China and Ethiopia have ramped up their economic relationship beginning in the early 2000s. But for a mutually beneficial partnership to blossom, the relationship should be examined critically.

At the central courtyard of the immigration office on Churchill Road, a group of Chinese labourers in khaki, tunic suits that appear a bit too large on them, and tacking oversized flip-flops of considerable age, lounge about the premises chattering feverishly. It is a languid and agonising wait for everyone, but they seem to be peculiarly restive and out of place as if they have just been disgorged from the brig of an ocean liner.

One squats at the edge of a sunny, small retaining wall holding the back of his head with both hands and seems to find a momentary solace where he can avoid the incessant babble of his companions. Another has the same idea but chooses to stand at a shady spot against a door where he ignores the quick inquisitive glances of those that pass by him.

The others follow a sturdy man who seems to be in charge. He holds an assortment of files and passports under his arms and scurries around, tailed fervently by his compatriots.  They appear like dunlins that sprint over a marshy field - now veering in one direction together, now flashing their shiny under-parts in unison and now rearranging themselves into a giant fan that sweeps across the sky.

In a different part of town, another Chinese contingent is gathered for a luncheon in the private dining room of Tayetu Hotel, but it is a different crowd than the motley pack at the immigration office. Here the leader is surrounded by smartly dressed businessmen and women who dote with ardent attention upon him. The chief is a tall slender man dressed in a classic suit style - one that seems obtained from a top-end tailor in Hong Kong.

China and Ethiopia have ramped up their economic relationship beginning in the early 2000s. But for a mutually beneficial partnership to blossom, the relationship should be examined critically.

The dark blue suit he wears is hand-sewn, constructed from Loro Piana wool or something similar, and features handpicked stitching and rounded sleeves and lapels.  Everything is complemented by a pair of handcrafted Italian shoes, a custom-made shirt with channeled collars and an implacable tie-knot that frames his inscrutable face. Everything about this gathering speaks of wealth and power.

China, in all its diversity and incongruity, has descended upon these ancient highlands and has settled comfortably. The rush may be for cheap human resources, for there is plenty of that in Ethiopia. But that doesn’t neatly explain the situation at hand.

China, unwilling or hesitant to reinvest its export surplus from the United States in interest-bearing Treasury bonds of the superpower, is instead electing to hold dollars in cash and lend it to Africans with a curious mix of borrowing terms. Ethiopia, a major beneficiary of this largesse, has been accepting these loans with glee and putting on airs of success.

China’s investment in Ethiopia, like most ventures by other superpowers, is in seeking to further the interests of the Chinese state in Ethiopia, no more. Ethiopia, however, does not have as much as was trumpeted to show for the massive loan-driven investment in infrastructure and industrialisation that exploded ever since China aggressively entered the scene in the early 2000s.

Ethiopian government experts, learned economists and pundits are all incessantly pontificating on the demise of the macroeconomic situation, the decline in exports, the shortages of hard currencies, the debt burden and lament about the countless other parameters that indicate the country is in serious economic trouble. But they mostly fail to mention China’s role.

Despite Chinese-led development projects of industrial zones, dams, sugar factories, roads and bridges, railways, power grids and high-rise buildings in Ethiopia, the nation remains in the doldrums of backwardness. All the talk about backward and forward linkages has failed to materialise.

Skill transfers are barely visible with local workers mainly concentrated in low-skilled jobs; the manufacturing industry continues to stagnate, and the export of manufactured goods has long ceased to register anything that resembles success.

How could we succeed as a nation if Ethiopians continue to be relegated to low-paying work that requires no skill?

Since China has now accumulated critical mass in controlling infrastructure developments, telecommunication networks, construction, energy, manufacturing and the mineral sector in Ethiopia, Chinese companies must provide journeyman-level training to the local labour force and share its know-how with local companies.

Ethiopia currently has no provisions in the law that require Chinese companies to join with local companies in ventures to bid for projects. This must be accomplished by instituting laws that apportion all contracts and investments to have a local company participation component - preferably upward of 45pc - to foster entrepreneurship and to create a posture of national independence and counter economic dominance.

Mega public construction projects must be broken up into smaller components for local companies to qualify to bid as it is almost impossible for Ethiopian firms to compete with state-sponsored and state-supported Chinese companies.

The Sino-Ethiopian economic relationship is marring the future economic development of Ethiopia, and indeed the whole continent of Africa, and is fostering an unhealthy dependency on China.

China is undeniably rooted in Ethiopia, and it is here to stay. But the economic relationships of the two should be critically examined now since our national interests are very much at odds with each other. Today, nearly all advantages in this bilateral relationship of unequal partnership mostly accrue in one direction - to China.

PUBLISHED ON Feb 16,2019 [ VOL 19 , NO 981]

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