Ethiopia’s distinct path to development, with help from China

Ethiopia is the most stable state in the dangerous neighbourhood of the Horn of Africa, despite recently facing its worst protests in decades. The Ethiopian People’s Revolutionary Democratic Front (EPRDF) has been in power since 1991, having toppled the military Dergue regime (1974-1991). 

The country is touted as an economic and developmental success story. Growth rates have approached 10% annually for over a decade, compared to just 3% in the early 1990s. GDP was $54,8 billion in 2014, up from roughly $30 billion in 2010, although with almost 100 million people, per capita GDP languishes at $550 compared to the $1,700 average in sub-Saharan Africa. 

Ethiopia’s development narrative, at times simplistic and exaggerated (glorifying the ruling party), has nonetheless translated into tangible results. And China is a major chapter in this story. 

While large parts of Addis Ababa reveal a city under heavy construction and transformation, the most significant major improvements have occurred in rural areas, home to 80 million people, through government providing better agricultural inputs, building roads and investing in education and health. 

The poverty rate has dropped dramatically from 45.5% in 1995 to 29.6% in 2010. Ethiopia’s Human Development Index has improved by 45% over the past 15 years. In this same period, life expectancy at birth increased by 15.8 years, mean years of schooling rose by 0.7 years, expected years of schooling by 6.3, and gross national income per capita doubled.

Trade and investment

Trade and investment between China and Ethiopia has also mushroomed. Annual bilateral trade volumes multiplied thirteen-fold between 2003 and 2013. China has become not only Ethiopia’s biggest foreign investor but also its largest trading partner.  

Large-scale symbolic investment projects, like the African Union’s shiny new headquarters, dot Addis’s urban landscape. Its 100-metre high tower dominates the capital’s skyline. Costing $200 million, the building was entirely financed by Chinese grant money and implemented by the China State Construction Engineering Corporation, revealing Beijing’s ambition to strengthen its influence in Africa. 

Another symbol of development – Addis’s 32-kilometre light-rail system - was recently completed in just three years by China’s Eryuan Engineering Group.

Infrastructure

Chinese involvement in major Ethiopian infrastructure projects spans transport, energy and telecommunications. About 70% of the road network in Ethiopia – including the Ring Road around the capital, the Ethio-China Friendship Road and the Addis Ababa-Adama Expressway – has been built by Chinese companies.

The China Railway Engineering Corporation and China Civil Engineering Construction recently completed the 750km-long Ethiopia-Djibouti electrified railway line which cost $3,4 billion. Another huge contract, for the  major expansion of the Addis Ababa Bole International Airport, was awarded to the China Bridge and Road Corporation.

Energy

Energy is another key area of Chinese-Ethiopian collaboration, although most projects currently exist only on paper. The 300 MW Tekeze Dam, considered Africa’s highest concrete arch dam (or ‘the Three Gorges of Africa’), was completed in 2009 with the involvement of Sinohydro. 

Next to the partially completed Grand Ethiopian Renaissance Dam, Gibe III on the Omo River was inaugurated in 2015 and is expected to produce 1 870 MW. Dogged by major social and environmental concerns, the World Bank, African Development Bank and European Investment Bank withdrew from the project in 2010. 

That same year, the Ethiopian Electric Power Corporation and Dongfang Electric Machinery Corporation (a Chinese state-owned enterprise) signed a Memorandum of Understanding (MoU) to provide electrical and mechanical equipment (turbines), while Italian building company Salini was awarded the actual dam construction contract. The Industrial and Commercial Bank of China is believed to cover 85% of the $495 million project. 

Additionally, China Eximbank is financially supporting high voltage transmission lines to Addis Ababa to be implemented by another Chinese company. Chinese operators will build power transmission lines for the Grand Renaissance Dam on the Blue Nile River.

Telecommunications

Zhongxin Telecommunication Equipment has helped upgrade and modernise Ethiopian telecommunications. By establishing a large mobile network in Addis and eight other cities, ZTE has boosted mobile telephony from one million to 15 million users between 2007 and 2012, despite criticism over the poor quality of the network and the installations. 

With new, more rigorous quality controls, the market has been opened to other operators, including France Telecom. Given its firm grip on the economy, the Ethiopian government shows exceptional ability to readjust to unbalanced and detrimental situations.

Politics

There are strong political ties between Ethiopia and China. The ruling Communist Party of China sent delegations to the Ethiopian People's Revolutionary Democratic Front  (EPRDF) organisational conferences (in 2008, 2010 and 2013) and signed an MoU on Exchange and Cooperation with the party. Close links exist between Ethiopia’s Parliament and China National People’s Congress.

Although Ethiopia, unlike China, enshrined multi-party democracy in its constitution, its growing authoritarianism and its heavy clampdowns on dissent also draw some parallels with China.

The Ethiopian government claims to have a “Developmental Democratic Model” unlike many Southeast Asian countries, including China. It says democratic rule must accompany rapid development to stave off national collapse. Yet democratic progress in Ethiopia has stagnated in the aftermath of the 2005 election crisis that left nearly 200 people dead. The future will tell if Ethiopia can transfer its developmental successes to the democratic realm.

Read the occasional paper on which this article is based here.

National Pride, Power and China’s Political Calculus in Ethiopia

Dr Romain Dittgen and Abel Abate Demissie

Contrary to the predominant perception of all of China’s key partners in Africa being either resource rich or economic powerhouses, Ethiopia is neither. Its strategic position within the Horn of Africa and its stable and efficient – although coercive – government, coupled with the concentration of regional institutions in Addis Ababa, have gradually turned Ethiopia into one of the main entry points into Africa. While pursuing its own development path, the Ethiopian government has also been drawing inspiration from success stories in East Asia, not least China.

In terms of engaging with foreign partners, Ethiopia is increasingly skilled in linking its national development priorities to its foreign policy strategies. As a result, the ruling party’s firm grip on the economy and on political power is having a direct impact on its engagement with foreign actors. By focusing on the themes of peace and security, human security and governance capacity building, this paper not only explores the nature of political cultures and concepts of power in Ethiopia but also looks at the ways in which China navigates this complex political landscape (both domestically and regionally) while seeking to expand its foothold and bargaining power on the ground.

Bilateral relations between Ethiopia and China have improved significantly over the past two decades. Between 2003 and 2013 the yearly volume of bilateral trade has multiplied by more than 13 and China has become not only Ethiopia’s biggest foreign investor but also its largest trading partner. As part of its expanding role and tangible presence in the country, the Chinese government has constructed large-scale projects in Ethiopia, including the Express Toll Way, the first operative wind power plant, the Addis Ababa Light Track Railway, the Ethiopia–Djibouti railway line, the Tirunesh-Beijing Hospital and a Confucius Institute. This level of co-operation has also been strengthened by the relative proximity in political ideology between the EPRDF and the CPC.

Both Chinese and Ethiopian officials proudly refer to the longevity of their own history (5 000 and more than 2 000 years respectively), and speak about the importance and ownership of their state-led developmental path. Since Xi’s coming to power in 2013, domestic politics in China have been dominated by the ‘Four Comprehensives’ political guidelines. Less vague than the ‘Chinese dream’ concept, the aims of the ‘Four Comprehensives’ are for China to ‘(re)build a modern and prosperous society in all respects by 2020’, ‘strengthen the rule of law and improve the party’s conduct’, ‘enforce party discipline’ and ‘strengthen reforms’, with the last three being seen as strategic steps. Despite strong party-to-party links between the two countries, it is difficult to assess whether and how much these domestic Chinese guidelines are spilling over into the Ethiopian context.

As outlined in the course of this paper, Chinese influence in the fields of governance and politics in Ethiopia appears to be quite constrained, due to the nature of Ethiopian statecraft and the strong vertical as well as horizontal dimensions of power and control practised by the ruling party. Nonetheless, the EPRDF’s developmental rhetoric of enforcing strong limitations on personalised rent-seeking, clamping down on corruption and accelerating economic reforms, resonates strongly with the ‘Four Comprehensives’ envisaged by the Chinese leadership. This said, China’s power of persuasion is mostly limited to being perceived as an example of economic success, while, politically speaking, Ethiopia is much more drawn to emulate experiences from South Korea and Japan.

For Western partners, the importance is to assess when this eventual turning point – the evolution from a purely developmental approach to a broadening of the political discourse – might happen. Until then, maintaining a stable and effective government seems to form the basis of a tacit agreement between Western and Chinese stakeholders.

If complementaries between the broader ‘West’ and China in Ethiopia seem limited to contributing to development priorities, the importance of the regional focus provides numerous avenues for dialogue and collaboration. The most obvious one comes in the form of China’s intensified interest in engaging the AU alongside other Western powers. In the field of peace and security, where China is also becoming more active, it is fairly easy to provide practical inputs as the framework is already entrenched.

The African Peace and Security Architecture, which offers a complete overview – from prevention and management to post-conflict reconstruction and development – allows development partners to engage in specific areas. However, while the AU holds ownership at the strategic level, most financial support is still coming from the outside. According to the director of a research institute in Addis Ababa, ‘donors have a lot to say and are able to influence the decision-making process’.

As a newcomer in this position, China is willing to be guided and learn from its more established counterparts. At present, Beijing is more comfortable in supporting peacekeeping missions than getting too involved in conflict prevention and mediation. Yet Beijing’s reaction to recent terrorist attacks (also directly affecting Chinese citizens), as well as the confirmation that a logistics hub for military operations will be set up in Djibouti, not only signals a broader, more active role for China but also provides possibilities to collaborate with Western countries, both at AU level and throughout the Horn of Africa.

Continue reading the full paper, entitled “Paper Own Ways of Doing: National Pride, Power and China’s Political Calculus in Ethiopia”, on South African Journal of International Affairs.

 

Promoting Stability and Development in Africa: The case of Ethiopia

(Mehari Taddele Maru and Abel Abate Demise)

During his meeting last year with Prime Minister Haile-Mariam Desalegn of Ethiopia, President Barack Obama pointed out the enormous progress in a country that once had great difficulty feeding itself. It’s now not only leading the pack in terms of agricultural production in the region, but will soon be an exporter potentially not just of agriculture, but also power because of the development that’s been taking place there (White House 2014).

Referring to Ethiopia’s economic performance as “one of the fastest growing economies in the world,” he dubbed the country as exemplary of the “bright spots and progress” in Africa. Recent promising mega trends in economic growth and relative stability in the region, coupled with an expansion of both middle class and market fueled by a fast growing population have created a surge of interest in trade and opportunity for investment.

Both internal and external factors and driving forces will have significant bearing on Ethiopia’s future peace and development and thus its regional integrative and security role. Although successful in dismantling the old unitary State of Ethiopia, the EPRDF is still struggling for a clear vision around which Ethiopia and its diverse people can rally.

Dominating the political space for two decades, the EPRDF has been striving to build a new federal developmental State. What is more, the country’s recent successes have come with a price.

Public-investment driven growth has marginalised the role of the private sector in the national economy, reducing the space for innovation and entrepreneurship required for a globally competitive economy, and for sustainable productivity-based growth. And while Ethiopia’s growth trajectory has auspiciously avoided increase in inequality, inflation – particularly food inflation – has been among the highest in Africa. The opening of opportunities for education, especially higher education, has not been met with job opportunities for a better educated youth.

From 1995 to 2009, total primary school enrolment rose by a staggering 500 percent (from 3 million to 15.5 million) (Engel and Rose 2011:7). The ripple effects of rapid mass-ification at the elementary level are felt at higher levels of education and vocational training, bringing immense challenges to educational quality and employment opportunities that match the numbers and skills of graduates.

Despite the existence of comprehensive legislative and institutional frameworks, corruption also remains an invasive social ill that could undermine Ethiopia’s development (Transparency Ethiopia 2009).

Infrastructure development, land administration, procurement, judiciary, enforcement and other organs of the State and government are the most corrupted (Tsegaye 2012). Rent seeking in the form of nepotism and corruption has been identified by the ruling party EPRDF as a grave internal challenge to the party and the Ethiopian political system.

However, given that constitutional accountability is weak under the dominant party, and the only existing accountability is intra-party, the EPRDF may not be able to combat corruption effectively.

To put it under control, corruption will require a cutthroat struggle. If not combated swiftly and effectively, corruption could easily become the most fatal political gangrene for the legitimacy of the ruling party.

In spite of all the country’s progress (World Bank 2015), extreme poverty will remain Ethiopia’s main source of threat to peace and security for decades to come.

Looking into the future, the main challenge will be maintaining the pace of transformation by scaling up and deepening reform. So far the main drivers of economic growth have been public sector investment and public service reforms. Both have their limits in terms of bringing about economic transformation.

With high population growth and demand for consumable goods, Ethiopia will be even more dependent on the security of its neighboring countries with access to the sea. Peace and security in the region will become increasingly intertwined as Ethiopia’s population and economy surge, and demand for consumption increases. The private sector will be vital in contributing towards bringing this transformation.

Regional priorities in the area of peace and security are: (1) common transnational threats to peace and security such as terrorism and piracy; (2) troubled neighbourhood due to State failure or poorly performing States; (3) nation-building based on animosity; (4) secessionist movements; and (5) rivalry surrounding geopolitical issues such as access to the sea and secure port services, including the security of trade and oil supply routes.

Ethiopia has shipping lines that are vulnerable to piracy. Any threat to Ethiopia’s secure access to the sea and port services will gravely endanger the peace and security not only of Ethiopia but also of the region.

The external context, particularly in the neighbourhood and the Nile riparian countries (especially in Egypt), will have a significant influence on Ethiopia’s future peace and development. These developments will determine whether the promising mega-trends in economic growth and relative stability in the region will continue.

Coupled with the expected expansion of the middle class (Heeralall and Ben Abdelkrim 2012) and a market fuelled by a fast growing population, Ethiopia’s role in regional integration and security will create a surge of interest in trade and opportunity for investment.

In regional diplomacy and integration, Ethiopia’s pivotal role within the IGAD and to a significant extent in the AU will continue to grow.

This paper has discussed the following six factors as the basis for Ethiopia’s contribution towards internal and regional stability and integrative development:

(1) Ethiopia’s inward-looking foreign and national security policy and efforts to address longstanding internal political instability and extreme poverty;

(2) Ethiopia’s recent promising economic performance, which offers hope for its people and attracts aid, trade and investment;

(3) Ethiopia’s military strength and role in regional peace and security;

(4) Ethiopia’s trusted mediator role in IGAD and at the AU level;

(5) Ethiopia’s role in combating terrorism and its strong counterterrorism capabilities; and

(6) A Pan-Africanist historical legacy and Ethiopia’s increased and effective use of multilateral platforms.

On a global level, Ethiopia’s overlapping interests with dominant and emerging powers such as the US, the EU, China and India, its geographic location, and traditionally strong military create demands for long-term partnership and alliance. International actors including the UN, EU, US, China and others actively endorse Ethiopia’s role in the IGAD region.

Ethiopia carries significant clout in IGAD decisions, AU endorsements and interventions, and the UNSC resolutions with regard to the region. The US, EU and China are in close consultation with Ethiopia on issues related to Sudan, South Sudan, Somalia and even Eritrea.

Read the full paper, entitled “Promoting Stability and Development in Africa: How to Foster Cooperation between Public and Private Sectors” at Istituto Affari Internazionali (IAI).

 

ETHIOPIA’S POLICY TOWARDS THE AU: TIME TO LOOK BEYOND UNIQUE CONTRIBUTIONS & SPECIAL RESPONSIBILITIES

Dr. Mehari Taddele Maru & Abel Abate

Ethiopia has a well articulated foreign and security policy called the Foreign Affairs and National Security Policy and Strategy (FANSPS). Its substantive anchor on development and stability as well as geographic focus on the Horn of Africa and Egypt reflects divergence from previous regime’s assessment of the state of affairs of Ethiopia and the means (including diplomacy) necessary to move forward.

However, Ethiopia’s detailed policies towards the Horn of Africa and to that matter the entire Africa are not a substitute to its policy towards the AU for the following reasons:
First, the AU, like any multilateral regional governance institution, constitutes more than a summation of the member states. AU’s norms, institutions and procedures do not readily aggregate the preferences of each member states, rather they look for an overlapping consensus as stated in the AU Constitutive Act and its various decision and policy making, and implementation organs. Thus, AU offers opportunities to countries like Ethiopia to influence, shape and impact continental policies that have bearings internally and regionally.

Second, Ethiopia has always been home to the AU headquarters. This entails in the wording of FANSPS, ‘a special responsibility.’ In this regard, the most substantive statement in FANSPS reads: “Ethiopia all along steadfastly championed the cause of Africa and Africans dating back to a time when it stood virtually alone.” There has never been a time when Ethiopian governments shied away from taking up their responsibilities towards Africa. It can also be said that there was hardly any occasion when Ethiopia was refused political and diplomatic support from Africa when it was needed. This emphasises on historical support of the OAU/AU to Ethiopia’s interest, ensures AU’s continued and robust support to Ethiopia in the future.
Third, indeed Ethiopia has hugely sacrificed its national interest in many occasions in support of Pan Africanism albeit only with general principles and ad hoc reactions dictated by dynamic circumstances. In spite of being the seedbed for Pan Africanism, the principal force for the establishment of the OAU, and the host of the AU for five decades, Ethiopia lacks a self-contained comprehensive policy toward the AU that clearly articulates its national interest and how to strategically pursue these interests in the AU. Despite the absence of a full-fledged and self-contained policy, throughout the past five decades, Ethiopia’s commitment, overall direction and contributions have been that of continuity and consistency.

Addis Abeba: The Diplomatic hub of Africa

Since May 1963 (de jure since July 1964), Addis Abeba has served as the Headquarters of the OAU. In the earliest times of the OAU, Ethiopia provided not only land and buildings, but also offered all the human and physical facilities that the OAU required. In 1963, Nigeria, and in the early inception of the AU, Senegal and later on Libya under Colonel Muammar Qaddafi, attempted to move the seat of the OAU/AU from Addis Abeba.

Despite these attempts however, the AU rules governing the hosting of AU summits designated Addis Abeba as the only headquarters of the AU, and agreed Ethiopia to host the January/February summit every year. However, individual member states could apply to host the June/July summit. The rotation of the June/July summit was originally devised to reduce the pressure from Colonel Qaddafi as a compromise deal to have two summits per annum and the rotation of the June/July to allow member states such as Libya to host summits.

As Africa’s diplomatic centre, Addis Abeba hosts the most important of all AU organs and Pan African institutions. Chief among these include, the AU Commission, the Permanent Representatives Committee (PRC) of the all AU member states, the Peace and Security Council (PSC), and the Committee of Intelligence and Security Services in Africa (CISSA). Other Pan African institutions include the United Nations Economic Commission for Africa (UNECA), UN office to AU, the Eastern African Brigade Headquarters, and Eastern African Standby Force Logistic Base, Pan African Chamber of Commerce, IGAD programmes such as Conflict Early Warning and Response Mechanism (CEWARN), IGAD Security Sector Programme (ISSP), and Liaison Offices of the Regional Economic Communities (RECs). Other accredited diplomatic representations to the AU include the United States, the European Union, China, India, Brazil and the United Nations agencies and other international multilateral and humanitarian organizations. While the US and EU have two heads of missions –a bilateral Embassy to Ethiopia and a multilateral Permanent Mission to the AU, China and other countries are considering establishing separate missions to the AU. On average, Addis Abeba also serves more than 1,100 meetings annually, related to Pan-African issues. During the January AU regular Summits, Addis Abeba hosts an average of 7200 delegates, and more than 40 heads of states and governments.
Addis Abeba’s special responsibility for the AU

In the words of FANSPS, Ethiopia’s opportunity to host the AU comes with “a special responsibility for the organization.” Nonetheless, what constitutes ‘special responsibility’ is not defined in the FANSPS or any other policy document. Ethiopia regularly pays its assessed contribution (for 2014, USD 1.8 million) based on the country’s GDP. Ethiopia is one of eleven AU Member States that has not only fully paid its contributions for 2014, but also one of the five that usually makes advance payments. Traditionally, Ethiopia, not necessarily for the sake of the OAU or AU, has provided a secure and enabling environment for the OAU and AU. Exemplary in many ways, these, however, do not constitute ‘special responsibilities’ of Ethiopia to the AU.

A consequence of the absence of a policy in regard to the AU, despite putting forward some of its prominent ministers and diplomats as candidates, so far, Ethiopia has failed to assume any visible, influential professional and elected posts at the AU Commission. In a bid to offer leadership to the AU Commission, Ethiopia unsuccessfully proposed several candidates (including to the posts of commissioner of peace and security in 2012, and political affairs of the AU Commission in 2003). Due to a weak nomination process and nearly non-existent campaigning strategy, unlike other significant countries, Ethiopian candidates were destined to fail.
Beyond unique contributions & special responsibilities

Signifying the genuine commitment of Ethiopia to the causes of the OAU/AU, regardless of their diametrically opposed internal policies, successive rulers of Ethiopia have continued to pursue the same policy on the OAU and AU. Ethiopia’s approach to the OAU/AU is characterized by continuity throughout many decades albeit in the significant changes in the internal underpinnings of Ethiopia foreign policy.

While the Pan-African positions promoted by the last three regimes were equally solid, nevertheless, their policies foundations and ambitions in relation to the AU were unambiguously divergent. While the regimes of Emperor Haile Selassie and Colonel Mengistu were outward looking and excessively externalized Ethiopia’s internal problems, the current regime is extremely inward looking. The former two also reduced Ethiopia’s domestic problems to what they termed ‘historical enemies’, and thereof used OAU to mitigate these external threats. Rooted in its ideological beliefs about the root-causes of Ethiopia’s internal troubles and perceived solutions, for the EPRDF, the AU and the IGAD remains another platform for solving regional challenges that affects Ethiopia’s internal governance and development problems. Consequently, unless directly affecting Ethiopia’s developmental agenda, Ethiopia’s current approach to the AU and continental affairs is un-ambitious and self-restraining. It is narrow as well as ad hoc. For this reason, Ethiopia has no grand strategy regarding the AU.

For Ethiopia, a country with a population of 90 million, projected to reach 120 million in the next 20 years, a strategy that proactively deals with its challenges with foresight is not only vital for its economic transformation, peace and stability, but also critically important for the peace and security of the entire region. Extreme poverty, internal political stability, economic development and regional integration, security in water, energy, food and climate change, the Nile River Basin, access to the sea and port services, as well as transnational threats dictate the need for grand strategy towards AU and even IGAD.

Thus, in order to maintain and increase Ethiopia’s influence in the AU, in addition to and beyond the personal capacity of its leaders, Ethiopia needs strategic long-term policies and institutions anchored inwardly not only to protect, but also promote its interest at the AU level. Enough has been changed to demand a grand strategy for Ethiopia regarding the AU. FANSPS needs a fundamental rethinking and reorganization to ensure Ethiopia benefits from the AU. Less concerned about ideological positions, grand strategies on the AU would detail how Ethiopia should make use of the AU in fostering peace, security, prosperity and stability. Anchored within the inward looking foreign policy along the lines of the national interest of Ethiopia, such a grand strategy to the AU need to be an outward looking pursuing multilateralism in vigorously promoting economic and integrative opportunities and dealing with threats proactively. Such a strategy would take Ethiopia’s history, large population, strategic geographic location, military strength and economy, but primarily on mega trends that will define Ethiopia in the future.