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Viewing cable 07ADDISABABA494, Ethiopia Gets It -- Economic Reform is Critical, Title I

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Reference ID Created Released Classification Origin
07ADDISABABA494 2007-02-20 14:36 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Addis Ababa
VZCZCXYZ0017
OO RUEHWEB

DE RUEHDS #0494 0511436
ZNR UUUUU ZZH
O 201436Z FEB 07
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4662
INFO RUEHNR/AMEMBASSY NAIROBI PRIORITY 2843
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
UNCLAS ADDIS ABABA 000494 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FROM AMBASSADOR YAMAMOTO FOR A/S FRAZER 
USAID/AFR/AA WNORTH, WWARREN 
USAID/DCHA/AA LROGERS, WHAMMINK 
 
E.O. 12958: N/A 
TAGS: EAID EAGR ECON ET
SUBJECT: Ethiopia Gets It -- Economic Reform is Critical, Title I 
Food Assistance Needed Urgently for Urban Poor 
 
REF: A. ADDIS 0115 
B. ADDIS 0072 
 
1. (SBU) This is an action message.  Post seeks an update on the 
status of approval and expected delivery date of Title I food 
assistance for Ethiopia.  See para 6. 
 
2. (SBU) Summary:  Ethiopian Foreign Minister Seyoum called in the 
Ambassador February 19 to underscore the urgency of Prime Minister 
Meles' request for Title I food aid.   The Foreign Minister 
reiterated the request to visiting Assistant Secretary Frazer in 
January and again during the AU summit.  The Foreign Minister 
stressed that the plight of the urban poor is worsening due to 
rising prices of grain; Title I food assistance will be aimed at 
alleviating the critical food needs, but will also facilitate needed 
reforms.  The GOE took another important step in December toward 
joining the WTO in the full knowledge that the accession process 
would entail making the necessary economic and political reforms, 
The Ethiopian Government "gets it" and is committed to reforming 
grain marketing and internal market structures.    End Summary. 
 
---------------------------- 
Waiting for Word on Title I: 
---------------------------- 
 
3.  (SBU) Foreign Minister Seyoum Mesfin called in the Ambassador, 
accompanied by the political/economic counselor, on February 19 to 
raise Somalia issues (reported septel) and the urgency of a Title I 
food assistance request made to visiting Assistant Secretary Frazer 
by the Prime Minister and Foreign Minister in early January, and 
reiterated during the AU summit in Addis Ababa in late January. 
Seyoum stressed that the food assistance is urgently needed to ease 
the plight of the urban poor.  Prices have risen over 20 percent in 
the past year and continue rising despite the harvest season. 
Thanks to abundant rains and increased planting of cash crops, rural 
areas are generally doing better on meeting food needs.  Unlike 
rural areas, where family networks and safety net works programs 
support those facing economic hardship, the urban poor have no such 
safety net.  The Foreign Minister pleaded that the food assistance 
is urgently needed to meet the current needs of this urban 
population. 
 
--------------------------- 
Critical Reforms Necessary: 
--------------------------- 
 
4.  (SBU) Farmers consuming more of their production and converting 
fields from grains and basic food stuff for cash crops, distribution 
problems and structural problems are at the heart of the rising 
prices and acute tightening of food supplies in the cities.  The 
Foreign Minister noted that the Title I food assistance can help 
meet the short-term need to stabilize grain prices in the cities, 
and also enable Ethiopia to use the money generated from sales of 
food for promoting economic reforms.   The Foreign Minister stressed 
that the Title I food assistance would enable needed changes. 
 
5. (SBU) The Prime Minister has stated clearly that Ethiopia is 
fully committed to joining the WTO and will make the necessary 
political and economic reforms to do so.  The Foreign Minister, as 
well as the Prime Minister and other senior officials, have 
consistently emphasized this commitment with the Ambassador at every 
meeting and have, for the first time, requested USAID technical 
assistance in this area.  The GOE also underscored the importance of 
using this assistance as a stimulus for efforts to focus on reform. 
 We can and should use this issue to work with the Ethiopian 
Government on necessary structural reforms necessary to improve the 
conditions of the urban poor.  We should also take a closer look at 
how the GOE, working in partnership with the U.S. and other donors, 
can ease urban poverty. 
 
6. (SBU) Post requests an update on the status of Title I food 
assistance, including the expected delivery date.  Once the GOE has 
our assurances on an expected delivery date, it can begin releasing 
some of its own emergency food stocks to alleviate supply imbalances 
in Ethiopian cities. 
 
YAMAMOTO