Pressure for the release of the detained  opposition leaders is mounting. The [U.N.] Human Rights Commissioner was talking about their release on bail; may these people get what is said?

I have heard about the statement made by the Human Rights Commissioner; and I believe she is entitled to her opinion like anybody else. We made our views quite clear that the people in detention are in detention with clearly expressed consent of the courts concerned and consistent with Ethiopian laws. I do not believe there is anything in the process that contravenes Ethiopia’s laws and due process. To the extent that there are no such rules, we do not see any reason why we change direction. I am aware that many of our friends want us to resolve this problem “in a political manner”. Our view has been and continues to be that this is a legal issue that needs to be sorted out through the legal process.

You said again and again that the issue of the detained opposition leaders is on the hands of the court; but a politician “never says never”, as the saying has it. Is there any negotiation behind the scenes spearheaded by the diplomatic community to bring the opposition and the government to the same table? How far did they go?

There is no discussion on the detained opposition leaders. The government clearly states that this is an issue in the jurisdiction of the courts. The executive will not interfere. If there are people who think that a politician will never say no, we respect [their views]. But, our position is “Ok is Ok and No is No”; there is no other definition.

I know the matter is in the hands of the court, but I recall it was stated earlier that they were charged with capital offence; for which, of course, the maximum sentence would be death, if not life in prison. Could you foresee that actually being a reality? Your personal opinion?

I am sure you would understand that I would hate to speculate about what the courts might or might not decide. It could be interpreted as prejudicial to the process. And therefore, I would cross that bridge when we get there, if we come to it. However, I think I need to remind you that in terms of passing death sentences in Ethiopia, the record in the past decade or so seems to indicate that the courts do not use that power that they have. And the number of death sentences passed over the last decade could not be more than a handful. Having said that, I am not in a position to prejudge what the courts might do and what might follow once the courts decide.

I would like to remind you what you had said prior to the election: your party and your government wanted to carry out a flawless election that would be credible in the eyes of the Ethiopia people and the international community. This was to form a legitimate government by the party that was to win the election. We all know how the election went and the kind of hardship and difficulties that followed. In retrospect, do you think your government has legitimacy in spite of these difficulties?

The issue of legitimacy is not even to be questioned. Except for an election observer, whose [report] is not worth more than the paper it was written on, the whole world has recognized the results of the elections. Some of them have declared this in public. Almost all European leaders wrote me congratulatory letters when I was elected Prime Minister. Above all, the Ethiopian public has accepted the result and moved on with its peaceful life. We know that there are some people who refused to acknowledge this, but what is most important is the Ethiopian public has accepted it.

The sustainable development and poverty reduction strategy has been completed for the next five years. Senior cabinet ministers and regional governments have deliberated on it and members of parliament will do so soon. What is the focus of this strategy? For Ethiopia to register economic growth for a fourth consecutive year what should be done? And what is the plan to bring about sustainable development in the country?

The five-year plan is where the Government will be focusing on the expansion of social, economic and infrastructural development, particularly in education, and health. Achieving the aim of the five-year in the target to provide basic education for all citizens by 2015 is the major task for the government. In relation to this, expanding education in secondary and higher levels and improving its quality delivery will be an important issue.

The government has prepared different strategies for sustainable growth for the next years, especially during 2006/07. Agriculture still remains our priority for the next five years for it is a primary source of growth during next year’s development endeavor: preparations are underway to increase productivity in agriculture; farmers are well prepared; inputs such as seeds and fertilizers are already imported and ready for distribution.

We will also give more attention to housing construction and the development of micro and small enterprises in urban centers. We do project enhanced activity and growth through more private investments in the areas of industry and other sectors. Especial attention will be provided to sectors such as floriculture, fruits and vegetables, textile, cement, leather, and sugar development. Finally, we will pursue our plans in expanding infrastructural works in the areas of electric power, telecommunication, as well as road construction.

The government says that there was economic growth for the last three consecutive years. On other hand, it is said that there is inflation. Are we poorer now than what we were three years ago?

I can simply point out to the track record. I think it is amongst Ethiopian journalists that it is assumed if there is growth there will not be inflation. There is no one to one relationship between growth and inflation. Indeed, in most instances, high growth leads to high inflation. Not in all instances but in most instances. Of course, as I said earlier there is inflation and the rate that I have now is about 11.2pc. But there is also high growth. And we are certainly not poorer now than we were three years ago; you might remember we needed hundreds of millions of quintals of food aid, to merely survive, three years ago.

Members of your cabinet were declaring growth in GDP for three consecutive years. However, not much has been changed in terms of GDP growth per capita. Would you still consider this a meaningful growth?

You may not have the data, but where there is growth in the economy, there is bound to be growth in the GDP per capita. Ethiopia’s GDP per capita has indeed registered growth.

The inflation is attributed to the economic development of the country. Some people, however, wonder how an economy grows when the purchasing power is getting weaker.

Economic growth is in actual fact there and it is confirmed through different ways. It does not mean that when there is economic growth, there is no inflation. There are two sources of price increment in this country: one is internal factor and the other is due to external factors. For instance, the price of oil increases – exuberantly - in the international market. The Government does not transfer the burden to the public. It still shoulders it although it spends hundreds of millions of Birr. It is now understood that the price of fuel will not be declining soon; and the government too will not continue its subsidy for so long. We intend to adjust it gradually, ensuring that it will not harm the public.

We have heard that your economic advisors have conducted studies on the impact of fuel price on the economy and proposed adjustments to be applied beginning February 2006. They suggested an increase of 25pc on benzene and 15pc on diesel in order to adjust the fuel price that remained the same since December 2004. They warned failure to act would burden the economy with an additional 200 million dollars by June 2006. Why are you hesitant to follow the advice? You may be concerned with the mounting inflation impact on households but the consequence of a huge subsidy is taking away from building schools, hospitals and infrastructure developments.

The studies you said you have heard about, I did not hear. Nor have I seen the data you just mentioned. However, we do have regular studies that analyze the impact of oil price on government budget, foreign exchange reserves as well as the macroeconomic stability. Based on these studies and after examining the pros and cons suggested, the Cabinet usually passes decisions.

There are two fundamental reasons why we have not adjusted the fuel price. We were anticipating the world price would go down, for it was increased due to demand and most importantly due to the political crisis around oil producing countries. Take the case of Iran, for instance, which has contributed to the sudden shock. We had hoped that we could have handled the increase through government subsidies if the price goes down should the political tension in Iran subsided.

On the other hand, we wanted to give the issue more time, concerned that fuel price adjustment at a time when there is urban inflation would exacerbate the inflationary factor. Yes, we should always keep a balance whether we should pay for oil bills or build roads and schools. And we do balance. We do believe that we cannot continue subsidizing fuel on a permanent basis, thus have to adjust it on an incremental manner.  

You told Parliament a while back that there is 1.2 billion dollars in the central bank reserve. I would like to know whether this is gross or net reserve. Businesses are neither provided the amount of foreign currency they require nor are they released on time, leading the business community to speculate that there is indeed a shortage in the reserve.

The foreign exchange amount with the National Bank is a net reserve. This is not to be sold to businesses for the National Bank does no longer sell foreign currency to them. It is from the commercial banks they could buy, while they first buy it either from the National Bank or exporters. If there is foreign exchange supply problem between business and the banks, then we will take corrective measures; it is to increase the foreign exchange supply by the National Bank to the commercial banks.

The Ethiopian economy is rather characterized by double digit inflation, budget and trade deficits, increasing domestic borrowing by the government, increasing oil bill and huge subsidies to stabilize local fuel prices. How is it possible to forecast positive growth in spite of all these?

Some of the things mentioned have questionable sources of information. Even if we assume these to be credible, no economist would say speedy economic growth cannot be achieved [in such circumstances]; unless, of course, it is someone who does not understand economics. Levels of deficit do not hamper growth; it is on what the domestic borrowing and the budget deficits have been spent that determines [growth]. In practice, inflation comes alongside economic growth due to increased circulation of money. Take for example the Korean experience when they had fast track economic growth in the 1960s, 70s, and 80s; their average inflation rate was 25pc. Is speedy economic growth possible, yes we have seen it here and we can be certain we will have it in the coming year.   

Do you think the economy is suitable for the private sector?

The Government believes that the private sector is the engine of growth in Ethiopia. And it does try to create a conducive environment so that it invests. We believe we have made enormous progress in that regard, although it is obvious that there need to be a lot of improvements. We shall continue to improve the economic and investment environment so that it becomes more and more enabling as far as the private sector is concerned, in terms of sustaining the economic growth that we have achieved over the past three years. We have put in place, in our five-year plan, what we believe will allow us to do so. We are confident that at least as far as next year is concerned, the economic outcome will likely be as favorable as it has been during the current year.

Judging from how the state media sets the agenda these days, your government’s priority looks more on the economy. Your critics, however, would like to see you focus on political issues too so that the current political impasse could be resolved.

It has always been our contention that the fundamental problem of Ethiopia is its poverty. Ethiopia has many problems, but the crucial problem, and the source of all problems, is poverty. And poverty has to be addressed by proper growth. And the focus of any Ethiopian government at anytime should be on economic development. That has been our view for many years and I suspect it will continue to be. This does not mean, however, we should focus on the economic issue to the exclusion of all other issues, although a number one priority should still be economic growth. The other issues should follow.

Nor am I aware of any international organization with which we disputed on the need for focusing on poverty reduction as a matter of top priority. In fact, the overwhelming consensus appeared to be that the number one agenda should be economic growth but that should be perused in a manner that does not exclude other issues, including political, regional, urban, as well as social issues.

Ethiopia’s development partners are not happy because the government is spending a huge amount of resources on the building of physical infrastructure particularly on electric power and telecom infrastructure. Both the IMF and the World would like you to reduce this spending.

The IMF is of the opinion - I am not sure whether it is fully shared by the World Bank although it is possible - that the infrastructural investment carried out by the public utilities, ETC and EEPCo, may jeopardize our balance of payment situation. And they suggest it needs to be adjusted to fit the country’s balance of payment. However, the expenditure by these companies has no impact on our budget for they are carried out by their own respective sources and in most instances from loans that they take out on the basis of their own business performance. If there is any issue, it has to do not with priorities of the government budget because we as a government do not invest a cent. I have not heard anyone opposing the type of investments that we are making in telecommunications as such; nor in the power generation and distribution. I do not see any serious problem here.

What is rather at stake is the balance payment situation and we believe we have carried out the investments in these areas in a manner that does not jeopardize our balance of payment stability. Our perspective is slightly different from that of the IMF. And I believe the result will prove us right at the end.

There was a resolution that the Addis Abeba City Administration will be under caretaker administration should the elected council members were to fail to takeover the city until April 18, 2006. Reports confirmed that they have indeed failed to fulfill the quorum. Do you believe this administration will bring a peaceful resolution and transition?

The best option, as it is always, is to administer a city by those elected by the people. The City has been without permanent administration from October to April. Parliament has passed a resolution to transfer power to the elected council members. However, should they not to takeover the City, a caretaker administration will be in charge for a year and then an election will be held in the city. Based on this, the national electoral board is responsible to register those who are wiling to take the city and report. If they fulfill the quorum, they will takeover the administration. If not, the provisional administration will take its place, according to a decision by Parliament.

I do not think the provisional administration has any negative consequence on the peace and stability of the city. Since October, the city has no permanent administration and it has been without problems.

How are members of the Addis Abeba’s caretaker administration going to be selected? Please share with us some of the criteria for the selection, will it be composed of political party members?

The selection process of the members of the caretaker administration in Addis Abeba would use criteria such as the qualification to perform the job; whether they have the skills, and the experience. Are they willing to perform the job within the framework of the constitution of the land, the charter of Addis and the laws [of the country]? These should be the criteria I will use. And on the basis of those criteria, the administration will be appointed from non-party people. As far as its independence is concerned, the Addis Abeba administration is independent within limits, as any administration. Even led by the opposition, it would still be accountable to the Prime Minister under the charter of Addis Abeba. And the Prime Minister would still have the right to dismiss such an administration even if it were to be an elected one. Therefore, there is a limit within which any administration in Addis – temporary, permanent, elected or non elected - will operate in Addis. But the charter does provide autonomy to the Addis Abeba Administration and it will have this full autonomy.

What would be the major duties of the caretaker administration? What is the difference between the existing provisional administration and the caretaker administration?

In my report to Parliament, I had submitted a proposal, which was endorsed, which, among other things, defines the key responsibilities, duties and focus of the caretaker administration in maintaining economic growth and addressing social issues in Addis. The difference from the existing one is that the latter is an administration of political operatives, with political party officials running the city. The new caretaker administration will be composed of professionals who would be running the city for a year until the political takeover pending election next year.

Is it possible for the opposition parties to participate in the selection of the members of the caretaker administration?

The law does not allow for that to happen. It is the Prime Minister that appoints such a temporary administration and I do not have any plans to violet the law.

Where do you want to see Ethiopia in 10 years politically, economically and administratively; and how do you see your role then?

I think we can be very brief about my vision for the next 10 years. The world has agreed on a number of targets that should be achieved by 2015; the code name used is Millennium Development Goals (MDG). My hope and expectation is that Ethiopia will achieve the MDGs and possibly more than what is said on the MDG’s target.

Should you leave office, may be in five or 10 years, who in your party would you prefer to replace you as a prime minister and in your party’s leadership?

As to when you expect to be free of me, I will have to keep you guessing. When that comes, however, I would not expect to be the king-maker. It will be an insult to my party if a departing leader were to appoint his successor.