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Ethiopia's role in Horn Economic Integration

Ethiopia's role in Horn Economic Integration

Tesfaye Lemma 08-03-17

Ethiopia  is strategically located in the heart of the conflicted region of the Horn of Africa and is, fortunately, the most stable and peace stabilizing state in the volatile region. It has a long history of statecraft, a sense of national identity and military tradition, which together mean that it is capable of acting in pursuit of clear-conceived national interest. It has, thus, been truly said that when Ethiopia has itself been conflicted, or has been seen as weak, political problems in the region have remained unsolved for decades upto the coming of EPRDF into power and have been observed run out of control.

Rightly, since 1991, the Ethiopian Foreign Policy has been maintaining tightly the country’s and the region’s peace and security side by side. The policy believes the region’s and Ethiopia’s peace and stability are inseparable. Rightly, accommodating and sheltering refugees democratically from the region and beyond is consistent within the National Foreign Policy though little is realized. Much desired remained to be done yet in this regard.

No question, Ethiopia is rising to take over the Horn of Africa in both fast demographic and economic development scopes. The government plans for growth, fuelled by infrastructural development and increasing exports of electricity to its neighbors, to drive the country towards middle-income status by 2025.

The country is also a significant international diplomatic performer, as host of the African Union and chair of the regional bloc the Intergovernmental Authority on Development aka IGAD. Ethiopia is a key partner in peacekeeping missions in Somalia and the disputed region of Abyei on both Sudan border, as well as facilitating regional negotiations to end the civil conflict in South Sudan. To release the potential of Africa, as the symbol of hope the entire world, there is surely the need for Africa to integrate economically to champion this dream. In the post independence period, integration has being a core element of the development strategy of African countries. The importance that African countries attach to regional integration has been reflected in the high number of integration schemes on the continent. The integration is geared towards empowering Africa to take its rightful position in the global economy. Hence, this reflects on Ethiopia’s priorities for regional stability, integration and development, and wider international relations.

The introduction of a federal democratic system in Ethiopia in 1991 made a U-turn in the history of the country towards to its neighboring countries. It is widely accredited among the academicians and politicians. Thus, they say Ethiopia’s major paradigm shift in the dynamics of the country's foreign policy and diplomacy towards the horn of Africa. The document, titled 'The Foreign Affairs and National Policy and Strategy of the Federal Democratic Republic of Ethiopia’ produced in 2003 is a document that clearly manifests practically the behavior of Ethiopia in the affairs of the horn of Africa.

It defined the foreign policy & diplomacy of the country in detailed manner and how it should be guided towards the outside world. Hence, it main agenda is promoting "sustained economic development, prosperity, promotion of democracy and peace as the pillars of the nation's objectives of foreign policy and diplomacy" both at home and with the outside world mainly with the horn. To be precise, the policy has brought political stability at home and good neighboring hood among the horn of Africa States.

Thus, it enabled the ground for economic integration to take place. The relations with the Republic of Sudan have already shifted to mutual economic development, economic integration, collective security and maintenance of peace. This trusted relation is manifested in the initiation to boost mutual trust in the use of the waters of the Blue Nile and possible power sharing schemes to be generated from GERD, the road connection, the boosting investment and trade among the two states, the cooperation on IGAD affairs are the practical result of the wisely guided foreign policy of Ethiopia.

Ethiopia sees the stability of the sub-region and Africa important. It strictly believes the instability of the neighboring countries is a direct instability of Ethiopia which harms both. Therefore, working to stabilize at home and at neighboring countries is mutual benefit. Hence, this mutual benefit should be manifested practically in the economic integration. It is for this reason that Ethiopia has deployed 8000 peace keeping troops in Abiye and considerable number of peace keepers in Somalia.

Economic integration is the unification of economic policies between different states through the partial or full abolition of tariff and non-tariff restrictions on trade, taking place among them prior to their integration. Economic integration is a process where barriers to trade are reduced or eliminated to facilitate trade between regions or nations. As the degree of economic integration increases, the trade barriers between countries decrease and their fiscal and monetary policies are more closely harmonized. Regional economic integration is not only about trade in goods, it covers other issues such as investment, services; labour. It encompasses regional co-operation on a wide range of matters.

The dream for a united economy or regional economic integration in Africa started since early years after independence. African leaders’ quest for unity clearly demonstrates their commitment, which gave impetus to the formation of Organization of African Unity (OAU) in 1963, now African Union (AU). The African Union Commission (AUC), the Economic Commission for Africa (UNECA), the African Development Bank (AfDB), and the Regional Economic Communities (RECs) are among the key players of regional integration.

Regional economic integration can be manifested and implemented across the continent on several of these platforms such as below.

Firstly, if integration reaches the stages of customs unions, then political decisions start to be made by a central body and this reduces the power of the domestic government of the country. This may not be popular with domestic politicians and also with those members of the population who are especially patriotic. Again if integration reaches the stages of a customs union, then economic decisions also start to be made by a central body. Governments and citizens in any given country may be reluctant to give up rights to make decisions about economic matters. Integration into a common market may `force` a country to change its economic policies. If there are greater tax benefits in one country and factors of production are free to move from one to another, then the government in the country with higher taxes may have to lower them in order to discourage such movement. The greater the level of economic integration the more member countries will lose control over political and economic affairs

Furthermore, Lack of complementarities among regional partners in goods and factors of production, and potentials for product differentiation between regional partners emanating from differences in income levels and consumption patterns coupled with no strong private sector support. There is also the lack of viable mechanisms for redistributing benefits from the net gainers to the more disadvantaged regional partners. Almost complete non-implementation of agreed trade liberalization schedules as well as other obligations by members.

Second, Economic integration fosters growth. The standard argument that an economic integration can affect the rate of output growth is realized through a faster growth of factor inputs, particularly return on investment in human and physical capital, and through increases in the growth of total factor productivity. Regional economic integration, which typically encompasses reduction in regional trade barriers and reduction in investment restrictions, can provide an important stimulus that may attract foreign direct investment (FDI), both from within and outside the regional integration arrangement (RIA) as a result of market enlargement, which subsequently serves as an engine for economic growth. However, a concerted effort should be made such that the benefits accruing as a result of the availability of larger markets would be made clear and evenly distributed among all members. This is to avoid the situation whereby, member countries would turn to be blocks against the smooth running of the integration.

Therefore, Ethiopia is constructing railways, roads, and electricity to connect with Kenya, Sudan, Djibouti, South Sudan and Somaliland. There is no practical example which can explain better than the huge infrastructures Ethiopia is conducting with all next door countries except Eritrea. The trade and investments are also going side by side with the cooperation on security and huge infrastructure lines.  Africa has come of age to be able to foster a more rapidly growth of economic integration. This will help the continent to realize it dreams of economic growth and transformation and to take its rightful position in the global economy. Rightly, Ethiopia is in the lead.






Eritrea is not weakened, isolated and dwarfed economically because of the ‘no war no peace policy’ but naturally by the hostile policy being carried on at home. No need to be boasted of the policy of the “no war no policy” instead! Additionally, following its belligerence in the horn of Africa, the UN twice has sanctioned Eritrea which has born a weakened and isolated state. Precisely, just because of the destructive policy conducted both at home and outside has brought the current state of Eritrea-isolated and weak. Surprisingly enough, there are Ethiopian scholars and politicians who proudly argue that as if the saddening situation Eritrea is in were brought by the ‘no war no peace’ policy. They argue that, as a result of the policy, Eritrea is isolated, the economy is fragile: the power of the army and the state is too weak to invade Ethiopia. They even try to emphasize the cause of exodus in Eritrea is of the policy effects. These claims might have partial truth in it; however, to conclude all belong to the policy does not hold water.

I say rather Eritrea was isolated just because of the belligerent foreign and domestic policy of Isayas, it is isolated. Additionally, Eritreans are fleeing just because of the dictatorial nature of the regime which denied the right to speak, work and go to school. The indefinite forced conscription, the very policy labeled as slavery and political leverage by the UN has caused exodus. Here, I do not dare to argue that the no peace no war policy has not direct effect regarding the terrible situation Eritrea is in. However, one should understand that Eritrea would not have been different as long as Isayas is there irrespective of the policy in focus, it does not matter. All colors of the evil things happening to Eritrean naturally emanate from the leadership behavior.






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