VIEWPOINT

Call for a 'fairer world' falling on listening ears

By Worku Belachew

2 October 2023

Leaders of developing countries have echoed their most pressing concerns in their speeches at the UN General Assembly 2023 held in New York. The centerpiece of the arguments that they have made perhaps abridged as: “We, developing countries, are fed up with the current exploitative international system”. The leaders once again bring the urgency of creating a fairer global system before the August international body, the UN.

In his speech, Ethiopia’s Deputy Prime Minister and Minister of Foreign Affairs Demeke Mekonnen had this to say to the assembly: “We call for a more inclusive and effective multilateral mechanism that works fairly for developing countries.”

He hailed the BRICS for championing the call. “Ethiopia is grateful to have been invited to join the group.”

Unless the world heeds the voices of the developing countries, the implementation of the UN Sustainable Development Goals itself will be a far cry from being successful.

Africa, for instance, a continent dubbed the “treasure chest of the world”, has not been able to utilize its resources to create jobs for its bulging youth population.

Diametrically opposite to the continent’s potential, the productive youth population marches in droves to their death in an attempt to cross the Mediterranean Sea.

The International Organization for Migration (IOM) has called the Central Mediterranean Sea as the deadliest first quarter on record since 2017. It says over 400 migrants died only between January and March of 2023. The April 2023 report further unveils the fact that over 31,000 migrants arrived in Italy over the preceding months of the year. Most reports show that the majority of migrants originate from Sub-Saharan Africa.

Politicians and scholars alike have, therefore, pinned their hopes on reinforcing multilateral bodies. And emerging blocs such as the BRICS would add a catalytic element to accelerate the sought-after reforms thereby tackling the grim scenario befallen the developing states.

Over 40 countries had submitted official requests to join BRICS. Countries including Algeria, Argentina, Bangladesh, Bahrain, Belarus, Bolivia, Venezuela, Vietnam, Cuba, Honduras, Egypt, Indonesia, Iran, Kazakhstan, Kuwait, Morocco, Nigeria, the State of Palestine, Saudi Arabia, Senegal, Thailand, United Arab Emirates and Ethiopia had expressed their interests formally ahead of the August 2023 summit.

It seems that the bloc wants to better represent developing countries, drawing members from each and every region and sub-region. Africa has three representatives in the bloc, South Africa, Ethiopia and Egypt. India, China and Russia are generally from Asia while Saudi Arabia, Iran and the UAE from the Middle East Asia. Latin America’s interests and benefits could be reflected through Argentina and Brazil.

BRICS will represent 30% of the World’s Population and 47 % of the global population with the new membership taking effect as of January 1st, 2024, reports show.

The Ethiopian context

Despite the undesirable ramifications of the global pandemic and the two-year war in its north, not to mention lingering skirmishes in some parts, Ethiopia’s geo-political location, the over 110 million population, and its resilient economy have made the country join BRICS. IMF 2023 forecast for Ethiopia shows that real GDP will grow by 6.1 % as well.

Clean energy and water supplies, including a relatively low cost as compared to other areas, over 53 million active labor force, strategic location to the Middle East, Europe as well as Asia, Ethio-Djibouti electric powered railway, wide-ranging incentive packages, inter alia, placed Ethiopia among the top FDI destinations in Africa.

The BRICS+ countries would seize these opportunities to expand their investment. And access to finance from the New Development Bank (NDB) and maybe the BRICS Contingent Reserve Arrangement (CRA) would further augment doing business among themselves.

For Ethiopia, a country that has already time-tested ties with both the BRICS and BRICS+ countries, the blessings coming from the new horizon is immense. At current, the bilateral trading between Ethiopia and members of the BRICS is not that significant, or the balance is skewed towards partners.

One of the most important trade and investment partners of Ethiopia is China. The latter does business with Ethiopia worth in billions. Pertinent information shows that currently Ethiopia-China bilateral trade volume, in 2022 for instance, strikes at USD 2.67 billion. As of the end of 2022, the Chinese investment stock in Ethiopia stands at USD 3.257 billion. It is highly likely for this to expand more and more, per the information from the Chinese Embassy in Addis.

If we take Ethiopia-India bilateral trade, India’s export to Ethiopia is worth 2,758, 000, 000 USD. The country’s import from Ethiopia’s market is 84,000,000 USD, per the information obtained from the Indian Embassy in Ethiopia.

More than 650 Indian companies are registered and as per the estimate, their cumulative investment is worth 5 billion USD. Areas they are engaging in include, but are not limited to, Plastic, Steel, Pharma, Textile, Vehicle assembling, Paper and Printing, Tanneries (Leather Processing), Meat production, Jute Bags, Cenent/PP Bags, Shoes, Transformers, Horticulture, Floriculture and ICT.

Ethiopia’s trade and investment relations with the other BRICS member, Russia, are making steady growth. Russia’s trade turnover with Ethiopia shows a 68.2% decline in 2022, when compared to the preceding 2021. This is due to the reduction in the volume of Russian supplies. The volume falls from 225.2 million USD in 2021 to 71.7 million USD in 2022. On the flipside, Ethiopia’s imports increased by 18% from 30.5 million USD to 36 million USD. Coffee supply is responsible for the expansion of the volume. It progressed from 20.7 million USD to 27.9 million USD.

Yet, the bilateral trade is peaking steadily between the months of January and April 2023 as compared to the same period of last year. The volume is said to have upped by 56 % from 10 million USD to 15.6 million USD. Russian exports to Ethiopia has grown by more than double to 3.3 million USD. Its import is raised to 12.3 million USD from the previous 8.5 million marking a 44.7 % increment.

Though the figures are not that significant, Ethiopia does business with almost all BRICS+ members, in the service sector, for instance, Ethiopian flies to all the countries. Still, Ethiopia has a vast potential to lure more BRICS+ investment and to stand being one of the most competitive trading partners to the bloc. There are striking facts which have already shown that Ethiopia could achieve economic miracles.

Global Chairman Fairfax Africa Fund Zemedeneh Nigatu subscribes to the fact that Ethiopia’s economy is one of the resilient ones. He said that despite COVID 19, Ukraine-Russia conflict, and other internal issues, IMF forecast the country’s economy to hit 6.1% in 2023, a figure that represents one of the fastest five largest economies in Sub-Saharan Africa.

In a nutshell, Ethiopia’s entrance to the bloc is highly likely to increase the bloc’s strength. No shred of doubt, Ethiopia is a gateway to the rest of Africa. Hence, BRICS influence in all respects, from investment, trade to international politics will get further traction.

The expansion of the BRICS grouping has clearly shown the birth of a new era in our world. In one hand, developing countries would use their collective strength to get the work of creating a fairer global system done sooner rather than later as it has been clearly observed in the recent UNGA 2023.

This article was first published in The Ethiopian Herald