whilst addressing priority policy issues to maximise the impact of such spending. CAS supports Ethiopia in achieving four main strategic objectives, consistent with PASDEP: (i) fostering economic growth; (ii) improving the quality of and access to basic service delivery; (iii) reducing Ethiopia’s vulnerability to drought to help improve prospects for sustainability; and (iv) fostering improved governance to support progress on the previous three objectives and empower citizens. PASDEP, covering the period 2005/06 to 2009/10, is the foremost medium-term development framework for accelerating robust and pro-poor economic growth and progress towards the attainment of the MDGs. 264 The performance of macroeconomic variables in the recent past has been remarkable despite repeated internal and external shocks to the economy. Significant achievements were made in the areas of economic growth, inflation control, employment creation, domestic resource mobilisation and the decline in fiscal deficits, export promotion (particularly of non-traditional exports), food security, private sector development and investment, among others. But in the last five years, the country has encountered internal and external shocks that led to high inflationary pressures, trade account deficits, and declining external reserves. However, government adopted several measures to reduce domestic borrowing, diversify export items and markets, expand private sector participation in agriculture and agro-industries, and promote increased investment in the cutflower industry, as well as improve the regulatory environment for medium- and small-scale industries. 265 In the energy sector, huge investments are being made in hydroelectric power generation – three main hydroelectric power generation stations are currently under construction, Beles (460 mega-watts), Gilgel Gibe II (420 mega-watts) andTekeze (300 mega-watts). This will increase the country’s total power generation capacity to 2,241 mega-watts in 2010/11, from 814 mega-watts in 2007/08. Fincha Amerti Neshe (97 mega-watts) as well as windmill power generation (150 mega-watts) are expected to be completed within 2-3 years. 266 With government’s commitment to private sector-led growth, a number of reforms aimed at improving the investment climate, attracting private investment (domestic and foreign), and increasing the level of productivity, are being implemented in Ethiopia. In this regard, the commercialisation and privatisation of state owned enterprises (SOEs) - under way for close to a decade - has gained momentum over the past five years with the establishment of the Privatisation and Public Enterprises Supervising Agency (PPESA). - 120 -