With the Ethiopian economy moving towards a free market system, UNDP support to the National Programme on Management of Economic and Technical Changes (METC) focuses on building capacities at central and regional levels. This support would focus on the ongoing reform programme, at a total cost of US$ 13.2 million for the period 1994-1997.

Under the METC programme the interventions were confined to sub-programmes in areas where the government capacity needed to be strengthened quickly in order to undertake current activities, or where a long lead time was required for such activities to reach maturity and initiate the process of resource mobilisation for the next phase of the programme's implementation.

The important feature of the METC is that is was formulated under the programme approach and is being nationally executed. UNDP supported the formulation of the programme and the establishment of the Programme Management Secretariat (PMS), which monitors implementation at both the central and regional levels.

The most important activities of the METC programme are:

Macro-Level Planning, Policy Analysis and Economic Reform Management

The objective has been to create capacities to analyse, adapt and formulate coherent economic policies, initiate sustainable development programmes and to better manage the whole development process. In this context, various training programmes on policy research, formulation and analysis, development planning, managing the programme/project cycle, public investment programmes and regional income accounting were conducted. In addition, the system of national accounts has been upgraded and a regional income accounting manual was prepared with the support of consultants.

These interventions have resulted in an enhanced capacity to formulate and implement policies, and to manage the changes taking place in the country, particularly under the reform programme.

Participatory Regional Development

Sound capacities at the central level would not by themselves be sufficient to achieve the Government's objective for the decentralisation of the planning and development processes. Complementary capacities would be required at the regional level. The sub-programme on participatory regional development was therefore designed to address these issues by enabling the regional administrations to create equivalent capacities, with a strong emphasis on community participation. In this context, a training package was conducted for regional officials and experts, vehicles and equipment were provided to regional administrations, and a strategic action plan for regional development was prepared. Furthermore, a massive training package is currently underway for zonal and woreda officials and experts with the objective of augmenting their technical capacities.

Private Sector Development

The objective of this sub-programme is to create capacities within the private sector. This will enable the sector to step in and provide services in areas relinquished by the state. The Government created the enabling environment - legal and institutional - which was complemented by the training of selected potential entrepreneurs and the provision of equipment to institutions that support the private sector. In addition, an Entrepreneurship Development Programme (EDP) blue print was prepared to serve as a framework for private sector capacity building in the future. Support was also provided to selected entrepreneurs such as women's associations, and to the training of staff from financial institutions.

Public Sector Review and Institutional Restructuring

This sub-programme aims at facilitating the rationalisation of the civil service and the restructuring and eventual privatisation of public enterprises. It addresses three inter-linked areas of activities - civil service reform, privatisation and restructuring of public enterprises.

A Civil Service Reform study was completed in order for the reform measures to be implemented at a later point in time. Restructuring studies of several public institutions were finalised, and support has been provided to the Ethiopian Privatization Agency (EPA) and Public Enterprise Supervising Authority (PESA). Designing a system of performance contracting for public enterprises is to be started soon.

As a follow-up to the restructuring of the Customs Authority, the implementation of the UNCTAD-ASYCUDA system in Ethiopia is also underway. Furthermore, to respond to the urgent needs of the newly established Ministry of Trade and Industry, a project is being undertaken to assess, design and introduce a "Trade and Industrial Information and Improved Import Management System", with ITC as a cooperating agency.