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Symbiotic relations with giants

Symbiotic relations with giants

Bereket Gebru 10-12-17

Although Europe and America still lead the world economy, the twenty first century has brought with it a new trend in the international system. The traditional supremacy of the western world in dictating international economic and political affairs is increasingly being challenged by the rising power of Asia. Asian economies have been growing since the last quarter of the 20th century. As a result, the new millennium has become a time when the growth in these economies has matured enough to push to the forefront of economic standings.

Japan was an early trend setter in the continent as it was already a world powers during WW I and II. Even after the heavy defeat of WWII, the Japanese economy bounced back up and kept up with the leading world economies. The Asian tigers (Hong Kong, Singapore, South Korea and Taiwan) also grabbed the attention of the world for realizing a fast track to growth and prosperity.

Time, however, proved that these were mere precedents to something bigger coming down the road. The world’s two biggest nations in terms of population are Asian. Each of them, China and India, support over a billion people. Although these countries are still considered as third world, their economies have shored up to the echelons of the biggest economies in the world. Both these countries have managed to turn their seemingly uncountable population sizes to an effective development machine. Their success has gotten so big that there are some who think that they are going to replace Europe and America at the helm of world economic and political power. All developing countries, especially those with huge population sizes, could therefore benefit a lot from their experience.

Ethiopia has had long standing relations between both China and India. An online source indicates that historical linkages between India and Ethiopia go back about 2,000 years of recorded history. Trade between the two countries flourished during the ancient Axumite Empire (1st century AD), which is seen to be the origin of modern Ethiopia. Indian traders flocked to the ancient port of Adulis in the 6th Century AD trading silk and spices for gold and ivory. In the 16th century AD, the Portuguese assisted the Christian King in Ethiopia to repel the Muslim invaders, and with them came Indians from Goa. Soon after achieving independence, a goodwill mission led by Sardar Sant Singh was sent to Ethiopia. Diplomatic relations at legation level were established in 1948. Full diplomatic relations were established in 1950 with Sardar Sant Singh as the first Ambassador.

Last week the two countries signed an agreement on trade, communication and media to reinforce their already strong relations. President Ram Nath Kovind visited Ethiopia and addressed the India-Ethiopia Business Dialogue, organized to commemorate the 12th Anniversary of the India Business Forum. During the occasion, the President stated: "India is now among the top three foreign investors in Ethiopia. Indian investment has made a mark in textiles and garments, engineering, plastics, water management, consultancy and ICT, education, pharmaceuticals and healthcare. Indian investments in Ethiopia have had a significant presence in manufacturing and value addition to local resources."

He went on to say: "They have created jobs in this country and contributed to the prosperity of Ethiopian families. He congratulated the Indian Business Forum (IBF) for playing a lead role in encouraging Indian investment and promoting trade and commerce between India and Ethiopia," the President stated.

In his meeting with the Ethiopian President Mulatu Teshome (Ph.D.), President Kovind mentioned India's willingness to positively consider support for power transmission projects in Ethiopia, as well as announced specific assistance in the areas of healthcare, education and agriculture.

Ethiopia also has blossoming relations with China. Currently identified as the second largest economy in the world next to the United States, various economic forecasts indicate that the Chinese economy is set to overtake its single pace setter. There were even reports that China has overtaken the U.S. economy in terms of Purchasing Power Parity (PPP). China is the best instance of motivating a billion people to form a highly productive machine that juggernauts through all forms of obstacles. It represents the realization of the hope that every developing country has – it is possible for a nation to withstand the pressures of the highly skewed international market to realize development. 

The website states that Ethiopia and China started economic relations about 100 B.C when the Han dynasty of China and the Axumite Empire of Ethiopia had trade exchanges. The two countries forged an official relationship when they opened embassies in their respective capitals in 1972.

Sources indicate that China has become Ethiopia’s largest trading partner with the volume of trade estimated to be over $6.3 billion. Chinese investments in Ethiopia also reportedly went above $4 billion. China is also Ethiopia’s main partner in its quest for infrastructural expansion. Chinese banks have provided loans for the Ethiopian government to pursue its development projects while Chinese construction and manufacturing firms are working on Ethiopian projects.

As a result, a sizable amount of Chinese workers lives in Ethiopia especially through these projects. That might be one of the reasons for recent reports of steadily increasing Chinese tourists to Ethiopia. The report states that Ethiopia received 41,660 Chinese tourists in 2015, up from 35,383 in 2012. The report goes on to analyze that although the number of Chinese tourists was lower than those of American and British tourists, the two largest groups of tourists received by Ethiopia, Chinese tourists tended to stay longer and spend more. The report further points out that despite the political turbulence in Ethiopia in 2015 and 2016, the number of Chinese tourists visiting its attractions had increased in contrast to western tourists.

As shown above, Ethiopia’s relations with India and China have been progressing over the past quarter of a century. Recent developments also suggest that there is even more to come for their ties. Considering these two countries make up two of the emerging countries that have already asserted themselves as forces to be reckoned with at the international stage, forging a strong working relation is likely going to benefit Ethiopia. After all, economic engagement is a two way traffic.  


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