Date: Saturday, 27 January 2018
PIA: Such development projects as water supply service, supply of energy (mainly electricity), housing and infrastructural services are critical determinants of success in almost all sectors of the economy. This is to mean that adequate water that meets our agricultural, industrial and other demands has to be preserved and there should be an effective water distribution system to ensure an effective utilization of the water resources we have already preserved. In a similar way, a sustainable supply of energy has to be secured for meeting our household, industrial and other consumption needs. Housing and infrastructural services such as road networks, ports and airports, as well as the provision of essential social services, such as educational and health care services are also very critical factors that determine the degree of our achievements in other sectors. The central point is our achievements in the economy cannot be assessed without looking at these fundamentals of development projects.
While it is a very important sector, for reasons associated with laying the foundation with regard to the aforementioned development projects, the progress in our industrial efforts is not commendable. Supplying unprocessed materials for domestic and export markets is not effective. If cotton, leather products, dairy and meat products or any other item is sold in its raw material form, it is not profitable. A considerable value is added if the items are processed and competitively supplied. Consider the difference in terms of the value added in the process and the improvements in the quality of products when vegetables are supplied in sacks and when they are packed. Hence, we need to think in terms of the employment opportunities and the subsequent contribution of strengthening our value added capacity in our GNP. Of course, strengthening our value added or manufacturing capacity in our economy takes time and requires huge capital and technological investments. There are no shortcuts in relation to strengthening our value added capacity. We need to be “long-termists”. What is important is that we need to be concerned about how we can incrementally address such challenges. In strengthening our value adding processes, we need to consider that the markets for our exports are very competitive. Hence, our products need to be competitive in terms of quantity and quality and we need to reduce cost of production in order to be competitive. Therefore, we need to fight the culture of supplying unprocessed and unfinished products in domestic and export markets. In a nutshell, we need to assess our performance from this perspective.
In regard to our marine resources, there is a potential to produce 80-120 tons of fish per year. In the last 25 years, even 10% of this potential has not been reached. One major challenge is that our traditional practices have not been yet transformed and modernized. This sector also requires huge capital, technology and human resources investments. We also have to think of adding value in this sector, too. This sector needs to be mainly export-oriented; it should not be limited to domestic markets. In this sector, export practices have not been successful, including those attempts that were made by foreign investors. Foreign investment in this sector has not contributed to enhancing the infrastructure of the sector; it is oriented towards exporting raw products. What was tried in Gelalo, Tio and Edi, aiming to improve the harbors and the cooling system and fish preserving mechanisms, was also not effective. In this sector, we need to develop and encourage partnerships with foreign investors as foreign investment alone is hardly productive. The achievements and investment requirements regarding other marine resources, such as salt, are similar. This year, while they are yet in a process of maturation, there are foreign investment ventures in collaboration with Egypt and other neighboring countries.
However, the best option is to strengthen our own capacity (in terms of various facilities, expertize, technology, and others) in order to properly exploit our resources in this area. While the subsequent achievements need to be assessed critically, we have established a college and various training services have been provided as part of strengthening the expertise required for improving our capacity to make use of the resources available in the sector.
Concerning our experiences in tourism, there have been distortions in this sector. This sector is considered to be highly prospective offering shortcuts to increased profits and revenue. Consequently, hotels and restaurants have mushroomed, and many of them happen to be idle. Without addressing the challenges mentioned previously (supply of water, electricity, transportation facilities and the like), it is hardly possible to develop this sector. The services associated with tourism need to be improved in terms of their quality, as quality matters in attracting investors. The tourism advantages (such as topography, climate and the like) we are endowed with are there. There needs to be a clear strategy for reactivating this industry and we need to assess what we have been doing and what we need to do in order to move forward in this sector and improve its contribution to our overall GNP.
In sum, what has been achieved in relation to fundamental development projects such as water supply services, electricity, infrastructure, transportation facilities, as well as in the provision of educational and health care services is commendable. We can assess the experience gleaned and critical mass accumulated so far to catalyse progress in the sectors where performance has been lagging.
PIA: 2018 priorities, in general, are part and parcel of the aforementioned ongoing projects. We are in better position in terms of the water resources that have already been harvested and the coverage of such projects in the economic development zones of our economy. 200-300 million cubic meters has been already preserved and it is estimated that around 400-500 million cubic meters of water is expected to be preserved in 2018. Therefore, while it requires huge capital and technology, we have a plan to transform our agricultural practices by scaling-up irrigation practices. Additionally, other agricultural inputs need to be in place for this objective to be finally materialized.
In 2018, we will move forward in scaling-up the degree of utilization of the water resources that have been preserved in our dams in order to enhance the return of our water resources investments. In relation to this issue, the supply of electricity and the provision of transportation facilities are necessary conditions for ensuring effective utilization of water resources and establishing an effective water distribution system. Since road networks are also critical for transporting agricultural produce to the markets, there are a number of preparations in the process for upgrading the quality of road networks connecting the economic development zones in the country and the places within the zones. Hence, these issues are going to be addressed in our 2018 plan.
Adequate supply or provision of all the resources such as machinery, electricity, water, transport facilities and the like that are required for transforming our economy are useless unless we secure the required expertise that is necessary for operating the apparatus of the economy. Therefore, a critical assessment of our investment in education is going to be part of our major priorities for 2018 and the next two years.
PIA: For our citizens to be productive, we need to solve the housing problem facing us first. So far the projects aiming to solve housing problems in the country have not been successful. There were houses, for example, that were built by a Korean company in Asmara and Massawa. However, such projects solved only a very small fraction of the problems. While all the housing problems we have cannot be solved in the short term, there should be incremental annual progress or improvements that cumulatively solve the problem in the long term.
There have also been recent attempts to build houses through foreign companies. However, such projects are also not that successful. It is important to strengthen our own capacity in the sector. To this end, strengthening the cement factory is part of our priorities as securing construction inputs is very crucial. However, the factory experienced in the past shortage of electric supply and more importantly, its production capacity is limited. For this reason, we import cement to complement what is produced by the cement factory. There are also challenges associated with other construction inputs. Appropriate technology has to be employed in this sector. The precast that was introduced in the last few years has not has not been as effective due to some problems associated with management, manpower, machinery, materials and other facilities. To solve this problem, as indicated above, we need to strengthen our capacity of producing construction inputs. With regard to introducing an appropriate technology, the precast project in Massawa has been expanded and a new one has been established in Asmara. The one that is in Alebu will also be strengthened further. All these are associated with our new 2018 residential housing plan.
PIA: The salary increment in the civil service should have been implemented in 2017. This issue is of course innately correlated to GDP growth or with wealth of the country. The improved lifestyle of citizens goes parallel with the gross domestic product. At the same time, what is of paramount importance is not increment of nominal salary to people in the civil service, but the purchasing power of the currency. People have to buy their daily necessities with the salary they receive. That is one aspect that has to be seen when talking about a salary increment. Hence, a salary increment cannot not be decided at one point in time with one decision. The market situation is a determining factor, not only at national level but also at international level, when talking about a salary increment. It has also to be seen vis-à-vis the speculations that are negatively affecting the stability of markets. Hence the program must be accompanied by appropriate fiscal and monetary policies for controlling inflation, stabilizing the exchange rate, as well as regulating the balance of payments. Ultimately, the Nakfa has to increase its value compared to other currencies and its purchasing power. All these factors have to be seriously considered. For the salary increment to become effective we should ensure the supply of basic items with a fair price, otherwise that will have a negative effect on the livelihood of the people.
The introduction of the new Nakfa currency coupled with the controlling mechanism introduced has given us a good picture as to where we are heading. Promising result are being observed in controlling inflation and the supply of basic consumer goods. Parallel to that, job opportunities should be created in all sectors.
The salary increment that was supposed to begin in 2017 has been implemented partially for some categories. With the completion of the requisite documentation and other relevant factors, the salary increment will be implemented fully this year retroactivity for 2017. With that, however, the culture of saving should be developed. For that, a conducive atmosphere should be created, coupled with increased awareness of the salary recipient. Meaningful and effective monetary policies should also be put in place, coupled with balancing income and expenditures.
PIA: We should not take external hostilities as a point of reference. With the existence of external hostilities or not, we should work for building clean, lean and effective government institutions. The contribution of the government and its institutions in national development should not be taken lightly. It is vital for a government that works for the development of the country and for the improvement of the quality of life of its citizens to become clean, lean, and effective. The civil service should not be saturated with unnecessary human resources that have no contribution in the economic development of the country; this would only incur avoidable wastage. With the introduction of technology, it is possible to conduct activities with a minimal workforce. Inculcating the culture of work coupled with the introduction of technology will ultimately contribute to realizing the desired outcomes. That was the secret behind our success in the armed struggle for independence. With few combatants and with minimal resources we were able to defeat a very large and strong enemy army to realize our independence. The level of commitment and sacrifice summoned during the liberation was cannot, naturally, be replicated in its totality in this new setting. But we have to be inspired by these values and norms, which had a multiplying effect, as we strive to build a lean, clean, efficient and effective civil service.
Furthermore, we should not compare ourselves with others; rather we should make a critical assessment of our experience in the past and try to develop in a way that fits with the order of the day. In order to develop the economy and improve the lives of citizens, there needs to be a recurrent evaluation in order to maintain and consolidate the positive aspects while addressing the shortcomings for better outcome.
We should not take external hostilities as a point of reference. With the existence of external hostilities or not, we should work for building clean, lean and effective government institutions. The contribution of the government and its institutions in national development should not be taken lightly. It is vital for a government that works for the development of the country and for the improvement of the quality of life of its citizens to become clean, lean, and effective. The civil service should not be saturated with unnecessary human resources that have no contribution in the economic development of the country; this would only incur avoidable wastage. With the introduction of technology, it is possible to conduct activities with a minimal workforce. Inculcating the culture of work coupled with the introduction of technology will ultimately contribute to realizing the desired outcomes. That was the secret behind our success in the armed struggle for independence. With few combatants and with minimal resources we were able to defeat a very large and strong enemy army to realize our independence. The level of commitment and sacrifice summoned during the liberation was cannot, naturally, be replicated in its totality in this new setting. But we have to be inspired by these values and norms, which had a multiplying effect, as we strive to build a lean, clean, efficient and effective civil service.
Furthermore, we should not compare ourselves with others; rather we should make a critical assessment of our experience in the past and try to develop in a way that fits with the order of the day. In order to develop the economy and improve the lives of citizens, there needs to be a recurrent evaluation in order to maintain and consolidate the positive aspects while addressing the shortcomings for better outcome.
The salary increment in the civil service should have been implemented in 2017. This issue is of course innately correlated to GDP growth or with wealth of the country. The improved lifestyle of citizens goes parallel with the gross domestic product. At the same time, what is of paramount importance is not increment of nominal salary to people in the civil service, but the purchasing power of the currency. People have to buy their daily necessities with the salary they receive. That is one aspect that has to be seen when talking about a salary increment. Hence, a salary increment cannot not be decided at one point in time with one decision. The market situation is a determining factor, not only at national level but also at international level, when talking about a salary increment. It has also to be seen vis-à-vis the speculations that are negatively affecting the stability of markets. Hence the program must be accompanied by appropriate fiscal and monetary policies for controlling inflation, stabilizing the exchange rate, as well as regulating the balance of payments. Ultimately, the Nakfa has to increase its value compared to other currencies and its purchasing power. All these factors have to be seriously considered. For the salary increment to become effective we should ensure the supply of basic items with a fair price, otherwise that will have a negative effect on the livelihood of the people.
The introduction of the new Nakfa currency coupled with the controlling mechanism introduced has given us a good picture as to where we are heading. Promising result are being observed in controlling inflation and the supply of basic consumer goods. Parallel to that, job opportunities should be created in all sectors.
The salary increment that was supposed to begin in 2017 has been implemented partially for some categories. With the completion of the requisite documentation and other relevant factors, the salary increment will be implemented fully this year retroactivity for 2017. With that, however, the culture of saving should be developed. For that, a conducive atmosphere should be created, coupled with increased awareness of the salary recipient. Meaningful and effective monetary policies should also be put in place, coupled with balancing income and expenditures.
PIA: We should not take external hostilities as a point of reference. With the existence of external hostilities or not, we should work for building clean, lean and effective government institutions. The contribution of the government and its institutions in national development should not be taken lightly. It is vital for a government that works for the development of the country and for the improvement of the quality of life of its citizens to become clean, lean, and effective. The civil service should not be saturated with unnecessary human resources that have no contribution in the economic development of the country; this would only incur avoidable wastage. With the introduction of technology, it is possible to conduct activities with a minimal workforce. Inculcating the culture of work coupled with the introduction of technology will ultimately contribute to realizing the desired outcomes. That was the secret behind our success in the armed struggle for independence. With few combatants and with minimal resources we were able to defeat a very large and strong enemy army to realize our independence. The level of commitment and sacrifice summoned during the liberation was cannot, naturally, be replicated in its totality in this new setting. But we have to be inspired by these values and norms, which had a multiplying effect, as we strive to build a lean, clean, efficient and effective civil service.
Furthermore, we should not compare ourselves with others; rather we should make a critical assessment of our experience in the past and try to develop in a way that fits with the order of the day. In order to develop the economy and improve the lives of citizens, there needs to be a recurrent evaluation in order to maintain and consolidate the positive aspects while addressing the shortcomings for better outcome.
