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
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
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
or joint ventures.
internships in Ethiopia
would offer expatriate
students a unique firsthand
also would strengthen
young Ethiopians’ ties
with their country by
giving them a sense of
belonging, while they
give back to their
group lives in Europe.
laws in several European
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
all around the world, is
another great asset for
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.
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.
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.
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.
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
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: email@example.com