Diaspora’s Contribution to Ethiopia’s Economic Progress
By Selamawit Legesse

How could Ethiopians build their country’s economy? Ethiopia is at the bottom of the world’s economic ladder. The country faces an HIV/Aids epidemic and the constant threat of war, which could lead to yet another famine. Additionally, many productive and educated Ethiopians have left and currently are fleeing Ethiopia at an alarming rate. The International Organization of Migration (IOM) reports that half of Ethiopians who traveled abroad for training in the early 1980s never returned home. The report indicated that Ethiopia lost 74.6 percent of her human capital from various institutions. More than a third of Ethiopian doctors also left between 1980 and 1991. Dr. Berhanu Nega contemplates on how the Diaspora could join hands with Ethiopians at home to build the country by creating a win-win arrangement between the two groups. He is the director of the Economic Association of Ethiopia.

In order to evaluate this potential, he first attempts to understand the characteristics of Ethiopians living abroad. Dr. Berhanu Nega holds a mirror in front of Ethiopians living overseas so they could recognize their strengths and weaknesses. During a speech to the Ethiopian community in Amsterdam in November 2003, Dr. Nega categorized Ethiopian expatriates into six groups according to their potential contribution to Ethiopia.

Dr. Nega argues that two of the six groups are, with or without knowing it, not only useless but also harmful to Ethiopia’s economic progress. The first group suffers from lack of knowledge about how to use money profitably. He gives one example: In an era when even people in Ethiopia’s rural areas, such as the Guragea region, have outlawed reckless spending on wedding and funeral ceremonies, Ethiopians who live in the developed world still throw away outrageous amounts of money in these practices. They spend beyond their limit, often depleting their savings without planning for their own or their children’s financial future.

The second group is also unhelpful. This set presumes that their full access to Ethiopian political or certain professional power is the only solution to Ethiopia’s economic stagnation. Sadly, this group also discourages others from helping the nation. They equate any type of positive contribution to Ethiopia with direct support for the government.

The third group includes expatriates who have accumulated work and education experiences. Dr. Nega believes this group is an untapped positive force that could improve Ethiopia’s economic conditions. Understandably, many do not want to return to Ethiopia because the region is volatile. Nevertheless, for those who want to contribute to Ethiopia’s progress but have not done so for political reasons, Dr. Nega proposes a solution: He suggests that this group exchange ideas and experiences with non-governmental organizations in Ethiopia through voluntarism or joint ventures. Additionally, internships in Ethiopia would offer expatriate students a unique firsthand experience. It also would strengthen young Ethiopians’ ties with their country by giving them a sense of belonging, while they give back to their country.

The fourth group lives in Europe. Anti-immigration laws in several European countries offer them a one-time payment if they agree to return home for good. This group could take advantage of the money and invest it in Ethiopia. They could also bring their strong work ethics to Ethiopia.

Th e f i f t h group, the Ethiopian business community all around the world, is another great asset for Ethiopia’s economic progress. Professor Nega draws lessons from developing countries such as Vietnam, China and India. These countries used their expatriates as an instrument for an economic leap forward. According to Dr. Nega, entrepreneurs abroad could be a bridge between domestic and foreign businesses. The Ethiopian government has been searching for foreign investors for years with little success. The Diaspora, however, have the contacts and know how to bring investors to the country. In addition to their own investment, they would also import entrepreneurial spirit and skills into Ethiopia.

The sixth group is expatriates with a strong affinity towards the country, which creates a desire in them to return to Ethiopia during retirement or earlier. This group is also a great-untapped force for Ethiopia’s economic empowerment, specifically through the money they invest in and send to Ethiopia consistently. For instance, when expatriates send money to their family and friends, Ethiopia earns foreign currencies.

For the money that the expatriates send home to be effective, in addition to spending the money wisely, people in Ethiopia must hold government officials accountable for the foreign currency it earns. The appropriate agencies in Ethiopia could then demonstrate how they spend the foreign currency. Financing economic development activities and investing in projects that employ people in abject poverty as well as former and current military members is extremely important.

Referring to the expatriates with a burning desire to contribute actively, Dr. Nega states that even if only eight thousand of them buy or build houses worth about $50 thousand yearly, then this investment would have a great impact on the economy. Ethiopia would earn about $400 million annually or $12 billion within thirty years. This amount would be four to five times larger than the current amount of foreign investment in Ethiopia, including by Midroc, Inc., the top foreign investor in the country.

Economic progress is one of the crucial elements in halting the HIV/AIDS epidemic and famine, and bringing the assurance of peace in Ethiopia. Dr. Nega strongly believes that if Ethiopians worldwide currently work on resolving Ethiopia’s economic problems, they could come up with many solutions. He invites the Diaspora to start discussing how they could collectively build their country.

For Ethiopians who are being raised outside the country, the history rhetoric alone will not entice them to have a strong affinity towards Ethiopia, or, more importantly, to invest there. Fortunately, the activity to mobilize the Diaspora for Ethiopian development has started. In addition to Dr. Nega’s research on the subject, many expatriates have moved back to Ethiopia to contribute directly, while others have demonstrated individual and collective effort to give back from abroad. Additionally, the IOM has just launched a website to provide information for Ethiopians and friends of Ethiopia on traveling, establishing business, resettling, and finding jobs in Ethiopia. The website can be viewed at www.ethiopiandiaspora.info.

A series of articles regarding remittances, trade, foreign aid, and investment in Ethiopia will follow this article. This new section (Business and Finance) will examine the potential of creating business ties between the Diaspora and Ethiopians at home. It will also include interviews with different economists, entrepreneurs, and expatriates who are currently working directly with Ethiopia. Tadias invites everyone interested on the subject to submit an article.

Professor Berhanu Nega’s speech regarding the Ethiopia Diaspora’s contribution can be found at: www.eeaecon.org/miscellaneous/ miscpprs/amstdspeechBN.pdf.

Selamawit Legesse is a freelance writer based in Washington, D.C. She can be reached at: peace_legesse@yahoo.com



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