China’s aid helps cooperation with Ethiopia
China’s development cooperation has long been an important part of its relationship with Ethiopia, which started soon after the establishment of diplomatic relations in 1970.
Complete projects have been the main form of China’s development efforts in Ethiopia. China has supported Ethiopia in constructing dozens of projects, including highway interchanges and energy stations. China also provided food, tents and medicine when Ethiopia suffered from a massive drought in 2011.
In the technical cooperation area, China has dispatched agricultural and health experts to provide technical guidance to local people. In addition, China has run seminars and training programs for government officials and technical personnel, and provided scholarships for Ethiopian students.
Economic cooperation and trade made steady progress, with bilateral trade continuing to expand. Chinese companies were actively involved in Ethiopia’s Growth and Transformation Plan, and progress was achieved in mutually beneficial cooperation. Ethiopiarelated projects under the framework of the Forum on China-Africa Cooperation were implemented step by step.
Still, geopolitical risk is potentially increasing and Ethiopia’s business climate is relatively poor. Additionally, the African nation’s currency is often volatile. Influenced by falling commodity prices, the value of coffee exports and other agriculture products has decreased. Widening trade deficits influence the nation’s ability to pay back debt.
According to data from the IMF and World Bank, Ethiopia has faced challenges in meeting its debt payments since 2017, leading to increasing debt distress.
Furthermore, Ethiopia is short of specialized technicians, notably those in the pharmaceutical industry. Companies need to repay the educational costs of those they want to hire; otherwise, those people are required to work for state agencies first. There are not enough skilled industrial staff, so Chinese companies need to train them first, not only in terms of skills but also in work behavior.
Based on the existing road, bridge and railway programs between China and Ethiopia, the two governments should support cooperation in the area of transportation, boosting railway operations and management capability in Ethiopia. This effort could include helping Ethiopia to build a state-level transportation university that will focus on training senior engineers and promoting technological innovation in rail transit and bridge engineering.
The two countries should establish small-scale railway training centers in the cities along the Addis Ababa-Djibouti Railway, combining the practice of railway management with the training of skilled workers in operations. Regarding energy and electricity, the two states should utilize interest-free loans and concessional loans to support the renovation and upgrading of the grid, which would increase the electricity supply of industrial zones and surrounding areas.
China should work with Ethiopia in technological cooperation, improving Ethiopian industrial-zone policies, as well as investment and trade policies. China can encourage officers from the Ethiopian Investment Agency and Industrial Parks Development Corporation of Ethiopia to come to China and study its experience of developing industrial zones. Participation in those programs should be extended to middle- and lower-level government officials.
Also, experts who work on Chinese economic reform can go to Ethiopia and meet with the Ethiopian Investment Agency to discuss policies related to attracting foreign investment. Aid programs should be specialized in particular areas like promoting trade and supporting academic exchanges in customs, tax, inspection and quarantine procedures. Such programs can further enhance the understanding of export policies and regulations in both nations, which will help reduce non-tariff barriers such as miscommunication and problematic business environments.
China should work with Ethiopia in technological cooperation, improving Ethiopian industrial-zone policies, as well as investment and trade policies.
Chinese WTO researchers and regional trade dealers can go to Ethiopia to help Ethiopia start capacity-building and training programs in the rules of international trade.
Also, China could design human resources development programs based on various factors. Considering the advantages of the cheap labor force in Ethiopia, we suggest that China should renovate or build state-level vocational schools. It should design the categories of training in those schools and open courses related to textiles and light industry, mechanical engineering, auto repair, and architectural engineering, which will target preferred development areas and meet demand for labor.
Academic programs should invest more in mathematical and engineering majors based on the Chinese educational advantages in these majors. The programs should cultivate international students, mainly senior engineers and technicians, who understand the technical standards of China and can look at issues with a Chinese perspective.
We also suggest that China should work with Ethiopian universities and think tanks in conducting research. China should also encourage Ethiopian professors, mainly those who work in mathematics and engineering, to come to China for further study. This will help disseminate Chinese experience through
Ethiopian experts. The author is an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation. bizopinion@ globaltimes.com.cn