Institute of Federalism and Legal Studies
Ethiopian Civil Service University
With a population of 1.4 billion, China recently became the second largest economy and is increasingly playing an important and influential role in the global economy. This has unprecedentedly opened the door for more improved relation with Ethiopia in terms of official visits, trade, technical assistance, investment, and political tie over the past decades. In fact, Chinese cooperation with Ethiopia and the dynamics in Ethio-China relationships differ considerably from EU-Ethiopia one’s. For China, unlike the EU, Ethiopia emerges as a unique political ally in Africa as well as a promising economic partner. Yet, in contrast to the EU, development aid is not the main component in Sino-Ethiopian relations. Although the size of Chinese economic cooperation varies noticeably across countries, Ethiopia is one of the cases where European donors and China emerge as two key partners for the government. Chinese engagement thereby increases the leverage of the Ethiopian government vis-à-vis European and other traditional donors. While African actors are discussing the implications for African development, this also raises questions for European donors concerning the consequences of Chinese engagement for European development policy.
Chinese government development finance initially appears to be largely complementary to European aid. China provides the bulk of its support to policy fields where the EU is less active or not engaging at all, for example, in the telecommunication or energy sector. China thereby supports policy fields that have received less attention by European and other traditional donors as they require large scale financing or because of diverging priorities between European donors and the Ethiopian government. In policy fields where European donors as well as China are engaging, parallel structures are emerging. In transport sector, for example, the European Commission provides sector budget support, whereas China supports several mega projects such as the Addis Ababa-Adama expressway, Addis Ababa-Djibouti railway, Addis Ababa light railway, and Dire Dawa-Dewalle highway. Since Ethiopian administrative capacities and sector development strategies are comparatively strong and well developed, these parallel structures do not symbolize a particular challenge for Ethiopia as of now. The Ethiopian government is perceived by donors as being strongly committed to development and as one of those countries with the clearest “ownership” of its development strategy in this regard. In education and health, Chinese assistance is still small compared to European aid. Challenges for donor coordination in these policy fields result from the fragmentation of the traditional donor system rather than Chinese assistance. Overall, Chinese engagement strengthens the ability of the Ethiopian government to implement its development strategy and to do this more independently from European and other donors’ preferences.
Until in recent times there has been some degree of direct contact between Chinese and European officials. European donors’ interest and knowledge on Ethio-China relations has also been limited. This can be explained by the fact that Chinese development finance, trade and investment have been growing only during the last few years. At the same time, the Ethiopian government has engaged with China and European donors on separate terms. China has rarely taken part in traditional donor coordination rounds and donor meetings with the government, providing limited direct points of contact between European donors and China. In addition, China partly cooperates with Ethiopia through different channels than the EU, e.g., party to party relations or exchange between government officials. European interest in Ethio-China cooperation has probably also been limited, since European donors have been busy reforming their development policy, leaving limited room to engage with other actors beyond the traditional donor system.
Yet, Chinese presence is more and more felt by European donors, not least because the Ethiopian government increasingly uses its relationship with China and other emerging economies as an explicit bargaining chip in negotiations with European and other traditional donors and vice versa. This shift in strategy has become evident recently when the Ethiopian government presented its development strategy to international partners. For the first time representatives from China, India, Brazil and Russia have been invited alongside traditional donors. During the meeting, the Chinese Ambassador has not only provided rhetorical support for the Ethiopian government against criticism from traditional donors. China has also committed to further increase its financial support for Ethiopia’s development strategy as it perceives Ethiopia as having relatively well developed bureaucratic structures and a government with a clear development vision.
For European donors this more direct “disagreement” with the leadership of the People’s Republic of China may increase the pressure to live up to its reform commitments and reduce the fragmentation of the European aid system. With decreasing relative weight as aid providers, European donors will need to make more efforts to remain attractive partners for the Ethiopian government. While the Ethiopian government seeks to maximize support for its development from various sources, the fragmentation of the European donor system is increasingly felt as an administrative burden. As one Ethiopian government official aptly reveals: “a clear advantage of China is that they support large scale projects in contrast to some European donors who come with many tiny programs”.
Cooperation with Ethiopia may further have implications for European donors to establish themselves as partners to discuss about political and economic reforms with the Ethiopian government. The political leadership in Ethiopia has been interested in Chinese development path for some time. However, China’s growing weight in international relations and strengthened contact with Ethiopian government and party officials further increase the attractiveness of China as a role model. While exchange on political and economic reforms between China and Ethiopia takes place in different fora, this cooperation is largely demand driven. In contrast to Chinese cooperation with Ethiopia, discussions on political reforms between European donors and the Ethiopian government instead are strongly driven by the EU. If European donors aim at setting up a comprehensive political dialogue on governance reforms, European donors will need to better explain this request in light of the presence of alternative cooperation partners such as China. In this respect, the EU will also have to illuminate how significant these values are considered as a basis for cooperation. Under European rhetoric and attempts to support governance reforms through political dialogue or direct assistance, European concrete policies towards Ethiopia reveal the thin layer of this value in EU development policy and the divergence in approaches among European donors. For instance, only few months after substantial disagreements between European donors and the Ethiopian government over some political and economic issues in 2010, the British Department for International Development (DfID) announced to double assistance to Ethiopia. While this decision arguably has been influenced by a number of factors, it also shows the attractiveness of a developmental state for aid bureaucracies regardless of the political and economic foundations of this state. With its different rhetoric and different approach to cooperation, Chinese presence in Ethiopia sheds more light on these inconsistencies in European development policy. Chinese engagement in Ethiopia thereby unearths the gap between European rhetoric and policy practice, pressuring the EU to make more efforts to reform its development policy system.
In terms of trilateral cooperation as well, some European donors have started to reach out to foster dialogue and partnership with Chinese and Ethiopian actors; yet with limited results. The Ethiopian government on its part has been reluctant to respond to requests by European donors, seeking instead to engaging China and traditional donors on separate terms. For the Chinese, in turn, interest in cooperating with European donors is low. On the European side, initiatives to foster trilateral dialogue and cooperation have been pushed mainly by those parts of the aid bureaucracy working on China rather than on Africa, raising questions about European motives for trilateral cooperation.
To come to the point, in the midst of a mounting influence of China at global level, Chinese exerts considerable competitive pressure on the European development policy to individual African countries such as Ethiopia, presenting an alternative to European aid. Although some have argued that the emergence of China and other new actors will further contribute to the fragmentation of the aid system, the case of Ethiopia shows that development finance from the EU and China are mainly complementary. Yet, Chinese and European perspectives are diverging on how development works, how aid should be provided and how aid should link to other forms of cooperation; this is challenging European approaches to cooperation. In countries like Ethiopia where China already constitutes an actor at eye-level with the EU, European donors will need to make sizeable efforts to maintain their attractiveness as partners. In this situation of (perceived) competition, the EU need to reform its own system, must put its weight into the balance to push for further reforms within the international aid system, and have to stretch out to engage with a diversifying range of Chinese actors and establish structures for communication with actors beyond the aid system. A more truly European approach will be vital in this regard.
On the Ethiopian side, given the complementary nature of both actors, the question for the Ethiopian government is apparently not an either-or question, but one about the clever combination of various sources of development funding. It would be on this point meaningful to resume in favor of deepening and increasing of its cooperation with both China and other traditional partners. The following words of a senior official in the Ministry of Foreign Affairs of Ethiopia are very supportive of the above remark:
…China has become “critical” to Ethiopia for economic reasons. Ethiopia understands, however, that China has its own interests in the country and close relations with China will not make relations with the West “redundant.”
In so doing, it is feasible to translate the advantages of such co-operation into overall economic opportunities and gains on separate terms, while doing more to leverage these partners’ engagement for maximum benefits.