1. At the end of the military rule, Ethiopia was at the brink of total collapse and disintegration. The country was strangled by economic policies deleterious to development; the citizenry was captive of an undemocratic and brutal regime, and the state rocked by sharp nationalist conflicts and interminable wars. Let alone its foes, Ethiopia's friends were convinced that the country's fate was sealed and its disintegration imminent.
2. Following the downfall of the military regime, the policies of the Derg, being detrimental to the country’s development were removed; policies based on the principles of free market economy were drawn up, and their implementation initiated. Among the many states effecting a transition from a command to a free economic system the timing and execution of Ethiopia's transition managed to avoid hurdles that would further weaken the economy or aggravate the crisis. In fact, the transition was made in a manner that achieved unprecedented economic growth. In addition to the satisfactory growth achieved, the experience gained on how to secure rapid progress was rich, and a firm foundation for further development laid down. Thus, significant headways were made in the economic front.