The Government of Ethiopia and its development partners continued to work together in enhancing aid effectiveness for the achievement of the PASDEP and the Millennium Development Goals (MDGs). In February, a High Level Forum (HLF) took place between development partners and the government to discuss the role of the private sector in the development of the Ethiopia economy. The discussion was focused on the creation of an environment that fosters the development of the private sector. Other areas of mutual interest included the preparations and support for the local elections held in April. The Annual Progress Review meeting of PASDEP took place in May to take stock of some of the achievements. The government indicated that although challenges remain, there had been a decline in the levels of poverty in both rural and urban areas and significant progress had been made in the education and health sectors. 
A significant part of the year was spent in dialogue with government at agency and diplomatic levels regarding the draft Charities and Societies Proclamation. Donors expressed concern about how this may affect development interventions undertaken through CSOs.
In the area of harmonization, the government and the DAG took part in the global OECD Survey on the implementation of the Paris Declaration on Aid Effectiveness and Harmonization. Although much more needed to be done using government public finance systems, the survey showed considerable progress in the use of programme based aid modalities. 
Global challenges emerged in 2008 which had an impact on the progress made in achieving development results. Challenges included the global financial crisis, an increase in the price of oil and food particularly grains and cereals. Within Ethiopia, the situation was exacerbated by the failure of the Belg rains. Development partners, the United Nations and the government worked together to raise additional resources to support the affected communities and provided humanitarian support in a well coordinated and effective manner.