An Old Challenge Surfaces in the new emerging Industry Zones
Industrial Parks have multifaceted benefits. They attract foreign investors with financial, technological and management capabilities, resources that least developed host countries are usually in short supply. Countries which fast expanded parks, such as Vietnam, achieved tremendous leap in manufacturing, thereby increasing job creation and export revenues.
Ethiopia has long realised these benefits and started building more than a dozen parks. Cheap labour and electricity along with lucrative tax incentives, and quota and tariff free access to the big USA, EU and Chinese markets have attracted investors. The presence of ‘cheap labour’ and highly subsidised electricity has especially contributed to Ethiopia’s leading position in Africa as FDI destination. However, the fact that employees are paid as low as USD35 per month, is hugely contributing to low labour productivity, high staff turnover and poor industrial culture. EBR’s Ashenafi Endale visited the Bole Lemi and Hawasa industrial parks to see the extent of the problem.