The Role of Ethnic Based Networks in Business in Merkato, Addis Ababa, Since 1991
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Date
2022-06-01
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Addis Ababa University
Abstract
Modern African history shows that ethnicity has been manipulated by rulers for political and economic control, social supremacy and cultural domination. Ethiopia is not exceptional in all this. An example of this is business activities, mainly in Addis Ababa, are influenced by ethnic networks, and preferences so much as to sabotage equal business opportunities. This study examines the impact of ethnic networks on businesses in Merkato, Addis Ababa. The aim of the research is to contribute to an understanding of the role of social relations/networks in shaping businesses both positively and negatively. Guided by qualitative research approach the study mainly draws a theory of social network, to reveal how business/market is run mainly on ethnic based networks and other ties such as religion and kinship. The findings of this study reveal that business/market networking, in post 1991 Merkato, is mainly created through political and ethnic affiliations as well as corruption. Following this, ethnic networking has become the main feature of the market center. Building such business relationships has become increasingly important as firms and individuals seek to improve their competitive advantage by entering long term relationships and networking with strategic business partners based on ethnicity. Particularly, main trade sectors and areas in this large market center are mainly controlled by people belonging to one ethnic group (Tigreans). Even though such networking mechanisms create a more trusting and cooperative environment, they can, as the same time, lead to the collapse of the economy by limiting business transaction within a limited group of people. In conclusion, ethnic based networks provide a domain of interaction at the wider ethno-political community, dominating business. Thus, the public make business networking based on ethnicity, religion and kinship ties. While such business networking has positive effects such as market access, trust, confidence, etc, it may also bring negative effects such as bias, unfair economic and political domination and discrimination.
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Ethnic Networking, Business, Post 1991 Merkato