Corporatization in Ethiopia: A Move Towards Coping with Globalization and Accession to the WTO
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Date
2014-06
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Addis Ababa University
Abstract
7fJe last three decades, facilitated chiefly by the sophisticated transport and communication technology,
have markedly exhibited an nnprecedented flow of products and capital. This is what is referred as
economic globalization. The economic integration process has been pioneered by the interllational
economic organizations (i.e. the IMF, World Bank and the WTO), but in the face of shaking critics. Of
conrse, available empirical evidences also brought to the surjilce not only the positive results but also the
scenarios whereby economic globalization failed to enhallce, ifnot aggravated, the poor living cOlleliliollS
and hampered fit/ure de"e/opment potentials of the poor. So far, the influence of the global South in
governance of the international economic order has been velY limited so that it has by and large
dominated by the rich powers. In fact the share of the South in the global economic operations in terms of
cross border trade and investment has also been inSignificant.
Ethiopia as part of the international c011lIJulIIily has beell ulldertaking the integratioll experimellt sillee
1991. It in particlliar introduced liberal trade and investment reforms. It is also acceding to the rlllebased
lIIultiiateral trading system (i.e. the WTO). Nonetheless, as different econometric studies uncover,
its peljorm(fllce in harnessing the lIoll-reciprocal preferential market accesses has been ulIsatisjactoJY
suggestiug the cOllllotatioll of becoJlJillg a WTO member ulliess it embarks 011 large scale export-oriented
production. lvioreover, FDJ's role in Harrowing the low level of domestic savings (Ind supplementing
investment endeavors has been at a rudimentmy level. To the worst, increased FDJ injlows and maximum
benefits ji'om it demand Ethiopia to reach a level of developmellt by its own effort. PreCisely, it is
ill voluntmy for Ethiopia to marshal export-oriented productioll and total jilctor productivity shonld it
cope with ecollomic globalization and accession to the WTo.
If the question turns out to be how to chmmel the scarce material and human resources to meaningful
busiffesses, it is argued ill this thesis that Ethiopia should promote corporate businesses thall ever.
Despite the low level of contributions of the lIIodern private sector to Ethiopia's economy and the
immature culture of iJlcOJ1JOralioJl could restrain development of sllch ventures in the short-run, it has
become certain that 10 promole internationally competitive firms ill cOJ1Jorate lines, the government of
Ethiopia shollld undertake some essential legal and institutional reforms.
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Keywords
Corporatization in Ethiopia