BY LAKACHEW ATINAFU
According to authorities, Ethiopia is able to attract Billions of Birr worth investment under the precarious situation. The recent exchange of words with the Ethiopian Investment Commission commissioner unveils that Ethiopia manages to attract sizeable investment.
Commissioner Lelisie Neme told the Ethiopian Press Agency that her institution has been putting in place attracting investment; let them operating and correcting delayed performance of projects on the investment sector. In doing so, over the preceding months from July onwards, a 1.07 billion USD investment capital was reported to be attracted though the country has been confronting internal and external challenges.
The empiric has shown a 28 percent growth vis-à-vis the preceding year’s performance of the same period. In terms of diversity, the manufacturing sector hit astonishing performance. Overall, there have been 54 new projects of which 33 are engaged in the manufacturing sector while the remainder opted in the service sector. The major investment generating country is China followed by other Asian countries.
The Ethiopian Herald had a Moment of togetherness with a diplomat, who agreed to speak to the reporter only on condition of anonymity, to investigate the issue from strategic partnership and international sphere of diplomacy.
The man is a middle-rank diplomat (Counselor) with close to ten years of progressive experience in implementing Ethiopia’s foreign policy. He has served in several diplomatic capacities at bilateral and multilateral posts, including Ethiopia’s Permanent Mission to the African Union and UNECA, Ethiopian Embassies in Mogadishu (Somalia), and Ethiopian Embassy in Washington DC (USA). He has acquired valuable expertise in the African Union system, the politics of the Horn of Africa and the Red Sea, International human rights and humanitarian law in Africa, the legal and political aspects of the Nile, Ethiopia’s foreign policy towards Somalia and the African Union.
As to the diplomat, despite the worrisome security situation, Ethiopia continues to attract sizeable Foreign Direct Investment (FDI). This can be attributed to several factors. First, astute investors understand that Ethiopia’s problem is temporary.
Despite the negative propaganda by some western media and partners, many have the confidence that Ethiopia is a dynamic country with an established state system and resilient people.
The experiences of many African and some non-African countries show that an armed conflict is not an absolute impediment to FDI. Investors always anticipate challenges and provide solutions in advance. Secondly, the Government has taken bold investment-related reforms, including the legal and institutional frameworks and administrative measures that ease doing business in Ethiopia.
The reforms have caught the eyes of investors, and several foreign investors have decided to take a risk. “Thirdly, we live in a multipolar world where several middle powers are making notable influence and contributions in less developed countries like Ethiopia. Multipolarism has created the advantage of widening policy options for Ethiopia as it no more relies on the will of a single partner to get what it needs to address its challenges,” the diplomat noted.
However, this does not mean that Ethiopia’s FDI has not decreased due to the northern conflict and instabilities in several parts of the country. Compared to the situation that existed some four years ago, the FDI has shown a significant decline both in terms of diversity of investors and amount of investment.
Furthermore, the situation has forced some established foreign investors to terminate their investment and leave Ethiopia while deterring potential foreign investors. Besides, the disturbing national security situation has been cited as a reason for some partners to exclude Ethiopia from regional and multilateral benefit such as the AGOA.
While the foreign policy has, for decades, been directed towards attracting FDI as a key priority, the coming into power of Prime Minister Abiy has enabled a new chapter where the legal and institutional framework, as well as administrative procedures pertaining to investment in general and FDI in particular, have been significantly reformed towards a more liberal, early and favorable system.
With the Government’s introduction of the Home-Grown Economic Policy, the primary focus of the Foreign Policy has been promoting and implementing this program. While implementing this program requires more aggressive diplomacy, the program has eased the diplomatic work by introducing inherently attractive and liberal initiatives.
Uplifting Ethiopia’s regional and global influence requires a wide range of measures at home and abroad. The armed conflict in Northern Ethiopia came as a golden opportunity for Sudan, Egypt, and some partners in the West to encroach into the country’s sovereignty or provide their prescriptions on domestic matters.
Secondly, for Ethiopia to exert enduring regional influence, it has to achieve the required level of economic development. A nation that cannot feed its citizens cannot exert sustainable regional influence. As much as Ethiopia is poor, it will continue to rely on other countries to satisfy its citizens’ basic needs, increasing its vulnerability to external pressure and manipulation, let alone making meaningful regional influence.
Thirdly, Ethiopia’s regional influence requires a well-articulated pragmatic foreign policy that considers the changing regional, continental, and global dynamics and realities. The Horn of Africa and the Red Sea region have witnessed unprecedented changes where major global and regional powers have made bold unilateral and concerted diplomatic measures to increase their presence. Some of such initiatives tend to exclude Ethiopia, thereby threatening to decrease its regional role and influence. Furthermore, the Horn of Africa region has become a geopolitical playground of major global competitors.
More importantly, with several actors from near and far participating in the scramble of the Horn of Africa, Ethiopia cannot/ should not sit hands folded; it must display its relevance by making some bold diplomatic, economic, and military measures in the neighboring countries. This includes participation in the establishment of military bases, port development, peacemaking, peace building, and peacekeeping efforts. Furthermore, Ethiopia should revitalize its antiterrorism policy and laws both at home and in the region and reaffirm that it is the most reliable regional actor in the fight against terrorism in Africa and beyond.
Besides, for Ethiopia to boost its regional and global influence, it has to use regional and sub-regional multilateral intergovernmental organizations such as IGAD and African Union. This requires a standalone comprehensive foreign policy towards these organizations. It should play a leading role in strengthening these institutions and show an unwavering commitment to accept and implement these organizations’ objectives, principles, visions, programs, plans, and decisions. Yet, the Ethiopian Government should do aggressive diplomacy in these organizations to make sure that the decisions of these organizations are consistent with its national aspirations and the shared visions of the member states.
Ethiopia must strengthen its bilateral relations with neighboring countries and the major geopolitical players in the region. Worth noting in this regard is the need for Ethiopia to forge good relations with competing global powers without showing any form of alignment towards one side. Ethiopia should be guided by its established policy of non-alignment and interest-based partnership that is centered on the widely known foreign policy maxim “there is no permanent friend, nor permanent enemy but permanent interest.” Ethiopia should not allow its territories to be a geopolitical playground for global rivals like China/ Russia and the US.
The diplomat further insisted that from the outset, one must note that AGOA is an essential but not ideal initiative for African countries. Therefore, while losing AGOA benefits could cause several socioeconomic and (possibly) political challenges, it should not be considered as the sole determinant of beneficiary nations’ economic prospects. First, having been used as a US foreign policy tool, one may logically doubt the very motive and purpose of AGOA. Secondly, the fact that the AGOA is the US’s grant for Africa, the continuation of which relies exclusively on the US, makes African nations donee beneficiaries hence contradicting the idea of establishing a mutually respectful relationship. While the US makes huge benefits from AGOA, it would be wrong and unfair to consider African countries the exclusive beneficiaries.
To prevent the aforementioned and related challenges Ethiopia and the US should engage in an interest-based constructive engagement. Continuing Ethiopia’s membership in AGOA program is in the interest of both Ethiopia and the US.
The two countries can work together to improve Ethiopia’s overall human rights situation through a mutually respectful engagement. If the US is to live up to its values, it should not exclude Ethiopia from AGOA because that would primarily affect the poor citizens rather than the Government.
Threatening the lives of millions of poor Ethiopians cannot in any way serve the purpose of human rights or any other value that the US is said to have stood for. The US should also understand that although it will not be affected as badly as Ethiopia, removing the latter from AGOA will adversely impact it. Furthermore, by excluding Ethiopia from AGOA the US will only give its traditional competitors, such as China, the upper hand in Ethiopia’s economic and political future.
The impact of Ethiopia’s exclusion from AGOA may go to the extent of damaging the relations between the two countries. Therefore, the two countries should deescalate the tension and build mutual trust, it was recommended.
The Ethiopian Herald December 16/2021
