Ethiopia plays down impact of withheld donor support

By Anthony Mitchell (Associated Press)

December 30, 2005

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ADDIS ABABA – Finance Minister Sufyan Ahmed said Friday that Ethiopia considers it “unacceptable” that donors plan to withdraw $375 million in direct aid to the government following a recent crackdown on the opposition and the independent press.

“Ultimately it is the poor who are the victims of this decision,” Sufyan told the Associated Press. “It is their basic services that will be affected at the community level.”

Ethiopia receives some $1.9 billion in aid a year -making it one of the largest recipients of foreign assistance in Africa. About $700 million is for emergency assistance while the rest is for development programs. Aid accounts for up to a third of the government’s entire budget.

Direct budget support – aid funds that are pumped into the treasury for the government to use at its discretion -account for about 10% of the Ethiopian budget.

Donors have said these funds will now be reallocated U.N. and aid programs intended to curb poverty among Ethiopia’s estimated 77 million people. This would include improvement of health care and the supply of clean water.

Sufyan said the shift in financing is a lengthy process that will hurt the poor.

Ethiopia is among the poorest countries in the world. Half of all children are physically stunted because of food shortages. Some 30 million people live on no more than $1 a day.

Donors plan to stop channeling aid through the government following political unrest that claimed the lives of at least 46 people in November. Another 42 died in June in similar protests, which began after the main opposition parties accused authorities of rigging May 15 polls that returned Prime Minister Meles Zenawi to power.