BY LAKACHEW ATINAFU
As one can see it from the perspective of diversity in terms of climatology and nation settlement, Ethiopia is not a mere nation; rather it is miniature representation of the planet of the earth embroidery of nations, nationalities and composed of diverse latitude ranging from Dashen to Dalol.
However, no one can deny that the colonial period and its legacy left Ethiopia with no port for the deep rooted hatred of humiliated whites at the battle of Adwa. Among all these worrisome and sleepless defamation and character assassination, Ethiopia manages to wow the world in attracting Foreign Direct Investment (FDI).
Formulation of sound foreign policy and contextualizing to the objective reality of regional political and geospatial elements would be the pillar in shinning out in as a country to be influential in international sphere of diplomacy.
Attracting FDI is crucial for a country to sale itself to the world market and one of the econometrics parameter for the GDP and image building. The Ethiopian Investment Commission (EIC) said that the Cessation of Hostilities Agreement (CoHA) helps foreign investors come up with increased confidence thereby flowing to work on various sectors.
Speaking at the discussion forum EIC conducted recently with its developmental partners revolving around future priorities and strategic areas to attract more FDI, EIC Commissioner Lelisie Nemie said that, the new FDI flow into Ethiopia has been growing following the signing of the agreement.
She said: “The Ethiopian government has planned to stimulate investment and FDI in collaboration with development partners and the Commission is supporting FDI across their business life cycle by promoting their investment and through their exploration phase.”
Investment policy and strategy development, undertaking project-based studies on investment areas, promoting public-private dialogue on investment, carrying out diagnosis on the overall investment areas will be addressed within the fiscal year, according to EIC.
Besides, creating business linkages, promoting export trade, Job creation, and digitalization of the sector have also been identified as priority intervention areas of the commission, The Ethiopian Herald learnt.
Briefing local media, EIC Deputy Commissioner, Daniel Teresa stated that, the interest of investing in Ethiopia is now stimulating once again after a two year long war. Following the CoHA, several foreign investors have shown keen interest in investing in Ethiopia and the commission is running to make the business environment more workable, he noted.
The commission is always ready to serve and to support foreign and domestic investors, he added. EIC Development Partners have also stressed that, the peace agreement between the government and TPLF has escorting role to restore investors’ confidence.
European Investment Bank Head of Representation to Ethiopia and African Union, Eleni Kyrou, on her part, indicated that the investment sector should be safeguarded by and guaranteed with political stability.
Sustainable Industrial Clusters Program Head at Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ), Anna Waldmann, on her part, commented that the peace accordance grants GIZ to perform activities using its full capacity, and she cited that they have a plan for supporting the manufacturing sector and it would help them create more jobs.
Ethiopia’s foreign policy has been centered on economic diplomacy, at the core of which is attracting Foreign Direct Investment (FDI). Diplomats have been tasked to promote investment opportunities, incentives, laws, rules, and regulations and recruit investors in the priority sectors identified by the Government. Therefore, as part of its annual plan, each diplomatic Mission takes the assignment of recruiting a specific number of investors, based on which the annual performance of the Mission and the individual diplomats is evaluated.
Ethiopia’s remarkable economic growth has partly been attributed to the economic-centered foreign policy and diplomacy that the country has fittingly designed and aggressively implemented.
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 Reform, 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.
Despite the worrisome security situation, Ethiopia continues to attract sizeable 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 that cannot survive occurrences like the current conflict.
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.
However, this does not mean that Ethiopia’s FDI has not decreased due to the conflict in the northern part of the country and instabilities in several parts of it. 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.
From a diplomatic point of view, a strategic partnership entails an exceptionally close relationship between countries or other entities that are vital to promoting each other’s strategic interests. Strategic partnerships are mostly created with highly valued partners, which are carefully selected based on a realistic assessment of the significance of the partnership to the long-term interests of the nation
However, this does not necessarily mean that both countries should recognize each other as strategic partners. Country X may identify country Y as a strategic partner, while the latter may not identify the former as its strategic partner depending on the countries’ interests. Customarily strategic partnership is reflected through regular engagements, joint ministerial commissions, and other joint institutional mechanisms.
Mostly, states institutionalize strategic partnerships. Yet, there are no universally agreed or specific criteria to identify strategic partners. Even a country may not follow a uniform standard to identify and categorize its partners as strategic and non-strategic.
A(n) (ordinary) partnership is a relationship created as a part of the standard diplomatic practice based on the idea that international relation is progressive. Partners are important countries, organizations, or other entities but not valued as important as the strategic partners. This kind of partnership may not require institutionalized engagement.
THE ETHIOPIAN HERALD 20 DECEMBER 2022
