Ethiopia bets on grand projects in drive for industrial power
By Edmund Blair and Aaron Maasho
ADDIS ABABA (Reuters) - Chinese workers mingle with Ethiopians putting the finishing touches to a metro line that cuts through Addis Ababa, one of a series of grand state infrastructure projects that Ethiopia hopes will help it mimic Asia's industrial rise.
Brought to its knees by "Red Terror" communist purges in the 1970s and famine in the 1980s, Ethiopia has been transformed in the last quarter century, becoming one of Africa's fastest-growing economies.
At the heart of the state's "Growth and Transformation Plan" are railway, road and dam projects to give the landlocked nation cheap power and reliable transport, as well as the metro line - the first urban light railway network in Sub-Saharan Africa.
"This is the future," said Abate Yaye, 27, from the poor south as he helped complete the $475 million system being built by China Railway Engineering Corp, much of it on concrete stilts to keep it above the crowded streets of an expanding capital.
"We will become an example for the whole of Africa."
Hefty state-led investment has kept the economy of Africa's second most populous nation growing at more than 8 percent a year for over a decade, but economists say Ethiopia's rulers need to relax their grip and give room for more private enterprise to maintain momentum.
Foreigners cannot invest in banking and telecoms and foreign retailers are barred, while Ethiopian banks are directed to buy low-yielding government development bonds.
"This is a country where, relative to rest of Africa, there is pretty good state capacity and a commitment to a development mission," said S. Kal Wajid, the outgoing Ethiopia mission chief for the International Monetary Fund. Continued...