Excellencies, Ladies and Gentlemen,

It is gratifying that the first session of the 2nd Phase of the High-level Forum is being held here today after a six month interval since the successful conclusion of the first phase of the policy dialogue for the industrial development of Ethiopia.  I would like to express my sincere appreciation to Ato Neway and Prof. Ohno for accepting to continue to lead this policy dialogue in the second phase.  My appreciation also goes to our colleagues in the Ministry of Industry and JICA for their advice and cooperation in the preparation for launching this second phase of our policy dialogue.

The main topic at this meeting is export promotion.  Export promotion is an important policy task in implementing the GTP, together with import substitution because it is essential for Ethiopia to maintain sufficient levels of foreign reserves so as to import the necessary equipment and materials for the nation’s sustainable development.  This is particularly important for Ethiopia, whose trade deficit has increased rapidly during the past few years.

In order to promote exports, we have to have goods to sell in the international market.  In this regard, Ethiopia is lucky enough to have several agricultural products that are competitive in the international market such as coffee, oilseeds and chat.  The export of fresh roses has been increasing in recent years, and honey has potential as an export item.  Therefore, a challenge for Ethiopia in agricultural exports is how to improve the quality of products so that higher value may be added to the export items and how to expand the market share by exploring new clients.  This is not such a difficult task.  Ethiopia can improve its performance by learning how to produce attractive, trendy products, based upon consumers’ tastes, as well as how to penetrate new markets.  The experience of JETRO, Japanese trading firms, and others can be shared.

However, it is a totally different story if the policy target of export promotion is manufactured goods.  The first question to raise is what industrial products Ethiopia has to export that can compete in the international market.  Perhaps only a few products are exportable today, and most of them are agro-processed products such as food items and beverages.  Some textile products and leather products are exported by Ethiopia, but these are either produced by foreign companies or with technical assistance from foreign companies, as far as I know.  AIKA, a Turkish textile company operating in Ethiopia, is often said to be a success story of foreign investment in this country.  Indeed, the factory is impressive with modern equipment and well trained workers.  100% of its products are exported.  However, AIKA is an exceptional case in my view, as it has an integrated, inclusive production system within itself, starting from the procurement of materials to the spinning, dyeing, sewing, packing, etc.  The increasing exports by AIKA are primarily achieved by its own initiative and effort, setting aside several incentives the Ethiopian Government provided when the company initiated the project.  The model AIKA presents cannot be easily copied by indigenous Ethiopian companies.  Nor can its expertise be shared with Ethiopian companies as AIKA does not depend on related Ethiopian companies.  It is entirely independent.  AIKA is a special, isolated case.

How to produce a manufactured product which can be sold in the international market at a competitive price is a task for an industrialization policy rather than for an export policy.  Ethiopia needs exportable goods first in order to increase its exports.  To that end, Ethiopia needs to develop industries which can compete in the international market.  For this, a series of issues must be addressed such as how to ensure a reliable supply chain, how to ensure a stable supply of power, how to improve the quality of labor, how to know consumer market trends, and so on.  It is also important to learn from foreign companies regarding management and technologies.  This is an issue related to technology transfer.  Therefore, export promotion of manufactured goods will require studies on a range of issues related to industrialization.  One session of discussions is not sufficient.  It is just the beginning toward extensive discussions.  If the knowledge and experience which Japan and other Asian countries have had is useful, we are glad to share it with you as we have done in the past.

Amesegenalehu.