Unveiling the potential of Ethio-Saudi relations

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The history of relations between Ethiopia and Saudi Arabia goes back to the time before the advent of Islam. Long before the Prophet Muhammad (peace be upon him) sent out his first group of Sohabas (followers), there were intense relations across the Red Sea that manifested themselves in religious, economic, and political aspects.

Endowed with centuries-old historical ties, thriving modern trade, and investment, as well as strong people-to-people ties, and shared geopolitical interests, Ethiopian-Saudi relations offer a fascinating landscape for potential growth and cooperation. Despite the ups and downs in the past, the dynamics of bilateral relations between the two countries in recent years have created a favorable environment and a promising path for mutual benefit and prosperity.

Saudi Arabia, with its position as a key player in the Middle East, has recognized the strategic importance of maintaining steadfast relations with Ethiopia. Saudi Arabia’s interest in Ethiopia stems from its strategic geopolitical location and immense potential for economic cooperation.

The Saudis see Ethiopia as a gateway to the Horn of Africa’s opportunities for trade, investment, and strategic partnerships for peace and security. The evolving dynamics of global economics and geopolitics have further underscored the importance of engaging with countries in the Horn of Africa, mainly Ethiopia. This interest is driven by the Saudi’s shared vision of promoting stability, economic growth, and regional integration within the Horn of Africa.

The strengthening diplomatic relations between Ethiopia and Saudi Arabia enabled the two nations to navigate regional challenges and opportunities as well as set the stage for deeper economic cooperation for mutual benefit. The inclusion of the two countries in the BRICS bloc could be an additional factor for further cooperation.

Furthermore, the recent meeting of Premier Abiy Ahmed (PhD) of Ethiopia and Crown Prince Mohammed bin Salman of Saudi -Arabia at the sideline of the Saudi-African Summit would give a fresh impetus for consolidating the multifaceted relations between the two countries. “Our two countries have many strategic interests to cooperate on and to this end, we have reached an understanding to establish a high-level joint ministerial committee.” commented the Premier after the meeting.

The potential for economic cooperation between Saudi Arabia and Ethiopia is accentuated by the complementary resources that each country possesses. Saudi Arabia’s expertise in areas such as energy, infrastructure, and mining development, can align with Ethiopia’s rich natural resources and its focal development sectors defined in its Home-Grown Economic Reform Agenda.

According to a report released last year, the growth of Gulf investments in the Horn of Africa, dominated by the Saudis and the Emirates, is on the rise. The report also indicated that over 300 Saudi investors obtained licenses in ten years, to implement over 140 projects in Ethiopia in the field of agricultural and livestock production and over 60 other projects in the industrial sector.

These figures are sure to grow in the years ahead because the Arabian strategists have come to realize that uncertainties in world politics do not allow them to depend on the wheat of Ukraine/Russia or the rice of India that has to travel thousands of miles crossing several territories to reach their shore.

The volume of trade between Saudi Arabia and Ethiopia is also rising. This trend in trade volumes is another sign of the deepening economic ties and mutual reliance between the two countries. It also underscores the evolving nature of their economic relations and the opportunities that exist for further diversification and expansion of bilateral trade.

Ethiopia’s agricultural sector presents a compelling opportunity for Saudi investors, given its fertile land, abundant water resources, and favorable climate for a wide range of crops. There are also other tantalizing opportunities for Saudi investment in Ethiopia, particularly in sectors such as energy, manufacturing, and mining, where the potential for collaboration and mutual benefit is significant.

Investment in Ethiopia’s agriculture sector is not only aligned with the development priorities of the country but also resonates with the broader goals of enhancing food security, improving rural livelihoods, and environmental sustainability. By leveraging the expertise of agricultural technology and agribusiness of Saudi investors, Ethiopia can accelerate the modernization of its sustainable agricultural practices, improve water management systems, and foster innovation in agribusiness.

The pull factors drawing Saudi investors as well as tourists to Ethiopia include the country’s geographic proximity, contrasting climate, rich cultural heritage, natural beauty, and burgeoning economic opportunities. Moreover, Ethiopia’s investment climate, characterized by liberalized policies, and incentives for foreign investors, this condition offers an attractive proposition for Saudi investors looking to diversify their portfolios and capitalize on emerging opportunities in Africa’s fastest-growing economy.

Besides the growing trade and investment, the Saudis have been working with the Ethiopians as a development partner by financing various development projects in such areas as infrastructure, and energy as well as supporting Ethiopia’s macroeconomic reforms through debt restructuring.

The joint interests of Saudi Arabia and Ethiopia in fighting terrorism and promoting peace have been pivotal in shaping their diplomatic and security cooperation. It serves as a unifying force that strengthens their bilateral relations and underscores the broader significance of their partnership. Both nations share concerns about the threat of terrorism and the destabilizing effects it can have on regional security and stability. The two states have also been making joint efforts to fight human trafficking and illegal migration.

The shared commitment to countering terrorism has laid the groundwork for collaborative initiatives and capacity-building efforts. In February 2020, an Ethiopian delegation led by the then Defense Force Chief of Staff conducted a working visit in Riyadh to discuss with Saudi military officials the military and security cooperation between Ethiopia and Saudi Arabia.

By aligning their efforts and resources, both nations can amplify their impact in countering terrorism and fostering peace, thereby creating a more secure and stable environment for economic cooperation and growth. The collaborative approach to addressing security challenges and promoting peace reflects the deepening of the Ethio-Saudi partnership and sets the stage for continued engagement in addressing shared concerns and advancing common goals.

Saudi Arabia’s role in the signing of the historical peace treaty between Ethiopia and Eritrea, The Jeddah Peace Pact, in 2018 exemplifies its commitment to fostering peace and stability in the Horn region. This proactive diplomatic initiative by the Saudis have played a significant role in facilitating effective dialogue and reconciliation between the neighboring countries, thereby contributing to the resolution of the protracted no war –no peace tension between Asmara and Addis Ababa.

Saudi Arabia appears to have a positive reaction to Ethiopia’s effort to assert its sovereign rights to have access to the Red Sea which is essential to achieve its strategic development objectives. A report issued by a Suadi think-tank in 2020 reads: “In April 2019, Riyadh held a meeting to encourage discussions between Eritrea and Ethiopia over the Red Sea, in which the Eritrean president did not participate, citing differences with Addis Ababa and insisting on an alliance between Eritrea, Saudi Arabia, Egypt, and the Red Sea.”

The people-to-people relations between Ethiopia and Saudi Arabia form the bedrock of their bilateral ties, fostering mutual understanding and goodwill. The deep historical and cultural connections between the two nations have created a strong foundation for interpersonal interactions, and collaborative initiatives that promote cross-cultural awareness and appreciation.

So it is no wonder to find data indicating that, Saudi Arabia is among the top four destinations for Ethiopians seeking work abroad. Many Ethiopians migrate to Saudi Arabia for employment in the construction, domestic work, retail sectors, and others. There are also some Ethiopians running their own businesses and engaged in high-skill professional jobs. The nation is also home to a large number of Ethiopian students who are studying in Saudi Arabian universities. Saudi Arabia is among the top four countries with the largest Ethiopian Diaspora population.

After all, the undisputed heavyweight, when it comes to investment in Ethiopia, is the Ethiopian-born Saudi billionaire Mohammed Al Amoudi. The people-to-people engagements have contributed to the development of a robust network of human and social capital that underpins the enduring partnership between Ethiopia and Saudi Arabia.

Ethiopian-Saudi cooperation could go beyond bilateral engagements to include regional initiatives and partnerships that contribute to the broader economic landscape in the Horn of Africa and the Middle East. Through collaborative ventures in infrastructure development, energy security, and trade facilitation, both nations can play a transformative role in promoting regional connectivity, economic resilience, and sustainable development.

Looking ahead, the future holds great promise for Ethio-Saudi relations as it reveals the potential for various cooperations characterized by shared prosperity, sustainable development, and a lasting partnership that transcends geographical boundaries and creates opportunities for mutual benefit.

BY SOLOMON WASSIHUN

 THE ETHIOPIAN HERALD TUESDAY 28 NOVEMBER 2023

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