Russia Needs To Embrace Ethiopia…Now!

16.09.2016

Strategic Context

Ethiopia was the world’s second-fastest-growing economy in 2015 at a rate of 8.7% growth, and its top trading partners are China, Kuwait, and Saudi Arabia. Ethiopia primarily exports energy and agricultural products in exchange for importing refined fuel and industrial-electrical machinery, both pairs of which are valuable businesses that Russia is sorely missing out on.  As Moscow searches for reliable non-Western economic partners and seeks to enhance the commercial viability of its Crimean merchant vessels, its presence in Syria and affiliated post-Daesh reconstruction plans there, and the Russian industrial zone in the second Suez Canal, it would do well to consider expanding its north-south maritime trading corridor to include the Ethiopian marketplace. 

China has already invested billions of dollars in building a railroad between the port of Djibouti and the Ethiopian capital of Addis Ababa which is expected to open up later this year, and it’s also constructing a similar transport corridor (LAPSSET) through the south beginning at the Kenyan port of Lamu. This East African initiative is also Chinese-built and will be able to accommodate twice as much cargo as the region’s presently busiest port of Mombasa, with the BBC estimating that its capacity will eventually reach the jaw-dropping figure of 20 million containers per year. 

These two projects will unlock Ethiopia’s vast economic potential and save Russian companies from excessive start-up costs in accessing the world’s most populous landlocked market. Moreover, China plans to ensure the Djibouti-Addis Ababa railway’s international security through its first-ever overseas military deployment in the former, which will complementarily safeguard both the maritime and mainland components of this pivotal Silk Road node. Russia can thus utilize China’s enormous infrastructure investments in affordably capitalizing off of what otherwise would have been a prohibitively expensive market to access. Therefore, what follows is a listing of the three industries that Russia should endeavor to tap into, including a review of their economic potential, foreign competitors, and strategic opportunities for access.

Oil And Natural Gas

Russian strategic investments in Ethiopia’s promising energy sector could open the door for a more robust partnership between the two historically friendly states and should thus represent the focus of Moscow’s reengagement with Addis Ababa. Most of Ethiopia’s resources are concentrated in the eastern Somali Region’s Ogaden Basin, which includes an estimated 2.7 billion barrels of oil and 133 billion cubic meters of natural gas

China just recently announced that it will invest over $4 billion in a gas pipeline to Djibouti and a liquefaction plant at the port terminal, while Kenya signed a memorandum of understanding with Ethiopia for exporting its oil through the LAPSSET Corridor. The second initiative is still at the drawing board and nothing legally binding has been agreed to thus far, which excitedly gives Russian companies a competitive opening to involve themselves in the process, whether as it relates to LAPSSET or perhaps to a totally new oil export route alongside the Chinese-built gas pipeline to Djibouti. 

Furthermore, it mustn’t be forgotten that Russia has world-class experience in oil and natural gas extraction, pipeline construction, and project management, and that it would be an invaluable partner for Ethiopia as the traditionally agricultural country rapidly modernizes into a manufacturing stronghold. Bringing Russia on board in some capacity could be strategically beneficial for Ethiopia in the long term, and after confidence-building measures have been undertaken in this industry, they could then spread to other ones, too. 

Security

While the Chinese military deployment in Djibouti protects the Addis Ababa railway’s maritime terminus and bottleneck location, there’s no such international security guarantee present along the Horn of Africa’s interior locations. This is troublesome because the railroad and any future pipeline routes to Djibouti must pass through the Somali Region, the one part of Ethiopia most intensely beset by ethnic, religious, and separatist conflict potential. 

The heavy-handed military presence in this large, sparsely populated corner of the country has largely succeeded in keeping the peace and preventing the neighboring Al Shabaab terrorist group from carrying out the sort of atrocities that it regularly commits in Somalia. Nonetheless, it’s uncertain just how efficient the Ethiopian Armed Forces could be here if they become distracted by peripheral crises with Eritrea, Sudan, and/or South Sudan, to say nothing of the Hybrid War that could break out in the centrally positioned and most populous region of Oromia over expanded Identity Federalism demands. 

Russian technical and training expertise could therefore fill a gaping void in Ethiopia’s security needs by equipping the military with state-of-the-art capabilities in defending its borders and promptly responding to asymmetrical internal threats.

Conventional military exports could help thaw the Soviet-era partnership that has remained largely frozen since the end of the Cold War, and the type of aircraft and weaponry that were used to devastating anti-terrorist effect during the Syrian operation could function as an ideal solution for forcibly dealing with a Daesh-like terrorist surge in the Somali Region. 

Not to be neglected, Russia’s expert community could also play an irreplaceable role. If Democratic Security experts teamed up with their special forces counterparts in teaching the Ethiopians how to counter the phased transition from Color Revolutions to Unconventional Wars, then the African giant could better insulate itself from Hybrid War threats and react more confidently whenever its many foreign adversaries try to provoke asymmetrical conflict within its borders. The unparalleled trust that this would create between the Russian and Ethiopian “deep states” (the permanent military-intelligence-diplomatic bureaucracies) would go a far way towards accelerating their belatedly renewed partnership. 

Agriculture

Over 40% Ethiopia’s GDP, around 73% of its population, and 84% of its exports are tied to the agricultural industry, meaning that the country will still remain largely agrarian in the medium term despite its rapid industrialization drive. Ethiopia’s exports in this sector mostly amount to coffee, livestock products, fruits, and vegetables – all of which are in high demand in Russia after Moscow’s retaliatory actions against the EU sanctions. Even if that spat gets cleared up in the next couple of years, the Russian leadership has evidently made it a point to seek out non-Western replacements as part of its forward-looking strategy in preventing future overdependence on any single supplier. 

Ethiopia’s agricultural advantages are that it has plenty of fertile soil and ample water supplies coupled with a hard-working and low-wage labor force. The Gulf Kingdoms have already recognized the promise that Ethiopia provides and have invested heavily in farming out their foodstuffs there. Russia would be wise to follow in their footsteps by capitalizing off of the comparatively low cost of entry and potentially limitless yields in this sphere, as well as working to generate consistent business in the country for its profitable fertilizer exports.   

Due to the Gulf Kingdoms’ attention to this field, it can circumstantially be concluded that foreign-supported Salafist terrorists will probably not operate in these domains or interfere with their trade out of fear of inadvertently targeting their most likely patrons’ investments. The most agriculturally productive regions of the country are in the north and west, which are less Muslim-populated than the other half of Ethiopia and thus less at risk from militarized radicalism. Despite this, the danger remains that the ever-present threat of ethnic, political, or refugee violence (like in the agriculturally productive Gambella Region) could pose a latent risk to any Russian investments in this sector. 

Concluding Thoughts

In the global context of the New Cold War and the accelerated trend towards multipolarity, Russia urgently needs a reliable anchor in Africa in order to establish a concrete and visible presence on the continent. 

Ethiopia satisfies this strategic imperative and is the most logical partner for Russia to reach out to because of its relative closeness to Russia’s Black Sea shore, location just past the Sea Lines of Communication linking Crimea, Syria, and the Russian investment zone in the Suez Canal, and nearly 100-million-person marketplace. On top of all of this, the country is inexpensively accessible due to China’s Horn of Africa Silk Road railway between Djibouti and the capital of Addis Ababa.

Russia stands to gain handsomely in the energy, security, and agricultural sectors if it harnesses the political-economic will to strengthen its full-spectrum engagement with Ethiopia, but the only obstacle standing in the way of this profitable partnership is a lack of awareness about these exciting opportunities.