Why Ethiopia’s Fate Matters to China

Why Ethiopia’s Fate Matters to China China’s (rhetorical) pragmatism China usually adopts a pragmatic approach to insecurity abroad, centred on preserving Chinese interests which include the safety of Chinese citizens and investments on the ground. In accordance with the often proclaimed principle of non-interference in other countries’ internal affairs, a corner stone of China’s diplomatic rhetoric in the Global South that aims to frame China as a different external actor in comparison to interventionist Western counterparts, Beijing remained relatively quiet when fighting first started in Tigray in November 2020. Yet, though unsurprisingly, Chinese workers were evacuated from Tigray with the help of the central government in Addis Ababa. Since then, China has attempted to balance protecting its interests with preserving its close bilateral relationship with the Ethiopian government. China has publicly opposed potential US sanctions against Ethiopia and Chinese foreign policy officials have reassured Ethiopian counterparts that China will oppose interference in Ethiopia’s domestic affairs. In February at a regular press conference, Ministry of Foreign Affairs Spokesperson Wang Webin expressed China’s willingness to “offer emergency food assistance” and called upon the international community to support efforts to bring about stability in Tigray. In August, Dai Bing, chargé d’affaires of China’s permanent mission to the United Nations, told a Security Council briefing that China wants the African Union (AU) and regional countries to find a solution to the conflict, reflecting how Chinese diplomats generally emphasise the finding of “African solutions to Africa’s problems.” Earlier this month, China further supported a UN Security Council Statement which called on the warring parties to halt fighting and begin ceasefire talks. While China and Russia reportedly watered down the final wording, affirming the Security Council’s “strong commitment to the sovereignty, political independence, territorial integrity and unity of Ethiopia”, Beijing’s support nonetheless signalled China’s interest in finding a diplomatic solution to the conflict in a multilateral setting. Meanwhile, the Chinese embassy has tried to signal business as usual on their Twitter account, showing Ambassador Zhao Zhiyuan during a visit of Chinese companies in Ethiopian industrial parks earlier this month. While the US has ordered all non-essential personnel and their families to leave the country, China seems likely to stay put, just as they did in Afghanistan during the Taliban take-over earlier this year. Why there is much at stake for China Despite China’s reservations and the efforts to emphasise business as usual, Beijing is certainly watching the situation in Ethiopia very closely. As one of China’s strongest African partners, Ethiopia has a special place in China’s Africa policy. Ethiopia is widely regarded as the most successful example of implementing lessons learned from China’s developmental state in the African context. Ethiopia’s real GDP per person rose by an average annual rate of 9.3% from 1999 to 2019, making it one of Africa’s fastest growing economies. As a major investor and lender, China has been instrumental in the low-wage manufacturing boom that has driven Ethiopia’s economic growth over the last decade. According to data from the China-Africa Research Initiative, Chinese loans to Ethiopia amounted to a total of 13.729 billion USD from 2000-2019. Projects such as the China-built industrial park in Hawassa, a city south of Addis Ababa, are often portrayed by China’s state media as examples of China’s successful economic engagement in Africa. Addis Ababa is further home to the AU headquarters, financed and built by China, as well as the China-financed Centre for Disease Control and Prevention, which has contributed to Africa’s fight against COVID-19. The Addis Ababa – Djibouti railway, which was built and part-financed by China and opened in 2018, and its connection to the Djibouti International Free Trade Zone (DIFTZ), which has been integrated into China’s Belt and Road Initiative (BRI), as well as China’s first overseas military base which was inaugurated in Djibouti in 2017, reflect how China’s extensive regional economic interests extend beyond Ethiopia and are part of a larger strategic presence in the wider Horn of Africa. Such economic interests certainly shape China’s approach and concerns vis-à-vis the situation in Ethiopia. With the recent coup and ongoing instability in Sudan, state collapse in Ethiopia could further destabilise the security situation in the region, endangering Chinese personnel and entities. But economics are only one part of the picture as China also faces an image problem. Both Ethiopia and Sudan are quickly becoming a litmus test for China’s approach to overseas insecurity. China understands development to require security and vice-versa, a view that is often dubbed the development-security nexus. Sudan and Ethiopia are both major recipients of Chinese investment as well as part of China’s BRI and China has engaged diplomatically in Sudanese and South Sudanese intrastate conflicts. This makes much of what happens in the Horn at the moment a case study to observe the success of China’s developmental peace – the idea that peace requires development coordinated by a strong central government. Failure to secure stability in Ethiopia and the wider region will thus hardly leave China’s image in Africa and across the Global South untarnished. What China can do about it China therefore has plenty of impetus to act constructively to help bring about a peaceful solution to Ethiopia’s protracted conflict. With the 8th iteration of the Forum on China-Africa Cooperation (FOCAC) held in Dakar around the corner (29-30 November), Beijing has an opportunity to leverage economic influence and diplomatic clout to contribute to breaking the stalemate between the TPLF and Abiy Ahmed’s government, both through multilateral channels and bilateral ones. Actions mediated through FOCAC should factor into and support existing attempts to broker a ceasefire by the AU and Kenya, whose delegations will also be present at FOCAC. They should especially back former Nigerian President Olusegun Obasanjo, now AU envoy to the Horn, in coordinating a process of de-escalation and demilitarisation, premised on the TPLF halting their insurgency while Addis Ababa releases services and aid to the Tigray region. Empowering a regional actor with credibility to head mediation efforts will contribute to success when the time for negotiation comes. If the TPLF and the central government are unwilling to agree on such a diplomatic solution, China could offer to deploy Xu Jinghu, the Special Representative of the Chinese Government on African Affairs, or Wang Yi, China’s Foreign Minister, to engage in shuttle diplomacy between the conflicting parties. China worked pragmatically with the repressive and TPLF-dominated ERDF. Beijing is thus known to the major parties in the conflict and while observers note that it is unclear what exactly the TPLF would agree to in a political settlement with the central government, especially now that the TPLF is in a position of strength, China could nonetheless help set the table for such negotiations. While it seems unlikely at first sight, especially in the aforementioned context of rhetorical non-interference, there is precedence for such a diplomatic manoeuvre. In Sudan, Beijing supported negotiations over the division of oil revenues between Khartoum and the then Southern Sudan regional government. When South Sudan partitioned from Sudan in 2011 and descended into armed conflict two years later, China stepped up its crisis diplomacy. While cautious in essence, Beijing was able to leverage its economic influence to bring warring parties to the negotiation table. In January 2015, for instance, Beijing sent Foreign Minister Wang Yi to convene a “special consultation meeting” in Khartoum that included South Sudan’s warring parties, Ethiopia, Sudan and the Intergovernmental Authority on Development (IGAD), a regional organisation which includes Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda. Willingness to engage does of course not guarantee success. Given China’s strong conviction to state sovereignty and fervent support of Abiy Ahmed’s government, any diplomatic engagement will have to start with the central government, rendering Beijing vulnerable to criticism from the TPLF and the Oromo Liberation Army (OLA), an armed group operating south-west of Addis that has begun to cooperate with the TPLF. China would further be confronted with a polarised political environment in which any party working with external support may be accused of selling out Ethiopia’s sovereignty. This is complicated by accusations that missiles procured from China were variously deployed against, and captured by, Tigrayan rebels throughout the conflict, making it more difficult for China to appear as a neutral arbiter or table setter in the conflict. Given Addis Ababa’s strong commitment to framing the Ethiopian crisis as an issue of internal affairs and resulting scepticism of external involvement, China would have an even harder time in selling a diplomatic solution to an Ethiopian delegation at FOCAC, especially given Abiy Ahmed’s conviction to achieve a military solution over a diplomatic one. Proposals to mediate from the now reinstated Sudanese Prime Minister Abdalla Hamdok, who is also the chair of IGAD, and from South Sudan’s President Salva Kiir have been made to no avail. Despite all this, the carrot that China can offer is financial incentive. As a major economic player in the region with a reputation for working in risky environments, China is uniquely positioned to help in rebuilding Tigray and other regions affected by the war while also providing immediate disaster relief in line with efforts from the international community. In the context of the Biden administration’s decision to suspend Ethiopia from the US African Growth and Opportunity Act, which has meant to lower trade barriers between African countries and the US since 2000, China may emerge as an even more important destination for Ethiopian exports. It is certainly true that an overseas spending spree is now a harder sell for Beijing domestically compared to a decade ago, owing to China’s slowing economic growth. But China has usually showed up to FOCAC with a bag of cash and FOCAC already has several existing funding vehicles that could contribute to supporting Ethiopia’s reconstruction. China may not be able to help in creating a shared vision for the Ethiopian state – an endeavour ultimately necessary to bring lasting stability to the country – but Beijing can help in pointing ways towards a brighter economic future for an Ethiopian economy that has been ravaged by the war. Avoiding the worst It is unclear what will happen if Addis Ababa falls to the rebel insurgency. China would likely be poised to evacuate remaining citizens from Ethiopia, a complex operation that could involve People’s Liberation Army (PLA) troops stationed in neighbouring Djibouti, echoing evacuations from Libya in 2011 and Yemen in 2015. While China is certainly better prepared now than it was then to respond to any such contingency and has a history of pragmatically shifting allegiances based on political realities on the ground, it is in Beijing’s strong interest to avoid such a situation and help bring about stability in Africa’s second most populous country. Chinese officials have long sought to present China as a responsible great power that is capable of shouldering international responsibility.The situation in Ethiopia presents an opportunity for Beijing to step up to the plate.

Judge OKs Boeing Agreement to Settle Ethiopian Airlines Crash Claims

Judge OKs Boeing Agreement to Settle Ethiopian Airlines Crash Claims A U.S. judge on Monday approved Boeing Co’s agreement to acknowledge liability for compensatory damages in lawsuits filed by families of the 157 people killed in the 2019 Ethiopian Airlines 737 MAX crash. As a result of the agreement filed last week between Boeing and the families, lawyers for the victims will not seek punitive damages and Boeing will not challenge the lawsuits being filed in Illinois. Boeing said last week it was “committed to ensuring that all families who lost loved ones in the accidents are fully and fairly compensated for their loss.” Lawyers for the victims noted in a statement last week that Boeing admitted under the agreement “that the 737 MAX had an unsafe condition, and that it will not attempt to blame anyone else” for the crash. All further planned depositions with former and senior Boeing executives were canceled as a condition of the settlement. Boeing’s best-selling plane was grounded for 20 months after 346 people died in two 737 MAX crashes – in Indonesia in 2018 and in Ethiopia in 2019. The plane was returned to service after Boeing made significant software and training improvements. The crashes already have cost Boeing some $20 billion. In January, Boeing agreed to a deferred prosecution agreement with the U.S. Department of Justice including $2.5 billion in fines and compensation stemming from the 737 MAX crashes, including the Lion Air crash in October 2018. Under the deal with Boeing, the victims’ families also agreed to dismiss claims against Rosemount Aerospace, a company that made sensors for the 737 MAX, and Raytheon Technologies Corp’s Rockwell Collins, the parent of Rosemount and a key supplier for the MAX. Tags Boeing 737 Max ethiopia airlines ethiopia news teweldemariam

The Backlashes of AGOA Sanction: how will it affect the emerging industry sector?

The Backlashes of AGOA Sanction: how will it affect the emerging industry sector? Netsanet Sidamu has been working in the Hawassa Industrial Park for five years; having failed the national exam, her chance to secure future survival chances was hanging by a thread. She came from a remote rural area in Sidama Zone with a family to support. These stories of many underprivileged girls broadly dive into the unemployment pool. Living in a condition on the breadline is an acceptable criterion in countries like Ethiopia. After many years of struggle, high hopes emerged with a promise of profitable working opportunities, long overdue for the country’s economy, and people struggling with unemployment. The development of industrial parks in different parts of the country bridges the gap the country faces with the rise of the unemployment rate, lack of Forex, and direct foreign investment. The federal government has thus far invested close to 1.5 billion dollars to build more than 13 industrial parks. Of the 24 industrial parks developed in the country, 22 are now in operation. The government has managed to attract more than 250 domestic and foreign investors, which, until August 2021, created employment opportunities for 86,837 unskilled laborers and over 20,000 posts for skilled and graduates, excluding the three industrial parks in the Tigray region ceased operation for the previous year. Since the operation of the industrial park began, The African Growth and Opportunity Act (AGOA) played an immense role in attracting direct foreign investment, creating a better bidding chance for industrial production in Ethiopia. The African Growth and Opportunity Act (AGOA) is a unilateral trade preference scheme that provides duty-free treatment to USA imports of particular products from eligible sub-Saharan African countries. There are 49 candidates from sub-Saharan countries, with 48 currently a general system of preference (GSP) qualified for the preference benefits. All the 22 operational industrial parks now host more than 250 domestic and foreign investors. The two primary drivers that attract foreign investors to locate their business in Ethiopia are the country’s access to the US market through AGOA and the competitive labor cost learned from actors in the field. Since its early dates of commencement, AGOA has played significant roles in different aspects of intensifying the economic development plan of Ethiopia, being the major pulling factor for the inflow of capital into the country and as an investment driver. Hawassa Industrial Park (HIP) is a flagship industrial park developed and supported by the Ethiopian government specializing in textile and garment production. As one of the earliest industries, it has 52 factories and 23 companies. Employees involved in direct manufacturing products are 29,000 ill-educated, 6000 educated employees, from the overall industrial productions 50 pc is from Hawassa industrial park, 70 pc of the HIP production goes to the American market. One of the compelling reasons for foreign investors to invest in is AGOA. One of the foreign investors operating in the HIP is Epic Group, established in the last four years. They are involved in the manufacturing of denim jeans. The group currently employs 2300 first generation of workers, giving training and continuously enhancing their learning skills and capability. AGOA must remain, but if it falls, the commitment of foreign investors’ coils will be at risk. According to Waseem Siddisul, manager of Epic Group,” we are here to stay at established factories and employ many workers. We want to open three more factories. The workers here have commitment and ambition. After the recruitment, we give 45 days of training before starting their work.” “American retailers have more capacity to buy apparel because of the huge market share. It makes the entire business more sustainable,” he added. The export performance continues to impart knowledge and skill and moves with exponential speed. The company’s annual turnover was 50 mil dollars in the previous year. “If AGOA stays, we are planning to start in January. But with AGOA sanction, it’s uncertain how we will stay operating here, so the government should ensure AGOA stays,” he concluded. Another Ethiopian textile firm is NASA operating in the HIP to export products to Canada, founded in 2019, exporting containers with 21,000 units of apparel, including shirts, trousers, activewear, and sweaters. With an investment of 5 mil dollars, Nasa is preparing to venture into the second phase of investment at Bole Lemi industrial park. Expected to cost 11 mill dollars, the plant will be fully operational in 2022, manufacturing denim with 7,000 employees. Industrial Parks Development Corporation (IPDC) generated exports earning more than 750 million dollars since 2014. Out of the 33 direct exporters operating in industrial parks specializing in the textile and garment manufacturers in Ethiopia, 30 enterprises export directly to the USA through the AGOA scheme. Ato Hibret Lemma, HIP Investors Association Manager, stated, “It creates direct and indirect employment opportunities, there are rumors about AGOA sanction which we are not yet sure about, since 96 pc of the HIP exports to America if the sanction is forwarded it will question the fate of this industry. In addition, the HIP is one of the most famous and influential industrial parks in Africa. For the first two years, we created the capacity building for the employees, with the foreign investors directly involved in this process. ” More than 65 textiles and apparel, 67 major leather products, and gloves manufacturing industries employ over 200,000 direct jobs; 80 pc are women and youth. Generate About 230 mill dollars per annum. Hundreds of thousands of farmers supply cotton and rearing livestock. Others are involved in the value chain in the supply of various inputs for consumption of respective industrial and export of final products to the export market. Inclusive of the ones in the industrial park context. Since its enactment, the USA government has amended AGOA’s five technical changes and renewed the trade preference. Criteria are based on the registry of sub-Saharan countries and the president of the USA to determine annually which eligible countries, from those on the list shoes, become beneficially of the AGOA. “Tariff-free market access is advantageous for countries like Ethiopia. The bilateral and multilateral agreement is essential. As a country, it’s wise to find other markets, it’s easier to provide textile production capability somewhere else, it’s advisable to focus on agriculture and seeking other confederation, it’s also sensible to diversify other industrial sectors, “remarked an expert and advisor at the HIP. Tags HIP IPDC

Industry inputs enterprise concludes HQ design work

The Ethiopia Industrial Inputs Development Enterprise (EIIDE), which was re-established after dissolving the former Merchandise Wholesale & Import Trade Enterprise (MEWIT), concluded the design work for the construction of headquarters within its premises located near the African Union Headquarters. Planned to rest on 3,103 square meters of land, the building will occupy 1,740 square meters. The 18-story mixed purpose building is expected to host office spaces for Banking & Insurance services, cafes, meeting halls and a guest house among others. It will also have a four-story basement for parking, gymnasium, a power house, water reservoir, and other facilities. According to the newly enacted construction guideline by the Addis Ababa City Administration’s Construction Bureau, the enterprise will make 40 percent of the HQ floors for guest houses and residential spaces, disclosed Gutema Kesu, the project engineer at Ethiopia Industrial Inputs Development Enterprise (EIIDE). The Ethiopian Construction Design and Supervision Works Corporation designed the head office building for 3.5 million birr and expects to manage the consultancy work while the bid for the project contractor will be disclosed come January. The design work was given to the state corporation without bidding via board decision as the Enterprise was threatened with evacuation from the land if it did not start construction within three months. “The headquarters will enable the Enterprise enhance its capacity to generate income. Moreover, the location is a key destination to expand EIIDE’s services and earn extra incomes,” stated Gutema. It will also save the Enterprise 13 million birr annually in rental costs. The design approval is done and the bid to hire a Grade-one national or international contractor will be floated by the end of January. The plan is to finish the foundation work before the rainy season comes, the project engineer told The Reporter. Gutema also revealed that the Enterprise will use its fixed assets as collateral to get loan from banks to match the already allocated budget for the construction. Construction of the headquarters is expected to be completed in less than three years. The Ethiopia Industrial Inputs Development Enterprise operates 85 branches across the country and is tasked with distributing raw materials for textiles, rubber, reinforcement bars, foam mattresses, detergents, sugar, nails, cash registers, salt, and edible oil to small and medium enterprises, as well as big industries.

Cheers all around

Ethiopian Airlines recognized members of Sheba Miles, its frequent-flyer program, as it marks the 20th anniversary of the program. Ethiopian celebrated the 20th anniversary of its loyalty program, Sheba Miles, and Customers’ Day on Tuesday November 12, 2019 at Ethiopian Skylight Hotel. The grand anniversary event brought together high-ranking government officials including minsters, ambassadors and the diplomatic community, Sheba Miles members management and board members of the airline and aviation stakeholders. On the occasion, Ethiopian Airlines awarded its Sheba Miles platinum members and cargo customers for their continuous support and patronage to the airline. Tewodros Ashenafi, founder and CEO of South West Holdings, Zemedeneh Nigatu, chairman of Fairfax Africa Fund, and Tibebe Yemanebirhan (MD), a renowned dermatologist, are among the Sheba Miles platinum members who received a plaque from Ethiopian Airlines Group CEO Tewolde Gebremariam. Nine cargo customers also won the award for using Ethiopian Cargo frequently. Sher Ethiopia, Alfarag PLC, Ethio Vegfru PLC and Organic Export Abattoir were among the import export companies that were recognized for their patronage. “We are excited to offer our members with more ways to earn miles over the years,” Tewolde said.  “Throughout these years, our customers have immensely contributed to the development of the loyalty program. Our frequent-flyer program has teamed up with several airlines and non-airline partners to create a world of choices for members to accumulate miles.” Tewolde said Ethiopian will continuously strive to offer enormous privileges for its customers underpinned by digital solutions. “We sincerely thank our loyal members and partners for their continued support throughout the years and for inspiring us to constantly enrich their travel and overall travel experiences.” Tewodros Ashehafi a prominent investor who was recognised amongst top platinum members told The Reporter that his father Ashenafi Tessema was one of the first Ethiopian marketing professionals in the early days of the airline. “I am proud to support Ethiopian Airlines from the early days of my father Ashenafi Tessema involvement in building up the airline and later as one of Ethiopian top customers. I am privileged to continue in his tradition,” Tewodros said. “I am honoured to receive the award. Ethiopian is going from strength to strength,” he said. Zemedeneh Nigatu, a renowned consultant turned investor, said that the success of Sheba Miles frequent-flyer program that started with 300 members 20 years ago and now has 3.2 million members, reaffirms the world class quality of the airline and strong loyalty of its customers. “As a platinum Sheba Miles member, I fly very frequently to ET’s 123 worldwide destinations and can attest to the excellent end to end service the airline provides,” Zemedeneh said. Originally named after the Queen of Sheba of Ethiopia, who gave generous reward to King Solomon, according to the Ethiopian mythology, Sheba Miles was launched in February 1999 and the loyalty program has now more than three million members.