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Learning in context - measures for Africa to learn from China: Endalkachew SIME from ISSCAD

  Question 1: As Ex-State Minister of Planning and Development of Ethiopia, could you share the basic information about economics, excellent achievements, and nowadays challenges in the development of your own country?

  It's a privilege to be invited to this interview. Ethiopia's economy has been growing two times faster than the Sub-Saharan average for the last three decades. But the road was not without challenges. During all the growth periods, inflation was challenging the economy coupled with unemployment and low levels of exports. Since Ethiopia exorcised a developmental state model, the government has been investing hugely in infrastructure which has led to a huge foreign debt. Coupled with other political and social challenges the economic problems urged the change of leadership happened in 2018 which was a peaceful transition, unlike the previous histories of change of government in our country. After reviewing core and pressing problems, the new leadership initiated the Home-grown Economic Reform (HER) which identified the key challenges of the economy as macro, structural, and sectoral issues and started to tackle them gradually. Encouraging result has been recorded and the preparation of the Ten-Year Development Plan (TYDP) started in parallel. Now TYDP is already in its second year of implementation. Both HER and TYDP tried to focus on the major problems identified increasing the role of the private sector and ensuring structural transformation are among the major focus areas of the plans.

  Question 2: In Ethiopia, how are the government sector and private companies working together to achieve cooperation and sustainable development in economic growth and infrastructure development?

  Actually, the history of the development of the private sector in Ethiopia is not very long. Before 1991, we did not have any private sector in the country. The local private sector and foreign private sector started to develop after 1991. As I explained, growth started with a big push from the government in the developmental state intervention. Since the role of the private sector was not growing in parallel, the growth faced challenges to sustain. The HER and TYDP interventions primarily focus on filling these gaps and bringing the economy into a sustained trajectory by actively engaging the local and foreign private sectors. The current low share of the manufacturing sector to GDP needs to be improved significantly.

  The engagement of the private sector with the government starts with a good recognition of the key role of the private sector by the government. We can see this in many ways. To mention an example, ensuring private sector-led economic growth is one of the ten strategic pillars of the TYDP prepared and implemented by the government. There are Public Private consultations being organized by the Chamber of Commerce and government ministry offices at different times. Chambers conduct research on problems of the private sector and propose policy reforms for the government through a dialogue process. There is an effort to institutionalize these exercises which was being done just by signing a Memorandum of Understanding between the two. The process is very slow, but the consultation process has created trust and dialogue cultures which is important for future partnerships.

  I remember the proposal we studied and presented for possible duty structure adjustment of the textile sector while I was working in the textile association some years back. The same import duty both for fabric and finished garments was discouraging for garment factory owners that employ many workers. Traders imported the finished garments with the same import duty and were dominating the market because the local manufacturers were selling adding their local cost of production, in which their prices were a bit higher than the importing traders. We reported our findings to the government and the government offered a good solution. The government differentiated the tax rates on raw fabric and finished garments.

  Question 3: The country just reached the peace deal and ended the two-year war. The war was triggered by many complicated reasons. What are your expectations about Ethiopia's political stability in the future?

  That's a very good question. Peace and security are very important issues for economic development and international partnerships. Unfortunately, we have some internal conflicts within our country, such as the two-year war in the northern part of our country you mentioned, which is linked to long-accumulated political problems. Fortunately, we are trying to address and contain it gradually. As you might hear from the news, in May this year, almost all of the opposition fighters fighting the federal government were disarmed, and the peace deal now seems to advance very well.

  There are other challenges and conflicts here and there, but the government still believes in consultation and nationwide dialogue, which was instituted recently under an autonomous commission, which is believed to bring issues of conflicts around the table. This is also good news for our partner countries such as China, as this platform of peace provides a very solid foundation for economic growth and facilitates the consolidation of economic ties between the two countries. Ethiopia attaches great importance to peace and stability, and the new leadership is trying to uplift dialogue as a leading and major tool to resolve internal differences. Ethiopia is a very diverse country in terms of Ethnicities, languages, religions, cultures, and the like. Differences are expected. If we contain them wisely, the differences could become an asset that brings different unique features for peace and prosperity.

  Question 4: 2023 marks the 10th anniversary of China's Belt and Road Initiative. Could you  tell us about the changes it has brought to Ethiopia? In your position, have you experienced or participated in this change first-hand? What do you think about the influence of the Belt and Road Initiative in Ethiopia?

  The post-colonization era was a period of striving for African countries to grow economically. As a country that has never been colonized, Ethiopia was also trying its best to grow economically. But the reality was the global order was not very welcoming and encouraging for African countries to transform their economies. Africa faced difficulties with the existing financing institutions for financing her development needs The arrival of the Belt and Road Initiative is a very critical chance for Africa for two reasons. The first reason is that the primary focus of the Belt and Road initiative is infrastructure, which is a very critical precondition for development. The second reason is that Africa was struggling to get options for development and getting loans from other sources.

  The first project is the railway connecting Djibouti and Ethiopia. Djibouti is a port country next to Ethiopia. Ethiopia is using Djibouti port for its fast-growing cross-border trade. However, the port-land transports between Djibouti and Ethiopia were previously inconvenient. The distance is around 730 KM, but it used to take around three days with poorer infrastructure costing a lot for the transporters. Then the arrival of the new Addis Ababa-Djibouti Railway changed the scene. It reduced the time and cost of Ethiopia's cross-border trade through the Djibouti port. On top of that, the new electric-powered railway uses clean hydroelectric energy, connecting the capital and the port with a modern railroad. It significantly reduced logistics costs. Upon completion, the Djibouti-Ethiopia railway project also provides more economical logistics costs for the development of private businesses in Ethiopia.

  In terms of the overall performance of the Belt and Road Initiative in Africa, it certainly brings a lot of value to African economies, especially in the area of infrastructure development. For the AFCFTA (African Continental Free Trade Area), among the main bottlenecks for trade within Africa is infrastructure. Researchers have identified this by comparing the financial expenditures and infrastructure needs of African countries, which clearly exceed the capacity of African countries. And the Belt and Road Initiative projects are attempting to fill this critical gap.

  However not all Belt and Road Initiative projects are successful, and there are different projects that are struggling. It is wise for Africa and China to expand cooperation in all areas and to make all existing projects successful.

  This is the natural law of development. In the development process, always what we have to do is to learn from the past and then improve the future. Development is like the process of learning. Sometimes you win, sometimes you learn, and there are no failures in the development process.

  Overall, the Belt and Road Initiative is an exceptional window of opportunity for Africa's development and industrialization. Regardless of the misunderstandings and misinformation, BRI is delivering some tangible results for Africa. To have the right and realistic perspective towards BRI, we need to evaluate its objective deliveries specific African nations are benefiting. And besides, we have to know that BRI is not a 'silver bullet' that addresses each and every problem in Africa. Given the current realities of Africa, we have many parallel assignments to address to enhance the contribution of BRI. For instance, project management and implementation capacity building is one area Africa should address. And Africa can benefit from China in this aspect through the South-South cooperation.

  Question 5: Since you came to China, is everything going well? As a student in the Institute of South-South Cooperation and Development, have you got any inspirations?

  Actually, I first came to China in 2004. I have paid several short visits to China since then, but this time I spent almost a year in China. This gave me the opportunity to learn more about China and to have a very different experience. At the Institute of South-South Cooperation and Development, the staff is very friendly and welcoming, and the professors are of high caliber. They know about Africa and generously share what they know. I remember one discussion with my professor which lasted until almost midnight.

  Their commitment and dedication are tangible and serious. I have been to universities in Europe and America, African countries. But here, their willingness and dedication to share experience is unique, and this has to be appreciated.

  I have also gained a deeper understanding of China, and how the government is working. Especially for the academic community and the government sector, there is a very close connection between them. We attended lectures hosted by government authorities, and I found that their lectures were very similar to what our teachers were teaching. Another point was the coordination between academia and the private sector (business sector). I had the opportunity to participate in a study tour to Shenzhen. During the visit to Shenzhen, we visited different places, the Shenzhen Stock Exchange, museums and robot manufacturers, IT companies, and private companies. What I noticed is that China is moving towards a knowledge-based economy. There are very young leaders in institutions, and one of the technology companies is owned by a university professor. Academia is very close to the private sector, so there is an overall opportunity to transform into a knowledge-based economy. The government, the academic sector, and the private sector are very closely linked, which is not the case in my country.

  Question 6: Since you also have extensive learning experience in other countries, what special potential do you see for South-South cooperation in promoting sustainable development?

  I think China's success in poverty reduction is one of its greatest achievements. It is a hopeful sign that there is potential for member countries to succeed in the SDG (United Nations Sustainable Development Goals). South-South cooperation provides a unique platform, bringing together almost 80 developing countries to share experiences in sustainable development. We can learn from China, and China can learn from our experience. It's a two-way process of learning from experience.

  When shared with developing countries, these countries also know more about our situation than developed countries do. What I often feel in working with many international organizations is the challenge of understanding each other, it is very difficult to fully understand our situation, our background, and our way of life. But if you look at Ethiopia now, it's like China 30 years ago. It's very easy for the Chinese to understand Ethiopia accurately. For Ethiopia, we are willing to learn from the Chinese because the Chinese have solved those challenges that we are facing.

  This is going to be a very influential platform for cooperation and I want to thank the initiator, President Xi. With the platform provided by South-South Development Cooperation, no one is telling you what to do. When I learn, I learn in the context. When my professor tells me about the economic history of China, I try to imagine my country and take what is relevant to my country. I will not copy everything that is implemented here and no one is imposing on me what I should do.

  At the same time, I learn not only from China but also from other developing countries. In the Institute of South-South Cooperation and Development, many policy-makers and government officials from different countries have gathered and shared their previous experiences of facing challenges in designing policies and implementing policies. We create some kind of friendship and cooperation by listening to each other here. For example, Nigeria is one of the largest countries in Africa in terms of population and economy, about which I had very limited knowledge. But after I attended these courses, I learned a lot from my colleagues in Nigeria. When we were studying the economies of other African countries, such as Namibia, I had to do group work with my Namibian friends. These cooperative learning experiences have given me the opportunity to learn more about other African countries, as well as some Asian countries, such as Cambodia and the Philippines. All of this was made possible by the opportunities provided by the Institute of South-South Cooperation and Development.

  Question 7: What are your expectations for the future strengthening of China-Africa relations in South-South cooperation, especially in the next decade of the Belt and Road Initiative?

  One of the key areas of improvement is that few Chinese know about Africa. It is time to learn more about each other and strengthen South-South cooperation. African countries should work closely with China to provide more information related to African countries. For example, My country. We have a very large embassy here, and we have among the largest number of students here. But we still need more efforts in this area to introduce Africa to our Chinese friends. Also, the Chinese should try to learn more about Africa because the partnership is entering a new chapter. This is one aspect of deepening South-South cooperation, another aspect is to expand China-Africa cooperation in different fields and to make existing projects fully successful.

  Although there are many regions that have misconceptions about the Belt and Road Initiative due to the false interpretation of some Western media, we have seen the good intentions, resource availability, political will, and serious commitment of decision-makers on both sides. Overall, it is a very good initiative. Therefore, sustaining these positive elements and making each project a success in Africa is a key point for future China-Africa cooperation.

  Interview: Lai Sijia

  Editor: Lai Sijia, Feng Liwen