Assessment of the Impact of Chinese and Indian Economic Activities in Africa: A Particular Focus on Ethiopia’s Economy

Abstract

In Africa, China and India are considered to be following a donor–recipient approach and are explicitly criticised for exploiting the continent’s energy resources. This study focuses on the presence of the Asian countries in terms of institutional theory, historical connections, instrumental motivations and political engagement with Africa in general, and with Ethiopia in particular. India offers non-pecuniary value, such as scholarship and technical assistance, whereas China focuses on a wider range of economic aids and non-pecuniary packages; thus, both countries are well positioned in Africa. This study is an exercise audit of the impact of Chinese and Indian economic activities on Ethiopia’s economic growth and examines the period from 1992 to 2016 from historical and contemporary perspectives. This study also includes a case study of members of Ethiopian society’s attitudes towards the presence and prospects of Chinese and Indian investment projects and its perceptions of these projects. Although some long-term developmental impacts remain uncertain, this study argues that the presence of the Asian drivers has favoured Ethiopia in many investment sectors and concludes that the overall impact of the Asian drivers on Ethiopia is beneficial. To collect primary data, individual and group interviews and discussions were conducted.

The recent political situation in Ethiopia and rapprochement with Eritrea

“…For instance, Shandong Dong, the first donkey abattoir company in the country, Dangote Cement Plc in the Oromia region and Karuturi Global Agro Products Plc in the Gambella region are among the victims. 24 The imposed SoE tarnished Ethiopia's image as one of Africa's fastest-growing economies.…”

“…60 However, in order to reduce the income inequality prevailing in Ethiopia and to promote sustainable development, the change must start from the rural areas of the country where 80% of the population are engaged in agriculture and agriculture is the foundation of the country's economy. 24 Besides, concerning employmentgenerating projects, there is no single project that has been commenced since Abiy has come to power. This is a headache to Abiy and his administration.…”

Chinese and Indian investment in Ethiopia: infrastructure for ‘debt-trap diplomacy’ exchange and the land grabbing approach

“…Since the beginning of the 21st century, economic development in Africa has drawn worldwide attention, and investments and cooperation by Chinese and Indian private and state-funded enterprises in Africa have been rapidly increasing (Addis and Zuping, 2019). To date, as many journalistic accounts describe, Chinese and Indian enterprises, especially privately owned enterprises, are increasingly pressing to enter Africa, invest and operate in the continent, this issue has produced two schools of thoughts: optimistic and pessimistic (Addis and Zuping, 2019).…”

“…Since the beginning of the 21st century, economic development in Africa has drawn worldwide attention, and investments and cooperation by Chinese and Indian private and state-funded enterprises in Africa have been rapidly increasing (Addis and Zuping, 2019). To date, as many journalistic accounts describe, Chinese and Indian enterprises, especially privately owned enterprises, are increasingly pressing to enter Africa, invest and operate in the continent, this issue has produced two schools of thoughts: optimistic and pessimistic (Addis and Zuping, 2019). The optimistic strand of the academic literature describes both China and India as establishing and developing new types of short-and long-term stable and mutually beneficial partnerships and providing various sound mechanisms for trade, aid and economic cooperation with Africa (McCormick, 2008;Nowak, 2016;Panda, 2016).…”

“…China and India have recently gained attention in the world economy. The developments that China and India have brought to some African countries have had significant positive impacts (Addis and Zuping, 2019). Nonetheless, their growing presence in Africa and the rise in their demands for energy, raw materials and food have become global issues.…”