Ethiopia - Political Environment Ethiopia - Political Environment
U.S. – ETHIOPIA RELATIONS
The United States first established diplomatic relations with Ethiopia in 1903, and has maintained them ever since, despite changing forms of government. The current government was established in May 1991 when a coalition of guerrilla groups seized control of the capital city Addis Ababa after seventeen years of armed insurrection against a Marxist military dictatorship known as the Derg. This coalition, the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), established a federally organized state, with regions based on the ethnicity of the population, a system known as ethnic federalism. The country today is officially known as the Federal Democratic Republic of Ethiopia. The official founding ideology of the government was “developmental democracy,” a model that prioritized economic development over political rights. The EPRDF controls virtually all aspects of the government, economy, and security sector, and supports rapid, broad-based modernization intended to transform Ethiopia from a poor, rural, agricultural state to a middle income, urban, and industrialized powerhouse by 2025 via its Growth and Transformation Plans. Recently, the ruling party has announced its intention to enact deep reforms to create a more inclusive and democratic political system and transition to a more capitalist model to accelerate economic growth.
The diplomatic relationship between Ethiopia and the United States is important, complex and focused on four broad goals: (1) protecting American citizens, (2) strengthening democratic institutions and expanding human rights, (3) spurring broad-based economic growth and promoting development, and (4) advancing regional peace and security.
U.S. Assistance to Ethiopia
Ethiopia is the second most populous country in Africa and the 12th most populous in the world. Ethiopia remains among the most effective U.S. development partners, particularly in the areas of health care, education, and food security. Activities include investments in high potential crop and livestock value chains, nutritional activities focused on children and pregnant and lactating mothers and resilience investments targeting chronically food insecure households and pastoral lowland communities. In addition, USDA supports Ethiopia’s agriculture development. The three-year $13 million Food for Progress program, known as the FEED project, helps to improve yields of meat, milk, and eggs by increasing the availability and quality of livestock feed.
Ethiopia has reduced poverty and improved human development during the past decade, meeting six of the eight Millennium Development Goals by 2015. When faced with the worst drought in more than 50 years in 2016, the Ethiopian government for the first time contributed significant domestic resources and manpower to address the impact and worked closely with international partners to mitigate the hardships. Increased investments in resilience by the government of Ethiopia and the U.S. government, including Feed the Future, allowed Ethiopia to weather the 2011 and 2015-2016 droughts with relatively little impact compared to neighboring countries. Drought, conflict, and land tenure disputes, however, continue to threaten economic growth, stability, and food security in Ethiopia. An estimated 8.5 million people in Ethiopia still require emergency assistance, in addition to 4 million chronically food insecure people already supported by the Ethiopian government. Agriculture accounts for 80 percent of Ethiopia’s exports and 40 percent of GDP; 75 percent of Ethiopians depend on rain-fed agriculture for their livelihoods.
Ethiopia hosts more than 900,000 refugees, the second largest number in Africa. U.S. support for refugees in Ethiopia, totaling $76 million in FY 2017, is crucial to maintain Ethiopia’s internal stability and to support the region.
Bilateral Economic Relations
Ethiopia ranks among the fastest growing economies in the world - Ethiopia’s GDP per capita increased from $162 in 2005 to $619 in 2015, an average annual growth rate of more than 14 percent. Despite the recent droughts, the IMF estimates Ethiopia will have an average GDP growth rate of 7.4% from 2017-2020. Ethiopia aims at reaching lower-middle income status by 2025 through sustained economic growth. The state is heavily engaged in the economy and Ethiopia’s growth has been largely driven by state-run infrastructure development. Debt load is a concern; the IMF’s ratings for Ethiopia was changed from moderate to “high risk of debt distress” in May 2018. Key sectors are state-owned, including telecommunications, financial services, aviation, logistics, railways and power distribution. Ethiopia’s ruling party announced June 5, 2018 state-owned enterprises, including the railway and the sugar corporation, will be partially privatized while Ethiopian state-owned monopolies in the sectors of aviation, telecommunications, and logistics will be opened to the private sector through the sale of minority shares. The current growth and transformation plan advocates an increased role for the private sector, and Ethiopia is systematically addressing bureaucratic bottlenecks in an effort to improve its ranking on the World Bank’s Ease of Doing Business Index. The United States has a positive trade balance with Ethiopia, owing largely to the purchase of 72 U.S.-origin aircraft by Ethiopian Airlines for its current total fleet of 100 aircraft.
The U.S. Embassy engages with the Ethiopian government to improve the business climate, create a level playing field for all investors, and to foster an entrepreneurship culture. There are growing opportunities for U.S. trade and investment, particularly in manufacturing, energy, and agricultural processing. Total U.S. exports to Ethiopia in 2017, consisting primarily of aircraft and aircraft components from Boeing, were valued at $857.4 million, whereas Ethiopian exports to the U.S. totaled $292.4 million, of which only about 30% was exported under AGOA. Ethiopia’s trade deficit is high, standing at 16.1% of GDP in FY2017. Exports finance only 18% of the country’s imports. In FY 2011 the trade deficit was $5.5 billion; by FY 2014 it had nearly doubled to $10.5 billion and has risen further to $12.9 billion in FY 2017.
Ethiopia is eligible for preferential trade benefits under the African Growth and Opportunity Act (AGOA). U.S. exports to Ethiopia include aircraft, wheat, machinery, low-value shipments and repaired products, and vegetables. U.S. imports from Ethiopia include coffee, oil seeds, textiles and garments. The United States has signed a trade and investment framework agreement with the Common Market for Eastern and Southern Africa, of which Ethiopia is a member.
Ethiopia's Membership in International Organizations
Ethiopia and the United States belong to a number of the same international organizations, including the United Nations, International Monetary Fund, and World Bank. Ethiopia is an observer to the World Trade Organization, and has expressed renewed interest in accession. Ethiopia is currently serving on the UN Security Council as a non-permanent member until Decemer 2018.
The position of U.S. Ambassador to Ethiopia is currently held by Ambassador Michael Raynor; other principal embassy officials are listed in the Department's Key Officers List.
Ethiopia maintains an embassy in the United States at 3506 International Drive, NW, Washington, DC 20008 (tel. 202-364-1200).
More information about Ethiopia is available from the Department of State and other sources, some of which are listed here:
Department of State Ethiopia Page
Department of State Key Officers List
CIA World Factbook Ethiopia Page
USAID Ethiopia Page
History of U.S. Relations With Ethiopia
Human Rights Reports
International Religious Freedom Reports
Trafficking in Persons Reports
Narcotics Control Reports
Investment Climate Statements
Office of the U.S. Trade Representative Country Page
U.S. Census Bureau Foreign Trade Statistics
Export.gov International Offices Page
Library of Congress Country Studies
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