Ethiopia entered its third millennium on its New Year’s Day, 1 Meskerem 2000 (or 12 September 2007 in the Gregorian calendar). Ethiopia’s calendar year begins in September, comprising of 12 months of 30 days and one additional month of five or six days in a leap year. The country is unique: It is the cradle of humankind, the origin of coffee and the first written music (6th century AD). Ethiopians greeted the new millennium with rekindled hope of the country’s renaissance. Ethiopians successfully created an advanced civilisation in the first millennium. Great monolithic steles and an alphabet left by the Aksumite era attest to this great period. One of the steles is the tallest and heaviest (half a million kg) monolithic structure in the world. In the first 300 years of the second millennium, Ethiopian civilisation was at its peak as evidenced by the Lalibela Church buildings and other artifacts. The rock-hewn churches in Lalibela are recognised as the Eighth Wonder of the world. In fact, Bete Medhane Alem, one of the 12 churches, is the largest rockhewn church in the world. Towards the middle of the first millennium, the first mosque in Africa was built as the first Muslim converts who fled from persecution in Arabia were given refuge by an Ethiopian king. At the beginning of the second millennium, Ethiopians in the east established an ancient trade centre at Harar, which already had a cluster of mosques, but later welcomed the establishment of churches – an expression of religious tolerance that prevails today. This heritage recognises

Harar as a “city of peace”. The achievements of ancient Ethiopia are truly innumerable, and by no means adequately expressed by historical relics. Indeed, the celebration of the Ethiopian millennium is the result of the ancestors’ development of an African calendar. Ethiopia is the only African nation never to be colonised in its entire 3,000-year history. Ethiopia has also served as a beacon of freedom for all the world’s oppressed peoples and the country is the seat of the African Union. However, the last centuries of the second millennium have not been as glorious as the country declined from being one of the most advanced nations on earth to being one of the poorest. The military junta known as the Dergue left the country in total ruin when it was toppled in 1991 through an armed struggle led by a coalition of democratic forces of the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), the current ruling party. Having realised that they themselves were responsible for the failures of the last centuries of the second millennium, the Ethiopian people have now launched an all-out effort to reverse the course of this history.

GovErnmEnt and Economy The 1994 constitution saw the first multiparty elections being held within a year. Following the adoption of the constitution, democratic institutions were established and an independent judiciary and press freedom were guaranteed. Now there are 69 political parties and the

(left to right) One of the world famous rock-hewn churches at Lalibela. The Nejash Mosque, the first mosque to be built in Africa. A woman performs the coffee ceremony central to Ethiopian culture. countryreport

opposition holds one-third of parliamentary seats. The constitution introduced a federal system of government. Federalism has not only maintained unity and peace among the people, but also prevented dominance by the ruling party, enhancing public participation in national affairs. As a result of the great changes in recent decades, Ethiopia pursued a market-oriented economy in 1991. Policy and reform measures introduced since then have led to an economic transformation and private sector participation. A privatisation programme embarked upon in 1994 has resulted in the privatisation of over 250 public enterprises. Above all, the government has committed itself to eradicating poverty with viable economic strategies and good governance. The strategies have begun to bear fruit as evidenced by an average 11.9% economic growth in the last five years. This is the highest growth rate among the non-oil economies in Africa. The economic progress has put the country among the top performing economies in subSaharan Africa, compatible with the country’s vision of becoming a middle-income country within 20 years. Government expenditure on poverty eradication has continued to increase over the years. Key sectors given special attention are agriculture, rural development and electrification, roads, health, and education. Macroeconomic data indicate that Ethiopia is well placed to meet the UN’s Millennium Development Goals (MDGs) at the end of 2015. Although agriculture is booming, the industry and service sectors are also recording doubledigit growth, indicating that development is

becoming more broad-based. With an improved investment climate, Ethiopia has continued to attract and expand both domestic and foreign investment. In the 2006/07 fiscal year alone, a total of 6,472 projects with an aggregate capital of Birr93.6bn ($9.75bn), the highest since 1992/93, were approved. These projects are expected to create job opportunities for over 300,000 people. In all, a total of 25,835 investment projects were licensed during the 1992/93-2006/07 period. Several factors work in Ethiopia’s favour as an emerging destination for investment. These include the existence of a one-stop service for new investment approvals, a large domestic market of over 77 million people, a liberalised economy, a strong growth record in recent years, fiscal stability, a democratic government, high employer satisfaction with labour and the prevalence of peace and stability. The country’s climatic diversity, resulting in 18 different ecological zones, allows for diverse agricultural activity. A very low crime rate and one of the least corrupt bureaucracies are also investor-friendly attributes. On-going civil service, private and public sector reforms, complemented by infrastructure upgrades have created one of the world’s best business environments. Furthermore, the government has developed a range of incentives for investors engaged in new enterprises and expansion across a range of sectors. For further information, simply visit the website: www.investethiopia.org. Encouraging results have also been recorded in the financial sector. With new banks coming