BY MENGESHA AMARE
It is recurrently proved that economic growth can be secured using myriads of mechanisms that have proven potential to help nations grow well. This time around eyeing on development catalysts predominantly industrial parks and/or zones is highly becoming a viable boulevard to bring about economic development.
Having a stay with The Ethiopian Herald, Meseret Belachew, an economist graduated from Wollo University said that with rapid globalization, industrial parks are playing an increasingly important role in the national and regional development which will have a direct bearing to continental or global economic recovery. Especially since the new economic reform was put forward in Ethiopia, industrial parks at national-level have been emerging with new development features, trends and capacities.
The establishment and operation of Industrial Parks in Ethiopia has significantly increased its macro-economic status. True, the positive role of industrial parks’ development projects for environmental protection, infrastructure development, employment opportunities foreign currency generation and technology transfer is untold indeed, Meseret added.
As to her, inclusive and sustainable industrialization has been considered as an engine of structural economic transformation within the realm of a country’s sustainable development. In order to gain leverage amid the emerging national or continental socio-economic dynamism for promoting successful industrialization, policy framework with proper implementation strategy for industrial tasks is a key determining factor of the process.
Meseret said, “It is important to draw decisive lessons and experiences from countries like China, Taiwan, South Korea, Singapore, Vietnam, Australia, and Mexico, which properly planned and effectively implemented industrial parks development as it could be a better means of promoting sustainable industrialization and a key driver of a country’s sustainable development.”
As to her, undertaking industrial parks’ development is instrumental in achieving the basic policy objectives of industrialization by attracting foreign direct investment, promoting export, creating large-scale employment opportunity, facilitating agglomeration of industries, enhancing sustainable urban development.
As learnt from Meseret, supporting successful implementation of a structural economic transformation strategy, serving as technology transfer and adoption center as well as acting as a test center for the new policies and implementation strategies would be of paramount importance in buttressing the economy of Ethiopia.
Most importantly, she said Industrial Parks are paramount for the growth of small and middle-sized enterprises in Ethiopia, indeed! They are pivotally important in promoting entrepreneurship as they are an ideal catalyst for industrialization and economic development.
They would also help put into place an infrastructure that fosters and attracts entrepreneurs of all scale and size. Industrial parks also foster regional development as they promote economic activity in adjacent neighborhood areas by offering better employment opportunities, fueling shared facilities, which means industrial parks offer all urban amenities that businesses desire and benefit as per the data secured from telecommunications, postal facilities, banks etc., she opined.
The aforesaid facilities have to be available for all enterprises to use and benefit from as well as boost SME Productivity as these businesses are not capable enough of ensuring all business verticals keeping regional or global standard. Hence, the role of Industrial Parks has become increasingly important for SMEs looking for an increase in productivity through the introduction of efficient logistics and supply chain solutions.
Nevertheless, it has been noted that the practices and process of industrialization in Ethiopia has been impeded by insufficient skilled labor, inadequate investment capital, lack of feasible and advanced production technologies, poor and inadequate raw materials supply, good governance problems caused by inefficiency and institutional defects, weak logistics and trade facilitation systems, lack of competitiveness, environmental pollutions and natural resources depletion problems as well as unstable political situation, she added.
This scenario has, as to her, to be prettily overcome to help the country meet what it has long aspired with regard to economic growth and overall development.
The reason why Ethiopia succeed or fail in achieving the basic sustainability objectives of industrialization through industrial parks’ development could be because of the differences in their specific contexts which need to be critically investigated in order to design and implement appropriate policy framework for promoting sustainable industrial parks development, she added.
As to Meseret, sustainable industrialization is a crucial process for achieving Ethiopia’s structural economic transformation. Besides, the 2030 agenda for sustainable development recognizes the importance of inclusive and sustainable industrialization as it generates economies of scale in national output, increases household income with more stable and higher-skilled manufacturing jobs as well as expands consumption by setting economies on a virtuous growth cycle.
Sustainable industrial parks’ development is neither a short-term fix nor a magic bullet as it highly requires much thoughtful aspect and scrupulous consideration.
The construction and operation of industrial parks development projects are widely used as a major economic development strategy for most policy and decision-makers. Currently, there are 32 industrial parks in different zones, special zones and city administrations in Ethiopia.
The existence of industrial parks has revealed presence of high community commitment, abundant non-financial resource, tangible government support and good social capital in Ethiopia as the major factors that optimize economic impact of industrial parks’ development project, whereas existence of unskilled labor supply, concentration of Ethiopian Industrial parks in the urban areas and out-dated technology are the major factors that diminish economic impact of Industrial Parks’ development projects, Meseret underlined.
“Industrial parks have great importance for the economy’s development – from local and regional, even to the global level. They represent modern platforms that provide excellent conditions for investment and development encourage industrial development, and bring large benefits. The way in which industrial parks have been shaping the development of production, trade, transport and the economy in general,” she added.
According to Meseret, in highly developed countries, industrial parks are enormous business centers with the necessary infrastructure, and are placed at the intersections of key transport links. This has made it easier for farmers to do business, use resources, apply a circular business model, reduce expenses, and better manage their risks. However, for underdeveloped and developing nations, industrial parks are the most efficient way of stimulating economic development, modernizing the industry, embracing innovation, and increasing the number of jobs available. The most important thing is that the development of parks attracts foreign investments.
Industrial Parks are being opened in accordance with the economic needs of each regional state in Ethiopia, which has led to a huge economic and industrial development. What speaks to the importance of industrial parks is the fact that their concept has served as a model for creating new platforms, such as agro-industrial parks, technology or science parks, innovation districts and eco-industrial parks. Industrial parks easily respond to new market demands, they are advancing and becoming an integral part of industrial development and beyond.
Meseret said, “Industrial parks offer infrastructure and various services to companies through land planning and development, and desirable industrial park promotes economic development via a group effect. Nevertheless, industrial parks located in different areas might have imbalanced development and differences caused by the input of knowledge, technology, resources and regulations, as well as industrial scale and structure. Hence, the government is expected to work more to create a balanced scenario as much as possible.
She further elucidated that after undergoing industrial transformations with time, planned industrial parks need to be rearranged and transformed based on changes in interior demands and exterior environment. Consequently, the ability of industrial parks to resist and react to shocks, and the adaptability of industrial parks in terms of long-term development which further resulted in economic resilience also need to be revisited.
Meseret wrapped her ideas up saying that manufacturing companies often come together in industrial parks, where they can reduce costs and environmental impact by sharing infrastructure. In Ethiopia, industrial parks have a particular advantage because of their joint access to some of the local companies and public sectors. Now, Ethiopian industrial parks are working hard to take the lead in terms of buttressing the economy of the nation. At the same time, industrial parks have a shared knowledge base which can pave the way for developing and testing climate-friendly solutions. Industrial parks are home to companies, which receive a considerable share of materials for industrial tasks and create a number of job opportunities for too many fellow citizens.
The Ethiopian Herald 18 June 2023
