Thank you, Mr. Chairman,
Excellencies, Professors, Colleagues, Ladies and Gentlemen,

Endemen Aderachechu.

It is gratifying that the second round of the 2nd Phase High-level Forum is being held here today.  I would like to express my sincere appreciation to those who have made strenuous efforts to prepare for today’s session in which we will focus on export promotion for the second consecutive time.  Based upon our discussions last January and also the outcome of the Strategic Export Promotion Seminar, I do hope that lively and more pragmatic discussions will take place this morning.

Excellencies, Ladies and Gentlemen,

Export promotion is an important policy task for Ethiopia in implementing the GTP, together with import substitution, because it is essential for Ethiopia to maintain sufficient foreign reserves to allow the stable import of machinery, equipment and materials necessary for the nation’s sustainable development.  This is particularly important as Ethiopia’s trade deficit increased rapidly during the past few years, reaching a high of 6.3 billion USD in 2009/10.  However, a change in this trend was observed in 2010/11 when the trade deficit fell to 5.5 billion USD.  This is thanks to a substantial increase in exports, from 2.0 billion USD to 2.7 billion USD.  This positive trend should be encouraged, and I do hope that our policy dialogue on export promotion will be conducive to that end.

In promoting exports, I believe that there are several challenges to overcome.
First of all, there must be goods that can sell in the international market.  Finding sellable products or materials is the first step to take.
Secondly, those sellable products must be made attractive to consumers.  Tasteful labeling with inspiring explanations or a charming container makes a product attractive and tempting to consumers.  To achieve this, a little knowledge or expertise is useful.  The Strategic Export Promotion Seminar held this week was intended to address exactly these two challenges.  A customer-oriented approach is critically important, as we discussed last January.
Thirdly, logistic issues related to exports should be addressed.  Ethiopia is a landlocked country, and access to ports is a great challenge.  Costs and time required for ground transportation, customs clearance and shipping, either by sea or air, should be minimized so that products can be competitive in markets.  Today, this challenge is not addressed due to time constraints.  However, it is worth spending time on this issue in the future as it is a serious challenge, related to wide-ranging policy matters, from transportation and customs to infrastructure development.
Fourthly, marketing networks and product advertising are necessary in consumer countries.  If it is difficult to do everything by oneself, it may be an alternative to find a good partner.  This is a matter of matching between companies.  JETRO may play a certain role here by offering various opportunities for companies to meet, get to know each other and talk about business.

Excellencies, Ladies and Gentlemen,

In the previous round last January, I mentioned that it was not so difficult to find competitive products in agriculture or agro-processing but not very easy to find ones in manufacturing in Ethiopia.  I also said that Ethiopia had to start from developing export companies if it wanted to increase manufactured exports.  Based upon recent developments, let me add some more words.

When talking of export promotion in Ethiopia, I believe, it is useful to distinguish between agricultural and agro-processed products, and manufactured goods.  In view of the relatively large availability of agricultural products and materials already competing in the international market, indigenous Ethiopian companies would have better chances to expand exports if and only if they apply some innovative ideas such as mentioned in the second challenge.

As for manufactured goods, on the other hand, it seems to me that foreign companies have recently played a key role in increasing manufactured exports.  In the previous round, I mentioned AYKA, a very impressive Turkish textile company operating here.  Since then, Huajian, a Chinese shoe company, has established a factory and started exporting.  This is a change I have observed for the past year or so.  Ethiopia now has competitive export companies in textiles, leather and other products.  Therefore, if Ethiopia is successful in attracting foreign direct investment in areas of its comparative advantage, it is not a dream for it to keep increasing its manufactured exports.  In this case, all the four challenges I mentioned before would be handled by the respective foreign companies based upon their own expertise, experience and ties with the Ethiopian government.

Therefore, this would be a relatively easy approach.  However, if you allow me to offer a word of advice, it is worth addressing the following two issues for the better future of Ethiopia.  The first is how to ensure the continued inflow of foreign direct investment in targeted sectors.  Are the incentives currently offered sufficient in the light of global competition?  Are there any obstacles that could be removed for investors?  The second is how to encourage indigenous Ethiopian entrepreneurs to develop similar export companies.  How can the knowhow of foreign companies be shared with them?  What devices should be prepared?  These are issues worth exploring, but for that we will need a separate session.  If the knowledge and experience which Japan and other Asian countries have had are useful, we are always glad to share them with you.

Amesegenalehu.