The current government action plan emphasizes that peace is a political condition that cannot flourish without democracy and development. Furthermore, it stipulates that democracy must be institutionalized by constitutionally mandated articulations and specifications of citizen's rights and liberties. Toward this goal, the police force will be the backbone of democracy. Similarly, courts will be strengthened; human rights commissions will be established; and political parties will be encouraged to participate in the dissemination of political culture.
The current government has also embarked on a program of economic reform, including privatization of state enterprises and rationalization of government regulation. In order to encourage foreign investment and trade, the government has introduced additional reforms that emphasize the use of free market mechanisms and liberalized trade laws. However, the government is also encouraging domestic entrepreneurs to play a larger role in the economy. While the process is still ongoing, the reforms have begun to attract much-needed foreign investment. In 2002, The International Monetary Fund (IMF) granted loans totaling US $30 million as part of the Poverty Reduction and Growth Facility (PRGF) arrangement with Ethiopia.
In response to escalating armed rebel insurgency, the Ethiopian military has had to intensify its military operations, especially against the Oromo Liberation Army (OLA—armed wing of the Oromo Liberation Front, OLF). As a result, over 2,000 rebels and Ethiopian soldiers died in battles between May and August 1999. Military forces also intensified operations against the Somali-based Al'Itthad terrorist organization, rebel elements of the Ogaden National Liberation Front, and Tokuchuma (another terrorist group operating in eastern Ethiopia), both in the country and southern Somalia and in northern Kenya. Ethiopia accuses Eritrea and Somalia of financially supporting and training the OLF and Al'Itthad.
Health issues continue to plague the population, which in 2001 had an estimated life expectancy of only 45 years. HIV/AIDS affects nearly 11% of the adult population. Polio is still prevalent and in September 2001, an outbreak of meningitis began, accumulating 2,329 cases by March 2002 with 118 deaths. In response, the World Health Organization initiated a polio vaccination campaign and the European Commission allocated one million euros to support a similar meningitis vaccination campaign. Both campaigns began April 2002. The Ethiopian government also appealed to the United States for an additional US $2.5 million to control the meningitis epidemic.
More urgently though, the Ethiopian government has appealed to the international community for famine relief. Fall 2002 found the country facing severe drought and famine, with up to 15 million people facing disaster. The famine could be much worse, officials say, than a 1984 famine in Ethiopia that killed one million people. In response to Meles's appeal, the United States donated thousands of tons of food aid, as well as US $87 million in emergency aid.
The famine came on the heels of the collapse of the coffee industry in Ethiopia. Prices have fallen dramatically for the country's primary product, due in part to unfair global trading. Coffee plantations began to replace their crop with chat, a narcotic drug, a practice that has further complicated the social structure in Ethiopia.