Impact of Economic Reforms on Economic Issues: A Study of Ethiopia

Abstract

This paper is an attempt to investigate the impact of economic reforms on the economic issues in Ethiopia. Different economic issues -parameters determining the effectiveness of economic reformsare separately discussed to measure how far Ethiopia has benefited from the reform policy. A simple and comparative analysis of various economic indicators between the pre-reform and post-reform, that is, between 1985/86-1991/92 and 1992/93-2001/02, reveals that those economic reforms have revamped the economy by moving its GDP from its long-standing poor record to a respectful growing state. Nevertheless, the reforms have failed in attaining other direct economic objectives, such as standard of living, external debt, trade balance deficit and current account deficit. Economic reforms have, no doubt, attracted a significant amount of private investment, but its volume started declining within the reform period and so were privatization proceeds. This study suggests that a full-fledged and committed reform is indispensable at the earliest to attaining the full benefits of reform policy.