Can Ethiopia Remain Neutral?

As the west is wrestling with Russia and China to maintain the ‘rule-based international order’, maintaining neutral positions on both fronts is difficult for Ethiopia and other developing countries.

On 22 October 2022, the United States introduced a national security strategy which reads “The most pressing challenge facing our vision is from powers that layer authoritarian governance with a revisionist foreign policy. Russia and [the Peoples republic of China (PRC)] pose different challenges. Russia poses an immediate threat to the free and open international system, recklessly flouting the basic laws of the international order today, as its brutal war of aggression against Ukraine has shown. The PRC, by contrast, is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to advance that objective.”

The strategy clearly shows that the US and its allies are facing with two strategic challenges: Russia and China. The struggle of such states at this level means there is a competition either for maintaining the global status quo or to revise it. The global level race by superpowers has definite impact for the rest of the world.

The questions are: should Ethiopia maintain its neutral position in the Ukraine war? In light of the strong pressure from the west on developing countries to take position in the matter, can Ethiopia keep pushing this position anymore?

The Sino-US competition is also posing a serious challenge on many developing countries because the pressure to side to either of the blocks is mounting by the day. In light of this, can Ethiopia maintain neutrality or should it continue to engage with both of them?

The Ukraine factor

On 24 February 2022, Russia invaded and occupied parts of Ukraine. The invasion has caused tens of thousands of deaths on both sides and caused Europe’s largest refugee crisis since World War II. A year later today, no one sees a clue on how the war would end. The war has created two basic challenges for the rest of the World. The disruption it caused in the global supply chain has created market gap and contributed for soaring commodity prices globally. In the Ethiopian market, the immediate effect was observed in the drastic increase of the price of edible oil and fertilizer. For the country that has for long been struggling with adverse effects of inflation and other economic and social problems, the Ukraine war meant additional burden.

According to the International Growth Centre, Ethiopia, along with the rest of the world, experienced a sharp rise in prices of key commodities with the onset of the war in Ukraine. The 12-month moving average price of petroleum in June 2022 increased by 64Pct from June 2021 while the price of wheat increased by 48Pct, with edible oil prices increasing by roughly 49Pct in the same period. Similarly, given that Russia is the biggest exporter of nitrogen-based fertilizer, the second and third most important global supplier of potassium and phosphate respectively, the Russia-Ukraine war has impeded supply and led to global increases in their prices. The Centre stated that Ethiopia’s overall economy would lose as much as 7.6Pct if the Russia-Ukraine conflict continues until June 2023. The loss would be estimated to reach up to USD eight billion.

The second challenge the Ukraine war inflicted on Ethiopia has been at the diplomatic front. Once the war began, US started organizing its allies to provide financial and military support to Ukraine. The US has been utilizing every possible bilateral and multilateral arrangement to mobilize diplomatic support for the Ukraine cause. The search for an ally state by great powers like the US means a stress for the strategic autonomy of aid dependent countries such as Ethiopia. In fact, this has placed Ethiopia in limbo. The experience of a yearlong war in Ukraine proved that Ethiopia has chosen to maintain neutrality.

Being neutral was necessary for Ethiopia when the war began last year. This was justifiable because Ethiopia was going though its own domestic war. The support of Russia and China who occupies a seat in the UN Security Council shielded Ethiopia from sanctions orchestrated by the US. However, the situation now is changing. Ethiopia is coming out of war and is trying to normalize relations with the US and its allies. At this moment, it is wise to ask the relevance of maintaining neutrality in light of the new domestic realities that necessitates strong economic collaboration with the West, IMF & the World Bank group.

The China factor

Until Doland Trump, former president of the US came to power in 2018; China and US were enjoying good relations. Everything turned upside-down when Trump began to point China as a primary threat to America’s economic and political supremacy. Biden’s policy on China is no different. His administration introduced a policy of containing China from its race towards a new world order. The general consensus across the West is that China is threatening the ‘rule-based international order’ which was established and maintained by the strong influence of the US since the end of WWII.

The Sino-US competition also poses strategic challenge for Ethiopia. As the country has been working with both countries for decades, it is not going to be easy for Ethiopia to forgo one over the other. The US has been a strategic ally on matters of security in the horn of Africa. This is without overlooking the billions of dollars poured in the form of aid and investment in the country’s health and education system. China, on the other hand has been an important economic partner especially in investment and direct participation in infrastructure development. Over the last ten years, China has been the largest sources of development finance for Ethiopia and many other developing countries. It’s the biggest export destination and sources of affordable imports for Ethiopia and other developing countries.

Making a Strategic Choice

Strategic choice is a function of the calculation between the national interest and the type of state that best help to achieve current and long term interests. The most critical post-war strategic interest of Ethiopia puts building its broken economy at the centre. Reconstruction and redevelopment in Tigray, Amhara and Afar states is high in government priority. Mobilizing resources to tackle the adverse effects of the draught in Oromia, Somali and South regions is crucial; while addressing the resettlement and rehabilitation of internally displaced people remains yet another crucial priority.

The mere fact in those matters is that the west would offer a more lustrous pasture as sources of finance to Ethiopia’s pressing economic woes.

Because of the marred relation with the west, aid for Ethiopia was suspended in the last couple of years. Ethiopia was also removed from the list of countries that benefit from the African Growth and Opportunity Act (AGOA), a US trade and Development Act enacted in 2000 and provides sub-Saharan African countries with duty-free access to the large US market for over 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalized System of Preferences programme. Proper restoration of relations with the US would help get back to this privilege.

Any investment coming either from the US or Europe would give investors from the rest of the World the confidence to follow suit. In light of this, restoring relations with the west effectively would be of paramount importance. Chinese investment is still growing well and will not change in the near future as there is a considerable migration of investment from China to overseas due to the rising cost of labour and electricity domestically.

There is no much investment coming from Russia at the moment. The trade relation between the two is also not far more than the relation Ethiopia has with Ukraine. Given the multifaceted economic challenges that Ethiopia has to deal with, much would not come from Russia financially. However, the US, EU and China would offer something to ameliorate some of the pressing economic predicaments confronting Ethiopia.  That’s why Ethiopia has to make a wise choice, staying neutral in the Ukraine war costly if it pursues it anymore.

Ethiopia is at a cross road. The stability factor that prevails in this equation is multifaceted. Armed opposition groups are operating in the country; the greater Horn of Africa is still characterized by poverty, porous boundary, fragile state and governments, repeated drought and many more age-old challenges. The threat of terrorism is still an active issue in the region. There is no strong sub-regional arrangement that can effectively address these issues via a collaborative initiative. The sum effect of these poses a high security risk in the region.

While instituting lasting solutions to these problems would require improving the state of democratic governance in the region, an immediate collaboration with regional actors and super powers is fundamental. That’s why on boarding Russians is also important. Russia has already improved and occupied a significant role in the Horn with a strong military presence in the region.  Undermining the role of Russia in restoring peace and stability in the region would therefore be risky.

To live peacefully with neighboring states and the rest of the world, some form of world order is important. Since Ethiopia is not a great power at the time, it cannot have its own vision of global order but it is clear that it benefits only when there is a stable global order. While working with China on numerous economic matters, Ethiopia needs to be cautious to the move towards revising the World order. That’s why it’s in the best interest of Ethiopia to strengthen diplomatic relations with US and China to advance its economic and security interests. In light of this, maintaining a neutral position any further should be considered.

11th Year • March 2023 • No. 115