Ethiopia-Turkey Economic Relations: an Assessment on Trade And Foreign Direct Investment From 2006 to 2018
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Date
2019-11
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Addis abeba Univercity
Abstract
Ethiopia has had long-standing historical relations with Turkey. The aim of this study is to
examine Ethiopia-Turkey economic relations from 2006 to 2018 with particular reference to the
trade and FDI. To attain its objectives, the study used a qualitative method to assess economic
ties. Data were collected both from primary and secondary sources. Available pieces of
literature were reviewed to discuss historical relations and bilateral economic relations between
the two countries. Additionally, in-depth interviews were conducted with officials from the
Ethiopian Investment Commission, FDRE Ministry of Foreign Affairs, FDRE Ministry of Trade,
The Development Bank of Ethiopia and The Embassy of the Republic of Turkey, seven officials in
number. The different economic cooperation agreements signed between Ethiopia and Turkey
are the responsible factors for the two country's relations. After the analysis of trade data
between Ethiopia and Turkey, this paper showed that Ethiopia incurs a huge deficit in its trade
relations with Turkey in the period under discussion. The result reveals that Ethiopia‟s export to
Turkey is much short of its imports from that country. Dependence on the export of a few
primary products and raw materials and weak export performance are among the reasons for
the country‟s trade deficit. Turkish investments take the third highest in terms of capital next to
china and Saudi Arabia, and the fifth-highest in the total number of FDI projects next to China,
India, Sudan and the USA in Ethiopia. The Turkish foreign direct investments and its experience
bring technology and access to employment, which have been lacking in Ethiopia. The
availability of natural resources, low labor wage, investment guarantees, and investor-friendly
policies, and incentives are among the prospects listed under this study. Besides the prospects,
challenges like lower human capital development, infrastructure problems, companies‟ failure to
service their debt and corruption are among the findings of the study.
Keywords: Economic Relation, Trade, Foreign Direct Investment, Ethiopia, Turkey.
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Keywords
Economic Relation, Trade, Foreign Direct Investment, Ethiopia, Turkey.