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World Bank Threatens to Withhold Ethiopian Aid

  • Ashenafi Abedje

The World Bank, Ethiopia's largest donor, says it is considering cutting aid to the country if the current political impasse there continues. Ishac Diwan, the World Bank’s country director for Ethiopia, told English to Africa reporter Ashenafi Abedje the bank currently disburses four to five hundred million dollars a year in assistance to Ethiopia. He said that amount will increase if governance improves or decrease over time if governance fails to improve. The World Bank representative declined to be more specific, saying the exact figures will have to be determined by bank management in accordance with prevailing circumstances.

Mr. Diwan says if the bank decided to cut assistance to Ethiopia, the areas that would be affected first are the operations where government has most discretion, such as budget support. He says those least affected by aid cuts would be those funds that go much more directly to the poor, such as the support for safety net or rural road projects. The World Bank official says his organization has the responsibility of ensuring that the poor are not hurt by the current circumstances. Accordingly, he says, the bank tries to insulate all its programs from political and partisan manipulations to ensure they reach their intended beneficiaries -- the poor. Mr. Diwan says his organization is carrying out these efforts in close collaboration with other development partners.

The World Bank official says three factors determine his agency’s assistance levels to developing countries – factors reviewed by the bank each year. They include population size, the level of poverty and the quality of policy. Mr. Diwan says the World Bank and other development partners continue to reach out to the government and the opposition in Ethiopia. He says the donor agencies are conveying their concern that the critical conditions for development must be re-established as quickly as possible. He says these include the rule of law, the free press and the participation of civil society in decision-making.

Mr. Diwan says Ethiopia, which he described as one of the poorest countries in Africa, has made significant progress over the last decade in several areas – increasing the number of children attending school, reducing child malnutrition, saving millions of people during droughts, and accelerating economic growth in the past two years, before the political crisis. He says the World Bank has been an active partner with the people of Ethiopia, providing financial and technical support in many areas. Mr. Diwan says since the deterioration of the political situation in the country, the bank and other development partners have been reviewing their development strategies for Ethiopia.