Deal with Somaliland is a Sign of Ethiopia’s Robust Economic Diplomacy

3 Mons Ago
Deal with Somaliland is a Sign of Ethiopia’s Robust Economic Diplomacy

By Daniel Kassahun

Ethiopia's pursuit of a sea outlet, both legally and historically, necessitates careful consideration in terms of development and security. It does not pertain to opulence, dominance, intimidation of the opposing party, or demonstration of authority.

The recently signed accord between the government of Somaliland and Ethiopia remains to be instrumental to usher a new paradigm in the economic cooperation as it brings opportunities for Ethiopia to access multiple seaports. Somaliland is lucky enough to enjoy the shareholder position in the Ethiopian Airlines, Africa’s largest airliner.

Hence, the agreement reached on Monday between the Ethiopian government and Somaliland marks a positive start towards fostering mutual benefits among the countries in the region. Moreover, it serves as a catalyst for other nations to contemplate the matter with an open mind and demonstrate a genuine willingness to enhance cooperation.

This deal which can be taken as a victory of Ethiopia’s robust economic diplomacy is a great stride gained by the leadership of the two sides for the benefit of their people in various ways.

At present, Ethiopia relies on ports situated in neighboring nations to facilitate its import and export operations. It is evident that utilizing foreign ports has its drawbacks, and whenever port owners impose an extra service fee, it diminishes the competitiveness of Ethiopia's commodities in the global market. Other nations that possess their own ports enjoy a significant advantage in the global market as they are exempt from paying any fees for port services.

The countries that own ports have the authority to levy extra tariffs on imported goods through additional port service charges. This, in turn, puts pressure on landlocked countries like Ethiopia to import inflation, which disrupts the stability of the local economy.

It can be inferred from these facts that the economic progress and advancement of a nation are contingent upon the volume of imports and exports. Whenever a nation's engagement in the global economy expands, it is inevitable that its import and export levels will rise. However, this heightened integration also amplifies its susceptibility to economic instability due to its landlocked status.

 

 

This shows the principled position of the Ethiopian Government to advance mutual interests through cooperation on the basis of reciprocity.

When we refer Ethiopia’s Foreign Relations and Diplomacy since 2002, it has been guided by the foreign policy and National Security Strategy of the country. In this time, the government of Ethiopia adopted the policy which emphasized ‘economic diplomacy’ as the cornerstone of its foreign policy.

The central component of the strategy which has been regional integration with Ethiopia’s neighbours in the Horn and Eastern Africa never changed now. It is based on win-win approach. The current signing of MoU between Ethiopia and Somaliland is the case in point as it heralds in a new chapter of cooperation for regional integration in the horn.

In this respect, since 2018, the political contexts of Ethiopia have been reinvigorated to ensure speedy sustainable development in to ensure the aspired prosperity.

 

Ethiopia's Foreign Affairs Ministry states, “Ethiopia's diplomacy is guided not by ideological affiliation to states and parties but based on the economic benefits that emanate from the relationship. The current diplomacy of the country focuses on the benefits it can get from export, investment, tourism, technology transfer, development assistance.”

Now, Ethiopia is seen as an attractive destination for labor-intensive manufacturing in the industrial parks; and the government continues to invest in mega infrastructure and power generation projects to drive its industrial ambition.

Ethiopia shares borders with all the countries in the Horn of Africa, and each of them has its own ports, except for South Sudan.

A port plays a crucial role in expediting global trade and facilitates the engagement of countries in international trade, thereby guaranteeing their economic advancement. One of the obstacles that Africans encounter in international trade is the presence of sea ports.

African countries have faced significant challenges in facilitating their trade activities due to the persistent issue of maritime transport bottlenecks.

Ethiopia had previously possessed its own sea outlets three decades ago, but due to the geopolitical instability in the region, the country was compelled to relinquish its access to the sea.

Hence, it is imperative for Ethiopia to actively engage in all feasible peaceful methods in order to achieve its objectives in the region.

Industrialization without reliable port channel may not be successful as it requires facilitation for both export and imports.  In this regard the port agreement achieved with Somaliland is a stride forward. Despite the signing progress, the deal is not immune from headwinds against it, a development that should not sway Ethiopia from pursuing its objectives in the Horn.//

 


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