Chapter IX
Economic Development
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Plans For Economic Development
Oct. 14, 1962
...In the case especially of those foreigners who have invested capital on development projects
in this country, apart form working in cooperation with both Our Government officials and
Our people, there has never been a case in Ethiopia's history when the property of a foreigner
has been unlawfully confiscated.....
The greater part of the world's population still lives in economically backward countries and the
life it leads is consequently characterized by hunger, disease and other similar problems.  Global
peace and security can only be permanently secured if all people of the world pool their resources
towards the complete eradication of man's common enemies -- ignorance, hunger and disease.

It is well known that the international economic and social organizations established at, and
operating in variouss underdeveloped countries in the world, are helping the economically
backward countries in different ways. Some wealthy countries are also manifesting their goodwill
through granting loans and technical assistance.  What the economically backward countries are
looking forward to, however, is the application of the money now dumped on destructve
armaments, to the solution of economic problems.  Fully supporting this idea, Ethiopia has
participated in disarmament conferences and unfailingly is struggling for world peace and man's
welfare and prosperity.  A nation can make rapid economic growth only when it makes use of
foreign economic and technical aid and, if the people make every effort towards the proper
exploitation of their natural resources.

In Our speeech after Our state visits to various friendly countries on August 29, 1959, We noted the
various reasons as to how advanced nations have achieved their present stage.  In Our study of the
various social systems in the course of Our extensive toure, We have found that the reason for their
successful progress lies in the fact that they have accumulated enough capital which, in turn, made
it possible for them to carry out better farming, finance various projects to develop their industries,
harness their rivers, and in general exploit their nature resources.  Unless it is used for worthwhile
investment, the hording of money would not yield dividend.  This spirit also remains true in the
case of this plan.

In has been found out that planning is indispensable for the rational utilization of both a nation's
resources and foreign aid or loans.

Having recognized that, in order to improve and raise the level of the Ethiopian economy and
administration and so raise Our people's standard of living and economy, a plan, based on the
country's needs and capabilities, is required, We gave orders for the execution of the First
Five-Year, which came into operation since 1958 prepared after a long period of study, on the basis
of our directives and by the Planning Board We had established.

As a basis of, and working procedure for, a national socio-economic policy, a plan is a means
whereby a nation can be developed through the rational utilization of labour and machinery for the
most important aspects of the country's needs.  The execution of any such plan needs, however,
national participation.  Planning is the basis in the rational and sustained use of capital, manpower
and time in the acceleration of economic development.  The opportunities We have today in having
at Our disposal those advantages which the now economically advanced nations acquired after
long periods of trial and exertion, namely the means to step up the rate of economic growth and
purchase equipment necessary for industrial and other purposes, enable Us to implement several
projects in a musch shorter time.

It is evident that prior to the First Five-Year Plan, Ethiopia was engaged in the execution of
numerous development undertakings.  Long-term projects were carried out in the respective fields
of telecommunications, public health, road transport, air lines and other similar phases of
development.  Satisfactory results have likewise been attained.  Nevertheless, a plan, embracing
Ethiopia's socio-economic growth, was prepared from a wide and detailed study of such
undertakings as were previously carried on through experience and also for the rational utilization
of labour and capital.  The advantages of a plan are by no means limited to the government; a plan
shows the respective goals of our country in each sector, the required funds and their sources, as
well as the success and failures of each year's endeavour.

Though the targets set in the First Five-Year Plan were not all reached, the experiences gained are
satisfactory.  The works accomplished during the period of the First Five-Year Plan are great and
many; so are the changes made and improvements brought about in the phase of administration.

The history of planning shows that no pioneer plans were ever executed even partially, much less
wholly.

Since a country that has a plan is awre of its requirements, Ethiopia will be able to acquire
technical and economic assistance from international organizations and friendly countries for the
implementation of the development projects included in its plan.  Millions of dollars have been
spent on the main projects carried out during the first Five-Year Plan.  These projects included: a
survey of the Blue Nile basin, Webbi Shebelli and Awash Valley develoment schemes, cement
factories, oil refineries, textile factories, a sugar factory, highways, telephone lines; modern ports,
jet aerodromes, transport jets, hydro-electric dams and equipment, the university and several
modern schools for raising the school population by 47%, as well as other economic and social
undertakings.  In the field of private capital, several industries and similar development enterprises
have been established.
Foreign Investors Encouraged
We have never ceased to encourage foreign capitalists to work either in co-operation with Our
people, or to invest their money on development works on their own.  It has for long been part of
the tradition of Ethiopia to welcome foreigners and to safeguard their rights and interests during
their stay here.  In the case especially of those foreigners who have invested capital on
development projects in the country, apart from working in co-operation with Our Government
officials and Our people, there has never been a case in Ethiopia's history when the property of a
foreigner has been unlawfully confiscated.  This is a source of pride for Ethiopia.  Ethiopia will at all
times welcome foreign investors who may be willing to employ their money for development  
works, either in partnership with Ethiopia, or as private enterprisers.  The necessary law
pertaining to the money to be expended on develoment plans will shortly be published in the
Negarit Gazeta.

As the period of the First Five-Year Plan has now expired, We ordered that the Second Five-Year be
duly prepared.  After the Second Five-Year Plan had been prepared and studied in detail by the
Planning Board Committee which meets under the Chairmanship of Our Prime Minister, and the
five Standing Study Committees, the plan was presented to the Planning Board that We head.  After
an exchange of views on it and having realized that it has been prepared in accordance with the
economic resources and needs of Our country, We approved of the Plan and ordered that it be put
into operation.  As We have earlier started, the Plan is to serve as a guide not only to Our
Government but to the entire people in the Empire now engaged in the work of development.
Allotted $2,670,000,000
It has been shown in detail in the Plan that for the Second Five-Year Plan the amount of money to
be spent on development projects and administration, both from Government and private  sources,
has been estimated at E$2,670,000,000.

In order that the Plan may succeed in achieving its objectives, much work has already been
accomplished in advance.  Among those that have been given priority are those pertaining to the
promulation of the Public Servants Pension and the Civil Service law.  For the plan, We have
ordered that various organizations be set up.

We have in the past made it known to you that We have formed several committees in all branches
and departments of activity.  These committees have been entusted that the task of studying ways
and means of effecting a lasting and not short-term programme of advancement, of finding
methods of improving the administration, the application of justice, the spread of education as well
as improving on the system of land tenure.  The Committee also studied the possibility of making
the administration system of the Provinces meet modern demands and standards so far as present
conditions permit, and also study ways of raising the standard of living of the people and their
skills, as well as safeguarding of the people's right to equality according to each person's standard
and ability.

Among the main points in Our plan for the improvement, progress and advancement of Our people
is that relating to the need for an equitable arrangement with respect to the payment of taxes as
well as to the tenure and allocation of land.  With this aim, We have annulled various taxes that
landowners had to pay in the past, relieved them of extra obligations otherwise binding, allowed
that only one tax be levied, and have ordered that those Ethiopians who may not have land give
evidence to this effect and be made to own half a gasha each to be used not only by the persons
during their life-time, but to be passsed down from generation to generationas well.

Furthermore, in accordance with the order We gave to the effect that thoso who may have land but
lack money to develop it be granted loans, the amount of money given out for the purpose has now
reached Eth. $3,000,000.  So that the work may in future be carried out on an improved scale of
performance, the setting up of a new bank that will lend money for development works is now
under preparation.

We do not, however, feel proud or complacent about the progress so far made by Ethiopia in this
respect as having accomplished enough.  The present age compels man to go on improving.  Since
the way of living of people at any period is closely tied up with the particular conditions prevailing
at the time, we cannot look back to Ethiopia prior to the 20th Century and criticize the manner of
administration of our forefathers.  The reasons and difficulties that made the way of living then
what it was can be accurately known.

It  would not, for example, be difficult to realize the problems and obligations created by the age
we are living in now, which faced Ethiopia in her past endeavour to reach her present stage as well
as in her future attempt at faster progress and development.  As generations come and go, those
assuming responsibility for the period do not cease to try and improve on the past in order to meet
newly arising demands.  In this respect, it is quite evident that to march with the time members of
the coming generation should build on what their forefathers have bequeathed to them.  It is
because the present generation is cherishing and keeping intact what it has received form the past
that it has succeeded in attaining its present stage of development, by making the necessary
changes and improvements called for by conditions now existing.  This would require great
foresight and the work accomplished so far as regards to this task fo great responsibility is no
small matter.  It has been fulfilled as a result of God's blessing and His divine guidance.
Land Tenure Reformed
Even though the system of land tenure as well as the collection of taxes in Ethiopia may have
varying forms, it is quite evident that these have their foundation in the country's past history.  
However, even though such a system was only suitable to the time when it was being practised, to
make it go hand in hand with the age, adn thereby serve as a safeguard for the interest and
prosperity of the country and be a means for the strenghening of the unity of the people, the old
systems of land tenure and certain rights pertaining to the payment of taxes have been kept in
operation.  Land is also being allocated to those Ethiopians who may not be owning any at
present.  It has, however, been found necessary that this be improved in the light of present
conditions, needs and requirements.  Having realized that the money collected from taxes would
be used for the development programme of the Empire, and having thought it desirable that tax
collection be carried out in accordance with the Proclamation, and that no distinction be made
among Ethiopians, and so that all people be given equal rights as regards the payment of taxes, a
committee was formed and ordered to study ways of improving on the present system of land
tenure.  Having reviewed the first part of the committee's report and recommendation, We have
passed the following order of amendment:

(1)        We have ordered that a bill be submitted to Parliament to be deliberated and passed into
law to make people possessing land as "Riste Gult" and "Siso" pay normal tax on it to the
Government Treasury.
(2)        The proposed proclamation be presented to Parliament for discussion with the final aim of
being passed as law to improve on the traditional form of relationship, shown existing in the Civil
Code, between land-owners and tenants.
(3)        Those serving for "Feresegna", "Alenga" and Gala land and "Gult" allowances, to be paid
salaries from the Government Treasury.  Those who were formerly living on allowances from
"Gult" and "Siso" to be given land.
(4)        Government lands in the Provinces, owned by people on lease, to be given to those who
have no land unless the person now possessing it has developed it with his own money and is not
simply collecting regular revenue from tenants.
(5)        Crown lands throughout the Empire, the benefice of which has been allocated to augment
the Civil List, of will be distributed in three categories:
1.  for development projects, such as industrial establishments, the building of townships and
    settlements;
2.  as compensation for those people whose land has been taken over by the government for
    development purposes;
3.  to patriots and exiles and to disabled veterans who have not received land before.  The land that
may be left over after apportioning in the above manner, is to be given either to tenants living on it
or to the landless people nearby, half a gasha each.
(6)       It is Our wish that all Ethiopians who are to be given government land on the basis of the
order given above shall, when receiving the land so donated by the government to raise the
standard of living of the recipient, pay for registration and transfer of name, Eth. $15 per gasha of
fertile land, Eth. $10 per gasha of semi-fertile land, and Eth. $5 per gasha of barren land, and so
bring the land under their ownership.

As is explicitly put down in Article 38 of Our Constitution, there is no need to point out that the
Ethiopian people enjoy equality.  Our instruction as regards reform in the land tenure system will
reflect the same basic statement in the Constitution.  It is known to all that every Ethiopian should
have land and be given money to cultivate the fallow land, and that an organization to carry out
this programme has earlier been set up, is indeed will known by all.  Unless the wealth of the
people increases and unless they co-operate their unity as a nation would be comprised.

Therefore, we have made it in such a way that chiefs and elders, without their service in the past
being forgotten, should live by working in co-operation with the people so that their own interest
would be safeguarded, not to the disadvantage of others.

While the economic growth of Our country and the living standard of Our people are being realized
to the extent of the effort We are making, and while the benefits of the endeavour We are making
for the growth of our country and the prosperity of Our people are being realized, it should be the
duty of every Ethiopian to co-operate and work hard towards their implementation.

All these are preliminaries of the Second Five-Year Plan and We hope that several socio-economic
achievements will be made during the period of the Plan.
Objectives Outlined
The main objectives and targets of the Plan are:

(1)       To achieve a great economic result through the rational utilization of available capital and
labour;
(2)       To make use of different means of development in order to narrow the economic divergence
between Ethiopia and the economically advanced countries.
(3)       To economize money as much as possible and invest it on some useful project in order to
bring about an independent growth of the Ethiopian economy.
(4)       To obtain balanced and uninterrupted economic growth in order to raise the standard of
living of Our beloved people.
(5)       To improve and expand education, public health, fine arts and industrial projects more
intensively.
(6)       To encourage every citizen in Our Empire to be a participant in the endeavours for the
economic and social development of his country, as much as his capacity and ability can allow.

The largest portion of the national income comes from agriculture and the raising of livestock.  
Moreover, the greater number of the population is engaged in these occupations.  For these
reasons, in the period of the Second Five-Year Plan, agriculture holds its place in the forefront of
the Ethiopian economy, and a special plan has been drafted to expand the agricultural production
in a much better way than it used to be before.

Moreover, it is designed to increase the quantity and improve the quality of the crops of coffee in
particular, which up to now has remained the backbone of the country's economy.  Planning is also
completed to provide the country's meat industry with 600,000 to 700,000 heads of live cattle
annually for local demand as well as for export.

Since Ethiopia's mineral wealth is undetermined, it has been considered in the Second Five-Year
Plan to make more extensive prospecting to determine the country's geological wealth and open a
new vista for its industrial growth.

In this Plan, it is intended to treble Our present industrial output by establishing a number of
industries and factories which will utilize the country's raw materials from agriculture and mining.  
These industries will be useful in that they will boost the economic status of the country by
producing industrial items of high demand in both local and foreign markets and also provide
plenty of jobs for the people.

Realizing the great importance and usefulness attached to facilities of transportation and
communications, it is designed to expand the systems by 28% in the period of the Second
Five-Year Plan.

It is also stipulated in the Plan to make necessary steps to better and multiply those social
amenities, like education, public health, pension and other similar welfare measures, which reflect
upon the living condition of the people and upon social development of the country in general.
Calls For National Participation
In Our effort to raise the living standard of Our beloved people, in Our endeavour to bring about
prosperity to Our country, the feeling of co-operation and understanding has always characterized
Our people.  A special case is the recent development in certain provinces where the people are
seen voluntarily raising funds to build schools, clinics, roads and other similar projects.  What can
give one more pleasure than to see such a measure of self-help in one's life time?  For the
prosperity and progress of his own country, let every citizen of Our Empire strive hard to
strengthen this esprit de corps everywhere.  We entrust the spirit of good will to Our people to
work diligently and co-operatively in order to arrive at the realization of this socio-economic
development that has been launched by either Our Government or Our people.

It is not sufficient simply to see and admire the natural beauty and fertility of Ethiopia.  It is Our
obligation to work upon and benefit from this country whose fertile soil has been granted us by the
Almighty God.  We have to gain honour and pride for this country.

Because of her unity and independence Ethiopia had and still has jealous enemies and aggressive
dissidents.  It is, therefore, the primary duty of every Ethiopian to safeguard the unity and freedom
that has been fortified since time immemorial by the courage and bravery of Our forefathers.  We
have to maintain its integrity, to work and benefit from its existence.

So that Our people can live working and enjoying the fruits of their labour in peace and order We
have given modern laws and made various proclamations.  For proper administration of these laws
in the governorates - general, provinces, sub-provinces and districts of Our Empire, We have
allocated judges for the courts, police for the security, and civil servants for running the
government officials that they were assigned to serve the interest of Our people and not the
contrary.  Hence, We again would like to make it known to Our government employees that
without losing integrity and honesty they are hereby instructed and ordered to work diligently in
whatever occupation they are engaged, for the economic growth of their country.

We have also entrusted to the Planning Board Committee which is chaired by Our Prime Minister
to publish and distribute the contents of the Second Five-Year Plan as well as to strictly follow and
execute the new plans at hand.

If each and everyone endeavours to co-operate and work in as much as his capacity permits, Our
faith rests upon the Almighty God that He would bless the results for us.
Haile Selassie the First - October 14, 1962