comparism of local goverment between ETHIOPIA and NETHERLANDS

HISTORY OF ETHIOPIA The prehistory and history of Ethiopia, from emergence as an empire under the Aksumites to its current form as the Federal Democratic Republic of Ethiopia, as well as the history of other areas in what is now Ethiopia such as the Afar Triangle. The Ethiopian Empire (Abyssinia) was first founded by Habesha people in the Ethiopian Highlands. Due to migration and imperial expansion, it grew to include many other primarily Afro-Asiatic-speaking communities, including Amhara, Tigray, Oromos, Somalis, Afars, Sidama, Gurage, Agaw and Harari, among others. The earliest possible mention of Ethiopia in records was by the Ancient Egyptians, who may have referred to it as being in the Land of Punt. One of the earliest kingdoms to rise to power in the territory was the kingdom of D'mt in the 10th century BCE, which established its capital at Yeha. In the first century CE the Aksumite Kingdom rose to power in Tigray Region with its capital at Aksum and grew into a major power on the Red Sea, subjugating Yemen and Meroe and converting to Christianity in the early fourth century. The Aksumite empire fell into decline with the rise of Islam, forcing the Ethiopians to move south into the highlands for refuge. The Aksumites gave way to the Zagwe Dynasty who established a new capital at Lalibela, before giving way to the Solomonic Dynasty in the 13th century. During the early Solomonic period Ethiopia went through military reforms and imperial expansion that made it dominate the Horn of Africa. Portuguese missionaries arrived at this time. In 1529, a conquest of Abyssinia (Futuh al-Habash) by the Muslim Adal Sultanate supported by the Ottoman Empire devastated the highlands, and was only deterred by a Portuguese intervention. With both Ethiopia and Adal greatly weakened by the war, the Galla people were able to migrate into the highlands, conquering the remains of the Adal Sultanate and pushing deep into Ethiopia. The Portuguese presence also increased, while the Ottomans began to push into what is now Eritrea, creating the Habesh Eyalet. The Portuguese brought modern weapons and baroque architecture to Ethiopia, and in 1622 converted the emperor Susenyos I to Catholicism, sparking a civil war which ended in his abdication and an expulsion of all Catholics from Ethiopia. A new capital was established at Gondar in 1632, and a period of peace and prosperity ensued until the country was split apart by warlords in the 18th century during the Zemene Mesafint. Ethiopia was reunified in 1855 Tewodros II, beginning Ethiopia's modern history. Ethiopia began to go through a slow modernisation process, and defended itself from an Egyptian invasion in 1874. Under Menelik II Ethiopia defeated an Italian invasion in 1896 and came to be recognised as a legitimate state by European powers. A more rapid modernisation took place under Menelik II and Haile Selassie, however this was not enough to deter another Italian invasion in 1935. The modern Italian army annexed Ethiopia and combined it with its other colonies to create Italian East Africa, forcing Haile Selassie to flee the country. A joined force of British and Ethiopian rebels managed to drive the Italians out of the country in 1941, and Haile Selassie was returned to the throne. Ethiopia and Eritrea joined to a federation, but when Haile Selassie ended the federation in 1961, and made Eritrea a province of Ethiopia a war for Eritrean independence occurred, lasting until 1991. Haile Selassie was overthrown in 1974 and the militaristic Derg Regime came to power. In 1977 Somalia invaded to try and annex the Ogaden region, but were pushed back by Ethiopian, Soviet, and Cuban forces. In 1977 and 1978 the government tortured or killed hundreds of thousands of suspected enemies in the Red Terror. After a famine in 1984 killing 1 million people, the Derg fell in 1991 and the Federal Democratic Republic was established. Ethiopia remains impoverished, but its economy has become one of the world's fastest growing. HISTORY OF THE NETHERLANDS The history of the Netherlands is the history of a seafaring people thriving on a lowland river delta on the North Sea in northwestern Europe. Records begin with the four centuries during which the region formed a militarized border zone of the Roman empire. This came under increasing pressure from Germanic peoples moving westwards. As Roman power collapsed and the Middle Ages began, three dominant Germanic peoples coalesced in the area, Frisians in the north, Low Saxons in the northeast, and the Franks. During the Middle Ages, the descendants of the Carolingian dynasty, came to dominate the area and then extended their rule to a large part of Western Europe. The region of the Netherlands therefore became part of Lower Lotharingia within the Frankish Holy Roman Empire. For several centuries, lordships such as Brabant, Holland, Zeeland, Friesland, Guelders and others held a changing patchwork of territories. There was no unified equivalent of the modern Netherlands. By 1433, the Duke of Burgundy had assumed control over most of the lowlands territories in Lower Lotharingia; he created the Burgundian Netherlands which included modern Belgium, Luxembourg, and a part of France. Under the heir Emperor Charles V this union was declared independent of Germany and France, and then became part of Charles' new Spanish empire. The Catholic kings of Spain took strong measures against the new Protestantism and other dissent, which polarized those peoples of present-day Belgium and Holland. The subsequent Dutch revolt led to splitting the Burgundian Netherlands into a Catholic French and Dutch-speaking "Spanish Netherlands" (approximately modern) Belgium and Luxembourg, and a northern "United Provinces", which spoke Dutch and was predominantly Protestant, with a large Catholic minority. It became the modern Netherlands. In the Dutch Golden Age, which had its zenith around 1667, there was a flowering of trade, industry, the arts and the sciences. A rich worldwide Dutch empire developed and the Dutch East India Company became one of the earliest and most important of national mercantile companies based on entrepreneurship and trade. During the 18th century the power and wealth of the Netherlands declined. A series of wars with the more powerful British and French neighbors weakened it. Britain seized the North American colony of New Amsterdam, turning it into New York. There was growing unrest and conflict between the Orangists and the Patriots. The French Revolution spilled over after 1789, and a pro-French Batavian Republic was established in 1795–1806. Napoleon made it a satellite state, the Kingdom of Holland (1806–1810), and later simply a French imperial province. After the collapse of Napoleon in 1813-15, an expanded "United Kingdom of the Netherlands" was created with the House of Orange as monarchs, also ruling Belgium and Luxembourg. The King imposed unpopular Protestant reforms on Belgium, which revolted in 1830 and became independent in 1839. After an initially conservative period, in the 1848 constitution the country became a parliamentary democracy with a constitutional monarch. Modern Luxembourg initially remained united with the Netherlands, but today is ruled by a separate branch of the Dutch royal family. The Netherlands was neutral during the First World War, but during the Second World War, it was invaded and occupied by Nazi Germany. The Nazis, including many collaborators, rounded up and killed almost all the Jews (most famously Anne Frank). When the Dutch resistance increased, the Nazis cut off food supplies to much of the country, causing severe starvation in 1944-45. In 1942, the Dutch East Indies was conquered by Japan, but first the Dutch destroyed the oil wells that Japan needed so badly. Indonesia proclaimed its independence in 1945. Suriname gained independence in 1975. The postwar years saw rapid economic recovery (helped by the American Marshall Plan), followed by the introduction of a welfare state during an era of peace and prosperity. The Netherlands formed a new economic alliance with Belgium and Luxembourg, the Benelux, and all three became founding members of the European Union and NATO. In recent decades, the Dutch economy has been closely linked to that of Germany, and is highly prosperous. After World War II the pillarized system that had separated society into closed Catholic, Protestant and secular pillars became integrated; Catholic and Protestant religiosity declined sharply. However, the arrival of immigrant Muslims (particularly Turks and Moroccans) may form a new polarization in the 21st century. DECENTRALIZATION IN ETHIOPIA The 1991 government change in Ethiopia ushered in a centralised system of governance, aimed to bring about harmony and cooperation between different groups and to promote local self-rule. It has proceeded in two phases: 1991-2001 centred on creating and powering National/Regional Governments, termed mid-level decentralisation. Further powers were devolved in 2001 through the District Level Decentralization Program and Urban Management Profram. This volume brings together studies by the Forum for Social Studies and others, with the aim of identifying knowledge gaps for further research and to generate debate on the issues in Ethiopia. The study is in two parts: a literature review seeking to document existing studies and highlight research gaps; and field work which involved a rapid assessment of eight weredas and two kifle ketemas in Addis Ababa. The other three studies are synopses of master theses submitted to the Institute of Regional and Local Development Studies of Addis Ababa University. DECENTRALIZATION IN THE NETHERLANDS The Netherlands has started a major decentralization exercise. From 2015 onwards municipalities will be given much greater responsibility in the social policy domain. This includes three specific areas the so-called 3D decentralization agenda: Services for person with disabilities (Wmo), youth policy and work & income. The overall goal is to help citizensfind work and stay employed, while also stimulating broad participation from citizens, and to provide active support where required. At the same time, it is expected that municipalities are able to provide services in a more efficiently. Municipalities will receive an additional share from the national budget, but they are expected to fulfill a larger set oftasks. Consequently, we observe the emergence of a new playing field, which includes both old and new stakeholders. In order to better understand this new playing field, the Institute of Public Administration at Campus. The Hague conducted a study on today’s impact of the upcoming decentralization. This was done in 57 municipalities across the Netherlands, in collaboration with the Association of City Managers (VGS) and the Association for Public Administration (VB). The analysis was done by research staff from the Institute and thematic experts from Deloitte Consulting. This study focuses on three issues that are relevant to this context: the national government, other municipalities and service providers. Another important issue, which relates to the changing role of the municipalities vis-à-vis citizens, will be addressed in a future edition of The Hague Governance Quarterly, as we expect significant shifts in terms of participation and individual autonomy. Based on the findings of the study, we have been able to summarize key recommendations for municipalities in each of the following three areas: 1. The national government – don’t get discouraged as a municipal decision-maker by unclear guidelines on regulations and finances. 2. Other municipalities – make use of the benefits from inter-municipal cooperation within the three decentralised areas. 3. Service providers and stakeholders – redefine your relation vis-á-vis existing partners and enrich your network in finding new partners in 2014 and 2015 Ethiopia: Financial Sector Profile A strong economic performance since the mid-2000s has helped turn Ethiopia into one of the fastest growing non-oil producing economies on the continent, with average annual growth rates above 11 percent between 2004 and 2008 - driven mainly by the agriculture and services sectors. The country has also enjoyed sustained inflows of official development assistance and foreign direct investments (FDI), as well as sizable growth in exports, dominated by coffee, oilseeds and flowers. Growth has however slowed since 2008 as economic performance was affected by deteriorating terms of trade and balance of payments problems towards the end of 2008 with exports, remittance and foreign investment inflows decreasing in 2008 and 2009 as a result of the global financial crisis. Inflation, exacerbated by rising food and fuel prices, also rose substantially from 15.8 percent in 2007 to 25.3 percent in 2008 and 36.4 percent in 2009. Real GDP growth declined from 11.2 percent in 2008 to 10 percent in 2009, 8 percent in 2010 and 7.5 percent in 2011. The projected GDP growth is 7.0 and 6.5 percent for 2012 and 2013 respectively. Ethiopia's financial system is small and largely dominated by the state. Currently public banks account for 67% of total deposits and 55% of loans and advances. Government dominates lending, controls interest rates, and owns the largest bank, the Commercial Bank of Ethiopia (CBE) whose assets represent about 70 percent of the sector total, as of April 2012. The Central Bank, the National Bank of Ethiopia, has a monopoly on all foreign exchange transactions and supervises all foreign exchange payments and remittances. By June 2011 the private credit to GDP ratio for Ethiopia was around 9% compared with the average of 30% for sub-Saharan Africa. The financial sector has recently been experiencing a reversal of financial deepening. The broad money to GDP ratio declined from 27 percent in 2007-2008 to 25 percent in 2008-2009, while the ratio of domestic credit to GDP decreased from 32 percent to 27 percent over the same period. Negative real interest rates (stemming from high inflation and low deposit rates), high reserve money growth, bank-by-bank credit ceilings, and a lack of competition in the banking sector have contributed to the economy's continued demonetization in recent years, which is posing increasing risks to financial stability. Authorities have made commitments to promote monetization, improve liquidity management and achieve positive real interest rates in the financial sector, but reversing demonetization remains a major challenge. Ethiopia's banking sector included 16 commercial banks in 2012. While the state has recently allowed the local private sector to participate in banking which brought about a rapid expansion of private banks, foreign ownership and branch operations remain strictly barred. Private banks have generally outperformed their state-owned counterparts and their market share of resource mobilization exceeds that of public banks, with market share of loan collections and deposits rising to 49 percent and 52 percent in 2007-2008. However, the share of new loans disbursements controlled by private banks for the same period decreased, and stood at 43.3 percent in 2007-2008. The banking sector as a whole, while remaining relatively sound, is characterized by excess liquidity. Non-performing loan ratio standing at 1.8 percent as of March 2012 appears unusually low, especially given the strong domestic credit expansion. The microfinance sector is relatively well developed but not strictly supervised. At last count about 31 MFIs, reaching 2.4 million people, operated in the country and have become a major source of financial services to many farmers and businesses. Some unlicensed NGOs are also active in the delivery of microfinance services through informal channels. The fixed income market is fairly limited and prevailing negative real interest rates have adversely affected the demand for securities. While 28 day, 3-month and 6-month Treasury bills are regularly issued, there is no formal government bond market, with bonds irregularly issued for specific purposes only. As of March 2013 Ethiopia received no sovereign rating from any of the major credit rating agencies. The market is largely dominated by government securities and corporate issuance of debt instruments is very low, although a few large public enterprises have recently issued a series of corporate bonds. At present, there are no intermediaries operating on either the primary or secondary market; securities, once purchased, are kept until maturity. While foreign investors can access Ethiopian markets, participation is low given that current laws restrict foreign investments in government securities. Aside from trading on the ECX the derivatives market is limited, with no interest rate or currency derivatives available. The Financial System of the Netherlands 1. Historical, political economic and international background Despite its small size, the Netherlands has established itself as one of the world’s leading economic and financial power since the seventeenth century following its independence from Spain in 1579. Historically, the Dutch economy, considered by many as the first modern economy, instituted a leadership role in Europe and created an innovative and effusively acclaimed financial system which inspired the systems that were later developed in Great Britain and United States of America. According to Rousseau and Sylla (2003), at the onset of the seventeenth century, the Netherlands had been characterised by robust public finances, monetary stability, monetary and financial institutions (including a well organised capital market, banks – both commercial and merchant – and the Wisselbanken – akin to a central bank) which are jointly deemed the cardinal features of a modern financial system. This marked the beginning of the accelerated wealth accumulation and economic prosperity for the Netherlands. The next couple of centuries marked a “golden era” of the republic as industrialisation took-off, external trade flourished and the country evolved into one of the richest and most affluent in the world. During the period, the country was renowned for exporting both commodities (goods and services) and capital (financial) to the rest of the world. In the second half of the eighteenth century, the increasing participation of the Dutch in the international capital market caused extraordinary growth, due essentially to the activities of its merchant banks. However, the traverse of Dutch economic and financial prosperity was punctuated intermittently by various political and economic upheavals including revolutions, wars and severe recessions. A key contribution to the recovery in the post-war Netherlands came from the Marshall Plan, which provided the country with funds, goods, raw materials and produce. Besides, partly in response to the 1957 Treaty of Rome, which heralded Netherlands - Local government As of 1994, the country was divided into 12 provinces, each governed by a representative provincial council (Provinciale Staten). Its members are elected by direct universal suffrage. The size of the council depends on the number of inhabitants in the province. Members are elected for four-year terms. From among their members, the councils elect provincial executives (Gedeputeerde Staten) with six to eight members. Each province has a commissioner appointed by and representing the crown. The municipalities (496 in 2003) are administered by municipal councils, which are elected directly for four-year terms by the local inhabitants and make local bylaws. The executive powers of the municipality are entrusted to a corporate board consisting of a burgomaster and two to six aldermen; the latter are elected from and by the council, while the burgomaster is appointed by the crown. The important function of flood control and water management is exercised by autonomous public authorities, some of which date as far back as the 13th century. The Netherlands is divided into over 400 municipalities. This number used to be higher, but because over the course of time, some areas of policy and service required a greater administrative-organisational strength, neighbouring municipalities merged. This is actually a gently ongoing process that has not yet come to a halt. The largest municipality is Amsterdam with almost 750,000 inhabitants. Schiermonnikoog, one of the islands along the north coast of the Netherlands, is the smallest with barely 1,000 inhabitants. In principle all municipalities have the same tasks though due to their size, the large municipalities require a different approach to the way their work is done than in the smaller municipalities. The municipal council is elected every four years. The same process applies to local and national politics. Local political parties conduct an election campaign with a programme and list of candidates. In addition Local government: its structure to local chapters of national political parties, purely local parties may participate though these are not present on the national political scene. Municipal councils Just as in national democracy, the people’s representation carries the power. In the municipality this is the municipal council and the size of the municipal council depends on the size of the municipality: the maximum is 45 seats (big cities) and the minimum is 7 seats as in the smallest municipalities (such as Schiermonnikoog). Council members receive payment for their work and expenses. The amounts depend on the size of the municipality. Ethiopia - Local government Ethiopia presently has nine ethnically based states and two self-governing administrations—Addis Ababa and Dire Dawa. Until 1987, Ethiopia was divided into 15 administrative regions, which in turn were subdivided into 103 sub-regions and 505 districts. In 1976, peasant associations were empowered to collect taxes and form women's associations, cooperatives, and militias. In the mid-1980s, an estimated 25,000 such peasant groups were in existence. Urban dwellers' associations were established for a variety of functions, including law and order. In 1987, at its first sitting, the Shengo redrew the political map. It created five "autonomous regions" (Eritrea, Assab, Dire Dawa, Ogaden, and Tigre). The remaining provinces were further subdivided into 24 administrative zones. The establishment of regions was altered with the creation of the transitional government in 1991. In 1993, Eritrea gained its independence. The new regime called for 14 regional governments, but the June 1992 elections for 11 of the 14 regional assemblies were challenged and widespread fraud was alleged. In the May 2000 elections, 3,300 regional and national seats were to be contested. RECOMMENDATIONS A) Ensure the preparations for the new tasks are on track, despite the lack of clarity about the exact budget. At the same time, keep in mind that these plans might change (e.g. use policy bandwidths or scenarios). B) Think about easy and fast reporting mechanisms to the national government and other stakeholders (within the given guidelines provided thus far). Anticipate future quality controls by national authorities in case municipalities decide to spend less money on the social policy domain. C) Make use of the existing models and guidelines provided by national authorities, Association of Dutch Municipalities (VNG) and the so-called ‘transition bureaus’ More shared starting points, reporting standards and right financial incentives, coupled with greater mutual trust, will increase the likelihood of successful collaborations. CONCLUSION Local authorities in Ethiopia increasingly came to be used for centralised control. All the regimes that have seized power since then used local authorities to guard their political power, to suppress resistance and to extract revenue to sustain themselves. Since 1991 the country has been undergoing a process of re-decentralisation which is premised on embedding democracy at grassroots level and enhancing development. However, the decentralisation programme has not yet resulted in democratic pluralism. Nor has it created autonomous local government which is responsive to local preferences and accountable to local people. Rather, the decentralisation process has been used to reinforce the dominance of the EPRDF. It would nonetheless be unreasonable to conclude without mentioning that the decentralisation process is not an absolute fiasco. For better or worse, three consecutive local elections have been conducted in the past two decades. This is not only a great departure from the past, but has been a significant democratic exercise. It is also indisputable that noteworthy progress has been recorded in terms of social service provision chiefly due to the decentralisation programme. For instance, the 2010 United Nations Development Programme report on human development ranks Ethiopia first in Sub-Saharan Africa and 11th in the world based on the progress registered in the areas of primary education, primary health care, agricultural extension services and the like. According to the report it was “local mechanisms” that made it possible to “increase access and thus the provision of public goods”. However, much remains to be doneto achieve the objectives of decentralisation . The following aspects in particular, it may be concluded,call for urgent attention: • Opposition parties should make a greater effort to increase their representation in local government. Their increased representation in local government would not only enhance the democratic process; in the long run it will augment their chances of being represented in regional and national government. • The government needs to create a legal environment which is favourable to the existence of autonomous local government. Especially the regional governments should clearly define the functional assignments of local government and provide equal protection to both REFERENCE Books and chapters in Books Aalen L Ethnic federalism in a dominant party state: The Ethiopian experience 1991-2000 Chr. Michelsen Institute Development Studies and Human Rights (2002). 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