U.S. urges Zenawi to privatize Telecom

By Jason McLure – March 19 (Bloomberg) — Ethiopia should liberalize its protected banking and telecom sectors as a step toward joining the World Trade Organization, a U.S. trade official said.“For a country like Ethiopia, this is extremely important in establishing the competitiveness of its economy,” Peter Allgeier, the U.S. representative to the WTO, said at a press conference in the Ethiopian capital, Addis Ababa. “Our expectation would be there are some movements in these areas.”

Allgeier, in Ethiopia to attend a gathering of African trade ministers, met privately with Prime Minister Meles Zenawi today and urged him to consider privatizing the state-run Ethiopian Telecommunications Corp. and allowing foreign banks to open branches.

Ethiopia is fielding questions about its trade policies from countries including the U.S. and Canada as it attempts to negotiate entry into the global trade group.

The Horn of Africa nation, twice the size of Texas, with a population of 82.5 million, applied for membership in the Geneva-based organization in 2003. The country is counting on membership to open new markets to boost its $25.1 billion economy.

“The prime minister today said he wants to advance things very quickly,” said Allgeier.

No Plan Seen

Ethiopian Trade Minister Girma Birru said in a Feb. 17 interview he didn’t “see any plan” to break up or sell the Ethiopian Telecommunications Corp. to private investors. He also said the country was unlikely to liberalize its banking sector.

“I think there is some tension there between those two positions,” said Allgeier, who at one point waved his non- functioning handheld wireless device to illustrate a point about Ethiopia’s telecom service.

Ethiopian Telecommunications’s monopoly enables it to charge $35 for a mobile-phone SIM card, which is required to obtain a phone number. In neighboring Somalia and Kenya, which have private mobile services, cards cost less than $5.

There are no foreign banks in Ethiopia, and local banks are unable to process common transactions such as MasterCard credit card purchases.

To contact the reporter on this story: Jason McLure in Addis Ababa via the Johannesburg bureau at abolleurs@bloomberg.net.

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