S. Korean President Park Geun-hye is expected to pay a visit to Addis Ababa, the capital of Ethiopia, next year. Since 2006 S. Korea and the African Union (AU) have been holding the Korea-Africa Forum, a ministerial-level meeting, every three years. The 3rd Korea-Africa Forum was held in Seoul in 2012.
At the 4th Korea-Africa Forum, scheduled for 2016 in Addis Ababa, President Park is likely to deliver a keynote speech. Recently, a growing number of Korean companies have set their sights on Ethiopia, thus bringing the two countries much closer.
In July 2014, Bloomberg released a report titled “Turning Ethiopia Into China’s China” so as to shed light on the Chinese manufacturing industry’s growing investment in Ethiopia. Ethiopia is unequivocally one of the world’s fastest growing economies. China has been keen on providing aid to African countries, especially Ethiopia.
In 2011-2015, China finished first with its average annual economic growth of 9.5 percent, followed by India (8.2 percent) and Ethiopia (8.1 percent), according to data The Economist complied based on the IMF statistics. According to CNBC, the Ethiopian economy grew, on average, 10.6 percent between 2013 and 2014.
In the future, the global economy will be driven by Asian and African countries. According to the IMF, three Asian countries (China, India, Vietnam) and seven African nations (Ethiopia, Mozambique, Tanzania, Congo, Ghana, Zambia and Nigeria) make the world’s top 10 fastest growing economies list. After 2011, Asia’s average economic growth (6.0 percent) was exceeded by Africa’s (6.5 percent).
Still, the African economy is small in size but its growth potential merits our attention. As of 2015, Ethiopia has a population of about 95 million, the second largest in African after Nigeria. And its population is very young: the median age in Ethiopia is 18.4 years. Labor is cheap and it has a huge workforce. Its educational infrastructure, however, is in such poor condition that investment is badly needed.
Lee Janggyu, President of Adama Science and Technology University (ASTU), is the first Korean president of an African university, who used to teach at Seoul National University. President Lee has advised the Ethiopian government to put two universities under the control of the Science and Technology Ministry, not the Ministry of Education, and to nurture them into Ethiopia’s equivalents of KAIST (the top science & technology research university in S. Korea. Appointing Korean professors as university president or dean shows the extent of this African nation’s faith in S. Korea. Diplomatically speaking, S, Korea has become the third most important nation to Ethiopia, after the US and the UK.
In Africa, the capital of Ethiopia, Addis Ababa, is a strategic point that serves as home to the AU, the Pan Africa Chamber of Commerce and Industry (PACCI), the United Nations Economic Commission for Africa (UNECA) and the African Standby Force (ASF)’s Headquarters. Unfortunately, few Koreans know that direct flights between Inchecn International Airport and Addis Ababa Bole International Airport are available. As such, S. Koreans know little of this fast-growing African economy. Though there is a two-hour layover at Hong Kong International Airport, the only African carrier that flies passengers from the African continent to S. Korea is Ethiopian Airlines
Ethiopia’s SOC infrastructure, however, leaves too much to be desired. It is where Korean companies have to roll up their sleeves. The construction of the USD 4.8 billion Grand Ethiopian Renaissance Dam (GERD), a symbol of Ethiopia’s Growth and Transformation Plan (GTP), is projected to generate 6 gigawatts of electricity, 4 gigawatts of which will be exported to 9 neighboring nations. Dams and power plants are spring up across the nation because Ethiopia’s potential hydroelectric generation capacity reaches 45 giga watts.
Once a sustainable supply of water and electricity is secured, the Ethiopian economy will charged ahead with a vengeance. Ethiopia has announced that it has to invest approximately USD 110 billion in order to generate 37 gigawatts of electricity by 2037. Ethiopia’s urbanization is likely to accelerate. Ethiopia has to build numerous new towns, like Bundang, from now on. Since communications are the backbone of a nation, both the government and the private sector are making agile movements in the sector.
Foreign aid worth USD 3.5 billion had flowed into Ethiopia in 2014. The Ethiopian government, however, sometimes finds it somewhat uncomfortable to receive aid from western nations. It is because their aid comes with strings attached. Western countries would suspend or slash their aid if Ethiopia failed to comply with their demands. On the other hand, China is different. As of 2014, the top five investors in Ethiopia are Turkey, India, China, Saudi Arabia and Sudan. China ploughed USD 1.25 billion into Ethiopia. In 2011, China built a USD 200 million building and donated it to the AU’s Headquarters.
About 70% of Ethiopia’s road construction is dominated by China. China Railway Corporation (CRC) had won a 32-kilometer-long (double-track), 39-station light-rail project from Ethiopia and completed the project in February 2015. The construction cost USD 475 million. On top of that, USD 3.3 billion will be sunk into the 748-kilometer-long Ethio-Djibouti Railway Project, which has also been awarded to the CRC. Chinese mobile carriers, ZTE and Huawei, are taking part in the nation’s fourth-generation mobile communications project.
Still, Korean companies’ entry into the Ethiopian market pales in comparison with their Chinese counterparts. Korean builder Keangnam Enterprises has completed the construction of runways at Addis Ababa Bole International Airport and the Mojo-Awashi road. As of now, Keangnam is partaking in the Aposto-Arba Moda road project. ADO Construction, a subsidiary of Korean company Jamyung, is engaged in the construction equipment rental business. In the communications sector, Wooam Corporation won an optical ground wire (OPGW) deal from Ethiopia.
IGLOO Security, a Korean provider of security services, bagged a deal to build a national cyber security center in Ethiopia. Korean SME Agerigna has developed an Amharic (the official language of Ethiopia) keyboard system and Ethiopia-specific Kakao Talk Service “Agerigna” and successfully had them localized. Korean software developer Tomato System has set up the ASTU’s education management system. There are 31 state-run universities and nearly 500 private universities in Ethiopia.
The Korea Association of Ethiopian Studies (www.facebook.com/groups/155003514683528/) has been playing a bridging role between S. Korea and Ethiopia. The association has recently donated money to a cash-strapped Ethiopian student studying at a Korean university. Her financial conditions have deteriorated since she underwent a nephrectomy. Furthermore, the association invited Ethiopian professors to S. Korea and helped them receive their master’s degrees or PhDs from S. Korean universities.
Leveraging advanced technologies and expertise in various areas, including agriculture, manufacturing, power generation, construction, information and communications, S. Korea can furnish Ethiopia with top-notch services. By scaling up mutual cooperation, the two nations can nurture their ties into a strong economic partnership. Korean companies should be mindful of the fact that Africa, especially Ethiopia, is a lion waking up to roar and take a leap forward.
