World Bank resumes aid to Ethiopia

Reuters
July 13, 2006

But Wolfowitz, on a seven-nation African tour, said the World Bank's re-engagement in Ethiopia under a new aid initiative must be followed by government action to correct the problems that sparked deadly election violence.

"I think there is more reason to feel confident that people are learning the right lessons from the experiences of last year," Wolfowitz said.

The World Bank "can only go so far in creating confidence by talking confidently. If the underlying situation doesn't support that then at some point you not only lose credibility but you accomplish nothing," he added.

Private sector representatives he met said they were more confident in Ethiopia's prospects since a crackdown on opposition supporters after May 2005 polls, and urged more help from the bank -- the country's largest investor.

They also asked Wolfowitz to speed up the involvement of the World Bank's private sector arm, the International Finance Corp., in Ethiopia, whose presence there is hampered by foreign exchange controls and restrictive laws.

After lengthy private meeting with Prime Minister Meles Zenawi, Wolfowitz told a news conference the World Bank would continue to work in Ethiopia but it would require the right political atmosphere and conditions.

Political harmony

"As I indicated to the prime minister, the events of last year required us to step back and to think about how we could operate in this environment in a way that contributes to political harmony in this country," Wolfowitz said.

"My impression is that in the last few months there have been compromises made by both the government and the opposition and I would encourage people to continue to do that," he added.

The World Bank and other donors cut off direct aid to Ethiopia last year in response to a crackdown on dissidents and a treason trial against opposition leaders criticised by the West as politically motivated.

Claims of vote fraud that favoured Meles sparked violent clashes between civilians and security forces after the election. Scores of people were killed.

In a meeting with opposition and government members of the country's first multi-party parliament, Wolfowitz urged bolder measures in building a democratic political system in Ethiopia, while also recognizing some change in past months.

The World Bank recently resumed work in Ethiopia with the approval of the Protection of Basic Services (PBS) project, which provides, water, health and education.

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