The Ethiopian Messenger 4 − October 2016 by The Ethiopian Messenger

The Ethiopian Messenger

ውድ አንባብያን,

Dear Readers,

ሃገራችን ኢትዮጵያ ምንም እንኳን በአንዳንድ አካባቢዎች ወቅታዊ የሆነ

We are pleased to share important news about developments in Ethiopia which confirm that the country is moving forward despite the challenges on the way.

ችግር ቢያጋጥማትም ስኬታማ የሆኑ የልማት ውጤቶችን በማስመዝገብ ላይ ትገኛለች፡፡ ከእነዚህም መካከል በአፍሪካ ከሰሃራ በታች ለመጀመሪያ ጊዜ በኤሌክትሪክ ሃይል የሚሰራ የባቡር ሃዲድ ከአዲስ አበባ እስከ ጅቡቲ እ.ኤ.አ. ጥቅምት 5 ቀን 2016 ዓ.ም. ተመርቆ ስራ ጀምሯ፡፡ የባበሩ ስራ መጀመር ለሃገራችን የኢኮኖሚ እድገት 90% የሚሆነው የወጭ ንግድ የሚወጣት የጂቡቲ መስመር ከፍተኛ የሆነ የጊዜና የትሪንስፖርት ወጭ በመቀነስ ካለው በርካታ ጠቀሜታ በተጨማሪ ለምስራቅ አፍሪካ የኢኮኖሚ ውህደት አይነተኛ ምሳሌ ይሆናል ነው፡፡ በዚህ ዕትም ውስጥ በኢትዮጵያና በአውሮፓ ህብረት ስትራቴጂክ ግንኙነት በተለይም ህገ-ወጥ የሰዎችና ስደተኛነት በመከላከልና በኢኮኖሚ ልማት ትብብር እንዲሁም በአይነቱ አዲስ የሆነና “Aid for Trade” በሚል ዓለም አቀፋዊ የንግድ ሞዴልና በኢትዮጵያና በኔዘርላንድ መካከል ያለውን የሁለትዮሽ የኢኮኖሚ ትብብር ይዳስሳል፡፡ ይህ እትም በዓለም ቀርስ የተመዘገበው ድንቅ የሆነውን የመስቀል በዓል እንዲሁም ወቅታዊ የምስራቅ አፍሪካ የሰላምና ፀጥታ ሁኔታዎችን ያትታል፡፡ ውድ አንባብያን በመጨረሻም የዝግጅት ክፍሉ መልካም ንባብ እንዲሆንላችሁ እየተመኘን በመፅሔቱ ያላችሁን ማንኛውም አስተያየት እንድታደርሱን በማክበር እንጠይቃለን፡፡

የዝግጅት ኮሚቴ

The Addis Ababa-Djibouti Railway, inaugurated on 5 October 2016, is the first electrified train line of subSaharan Africa. It is expected to give an unprecedented boost to the Ethiopian economy. As a matter of fact, it will expedite the ongoing efforts to integrate the East African region and will considerably cut the time and cost for transporting export commodities to the port of Djibouti, where 90% of Ethiopia’s exports transit.

In this issue, we also offer an update on the importance of the Ethiopia-EU partnership. We show that, in the wake of challenges such as forced migration and in the area of development, this partnership is more relevant than ever. A innovative and little-known international cooperation modality, the so-called « aid-for-trade » model, is also addressed in this issue. The cooperation between Ethiopia and the Netherlands which is now working in this framework, can rightly be considered as a success, with more than 60,000 jobs created by Dutch companies and salaries 40% higher than average wages in the same sectors.

Enchanting Meskel Festival, regional news and untapped natural resources of Ethiopia are other topics we invite you to discover in this issue. We hope you will enjoy reading some of these articles. We would be happy to publish your contribution in our next issue, so don’t hesitate to write us. Your feedback is also highly appreciated.

The Editorial Team

Content

Ethiopia-EU strategic cooperation remains strong

A successful “Aid for Trade” model

Railway development in Ethiopia

Ethiopia’s untapped natural resources

Ethiopian Meskel festival

Civil war in South Sudan: more than a regional challenge

Article for the members of the diaspora

Quarterly magazine of the Embassy of Ethiopia in Brussels. Editor: Embassy of Ethiopia in Brussels, Avenue de Tervuren 64, 1040 Etterbeek, Belgium. info@ethiopianembassy.be +32 2 771 32 94.

October-November-December 2016

Ethiopia-EU Relations

Ethiopia-EU strategic cooperation remains strong The partnership between Ethiopia and the European Union is more relevant than ever. Challenges such as forced migration, regional stability and development can be addressed most efficiently through a partnership based on mutual interest and respect.

Ethiopian Prime Minister H.E. Hailemariam Desalegn and Mr Jean-Claude Junker, European Commission President at signature ceremony of the Ethiopia-EU Strategic Engagement Agreement, 14 June 2016 in Brussels. Picture © European Commission Since spring 2015, the European Union has been facing an unprecedented peak of illegal migration from the Middle East and Africa, in particular from countries of the Horn of Africa. The EU has defined a set of strategies and policies to deal with this challenge internally, but also to help countries of origin and transit to manage reception and hosting of migrants. Ultimately, the goal is to address the root causes of illegal migration in the countries of origin by creating better living conditions at home. For African countries, the most significant tool of this policy was set up in Malta at the Valletta summit in November 2015 with the EU Emergency Trust Fund for Africa, endowed with €1.8 billion for 35 African countries. At the same

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summit, Ethiopia and the EU signed a joint declaration on a Common Agenda on Migration and Mobility (CAMM) that acknowledges the importance of Ethiopia as a key country of transit, destination and origin of irregular migrants and refugees from the Horn of Africa on the route to Europe. However, this agreement faced critiques from some media outlets and political commentators who believed that through this solidarity fund with African countries, the EU was “compromising” itself by “funding authoritarian governments”. Clarifications are thus needed regarding the relevance and use of this financial support as well as on the political

partnership between the EU and African countries, and more specifically Ethiopia. First, the EU acknowledged Ethiopia’s special role as a major host of refugees in Africa long before the European continent itself faced a migration crisis and provided funding to the country to deal with this challenge.

With political instability and war in Somalia, South Sudan and Eritrea among others, Ethiopia has been welcoming hundreds of thousands of refugees in the last decade from different countries in the Horn of Africa region.

Today, Ethiopia is hosting more than 800,000 refugees, which is significantly more than several major European countries. As the largest host of refugees on the continent and fifth in the world, it is not surprising Ethiopia receives a coordinated support from the EU to face the challenge. Besides, the regular cooperation support provided in the framework of the European Development Fund, as well as this support package are project-oriented and have the objective to solve specific problems. The National Indicative Programmes are signed by the European Commission with the government of Ethiopia, and in this framework projects are implemented through the signature of Financing Agreements, which foresee different implementation modalities consisting of various degrees of decentralization and use of government’s structures.

After implementation, the projects are screened by the Commission and the member states. More specifically, projects funded under the EU Trust Fund for Africa are being implemented through EU member state agencies, international organizations, the private sector and nongovernmental organizations. The Commission already contracted projects amounting to €67 million in Ethiopia to support most vulnerable communities and refugees in the Oromo, Amhara, Tigray, SNNP, Afar and Somali regions, while the remaining €30 million project is undergoing a competitive call for proposals. This European support to Ethiopia’s development in the last decades has contributed to several achievements of the country recognized by the international community. According to the World Bank, poverty rates were reduced by 33% in the country between 2000 and 2011. This international organization also recognized that health, education, and living standards have been improved, with undernourishment rates passing from 75% to 35% since 1990 and infant and child mortality rates falling considerably since 2000.

A middle-income country by 2025 Education rates and access to health facilities have also dramatically improved. More than 30 new universities opened throughout the country in less than 20 years in which more than 25 million students are enrolled; 38,000 health extension workers were trained and deployed; 3,000 health centers were built in recent years. Among other achievements, this helped the country to reach several Millennium Development Goals (MDGs). Besides this, construction of infrastructure such as roads, railway and hydroelectric dams have created the conditions for the

further development of the economy and quality of life of Ethiopians and also plays a crucial role in terms of regional integration. The country has grown at a rate of more than 10% in the last decade and hopes to reach the status of middle-income country by 2025. Alongside these developments, new challenges have arisen: access to jobs for young graduates, equal access to the benefits linked with economic growth and lack of good governance. The Ethiopian government is well aware of the legitimate demands of the Ethiopian people linked to these challenges and is determined to address them in effective ways.

«The strategic partnership is highly valued on both side» Extensive consultations with the public and different parts of the society after the recent unrest in the country have led the government to improve and reorganize government bodies and structures to make them more effective and responsive and to ensure transparency and accountability. The government is taking measures to address these challenges through deep political reforms including restructuring of some government offices and reforming the electoral system. Some of this progress, especially regarding the reduction poverty, growth of the economy and infrastructure, has been recognized by the EU. It also fully supports Ethiopia’s constructive role in peace and security in the Horn of Africa, amongst others in Somalia and South Sudan and as chair of the Inter-Governmental Authority on Development (IGAD), and as the number one contributor to UN peacekeeping operations in the world, as well as on thematic international debates such as climate change. It is thus not without reason that the strategic partnership between Ethiopia and the European Union is highly valued on both sides and considered as a successful one among the ACP countries. On this ground, it has been considerably intensified during the past years following a set of high-level political consultations. After significant milestones such as the Common Agenda on Migration and Mobility in November 2015 and the establishment of a friendship group within the European Parliament in March 2016, Prime Minister Hailemariam Desalegn of the Federal Democratic Republic of Ethiopia and Jean-Claude Junker, European Commission President signed an Ethiopia-EU strategic engagement document in Brussels on 14 June 2016. The Strategic Engagement Agreement aims at structuring the reinforced cooperation between the two partners.

Ethiopia values the partnership with the European Union helping the country to address its developmental issues and to face its internal challenges constructively. The European Union is also keen to intensify its partnership with Ethiopia as stated by an inter-service EU Commission delegation which visited the country beginning of October 2016.

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October-November-December 2016

Dutch investments in Ethiopia

A successful “Aid for Trade” model In order to improve the efficiency of their development policy, some EU countries now link aid with trade. In Ethiopia, the Netherlands have found a particularly receptive partner for this innovating policy. The results of this partnership show that this new development paradigm can actually bear fruits and assure the prosperity of both partners.

H.E Mrs Lilane Ploumen, Minister for Trade and Development Cooperation of the Kingdom of the Netherlands and Ethiopia’s Minister for Foreign Affairs, Dr Tedros Adhanom held talks on 4 March 2016.

A new paradigm Pushed by economic constraints and the will to improve the efficiency of their development policy, most EU donor countries have started linking aid with trade over the past few years. In parallel, poorer countries like Vietnam, Ghana or Ethiopia developed faster than expected and began promoting inward investments as strategies to achieve sustainable development and create jobs. It is in this context that the Netherlands launched in April 2013 “A world to gain”, a new agenda aiming at benefiting from the economic growth in Asia, Africa and Latin America through its longstanding aid relationship with developing countries. In Ethiopia, the Netherlands have found a particularly receptive partner for this innovating policy. The

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business and development relationship between the two partners has considerably grown for the past three years and the Netherlands is now the European country next to Turkey with the largest number of companies in Ethiopia, with 130 compared to 80 three years ago. The country played a substantial role in supporting Ethiopia’s success, proving that this new development paradigm can actually bear fruits and assure the prosperity of both sides of the relationship.

Ethiopia’s attractiveness It is no coincidence that the Netherlands’ agenda was successfully implemented in Ethiopia. Ethiopia’s path to development rests on boosting manufacturing and exports

to industrialize, and a central aim of Ethiopia’s two Growth and Transformation Plans (2010-2015 and 2016-2020) is to pull in international investment. The country is energetically working on this, as shown with industrial park construction, and it finds some attention from international investors: each month, the country hosts business delegations. Foreign investors are being offered tax breaks and other types of preferential treatment to help develop Ethiopia’s manufacturing, textiles and agricultural sectors. Ethiopia offers a comprehensive set of fiscal and non-fiscal incentives to encourage investment into priority areas, such as an exemption of customs duty or income tax exemptions for a period ranging between 1 and 9 years, depending on the specific activity and the location of the investor. Besides preferential trade policies, international companies have also flocked to Ethiopia to take advantage of the country’s promising demographics and market potential – an increasingly educated population of almost 100 million people with an average age of 18, and a low cost labor pool which undercuts that of China by more than two-thirds. In addition, Economic growth has jumped to heights never known before in the country over the last ten years, with a 10.6 percent average annual rate of growth, and the country is known for making an efficient use of its financial resources, whether they come from the national budget, international aid or diaspora remittances. As a result, Ethiopia has attracted millions of dollars in investment and the business-friendly investment environment has convinced several companies to invest in Ethiopia.

The Dutch example In Europe, the Dutch development cooperation policy is one of the most effective in adding value by combining aid and trade. The Netherlands’s Dutch Good Grow Fund (DGGF) finances Dutch SMEs willing to engage in emerging markets and provides funds to local SMEs in developing countries, focusing on young entrepreneurs, female entrepreneurs and companies in fragile countries. All selected projects are expected to have a direct impact on the development of the financial sector in low- and middle-income countries. The “A world to gain” strategy divides the Netherlands’s partners into three groups: post-conflict and fragile countries that need assistance to reduce poverty (aid relationship), low and middle-countries with burgeoning economies (transitional relationships) and advanced economies, where the Netherlands’s main aim is to promote trade and investments (trade relationships). The Netherlands share a transitional relationship with Ethiopia, which means that they are linked by a combination of aid and trade. Apart from poverty reduction programs, the Netherlands also support Ethiopia in increasing its market access and improving its business climate. In other words, thanks to this strategy, Ethiopia – which remains one of the Netherlands’ 15 partner countries in development cooperation – has also become a substantial business partner for Dutch businesses. Another interesting feature of Dutch companies is that they put a lot of efforts in order to create a sustainable work environment, as the Netherlands pays particular attention to corporate social responsibility, sustainable growth and partnership with local entrepreneurs. Companies that get financial support from the Dutch government need to comply

to standards of international corporate social responsibility. This is monitored by the responsible government officers in the Netherlands. Dutch entrepreneurs are therefore taking into account issues of environmental protection in their activities, opting for higher investments and higher scale technologies (such as irrigation systems that collect the water and reusing it in the horticulture sector) and investing in environmental-friendly products (bio-fungicides, etc.).

« Dutch businesses have been benefiting from Ethiopia’s booming economy. » Criticism However, this new trend has also attracted criticism. Some NGOs are worried that Dutch interests might take precedence in development policy and that the Netherlands could end up subsidizing their private sector in the name of development. They also raised concern about the wages of the local employees, arguing that the low wages of some companies could not get them out of the poverty cycle. Questions about the impact of the Aid for Trade strategy emerged: can the needs of donor countries really meet the needs of developing countries? Will European companies not supplant local businesses? Does this approach have a real impact on development? In practice, the majority of Dutch companies operating in the country are bringing benefits to their employees. Many Dutch companies give priority to members of the local communities, in particular in the labor-intensive agricultural sector, about 99% of their employees are Ethiopian nationals. So far, more than 60,000 jobs have been created as a result of Dutch investments in Ethiopia and salaries are 40% higher than average wages in the same sectors. Companies like Holland dairy produces milk and cheese by collaborating with small Ethiopian farmers, helping them to increase their revenue. Another company, Moyee Coffee, is producing fairer coffee to increase the revenue of local producers (up to 300% more income), most notably by roasting the coffee on the ground and by sharing the company’s shares equally with the local producers. In several instances, Ethiopian employees working for Dutch companies launched small agricultural businesses of their own with a technical support from the Dutch Embassy in Addis Ababa. The success of the Dutch example is not just about the numbers, but also about the way of doing business, the quality and durability of the relation. Dutch investments helped creating tens of thousands of jobs in a country where 2 to 2.5 million young people arrive each year on the labor market and contribute to increase the exports of Ethiopia, whose balance of trade is still negative. But Dutch businesses have been benefiting from Ethiopia’s booming economy. The profit of Bavaria reached the record

October-November-December 2016

Horticulture facility of the Dutch company Afriflora/Sher in Ziway. Today, 50,000 people are employed in the factory, and between 3 and 4 million roses are exported every day. Picture © Afriflora/Sher sum of 531 million EUR in 2015, in a large part due to the investment in Ethiopia with the brand Habesha and Bavaria’s collaboration with 8000 local partners. Its distribution network that has expanded throughout the country and the capacity of the brewery has doubled to 600,000 hectoliters this year. The Dutch brewer, Heineken, bought out two of Ethiopia’s state-owned beer labels for $163m in 2011 and is hoping for similar success.

A long-lasting impact Beyond its valuable contribution in terms of employment and economic growth, it is also worth asking if the Aid to trade approach bring long-term results. It appears to be the case, as Dutch investments have evolved, both quantitatively and qualitatively, over the past years. If the majority of Dutch companies in Ethiopia (about 70 companies) are investing in the horticulture sector, their areas of interests have been expanding, and they are now investing in seeds, dairy, poultries or spices. More recently, they have started investing in more complex activities such as food-processing, manufacturing, packaging. The focus is now on technology transfer and capacity building. Some companies do import substitution, which produces finished products locally so the country does not have to rely as much on imports, fulfilling a growing demand for materials. Moreover, when Dutch companies establish themselves in Ethiopia, they often remain for many years. That continuity is of great value and often brings a more lasting contribution

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to the renaissance of the country than more classic forms of development. This is not to say that Ethiopia does not need aid anymore. But as the country remains part of the world’s least developed countries, the current high volume of development aid given to Ethiopia allow the government to channel its own resources into other areas and has been instrumental in supporting the government’s efforts. The Ethiopian government hopes that trade and investment will replace aid in the coming years and that the country will become self-sufficient in the near future. The success encountered by Dutch investments in Ethiopia should inspire other EU governments, who tend to perceive investment in African countries as riskier, to follow the Netherlands’s example. On this matter, Jean-Claude Juncker’s announcement of the creation of a € 3.35 billion European External Investment Fund (EEIF), focused on the EU’s neighborhood countries and Africa to address the root causes of migration and to promote sustainable investments in these regions, is a most-welcomed development. If successful, this ambitious fund could significantly increase the ability of the EU to crowd-in private finance and stimulate reforms towards more decent and sustainable jobs and economic activities. This development would mark a new chapter for successful European investments in Ethiopia.

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Infrastructure

Railway development in Ethiopia After three years of uninterrupted construction works, the Addis AbabaDjibouti railway officially started operations. It is one of the eight new railway projects planned to be constructed in the country. As a very costeffective means of transport over long distances, the Ethiopian railway infrastructure development projects are expected to significantly stimulate the national economy and accelerate regional integration.

The new Addis Ababa-Djibouti railway. © ERC « By all standards, the Ethio-Djibouti project will change the way things work for any investor, particularly one who wants to get involved in manufacturing. The transportation cost will be low and it will be very reliable” Transport Minister Workineh Gebeyehu said at the 8th Ethio-Djibouti Railway Project Joint Commission meeting. « It is difficult to think of rapid economic development, industrialization and international competitiveness without efficient, high quality and modern transport infrastructure ».

the country has witnessed a more than tenfold increase of foreign direct investments, which grew from USD 100

Ambitious railway policy to support national growth Thanks to the implementation of three national development plans (The Agricultural Development Led Industrialization then the Growth and Transformation Plans I & II), Ethiopia is increasingly being recognized as an attractive country for local and foreign investors. Between 2008 and 2015,

Inside the passenger train © ERC

October-November-December 2016

itself the even faster-growing needs of the economy on the very large territory of Ethiopia (1,1 million km2). “We are a niche market in a good geographical position,” said CEO of the Ethiopian Railways Corporation (ERC) Dr Getachew Betru in an interview with The Worldfolio. “This is why the railway mode of transport is called a game changer.” In 2007, Ethiopia’s Council of Ministers established the Ethiopian Railway Corporation (ERC), with a mandate to develop an integrated and high-capacity railway providing competitive and affordable passenger and freight transport services. The aim for the National Railway Network of Ethiopia is to build eight new railway lines for freight and passengers covering a total distance of 5,000 kilometers working across the country by 2020, in addition to an innovative 32-km light railway in the capital. Five of these eight projects are already in early or advanced stages of construction, while the Addis Ababa light railway already started operations in 2015.

million to USD 1.5 billion. Sectors such as light industry and agro-processing, that were practically inexistent two decades ago, are now in the focus thanks to cheap and trainable labor force, affordable electricity and huge availability of raw agriculture goods. This attractiveness is set to further increase in the next years. According to consultancy firm Ernst & Young, the country will rank among Africa’s top four manufacturing hubs by 2025. To achieve the status of regional manufacture and agricultural hub, Ethiopia needs to take advantage of its unique location, close to the Middle East, Europe and Asia. Though the world-class national airline Ethiopian Airlines already provides great transportation of fast consumption goods like horticulture and floriculture, the country still has to develop its transport capacity for non-perishable goods. This need is particularly acute because the country is landlocked. Road infrastructure has been developing fast in Ethiopia during the past years, but it cannot cover by

Major Projects LIGHT RAILWAY ADDIS ABABA The light railway of Ethiopia is the first urban metro light rail scheme to be built in sub-Sahara, South Africa excluded. Since September 2015, up to 60,000 passengers can travel each hour on the two lines, across 39 stations and 32 kilometers. Thanks to subsidies from the government, the tickets are very cheap, allowing all the city inhabitants to use the innovative tramway. This new transportation system plays an effective part in solving the problems affecting Addis Ababa transport: an aged fleet, the chaotic and dangerous movement of mini-bus taxis and environmentally unacceptable levels of CO2 emissions. Eighty-five percent of the USD 475 million cost of the Addis Ababa Rail Transit project were covered by the Chinese Exim Bank, an agreement which came with significant technology transfer to train Ethiopian engineers and maintenance personal. ADDIS ABABA-DJIBOUTI Built by the French in the 1890s, the initial Addis Ababa-Djibouti railway line deteriorated over the decades due to lack of maintenance, cutting Ethiopia’s direct railway access to the port of Djibouti. The construction works of the new line, which runs parallel to the old one-meter gauge railway, started anew in 2012, with a total construction budget of USD 4.5 billion, financed by the Ethiopian government and in loans from the Exim Bank of China. The 320 kilometers stretch from Addis Ababa to Mieso was built by the China Railway Group, while the 339 kilometers section from Mieso to the Djibouti border was built by the China Civil Engineering Construction Corporation. Italferr, the engineering subsidiary of Italian State

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Railways, provides consultancy services for maintenance and operations. The first freight on the line was carried on 20 November 2015 along the partially completed line to Merebe Mermersa and the line was inaugurated on 5 October 2016. According to Transportation minister Workineh Gebeyehu, the Addis Ababa-Djibouti railway line will allow Ethiopia to compete efficiently on the international market. In fact, it will provide a fast, efficient and cheap freight and passenger transportation from the capital city to the port of Djibouti, where most of Ethiopia’s export and import items transit. With this new line, the travel distance is cut from several days to less than 10 hours, with passenger trains transiting as fast as 160 km/h and freight trains at 120 km/h. The line is East Africa’s most important standard gauge railway and will carry 750,000 passengers and 8.5 million tons of freight annually. It will create more than five thousand job opportunities. On the other hand, the completion of the Addis AbabaDjibouti railway will certainly expedite the economic integration efforts of the Eastern Africa region. It is to be recalled that Ethiopia is linked by standard road with Djibouti, Kenya, Sudan, South Sudan and Somalia. Electricity is also exported to Djibouti and Sudan. MEKELE-WELDIYA The construction of the 268 kilometers Mekele-Weldiya line began in February 2015. It is funded by a loan from Exim Bank ($1,5 billion) and several other lenders ($1.7 billion). CCCC (China) and Yapı Merkezi (Turkey) are managing the project. WELDIYA-AWASH Connected to the Weldiya-Mekele line, the Awash-Weldiya line will ultimately connect Mekele to the Addis AbabaDjibouti line. The 375 km project line is constructed by a consortium led by Yapi Merkezi (Turkey). The financing package comprises a USD 450 million seven-year loan from a consortium of lenders from Europe, Africa, the Middle East, and North America, and a USD 415 million 13-year loan backed by Sweden’s EKN and EKF and Swiss Export Risk Insurance. The terrain is particularly challenging for railway construction as Awash, at the southern end of the line, is 986 meters above sea level, and the line then climbs to Kombolcha at 1842 meters and finally reaches Hara Gebeya, close to Weldiya, at 2122 meters above sea level.

Tunnel drilling on Weldiya-Awash © Railway Journal

This railway section achieved a major milestone in August 2016 with the holing through of a 1530 meters tunnel after one year of work. Three of the six tunnels on the line are now holed through. WELDIYA-TADJOURA This 280 kilometers project will give access to the port of Tadjoura in Djibouti, connecting the Ethiopian hinterland to another port facility in addition to the Djibouti port. It could be particularly useful to exploit the potash deposit in this region of Ethiopia. ADDIS ABABA-BEDELE The 439 kilometers line will connect Addis Ababa with Jimma, Bedele and in the future with South Sudan. Andrade Gutierrez Participacoes (Brazil) is in charge of the construction which started after prime minister Mr Hailemariam Desalegn laid the foundation stone for the project in May 2015. “The railway line which will ultimately connect to their neighbor Sudan, will play a major role in enhancing social, political and economic activities of the areas it crosses as well as the nation” according to Ethiopian Railways Corporation CEO Getachew Betru.

Long-term development integration

Regional

Beyond the construction of the different railway lines throughout the country, Ethiopia is investing in long-term capacity-building to continue planning, maintaining and building its railway network. In April 2015, Ethiopia put forward the plan to establish the Railway Academy of Ethiopia for skilled railroad professionals, where railway professionals would be trained as managers, engineers, technicians, and researchers. The goal is to develop the competencies at national level to be able to manage the whole rail network with Ethiopian engineers and staff by 2020. “Hopefully, by the end of 2020 all the railways will be made in Ethiopia by Ethiopians,” Betru said. “My generation is trying, but it is the next generation, the youth, that will transform Africa, and we will see the real impact on education, health and economy in the 2020s.” In 2015, the country also drafted its first National Logistics Strategy, which is expected to improve Ethiopia’s maritime, air and road connectivity, which in turn will greatly enhance multi and unimodal logistics operating systems, EthioDjibouti Corridor Management, customs, maritime and transit administration structures. Railway development in Ethiopia is first and foremost focused on economic development, but it will also have a positive impact on the building of a climate-resilient economy and regional integration. As a very cost-effective means of transport over long distances, the Ethiopian railway infrastructure development projects are expected to significantly reduce transport costs, increase the safety and reliability of transport services, facilitate the import-export trade of the country, increase the inflow foreign direct investment, strengthen socio-cultural cohesion, technical knowledge in the country and stimulate trade and peace in the whole region.

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Natural resources

Ethiopia’s untapped natural resources While home to one of the highest deposits of natural gas in Africa, Ethiopia did not take full advantage of this natural resource yet. But the government recently set the strategic goal of increasing the exploitation of this formidable mineral resources potential and turn the sector into a backbone of the country’s industry by 2020-2023 A new beginning for Oil and Natural gas exploitation in Ethiopia Ethiopia is home to one of the highest deposits of natural gas in Africa. Some parts of the country’s geological structure resemble the oil and gas fields of the Middle East, particularly in the Ogaden basin. However, despite the commercially viable volumes of gas present in the country’s soil, Ethiopian regimes before 1991 have been unable to put together an arrangement to extract the gas, in part due to the consecutive regimes changes the country experienced. In 1972, natural gas fields were discovered by an American company, Tenneco, which was expelled in 1977 by the Derg. Following this expulsion, a former USSR company, Soviet Petroleum Exploration Expedition (SPEE), started exploring Ethiopia’s gas fields, but the company’s contractual agreement was also terminated in 1994 after the fall of the military regime. As a consequence, most of the country’s potential in oil and gas is still untouched. This is why, in order to increase its foreign currency earnings, the government of Ethiopia set the strategic goal of increasing the exploitation of its formidable mineral resources potential ten-fold by 2023 and turn the sector into a backbone of the industry by 2020-2023. The strategies to reach this objective include delivering basic geological data to the civil and business sectors, attracting private investors in the development of the mining sector and issuing licenses to those engaged in mineral and petroleum operations. In addition, the development of mineral and geological energy resources of Ethiopia has to take place in an environmentally friendly manner and in collaboration with different stakeholders to regulate the market.

In addition, the Ethiopian government established in 2012 the Ethiopian Petroleum Development Enterprise that will engage in developing the gas fields in partnership with private companies.

Exploration and pipeline constructions Several firms have already acquired licenses to explore more than 40 blocks throughout Ethiopia in the past four years, the vast majority of them in the south-eastern Somali Region. The country is planning to start producing

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and exporting natural gas from untapped reserves in the Calub and Hilala fields in its southeast region by next year. Studies reveal the Calub and Hilala fields have deposits of 4.7 trillion cubic feet of gas and 13.6 million barrels of associated liquids, both discovered in the 1970s but not yet exploited. According to Ethiopian Mines Minister Tolossa Shagi, the country expects to make an excess of 1 billion USD in annual foreign exchange earnings from gas exports thanks to these 4.7 trillion cubic feet natural gas reserves. The company POLY-GCL Petroleum Group Holdings Ltd, a joint venture between the state-owned China POLY Group Corporation and the privately owned Hong Kong-based Golden Concord Group, has finished drilling two appraisal wells and will soon know the actual size of gas deposits in the south-eastern Somali Region. POLY-GCL plans to drill five wells in Ethiopia’s southeast, including three wildcat exploration wells. The project involves developing the fields and building a 700 km pipeline to transport up to 12 million cubic meters of gas from the Ethiopian hinterland to the coast of neighboring Djibouti, where it will build a 3 Metric Tonnes Per Annum (mtpa) liquefied natural gas (LNG) plant and export terminal. Initial construction is expected to take three years to complete. The plant’s capacity could eventually be extended to 10 mtpa. POLY-GCL estimates the cost of this construction at 4 billion USD and initially expected to start LNG production by mid-to-late 2018 at 3 million tons a year at first, rising to 10 million tons later. Another vast natural gas reserve recently found in Arbaminch could transform Ethiopia into a major natural gas producer

In a recent remark, Prime Minister Hailemariam Desalegn said the nation would be ready to join the global natural gas market after two years. The Premier said that his administration is undertaking projects meant to sell the resource domestically and export it. This is a substantial step for Ethiopia. In fact, since the beginning of the millennium, the country has been building a diversified economy by improving productivity in the agricultural sector and supporting the rise of agro-processing, light manufacturing and infrastructure development. Additional foreign currency earned through natural resources could reveal itself to be an important support in the country’s endeavors to reach the status of middle-income country by 2025.

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Tourism

Ethiopian Meskel festival Meskel is one of the many colorful religious festivals in Ethiopia, attended by tourists from all over the world. Go and visit Ethiopia to be part of this unique celebration!

Ethiopia is a country that maintained its culture and civilization for three thousand years by defending its sovereignty against aggressions perpetrated by external powers. This was a sine qua non condition to maintain its unique identity and cultural heritages, which did not dilute to this date. Among the country’s numerous cultural identities, celebrating diverse national festivals remains an irreplaceable custom of its peoples. The country’s unique calendar offers the celebration of many holidays such as the Meskel Festival, a veneration of the discovery of the true cross of Jesus Christ by Queen Eleni. The legend narrates that Queen Eleni was directed by smoke of burning fire to unearth the cross that had been buried for long. Meskel festival is especially celebrated by Ethiopian Orthodox Christians just after the Ethiopian new year from Meskerem 16-17 (Ethiopian calendar), or 26-27 September (Gregorian calendar). Two important occurrences take place during this celebration. On the first day, the Demera, a

building and burning of bonfires decorated with a seasonal flower topped by a cross in the presence of thousands of people in different part of the country. The lightning ceremony of the bonfire is followed by several colorful spiritual ceremonies including the singing of priests and deacons dressed in traditionally woven costume. The following day is considered to be Meskel festival and believers wake up early in the morning and proceed to the place where the bonfire took place to mark their foreheads

« The celebration is serving as an important social interaction for families»

October-November-December 2016

with the sign of the cross using the ashes of the bonfire. In some parts of Ethiopia, especially in the southern part of the country, the ceremony is celebrated a week earlier and it is serving as an important social interaction for families to get along after their yearly engagement. The festival is also celebrated with Kitfo, a typical Ethiopian dish made with minced raw meat marinated with local spices. Besides its cultural significance in the country, the festival is attracting tourists from everywhere. Due to its

Kitfo served during Meskel Festival ÂŠ California Cookbook

unique colorful celebration and cultural importance, the Meskel festival has been inscribed by UNESCO as the intangible cultural heritage of humanity. Once you made your mind to visit Ethiopia in order to be a part of this sacred festival, you might want to extend your stay in Ethiopia to witness a colorful celebrations of Ethiopian Christmas (Gena) and Timkat (Epiphany), taking place in January.

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Meskel bonfire on Meskel Square in Addis Ababa

Meskel celebration ÂŠ Mary Clark Traveler

The Ethiopian Messenger

Regional affairs

Civil war in South Sudan: more than a regional challenge Since the beginning of the civil war in December 2013, South Sudan has been sending shock-waves through the entire Horn of Africa. As current chair of IGAD and member of the UN Security Council, Ethiopia has taken responsibility to mitigate this crisis.

South Sudan’s President Salva Kiir and South Sudan’s rebel commander Riek Machar, together with African Union Commissioner for Peace and Security, Smail Chergui, Kenya’s President Uhuru Kenyatta and Ethiopia’s Prime Minister Hailemariam Desalegn, attend the signing of ceasefire agreement during the IGAD Summit in Addis Ababa, on 1 February 2015. © Reuters

The conflict opposing troops loyal to President Salva Kirr and soldiers backing former Vice-president Riek Machar has killed more than 50,000 South Sudanese and displaced 2,3 million people, nearly one sixth of the total population. Five years after its independence, South Sudan has been at war with itself for nearly three years. Ethiopia is hosting more than 311,000 South Sudanese refugees and is particularly active to support negotiations to reach a lasting peace agreement between the warring parties. These initiatives should be supported by the international community. In the context of increased instability in

the EU’s neighbourhood and of a global migration crisis, the impact of the conflict in Africa’s youngest country is reaching beyond East Africa.

From a political conflict to a humanitarian disaster In December 2013, fighting between the Sudan People’s Liberation Army in the Government (SPLA-IG) led by the president and Riek Machar’s Sudan People’s Liberation Movement/Army-In Opposition (SPLM/A-IO) led to internal

October-November-December 2016

conflict and widespread civilian displacement. After nearly two years of civil war, peace talks led by IGAD eventually convinced the main warring parties to sign the Agreement on the Resolution on the Conflict in the Republic of South Sudan (ARCSS) in August 2015, which stopped the worst of the fighting. The deal included the establishment of a Transitional Government of National Unity (TGoNU) with Riek Machar. When he returned to Juba in April 2016 accompanied by some 1,000 opposition soldiers, clashes erupted between them and units of the national army and presidential guard, raising fears of a slide back to full-scale war. Following the brief fighting, Riek Machar left Juba and remained in the bush, waging a guerrilla conflict. End of September, Riek Machar issued a statement calling for an armed struggle against President Salva Kiir’s government which he accuses of attacking Sudan People’s Liberation Movement in Opposition (SPLM-IO) positions. So far, the country is still stuck in a political impasse and is now facing an arms embargo imposed by the UN and targeted sanctions from the international community. In addition to its dramatic humanitarian impact, the conflict has paralyzed oil production, which accounts for 98% of South Sudan’s economy and almost three quarters of the government’s expenditure, and kept investors away. South Sudan’s collapse into civil war prevented farming and closed rural markets, leaving an estimated 4.8 million people currently in need of urgent humanitarian assistance. Inflation, displacement and hunger are on the rise. Nationwide, food inflation hit a record 850 percent in August, according to the National Bureau of Statistics.

Ethiopia’s role in peace-making

of the 4,000 troops, in addition to Rwandan and Kenyan troops.

What can the international community do? Regional powers are currently negotiating to secure consent for deployment which will act as a buffer between governmental and rebel forces and secure humanitarian supply lines and key installations in case the conflict worsens. Next to buffing up the UNMISS peacekeeping mandate, increased attention should be paid to political developments in the country in order to reinforce its crumbling national unity. In addition to supporting mediation efforts, the international community should also intensify its support to countries in the region hosting South Sudanese refugees, as of the total $113.8 million appealed by UNHCR for the refugees in Ethiopia, only 10% has so far been secured.

« Renewed war would be devastating not only for the people of South Sudan, but also for the entire Horn of Africa »

Due to its proximity to South Sudan and its long-term role in regional peace-making, Ethiopia has actively been contributing to stabilize the situation. Ethiopian leaders played a critical role in authoring the Declaration of Principle (DoP) that led to the signing of the 2005 Comprehensive Peace Agreement (CPA) which ended the Second Sudanese Civil War and set a timetable for a Southern Sudanese independence referendum. Following clashes between Sudan and South Sudan forces in 2012, agreements were signed in Addis Ababa between Sudanese President Omar al-Bashir and South Sudanese President Salva Kiir. At the civil war’s outset, Ethiopia hosted peace talks and tried to take a neutral position between the government and SPLM/A-IO, as well as with Sudan and Uganda. Ethiopia’s intention was to prevent South Sudan’s civil war from becoming a regional conflict. After the civil war broke out in December 2013, Riek Machar stayed in Ethiopia during the consultations and negotiations of the peace deal.

Renewed war would be devastating not only for the people of South Sudan, but also for the entire Horn of Africa. Should the conflict last, the country could face dissolution which would further destabilize a region already troubled by civil war in Somalia and flows of refugees from Somalia and Eritrea. The entire sub-region could plunge into a major crisis that would inevitably hinder its economic development and push thousands to risk the perilous journey to Europe.

As the current chair of IGAD and a Member of the UN Security Council, Ethiopia has spearhead the process of mobilizing the United Nations Security Council on the South Sudan conflict. In early August, the UN Security Council endorsed sending an extra 4,000 troops to operate under the existing UN Mission in South Sudan (UNMISS), which includes more than 13,500 troops and police, with Ethiopian troops comprising the largest contingent currently estimated at 8,300 men. It is also planned Ethiopia will provide the bulk

This summer, no red line has been crossed in contrast to the mass ethnic killing of civilians in Juba that occurred in December 2013, marking the start of two years of terrible conflict. Apart from pockets of trouble around Juba, the violence has not spread so far. A unified regional position in IGAD-Plus supported by the African Union is crucial to take advantage of the current window of opportunity, to get out the political impasse and implement the power-sharing agreement negotiated in Addis Ababa.

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However, there is still hope for the country. Diplomatic efforts have had a positive impact in the past. IGAD in collaboration with the IGAD-Plus partners pressured the parties to sign the 2015 peace agreement and ended the two-year civil war. In the upcoming months, Ethiopia will continue to push the IGAD-led peace process, which has so far been able to halt the fighting, create a framework for reform, transitional justice and elections and prevented regional powers being caught up into South Sudan’s war.

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October-November-December 2016

The Ethiopian Messenger

October-November-December 2016

The Ethiopian Messenger