Ethiopia has an image problem. For years, this gigantic country, the second most populated in all of Africa, with almost 100 million inhabitants, was a synonym for extreme poverty, hunger, disease, wars… in short…. true misery. However, in the new century… everything began to change… Even though Ethiopia is still a very poor country, in the last decade it has become one of the fastest growing economies, not only in Africa but in the world.
At the same time, it has grown very close to Beijing and has also become a close ally to the United States in the fight against terrorism. Why have a single friendship if you can have both? The fact is that we’re probably witnessing, nothing more or less than the birth of a future African power. And that’s more than enough reason to ensure that we, here on Africa News Channel (ANC), won’t want to miss what’s happening in the country that many are already calling the “new African China”. Listen up.
After decades of tension, hostility and confrontation – before and after Eritrea gained independence from Ethiopia in 1993 – on July 9th, 2018, both countries signed a declaration for peace. And we should remember that during this long confrontation between Ethiopia and Eritrea, there were moments and events as tragic as the military conflict that between 1998 and the year 2000 ended the lives of almost 100,000 people. Now, the leaders of both countries have agreed to sign for complete peace:
(“We had agreed to resume the services of our airlines, to get our ports working, to get our people to trade and to open our embassies again. […] There is no longer a border between Eritrea and Ethiopia because a bridge of love has destroyed it.” Abiy Ahmed, Ethiopia’s prime minister.)
But… of course, the question remains… What has led these two countries to suddenly like each other so much? Well, my friends, even though it may seem incredible, one of the problems that prevented reconciliation was this village that you see in the image, Badme, a place where there’s practically nothing at all. And see… based on the peace agreements that were negotiated in Algiers in the year 2000, to end the last war, this territory belongs to Eritrea… but in the end the Ethiopian government realized that this didn’t work for them, so those peace agreements didn’t really go anywhere… until now. Now, Ethiopia, the stronger country between the two – after all we’re talking about 100 million people against just over 5 – has decided to give up… Because dear viewers, in many occasions persisting just to look stronger is a mistake that’s bad for everyone. There’s nothing to gain and much to lose. In any case, this peace is a good reflection of the changes that are taking place. Listen up because this may surprise you.
(A CHINESE MODEL?)
In recent years, Ethiopia has become one of the fastest growing economies on the planet. During the last decade, Ethiopia has averaged a growth rate of around 10% per year. For example, check out the following graphic.
Here we can compare Ethiopia’s GDP growth per capita with that of another rapidly growing country: Vietnam. And watch out, because Ethiopia’s population growth is huge… and we’re talking about GDP per capita. But… just a moment, we’re not just talking about the economy. As you can imagine all this growth has also had some important social consequences. Which is something that sooner or later always happens when a country grows, opens up to the world and does things right. Since the year 2000 the average life expectancy has increased by 13 years; the number of workerswith at least a completed secondary education has grown by almost 50% and poverty…. Well… look at what’s happening with poverty.
Yes, I know, even today there’s a lot of poverty in Ethiopia.
With a simple Google search we can find terrible situations in this country… but, folks, let’s talk clearly, overcoming poverty isn’t something that happens overnight… I wish it were that easy. In any case, Addis Ababa, the country’s capital, is a good reflection of the process Ethiopia is experiencing. Cranes, works and projects of all kinds are flooding the city. In fact, it was here, in this city that the first light subway in sub-Saharan Africa was inaugurated in 2015.
But of course, having reached this point… the question that remains is clear: How on earth has Ethiopia achieved such an economic leap? Well… we could say that this country has become something like Beijing’s outstanding pupil. Their growth has largely been led by essentially copying the Asian giant. See, on the one hand, the Ethiopian government has promoted the construction of enormous infrastructure projects that are essential for the country’s development.
We’re speaking, for example, of a railway line costing more than 4 billion dollars thatconnects Addis Ababa with the Djibouti port – to facilitate merchandise exports – or the greatest project in all of Africa: the Grand Ethiopian Renaissance Dam;a giant dam on the Nile River that required an investment of around 6 billion dollars and whose mission was to revolutionize the country’s energy system with abundant and cheap electricity.
By the way, do you know who gave the investment and knowledge for these projects? Well, surely those of you who follow Africa News Cahnnel won’t be surprised. To a large extent, it was China, Chinese companies…
In fact, China has become Ethiopia’s biggest investor and trading partner. In other words, a large part of the country’s growth has been due to its ties with China. The second pillar of Ethiopia’s growth is that little by little large state-owned companies began to operate with enough autonomy and to manage themselves as if they were private companies. This is the case, for example, of Ethiopian Airlines, the country’s flag carrier… which has become the largest African airline and now intends to compete internationally with the biggest airlines in the industry.
(“Even though Ethiopian Airlines is 100% state-owned, it’s run like a business: The board runs it as if it’s British Airways or United Airlines.” Zemedeneh Negatu, chairman of Fairfax Africa Fund LLC) And finally, the third pillar: the attraction of foreign direct investment through the development of economic zones, fiscal incentives, participative financing, etc., etc.
Take a look at how foreign investments have evolved: This is how Ethiopia has begun to industrialize… Largely because of all these policies and also thanks to the cost of labor, an industry that has grown a lot in recent years has been textiles.
In fact, brands such as H & M, Guess, Tommy Hilfiger and Calvin Klein already produce some of their garments in this country. But… Unfortunately, that’s not all. Their similarities with China aren’t limited to the economic part. At the same time that the country was experiencing an economic take-off… the repression of civil liberties became stronger and stronger: the media was broadly restricted, political opposition was persecuted, websites were blocked, etc., etc. In recent years, this country became one of the 10 biggest journalist jailers in the entire world. The Ethiopian government virtually locked up, forced into exile or intimidated almost every independent journalist.
In other words, Ethiopia practically reached a situation in which there were no journalists, only government spokesmen. But… folks, just a moment… because now, suddenly, it looks like everything has begun to change. Listen up.
(A NEW GENERATION)
At the beginning of 2018 Ethiopia was mired in a wave of violence, racial clashes and political repression that threaten the country’s stability with absolute collapse. And, although economically things have worked out quite well in recent years, there have also been some imbalances: a rather large foreign debt; a great shortage of foreign currency as a result of large investments and population grown, a very high youth unemployment rate.
Indeed many were wondering if what Ethiopia had gone through in recent years had been nothing but a mirage. However, against all odds… after a hard power struggle… the ruling party, the Ethiopian People’s Revolutionary Democratic Front – in practice the only party – elected Prime Minister Abiy Ahmed, a 42-year-old former army officer. Not much was expected… but within just a few months… boom, how things have changed!: See, since he came to power, Abiy Ahmed has released many political prisoners; he has apologized for the government’s abuses; he’s denounced senior officials of the intelligence services and the security forces for having committed state terrorism; he’s promoted the Peace Agreement with Eritrea; he’s announced a modification to the Constitution to establish the limitation of mandates and he’s begun to dismantle political censorship and ask exiled journalists to return home.
(“Ethiopia unblocks 264 websites and TV channels” AFRICANEWS) And not only that, he has also announced that the government will deepen the liberalization of the economy to attract more investment to the country.
(Ethiopia Opens Door to the World With Unprecedented Privatization Plan. Wall Street Journal)
Of course… as you can imagine, all these changes haven’t been great for the country’s elite… and their answer didn’t take long to come. (“Ethiopian PM escapes grenade attack, one dead, scores hurt”. Reuters) On June 23rd, 2018, during a political event in the heart of Addis Ababa in which the president wore a Nelson Mandela T-shirt, some tried to put an end to his “political transition”. However, they failed… and now the Prime Minister knows that he has to step on the accelerator.
Ethiopia, dear viewers, is still a very poor country that has many, many problems…. political, social and economic. However, the country that not long ago was considered the most miserable country on earth now seems to have an opportunity to take off. Will it do so? Only time can answer this question.