Rebel attack won’t discourage Chinese investment in Ethiopia-PM

May 16, 2007 (ADDIS ABABA) — A rebel attack on an oil facility in Ethiopia that killed nine Chinese workers and 64 locals has not dented Beijing’s investment in the Horn of Africa nation, the Ethiopian leader said on Wednesday.

“The Chinese have made it abundantly clear that they are not going to be scared away,” Prime Minister Meles Zenawi told Reuters. “On the contrary, they are increasing their investment in our country.”

Chinese personnel returned quickly to the exploration project they run in the remote south-eastern Ogaden area after the attack, he said. “We have immediately after the incident taken effective measures to ensure it does not happen again.”

The pre-dawn raid in late April was one of the Ogaden National Liberation Front’s (ONLF) highest profile operations.

The attack highlighted the perils of Beijing’s growing investment push in Africa, which it regards as a crucial source of raw materials for its booming economy. In Ethiopia, the Chinese are mainly involved in the construction business.

Meles’s government wants more foreign investment and he said the attack should not have a lasting impact.

“I would understand that some foreign investors might be a bit worried about going to the place where the massacre took place,” he said.

“But I do not think it will have any long-term impact. There have been no such incidents in the main economic centres of the country. And here in Addis, I would argue that it is probably one of the safest cities on earth.”

WORLD TRADE CLUB

Meles confirmed Ethiopia was seeking membership of the World Trade Organisation (WTO) and was “reasonably optimistic” of acceptance.

“I hope it will be a speedy process. It can take many years, but I very much hope that this will not be one of those very protracted processes. They tell me that two to three years would be a reasonably expeditious process,” he said.

Economists say Ethiopia may come under pressure first to open its financial sector to foreign investors and relinquish state control of telecommunications.

Meles said: “I do not think they should be obstacles. As you know, we are a least developed country, and least developed countries benefit from what is called a special and differential treatment (in the WTO).”

Africa’s top coffee producer and sub-Saharan Africa’s second most populous nation, Ethiopia was on track for its projected economic growth rate of near 10 percent this 2006-07 year, compared with 9 percent last year, Meles said.

“We expect to maintain the momentum next year too. Our hope and expectation is that it will be a double-digit growth rate. It is still agriculture leading the growth. But industry and services are also picking up.”

Inflation — a big problem for Ethiopia’s 79 million people — was “unfortunately still too high for our taste”, said Meles, with an expected 10-12 percent rate this year, after 12 percent in 2005-06.

“But I hope it will be lower next year,” he said.

The most vulnerable group, the urban poor, were being helped by measures including food subsidies, said Meles, who receives generally high marks from analysts and diplomats for his pro-poor policies.

(Reuters)