Industrial Parks In Ethiopia
An industrial park is an area set aside specifically for use as the site for industrial businesses. Often times, these parks are used as a method of encouraging investment as well as driving productivity within a specific area. They are often developed using the "plug and play" model wherein the government of a country designates a specific area for the park and provides to attract businesses and business simply come in, build out their section of the lot and begin operations.
In Ethiopia, there is strong government support as well as a robust investment policy framework set out by the Ethiopian Investment Board (EIB) for industrial park development. The government also provides incentives such as tax and duty exemptions for businesses that choose to settle in the parks. It has also improved infrastructure in the areas surrounding the parks with emphasis placed on improving ports, railways and universities among others. This commitment to industrial parks has been extremely lucrative for Ethiopia. In the past decade, Ethiopian Foreign Direct Investment (FDI) has dramatically increased to become the first in Africa at 3.63 billion USD. Industrial parks in the country have made Ethiopia a major export hub and have generated an estimated 248 million USD in exports. The parks have also resulted in the employment of tens of thousands of Ethiopians. Furthermore, the influx of people with spending power in areas surrounding the parks has lead to stimulation of local economies.
Innovations such as this are a great example of how developing infrastructure creates the environment for an economic activity which ultimately results in economic growth and social benefit. In this case, the Ethiopian government provided an area for industrial activities and supported this with favorable policy leading to increased productivity and investment. Do you think Industrial Parks could be relevant in our discussion of our first topic? If so, how do you think they could be adapted to fit the technology sector?
You can read more about industrial parks in Ethiopia at the following links:
http://www.ethpress.gov.et/herald/index.php/technology/item/9721-industrial-parks-in-ethiopia-s-economic-development
http://www.investethiopia.gov.et/investment-opportunities/strategic-sectors/industry-zone-development
http://www.ethiosports.com/2017/09/16/industrial-parks-in-ethiopia-generate-248-million-from-export/
allafrica.com/stories/201710180545.html
Industrial parks are seen as a way to drag foreign investment. Because of such investment, Ethiopia is seen as one of the first countries to facilitate immense economic growth, with an immense increase to their overall income by $3.63 billion, the biggest increase in a large amount of years. From September 2017 to now, there has been a large increase in the amount of industrial parks, specifically the Hawassa Industrial Park (HIP). The HIP is a Chinese-invested Ethiopian industrial park set at the initial building of $250 million and an initial strategy to “lure manufacturers seeking lower costs to one of the world’s least developed countries, which is still dominated by subsistence agriculture.” With a primary speculation of creating jobs for the growing population, Ethiopia has a primary set of bolstering their economy.
ReplyDeleteAs the rise of industrial parks continue, the Arab Republic of Egypt holds staunch support towards this. Considering how economic tranquility and demonstration is a dire necessity for the reduction of poverty and the introduction to small-scale economics, Egypt is in full support to this and believes that with this, we can integrate a better economy for not only Ethiopia and Egypt, but as a precedent to the African Union as a whole.