{"id":13385,"date":"2016-10-10T10:33:27","date_gmt":"2016-10-10T10:33:27","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=13385"},"modified":"2016-10-10T10:33:27","modified_gmt":"2016-10-10T10:33:27","slug":"ethiopia-losing-foreign-investment-appeal-as-attacks-spread","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/world-news\/ethiopia-losing-foreign-investment-appeal-as-attacks-spread.html","title":{"rendered":"Ethiopia Losing Foreign-Investment Appeal as Attacks Spread"},"content":{"rendered":"

Ethiopia Losing Foreign-Investment Appeal as Attacks Spread<\/strong><\/span><\/h2>\n

Ethiopia Losing Foreign-Investment Appeal as Attacks Spread:-<\/strong> Ethiopia\u2019s attraction as a favorite new destination for foreign investors is fast dissipating as businesses owned by Nigerian billionaire Aliko Dangote and Dutch fruit processors come under attack in growing political unrest.<\/span><\/p>\n

The government declared a six-month state of emergency Sunday to deal with the violence accompanying protests by ethnic Oromo and Amhara communities that began 11 months ago over dispossession of their land, political marginalization and state repression. The security forces have killed more than 700 people during the demonstrations, according to the Association for Human Rights in Ethiopia. The government says the attacks are being orchestrated by \u201cforeign elements.\u201d<\/span><\/p>\n

Last year, investors had been touting Ethiopia as a hot new investment destination, lauding the way the government has ramped up infrastructure spending and embraced foreign capital to propel economic growth at the fastest pace on the continent. That appeal is losing its luster as the protests present the biggest challenge to Ethiopia\u2019s ruling coalition since it gained power by force a quarter of a century ago.<\/span>
\n\u2018Tacit Support\u2019<\/span><\/p>\n

\u201cForeign investors are viewed as parties to the regime\u2019s development agenda and part of the wider international community\u2019s tacit support for Ethiopia in spite of human rights transgressions,\u201d Mark Bohlund, an economist with Bloomberg Intelligence in London, said by e-mail. \u201cThe attacks are likely to have a severe impact on foreign direct investment in the affected areas in the short term and prompt investors to suspend operations indefinitely until security has been restored.\u201d<\/span><\/p>\n

Dutch-owned Africa Juice BV was set alight last week by a crowd of hundreds in Oromia, the country\u2019s most populous region, which has experienced fatal unrest since November. Another Dutch-owned business, Bishangari Lodge, was burned on Oct. 5. Trucks belonging to Saudi billionaire Mohamed al-Amoudi\u2019s Derba Cement and those of Dangote Cement Plc were damaged as demonstrators blocked roads and stoned vehicles.<\/span><\/p>\n

Opponents of the government argue that Ethiopia\u2019s economic gains haven\u2019t been matched by increased political freedoms since the ruling party cracked down on the opposition in 2005, after losses in that year\u2019s elections. Critics of the government\u2019s human-rights record, including Amnesty International, cite the strict limits the state has imposed on independent media and its \u201cpervasive violations\u201d of civil political rights.<\/span>
\n\u2018Big Issues\u2019<\/span><\/p>\n

\u201cThe issues that need to be resolved are big, and investors will be wary as to whether the current government will be able to address them,\u201d Jared Jeffrey, a political analyst at NKC Africa Economics, said by e-mail. \u201cThe longer it takes for the necessary reforms to be made the more fragile the state will become and the higher the risk to investors.\u201d<\/span><\/p>\n

The latest burst of Oromo protests was triggered after about 200 people drowned or were crushed to death in ditches on Oct. 2 when regional authorities forcefully dispersed a protest by a large crowd at an annual cultural festival in Bishoftu, according to AHRE.<\/span><\/p>\n

Jawar Mohammed, an influential Oromo activist based in the U.S., said businesses that have displaced Oromo or have links to the ruling coalition are being targeted.<\/span>
\n\u2018Regime Affiliation\u2019<\/span><\/p>\n

\u201cCompanies are not attacked on the basis of being foreign or domestic,\u201d he said in an e-mail. \u201cIt\u2019s their affiliation with the regime.\u201d<\/span><\/p>\n

Africa Juice, which is about 200 kilometers (124 miles) southeast of the capital, Addis Ababa, employs more than 2,000 people to process passion fruit for export and produce fruit and vegetables for the domestic market, Chief Executive Officer Harry Van Neer said. The Hague-based company, operating on 1,600 hectares (3,954 acres) after buying the privatized state farms in 2009, has yet to make a decision about its future.<\/span><\/p>\n

\u201cOnce we know details and the situation then we will need to see,\u201d he said. \u201cTwo of the three farms suffered extensive damage.\u201d<\/span><\/p>\n

Bishangari was first attacked on Oct. 3 and protected by elders from the local community, who the company had provided assistance to, said Omar Bagersh, one of the owners. Hundreds of protesters returned over the next two days to completely destroy the popular lodge. A U.S. citizen died on Oct. 4 on the outskirts of Addis Ababa when protesters threw a rock, according to the U.S. Embassy in Ethiopia.<\/span><\/p>\n

Citing delays in infrastructure provision and a tax dispute, Israel Chemicals Ltd. announced last week it\u2019s exiting a potash project that had promised to be one of country\u2019s largest mining operations. The government is reassuring investors that it will restore order, said Fitsum Arega, head of the country\u2019s investment commission.<\/span><\/p>\n

\u201cThey are not happy with the situation but they are confident and taking our word that things will be normalized soon,\u201d he said.<\/span><\/p>\n

Jiangsu Sunshine Group, a Chinese textiles company, demonstrated that confidence by signing a \u201cfinal agreement\u201d to invest $500 million over four years at a factory in an industrial park in Adama city in Oromia region, Fitsum said. A Chinese-funded railway going through Adama that connects Addis Ababa with its main port in neighboring Djibouti was opened on Oct. 5, while the Gibe III dam, Africa\u2019s biggest hydropower plant, and also backed by China, began generating electricity a year ago.<\/span><\/p>\n

Source:-\u00a0http:\/\/www.bloomberg.com\/news\/articles\/2016-10-10\/ethiopia-losing-appeal-for-foreign-investors-as-attacks-spread<\/span><\/p>\n

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