Chinese Special Economic Zones in Ethiopia: towards a "New China"?

Abstract

This thesis is intended to analyse the development path of Chinese Special Economic Zones (SEZs) in Ethiopia. The first part of the work provides an overview of the types and theoretical benefits of SEZs and highlights the key principles that have guided and still guide the Chinese policy in Africa today. It also briefly reviews China’s experiences with domestic SEZs, whose success led to the launch of the “Going Global” strategy and to the promotion of the Overseas Special Economic Zones programme. Several African countries have been involved in the programme. Among them, one of the most important was Ethiopia which was flooded with an extraordinary influx of Chinese investments. One of the main objectives of this work is to retrace Ethiopia’s remarkable economic journey. Since the early 2000s, the country has adopted a development strategy for promoting a rapid industrialization with the aim of becoming a middle-income country by the end of 2025. The industrialization strategy carried out by the Ethiopian Government is mainly based on the development of Special Economic Zones, considered a key element to foster the structural transformation of the country. Both the Government and private developers have been working on the construction of SEZs. Some of them are already operational while others are under construction and waiting for completion. This works aims at exploring Ethiopia's experiences in the development of Special Economic Zones, focusing on three main case studies: the privately-run Eastern Industrial Zone (EIZ) and two state-owned Industrial Parks, the Bole Lemi I Industrial Park (BLIP) and the Hawassa Industrial Park (HIP). Thanks to its Special Economic Zones, Ethiopia has been able to attract foreign direct investment (FDI), to transfer technology and knowledge and to generate employment for local workers. Yet, many challenges still have to be faced including financing issues, difficulties in creating linkages with the local economy, complications in coordinating key actors and stakeholders, problems with the provision of infrastructure and public utilities and with administrative and regulatory capacity building. However, following China’s path and learning from its experiences, Ethiopia, one of the fastest growing countries in the world, has all the potential to become the “New China”.