Ethiopia is making the wrong choices in its relations with the U.S.
These requirements consisted of dramatic scale privatization and zero tariff barriers. Such actions served to effectively dismantle the economy of the given states, leading to a decimation of industry, agriculture, increased inequality and severe depletion of living standards, even inducing famine in some.
Such has always been the modus operandi of the United States when it comes to lending, it often attaches ideological and political strings to its support which can undermine the prosperity and sovereignty of the country targeted. The U.S. DFC, created in 2019, is an institution of the U.S. government designed to be an American counterweight to China’s Belt and Road initiative (BRI) which offers low interest rate loans to developing countries.
Although this sounds promising, receiving financing from it comes with strident political strings which force the recipient to fall in line with anti-China requirements, as well as privatizing national infrastructure to U.S. investors.
In early 2021, the corporation made a deal with Ecuador’s neoliberal government in order to clear its debt, which Washington attributed to China. The agency would pay off debt payments early in exchange for first nationally signing up to Pompeo’s “clean network” initiative, excluding Huawei and ZTE on a national scale, and then secondly the privatization of the country’s oil assets to American investors, with the United States always making a foreign policy point out of controlling strategic energy reserves in the Americas (hence its bid to pursue regime change in Venezuela).
China respects African sovereignty
The U.S. is now targeting Ethiopia as a country of strategic interest, namely because it sits near a critical juncture between the Red Sea and the Indian Ocean, and has a close relationship with Beijing. Whilst promising financing for 5G, it is moving to block other forms of aid and assistance over the Tigray conflict, of which both factors accumulated will allow the U.S. to increase its influence over Ethiopia and subjugate it to its own foreign policy goals.
It is worth noting in contrast, China’s lending and investment in Africa do not come with the conditionality that other countries or companies are excluded, and nor does Beijing’s dealings on the continent attempt to upend national sovereignty in the way the U.S. has sanctioned Ethiopia’s army over fighting the Tigray conflict.
African nations primarily choose China as a partner precisely because it does not leverage national sovereignty or domestic political interference in exchange for financing or aid. In this case, Ethiopia now risks being pulled into a trap by the United States. Addis Ababa ought to reconsider this deal accordingly, if American sanctions do not leverage it altogether.