Fri, Jul 14, 2006 - Page 6 News List

Wolfowitz hails return of foreign aid to Ethiopia

AGENCIES , ADDIS ABABA

World Bank President Paul Wolf-owitz on Wednesday called the bank's resumption of aid to Ethiopia a sign of improved confidence in the country since donors cut direct support over political turmoil last year.

But Wolfowitz, on a tour of seven African countries, 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 polls in May last year, and urged more help from the bank.

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 a 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.

"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.

Wolfowitz said his visit with Meles was productive considering the political turmoil the country had undergone in the past year. The World Bank recently resumed its activities in Ethiopia after elections Meles's party won last year were marred by protests and riots that left 88 citizens dead at the hands of police.

Wolfowitz said though Ethiopia had been through some difficult times, economic progress was being made. He said there was a long way to go in terms of scaling up aid in Ethiopia.

The World Bank's resumption of work in Ethiopia has occurred under the Protection of Basic Services project, which provides water, health and educational assistance.

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