The Policy Studies Institute (PSI) in collaboration with the Ministry of Industry, Japan International Cooperation Agency (JICA), and the National Graduate Research Institute for Policy Studies (GRIPS) held a policy workshop titled "Policy Trade-offs and Inconsistencies: why Ethiopian Manufacturing fails to grow fast?” on December 15, 2022, at Skylight Hotel, Addis Ababa.
The workshop organizer said the main aim of this workshop is to present papers that spark ideas among various stakeholders in the manufacturing sector. Ms.Megumi Hirose, the senior representative of JICA Ethiopia, said in her opening remarks that the Japanese Industrial Policy Dialog Initiative in Ethiopia aims to promote economic development and poverty alleviation through sharing development experiences from Japan and other Asian countries. She said that this initiative has been officially underway since 2009, and JICA, together with the team from GRIPS led by Professor Ohno, has conducted three phases of the project so far. Regarding policy inconsistencies, she said Japan lost about a quarter of its national wealth by WWII, but rose to become the world's second-largest economy in 1968. She cited the application of consistent development, the transformation of existing technology for development, the commitment of workers, the good culture of proper use of existing resources, the commitment of the government, and the strong cooperation of organizations that played an important role in achieving the economic miracle in about two decades without having natural resources as reasons for this success. She said that hopefully, today's speakers would provide ideas on the workshop leitmotif.
After this opening speech, H.E. Mr. Hassen Ahmed, State Minister of the Ministry of Industry, delivered a keynote address. He said Ethiopia is endowed with various natural resources and the country has a comparative advantage in the manufacturing sector. H.E. added that with all its comparative advantages, Ethiopia will achieve successful economic development by bringing in both domestic and foreign direct investment.
Following the keynote address, Dr. Amare Matebu, a lead researcher at FDRE, PSI, presented a paper to stimulate policy dialog. He said Ethiopian manufacturing is not as successful as it should be due to multiple challenges. He said that most countries can formulate sound policies but fail in implementation because policies are inconsistent. Dr. Amare said policy inconsistencies include contradictions, deviations, and irregularities in policies, strategies, announcements, laws, regulations, rules, and guidelines, as well as lack of coordination among stakeholders and across sectors, misunderstandings, and improper management of policies. Dr. Amare explained more about the policy inconsistencies in Ethiopia's production growth. In conclusion, Dr. Amare provided several recommendations to address the policy inconsistencies in Ethiopia's manufacturing sector.
Next, Professor Kenichi Ohno of GRIPS presented his paper entitled Resolving policy-tradeoffs and inconsistencies: Ethiopia's Mechanisms and Asian Experiences. He discussed the different typologies of policy trade-offs and inconsistencies based on Ethiopia's mechanisms and Asian experiences. He also explained the key players in industrial policy formulation and discussed in detail the contradiction mechanisms in Ethiopia's Tamirit Movement and the coordination mechanisms in the Ministry of Industry. Professor Ohno mainly discussed East Asian experiences and solutions. The professor shows various political experiences from Japan, Korea, Thailand, Vietnam, Malaysia, Myanmar, and so on.
Professor Ohno emphasized that there are many inconsistencies in policies and there are also many solutions. He added that success depends on the existence of human factors. The professor also emphasized the crucial role of national leadership in monitoring all policy inconsistencies and disagreements. He described the role of leaders as strong involvement, appropriate guidance, mandating, and monitoring. He also pointed to the importance of competent technocrats who can identify, resolve, and follow up on disagreements. He also emphasized the sufficient involvement of private actors. Finally, he suggested that foreigners can provide additional assistance if the government is on the right track.
After the two presentations, Professor Daniel Kitaw of Addis Ababa University moderated the discussion on the presentations and various ideas were raised. Participants raised their own experiences with policy inconsistencies in the manufacturing industry. They challenged the speakers to clearly identify those policy inconsistencies and the corresponding solutions.
At the closing of the half-day workshop, Professor Beyene Petros, Executive General Director of PSI, delivered closing remarks about the workshop. Professor Beyene emphasized that policy formulation should be based on evidence and knowledge and that it must start from the bottom up. Professor Beyene also advised policymakers to work on policy alignment, the human factor, and the need for strong leadership.