies conducted their plans under the PDC framework,” she said.
At the same time sectors are also synergized each other to keep the linkage of sector like agriculture and industry.
“Spatial dimension that will support to keep the balanced growth rate based on areas is also the other new point included under the current plan,” she added.
It is real we have been growing in the past years but there was a problem on the source of growth that was only focused on public investment, according to the commissioner.
She said that quality economic growth and fair distribution of growth are crucial that are understood by the public.
Enabling environment like sustainable development finance, improve competitiveness and productivity are also strategic areas to reach at the expected achievement.
Institutional transformation include improving public policies, cultural shift and mind set shift is also one of the pillars in the ten year plan.
Real involvement of the private sector in the economy should be ensured at this ten year plan and it is one of the strategic pillars to be achieved in the period.
Resilient economy against the climate change is also a strategic pillar of the plan.
Job creation is the major target for the government to be achieved in the coming decade. According to the plan at the end of the ten year plan the unemployment rate should be below nine percent. To meet the target every year at least 1.36 million new jobs should be created.
“At the stage we were going to kick off the public consultation the pandemic is reported in Ethiopia, meanwhile the new plan should be matured and will be introduced in the coming year since it is new year after the end of the five year plan, GTP II, that will end in July 7,” Fitsum said.
“COVID 19 does not only halt consultation but gave us a lesson to revisit the plan, and internally we raise issues like should we retouch the targets, do we need to look implementation instruments again, do we need to refocus on priorities, and redefine strategic pillars,” she said.
PDC conducted the short and long term impacts of COVID 19 that indicates the targeted growth rate will drop by 2.8 to 3.8 percentages from the original target of nine percent for the year.
This year growth will be between five to six percent. Recently the International Monetary Fund (IMF) has forecasted that the effect of global outbreak of COVID 19 will contract Ethiopia’s real GDP growth to 3.2 percent in 2020.
She said that initially the government’s projection for the year is different with IMF and the government expected the economy to grow by nine percent and IMF estimates 6.2 percent.
“Nobody understands our economy more than us. The IMF and other similar organizations and our indicators shall differ since they are considering the least developed countries under similar views but our assumption on productivity is considered as our own experience and achievements,” she explained.
“Some small boost on productivity has big impact. When they said Ethiopia will grown by 6.2 percent they considered that the country is under reform that means the public expenditure and government investment will drop. But the government expenditure will be diverted to the agriculture and private sector development that will boost the economy,” Fitsum said.
“Our production functions and the IMF school of thought on the area are also differing,” she added.
From 705,000 to 1.1 million jobs, mostly at the service sector, will be severely affected because of COVID 19.
According to the study of PDC, if the government does not intervene the impact of COVID in the economy will continue for the coming two and more years.
“But we witnessed that the government is intervening like injecting liquidity to the financial sector, sharing costs and allocating supplementary budget to mitigate the impact,” she said.