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The Developmental Impact of Asian Drivers on Ethiopia with Emphasis on Small‐scale Footwear Producers

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  • Tegegne Gebre‐Egziabher

Abstract

(1252) Tegegne Gebre‐Egziabher This paper examines the developmental impact of China and India on Ethiopia by examining macro‐level trade, investment and aid relation, and micro‐level impacts on local micro and small‐scale footwear producers. Both secondary and primary data were used. At macro level there are clear evidences of an increase in trade between Ethiopia on the one hand and China and India on the other, though the trade balance disfavours Ethiopia. China has displaced other countries as export destinations for Ethiopia. Similarly, the presence of China and India is also felt in the areas of investment and aid. At local level, Chinese imports of footwear have forced local enterprises to downsize their activity and lose assets and money. At the same time, however, firms have followed both the high road of competition (design and quality improvement, investment in machinery, product specialisation) and the low road of competition (lowering price and profit, reducing raw materials and inputs, and joining the informal sector) to withstand the impact of Chinese imports. The long‐term effect of Chinese imports is to crowd out local efforts of using the sector as the basis for industrialisation. Government, non‐government organisations and local producers should work together in order to withstand the negative impacts of footwear imports by raising the competitiveness of the local producers.

Suggested Citation

  • Tegegne Gebre‐Egziabher, 2009. "The Developmental Impact of Asian Drivers on Ethiopia with Emphasis on Small‐scale Footwear Producers," The World Economy, Wiley Blackwell, vol. 32(11), pages 1613-1637, November.
  • Handle: RePEc:bla:worlde:v:32:y:2009:i:11:p:1613-1637
    DOI: 10.1111/j.1467-9701.2009.01252.x
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    Cited by:

    1. Bräutigam, Deborah & Tang, Xiaoyang, 2014. "“Going Global in Groups”: Structural Transformation and China’s Special Economic Zones Overseas," World Development, Elsevier, vol. 63(C), pages 78-91.
    2. Alice Nicole Sindzingre, 2011. "The Rise of China in Sub-Saharan Africa: its Ambiguous Economic Impacts," Post-Print halshs-00636022, HAL.
    3. Sylviane Guillaumont Jeanneney & Ping Hua, 2015. "The impact of Chinese competition on Africa’s manufacturing," Working Papers halshs-01179283, HAL.
    4. Sylviane Guillaumont Jeanneney & Ping Hua, 2020. "When and how African real exchange rates relative to China affect its manufacturing?," Post-Print hal-03060589, HAL.
    5. Lee Robinson & Alice Nicole Sindzingre, 2012. "China’s Ambiguous Impacts on Commodity-Dependent Countries: the Example of Sub-Saharan Africa (with a Focus on Zambia)," EconomiX Working Papers 2012-39, University of Paris Nanterre, EconomiX.
    6. Sylviane Guillaumont Jeanneney & Ping Hua, 2015. "The impact of Chinese competition on Africa’s manufacturing," CERDI Working papers halshs-01179283, HAL.

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