I had a chance to visit the great nation of China twice in 2011 and 2013 for about ten days each. It was a very short time to explore such a big nation within ten days. At that moment, I visited Beijing, Shanghai, Guangzhou, Hangzhou and Hunan. Due to my professional background, I have also visited the “Three Gorges Dam” which is the world’s largest hydroelectric power plant with 34 generators each with a capacity of 700 MW and in total 22,500 MW.
My visit to “Three Gorges Dam” in 2013 was worthwhile since Ethiopia in 2011 had started to construct the seventh largest dam in the world called the Grand Ethiopian Renaissance Dam (GERD). The visit was aimed to get skill and knowledge to utilize for the construction management and operation of GRED. GERD has 16 generators and each planned to generate a capacity of 375 MW and in total 6000MW, which is about one-fourth of “Three Gorges” hydroelectric plant. The project’s construction cost is fully covered by the people and government of Ethiopia.
The word Renaissance is used in the name of this iconic mega project to remind people that Ethiopia was one of the great ancient civilizations centuries ago. But for the last millennia, the country suffered historical downturn politically and economically becoming one of the poorest, backward and war ravaged nation. Now that the country is registering a rapid economic growth and becoming politically influential it is hopeful that it will revive into its former glory or achieve Renaissance serving as a symbol for other developing nations, especially for African nations.
This shows how things could be improved and achieved when the government determines to intervene selectively in the market failure whenever required as China did in the past several years. Here, as usual, and everywhere anyone can understand how the People’s Republic of China allows the developing nations to share its experience similar to visiting construction management and operation of the Three Gorges hydroelectric dam. The impacts of the Three Gorges hydropower electricity supply and other forms of energy infrastructure development are the results of China’s determination towards growth and development.
Currently and fortunately, I have also got another chance to explore this great nation-China for the third time due to the long term study. From the previous observation and current opportunity, it might be possible to explain the reality of China’s remarkable economic growth and development as well as its significant to African nations in general and to Ethiopia in particular. Infrastructures development helps as an engine for the development of advanced economic nations. Even if China is still on a transition and emerging economy its infrastructural development contributes a lot for industrialization progress. As to my understanding and of course others are also sharing me that within only four decades China has transformed itself from a poor centrally planned economy to a middle-income and emerging market economy. This growth and development can be observed wherever anybody visits the country except for some very remote rural areas of China. China is also currently involving global cooperation on infrastructure development through “the Belt and Road”, which aims to connect the world for development and prosperity. “The Belt and Road” likely to advance infrastructure construction plans and technical standard systems, pave for advancing the construction of global corridors and form an infrastructure network phase by phase linking all sub-regions in Asia, Africa, and Europe. This initiative is more important for the African nations including Ethiopia for their vision of economic development and integration.
African-Union envisages a long-term transport vision in its agenda 2063, which is in line with the objectives of “the Belt and Road Initiative”. Some of the objectives are reducing transport logistic costs for all modes of transport; improve and extend the connectivity of regions; promote transport infrastructure and services that are sustainable and friendly to the environment and communities. Hence, The Belt and Road Initiative has significance on AU’s agenda 2063 and development strategy of African nations.
China’s vision and action plan for The Belt and Road goes beyond infrastructure construction.Among the major objectives are connecting countries along the Belt and Road to fully coordinate their economic development, expand investment and trade facilitation, and eliminate investment and trade obstacles for the formation of a sound business environment within the region and in all related nations, promote cultural and academic exchanges, people to people exchanges and cooperation.
Africa has a good potential of natural and human resources that need to exploit and train to utilize as economic resources. During a low stage of development, it is obvious that most of the resource potential could not be utilized. Therefore, the first building infrastructure to increase existing resource utilization has an impact on economic development. Second, when development bounces to the upper stage it necessitates new economic growth drivers, advanced infrastructure investments are required to prime the appearance of new industries and sectors that will further increase an economy. Even though most African nations now exist at a low stage of development,some nations are indicating the possibility of economic development including Ethiopia. If they could strictly follow proper utilization of their potential economic resources with their economic strategies and policies they can achieve economic development.
In 2002, the industrial development strategy of Ethiopia was approved and its principle mainly emphasized expansion of labor-intensive industries, export-led development, and promotion of agricultural-led industrialization. As per the government’s goal, this industrial strategy refers to those, which are primarily involved in the production of manufacturing goods. Even if the industrial strategy was put in place in the country, it was very challenging to start the implementation phases. Of course, similar to other African nations Ethiopia has also some natural and human potential economic resources but there has been a shortage of physical capital such as infrastructures. As it was seen from China’s experience at the first stages of economic zone establishment the country assessed foreign direct investment around the globe and utilized for its infrastructure development. Before ten years ago Ethiopia was also searching investors around the globe to utilize the opportunities of private sectors participated in the industrial process.
Due to long-term relation the Chinese government through the Ministry of Commerce and Trade of China, “Eastern Industry Zone (EIZ)” was successfully established in 2007. The EIZ became a positive symbol of Chinese Government support to Ethiopia’s Industrial Development. Inside the industrial zone, there are many manufacturers from China such as Huajian shoes and Lifan motors. In addition to its revenue contribution, it creates many job opportunities for the local people. Ethiopia’s EIZ can be taken as the prime mover of the country’s ambition to establish additional new industrial parks. Hence, Bole-Lemi, Kilinto, Hawassa, Mekelle, Kombolcha, Adama, and Jimma industrial parks are established and have gone operational. Other industrial and agro-processing parks are also under construction. Several investors from China, India, and South Korea are involving in textile, garment and shoe production sectors, among others. As per the agreement between the government and the investors, almost 95 percent of the products are supplied to the foreign market, and thereby enhance the nation’s currency earning capacity. Moreover, the firms use local raw materials such as animal skin as input for their products. Therefore, it is possible to claim that Ethiopia has benefitted from China’s foreign direct investment and technology transfer from Eastern Industrial Zone the first of its kind in the country.
In addition to that from China and other Asian countries experience industrialization to be realized, it needs to create enabling environment by providing infrastructure for the investors such as telecommunication, road, electricity, air transport, water supply service, and railway to facilitate their logistics management during import and export as well as the production process. Even if the current infrastructures are not sufficient and efficient, most of the industrial parks are located along key economic corridors but need additional infrastructures especially for export facilities.
Through “the Belt and Road Initiative” China’s Government has been also playing a major role in the development of Ethiopia’s infrastructure which has a direct influence for industrial development. Because of this intention, Chinese Government supports the construction of Ethio-Djibouti Railway about 750km, which connect to the Port of Djibouti. Moreover, Bole international Airport Expansion which recently inaugurated, Addis Ababa-Adama Express High Way, Addis Ababa light Rail Ways, Adama I & II wind farm with a total electric power generation capacity of 204MW and many other infrastructures development are accomplished with the support of China.
China supports infrastructure development of Ethiopia through financial loan provision and involving on construction as well as management contract for operation on some of the infrastructures due to local skill limitation such as railway operation management until the locals could handle it. This could be seen as technology spillover to Ethiopia and the supports are not only aims for Ethiopia’s local infrastructure development but also for regional integration, Therefore, these show that China has been supporting Ethiopia before and after the “the Belt and Road Initiative” in the industrialization process and infrastructure development of the country. In Africa in general and in East Africa, in particular, there are also many infrastructure projects implemented by the Chinese government through “the Belt and Road”. For example, the 470km Nairobi-Mombasa railway line which supposed to ultimately link the land-locked Ethiopia, Rwanda, South Sudan and Burundi to the Indian Ocean.
In summary, the “Belt and Road” could help nations to jointly contribute and share benefits for promoting economic globalization and building human prosperity. Each nation should work hand in hand through belt and road initiative for better connectivity between regions and nations to capture opportunities that each location’s comparative advantage can offer. As China is taking a more active role on the global stage, it is an ideal position to collaborate with China for the developing nations to get lessons for their development. Infrastructure is always an essential part to increase the nation’s growth potential. As the aim of “the Belt and Road” is believed to create markets, facilitate the flows of products, resources, and ideas active collaboration between each region, nations and different stakeholders should be considered as the critical path.
Sometimes “the Belt and Road” is viewed as a threat and criticized by some developed nations. As we can see by our naked eyes in most developing nations including Ethiopia, the inadequacy of basic infrastructures such as electricity, water supply, roads, and ICT are huge and this market failure should be fulfilled by different mechanisms. One option is to utilize the global initiative such as “the Belt and Road” which could facilitate financial resources as success solution for all parties participating in the intervention. Whatsoever or by whoever said the reality of “the Belt and Road” and other intervention of China in Africa is goodwill and it is generating important economic development for the continent. To judge effect it is better to see the industrial zones and the infrastructure development supported by China in Africa in general and in Ethiopia in particular, which would speak more about the positive sign of “the Belt and Road”. Therefore, the African countries engagement with China through “the Belt and Road” is about productivity, economic growth, and development which are also in line with the AU’s vision in its agenda 2063 to integrate its nations.
The Ethiopian Herald April 20, 2019
BY WONDIMU TEKLE SIGO
