Ethiopian Business Review

The WTO Multilateral Trade Negotiations in Bali almost failed. By negotiating for one day beyond the scheduled conference time, 159 exhausted nations finally concluded an agreement.

What’s at stake are the rules which govern trade among member nations in goods, services and intellectual property. They are the foundation of the present world economic order. Indeed, these negotiations are the most important to be held in any area of multilateral negotiations among the nations of the world for at least 30 years.

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Living aside the long history of the use of money in Ethiopia that can be traced back more than 2000 years.  It is following the demise of the Dergue, that the post-1991 economic policy witnessed a marked departure from the previous Socialist system. This new change in policy brought about a significant change in the functioning of the financial sector. Not only was the financial sector going to serve the private sector, which had hitherto been demonized, but new private financial institutions, also emerged. At the same time the role of the Ethiopia’s central bank, the National Bank of Ethiopia (NBE), was also reformulated. Thus, financial sector reconstruction was at the top of the EPRDF’s government agenda some two decades ago. In undertaking this task the Ethiopian government adopted a strategy of gradualism: gradual opening up of private banks and insurance companies alongside public ones, gradual liberalization of the foreign exchange market, and so on, and a policy of, at least in intent, strengthening domestic competitive capacity before full liberalization. This is, restricting the sector to domestic investors, strengthening the regulatory and supervision capacity of the NBE, giving the banks autonomy, and opening up the interbank money market. In line with this strategy various proclamations and regulations have been passed since 1992.

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WASHINGTON, DC – Financial markets and the news media have one thing in common: they tend to oscillate rapidly between hype and gloom. Nowhere is this more apparent than in analyses of emerging economies’ prospects. In the last few months, enthusiasm about these countries’ post-2008 economic resilience and growth potential has given way to bleak forecasts, with economists like Ricardo Hausmann declaring that “the emerging-market party” is coming to an end.

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