Ethiopia: Bridgehead at Risk

Uwe Hoering, December 2021

After fighting broke out in Ethiopia’s Tigray Province in early November, China Military Online proudly reports that “the Chinese Embassy organized the evacuation of Chinese compatriots,” assisted by Ethiopian military. A few hundred were said to have been employed in construction projects and industrial parks. These are few compared to the roughly 35,000 compatriots evacuated from Libya in 2011. But an escalation of the conflict, observers agree, would be damaging to Beijing’s plans for Africa.

The close cooperation with the government in Addis Ababa goes back to the 1990s. It is rumoured that the Chinese Communist Party also has a strong connection to the breakaway TPLF, which dominated the government until two years ago.

With the lowest wages in the world and increased costs in China, Ethiopia has become an attractive destination for the relocation of processing industries.

Helped in no small part by these good relations, Ethiopia has become one of Africa’s fastest-growing economies over the past two decades. The rail link between Djibouti on the Red Sea and Addis Ababa, built with Chinese credit and by Chinese companies, provides the landlocked country with a connection to the “Maritime Silk Road,” the sea route from China through the Indian Ocean and the Suez Canal to Europe. With the lowest wages in the world and increased costs in China, Ethiopia has become an attractive destination for the relocation of processing industries such as textiles, leather and electronics. A flagship project is the Chinese-style special economic zone near Addis Ababa, where Huajian, one of China’s largest shoe exporters, produces for brands such as Tommy Hilfiger and Guess.

The objective is to make Ethiopia an international industrial hub and thus earn the foreign currency to repay the Chinese loans that have accumulated to more than $14 billion since 2000. According to official figures, the country is also one of the largest recipients of Chinese direct investment in Africa, second to Nigeria and on a par with South Africa and Zambia. Ethiopia is also attractive because of its largely free market access to Europe and the United States. The increasing number of Chinese companies relocating their production there already turned it into the “next China” for some observers. Huawei, ZTE and China Telekom are expanding the Digital Silk Road in Africa, and the Transsion factory in Ethiopia supplies the cell phones for it.

Cracks in the flagship model

Prime Minister Abiy Ahmed apparently picked up seamlessly on this friendship after taking office in spring 2018; he had a face-to-face meeting with Xi Jinping at the 2nd Belt and Road Forum 2019 in Beijing. But he is also pitting East against West: In December 2019, Ethiopia secured a $9 billion cash injection from Western donors, the International Monetary Fund and the World Bank. On the occasion, Prime Minister Abiy expressed guarded criticism of the burden of Chinese debt. Russia, several Gulf states and the EU, whose Commission President Ursula von der Leyen visited at the end of 2019, are also showing growing interest in the geopolitically significant Horn of Africa – and after the peace agreement with its northern neighbour Eritrea in July 2018, hope for a new period of stability and recovery also seemed to be on the cards.

First problems for the government of Nobel Peace Prize winner Abiy emerged just one year after the euphoria. One of the sparks for the unrest and bloody conflicts was probably expropriation for industrial zones around Addis Ababa. It was not without Schadenfreude that the Swiss daily NZZ saw this as evidence that the Chinese model of “development dictatorship in Africa is doomed to failure.” These rebellions, which have longstanding political and ethnic causes, were met with a heavy hand even then. The new conflict, which threatens to escalate into a veritable civil war with a battle-hardened adversary, now has much greater potential to become an explosive device, with regional proportions.

Beijing has a considerable stake in a more stable and peaceful Ethiopia.

No question: Beijing has a considerable stake in a more stable and peaceful Ethiopia. Although Africa as a whole has lost economic importance for China in recent years as it has focused more on neighbouring regions in Asia. The Ethiopian role model is also no longer shining as brightly: Protests, power shortages and other problems are slowing down the high-flying expectations for industrialization, the rail line is not profitable, and Corona has done the remaining bit to dampen growth prospects for the time being.

Nevertheless, the Horn of Africa remains the bridgehead for access to East and Central Africa. Furthermore, Beijing will make some efforts to secure the large economic and political investments. But how far will it be willing to go in the process?

Slippery slope

At this point, this article becomes highly speculative: There is little information about Beijing’s diplomatic-political activities in Ethiopia or the region; they are subtle, secretive, inconspicuous. One possibility would be for China to participate in a UN or African Union operation, if one were to materialize, to stop further escalation of the conflict. In Sudan, a major oil supplier, it already helped establish a fragile peace in 2015 with an infantry battalion. It is also involved in several other conflict resolution missions in Africa, which, as in Sudan, cannot always be clearly distinguished from national self-interest. And such missions help China’s image as a peacemaker.

It is extremely unlikely that there could be a Russian-style mission like to Nagorno-Karabakh to arrest the armed conflict, because this would be interference into internal affairs, which Beijing vehemently rejects officially, and carries the risk of being viewed as a new colonial power. But military ties are being knitted, for example with training programs. And the Chinese naval base in Djibouti on the Red Sea is barely 900 kilometres from Addis Ababa. However, it is doubtful whether the Horn of Africa would be worth such a high cost.

However, the pressure is growing. More and more companies are operating overseas, employing millions of people and investing billions of dollars, in many cases in conflict regions such as the Horn of Africa. This is increasing the risk that the government will have to protect these interests and compatriots, and in doing so will get on the slippery slope of also resorting to military means if necessary. The number of paramilitary security services is growing, and military cooperation is intensifying in countries like Pakistan, a key country for the BRI. And since April 2013, the People’s Liberation Army (PLA) has been explicitly mandated to protect China’s rights and interests abroad, including energy sources and other natural resources.

Translated with (free version)

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