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Unveiling the bonds and opportunities between Mexico and Ethiopia

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In an exclusive interview with Víctor Treviño Escudero, the Ambassador of Mexico, conducted by Capital’s Groum Abate, we delve into the dynamic landscape of diplomatic relations between Mexico and Ethiopia. As two nations with rich histories and vibrant cultures, their collaboration spans a spectrum of domains, from economic endeavors to cultural exchanges and collaborative ventures in agriculture, tourism, and infrastructure development.

Against the backdrop of global challenges, including the ramifications of the COVID-19 pandemic, Ambassador Treviño Escudero sheds light on the current state of diplomatic ties, emphasizing the resurgence of momentum in bilateral engagements post-pandemic. As both nations gear up to commemorate the 75th anniversary of their diplomatic relations, the interview offers a comprehensive overview of the shared aspirations and synergies driving their partnership forward.

From burgeoning economic ties facilitated by cargo flights and trade agreements to the promotion of cultural understanding through language programs and educational exchanges, Mexico and Ethiopia are charting new avenues of collaboration. The interview explores key initiatives in agriculture, tourism, renewable energy, and infrastructure development, underscoring the potential for mutually beneficial partnerships that transcend geographical boundaries.

Ambassador Treviño Escudero’s insights provide a nuanced understanding of the multifaceted relationship between Mexico and Ethiopia, offering a glimpse into the transformative impact of diplomatic engagements on the socio-economic landscapes of both nations. As they navigate the complexities of a rapidly evolving global landscape, Mexico and Ethiopia stand poised to harness the power of collaboration to propel their shared aspirations towards prosperity and sustainable development. Excerpts; 

Capital: How would you characterize the current state of diplomatic ties between Mexico and Ethiopia, and what key areas of collaboration define the relationship?

Víctor Treviño Escudero: The current state of diplomatic ties between my country and Ethiopia is regaining impetus after the COVID-19 pandemic. We are expecting a visit to Mexico of a high-level delegation of the Diaspora Service of Ethiopia and there is a high possibility of a visit of the Mexican Foreign Minister, Alicia Barcena, in the upcoming months.

The momentum could not be better, as this year we celebrate 75th anniversary of the establishment of diplomatic relations between our countries.

There’s a strong foundation of mutual respect and interest in enhancing cooperation across various sectors, particularly in cultural exchanges or cooperation in international forums, especially regarding issues like climate change or sustainable development goals.

Capital: How would you describe the economic and trade relations between Mexico and Ethiopia? Are there any notable bilateral trade agreements or potential areas for future economic cooperation?

Víctor Treviño Escudero: The cargo flights operated by Ethiopian Airlines have greatly increased trade between the two nations, which opens significant business opportunities for Mexican companies looking to invest in Ethiopia. It’s worth noting that Ethiopian Airlines is the first African airline to operate in Mexico and the first one to move to the recently built Felipe Ángeles International Airport in central Mexico.

The latest data in Trade Map indicates that bilateral trade (2020) amounted to $5,641 USD, of which $1,621 correspond to Mexican exports to Ethiopia and $4,020 correspond to imports from that country, with a negative balance for Mexico of -$2,399 dollars.

Capital: In terms of cultural exchange, what initiatives or programs have been implemented to foster cultural understanding and collaboration between Mexico and Ethiopia?

Víctor Treviño Escudero: The pillars of our cultural exchange are language and education programs. The governments of Mexico and Ethiopia have established robust scholarship programs aimed at enhancing educational opportunities and fostering academic exchange between the two nations. One such initiative is the provision of Spanish language courses, facilitated by the Government of Mexico, which allows Ethiopian students and professionals to learn the Spanish language. Last year we donated a collection of books for children and Spanish learners to the Abrehot library, strengthening our presence and availability of reading material for those interested.

Regarding scholarships and academic exchanges, the Mexican Diplomatic Academy offers specialized courses tailored for diplomats from Ethiopia, providing them with valuable insights into international relations, diplomacy, and negotiation skills. Furthermore, the scholarship programs encompass opportunities for Ethiopian students to pursue advanced degrees at renowned Mexican universities. Scholarships for Master’s and Doctoral programs are available in various academic disciplines, enabling Ethiopian scholars to access high-quality education and research opportunities in Mexico.

Cultural exchange programs facilitate the exchange of artists, musicians, dancers, and other cultural practitioners between Mexico and Ethiopia. These exchanges allow artists to collaborate, share their skills and techniques, and create new works that reflect the fusion of their cultures.

Cultural diplomacy events, organized by the Embassy, cultural institutions, and non-governmental organizations, promote cultural understanding and collaboration between Mexico and Ethiopia. These events may include film screenings, literary readings, art exhibitions, and cultural performances that celebrate the cultural heritage of both countries and promote intercultural dialogue.

Capital: Mexico has a rich history in the field of agriculture. Are there any ongoing agricultural projects or initiatives in Ethiopia that involve collaboration between the two countries?

Víctor Treviño Escudero: Mexico is dedicated to assisting Ethiopia in combating the scale insect plague that harms cactus crops. As part of this commitment, Mexican agricultural technicians are training their Ethiopian counterparts to tackle this issue effectively. In Mexico, this pest has become an interesting source of income due to the high value pigment it creates. Cochineal, as we call it, has been present in our textiles, written texts and food industry for centuries.

Additionally, there’s a cooperation agreement between Mexico’s International Maize and Wheat Improvement Center (CIMMYT) and Ethiopia. Through this agreement, experts in agriculture receive training in development programs, which cover a wide range of topics, including agricultural entrepreneurship, market access, food safety standards, and agribusiness management. This collaboration aims to enhance Ethiopia’s agricultural sector and promote sustainable development.

85% of the germplasm used in Ethiopian fields for wheat comes from CIMMYT, and the best practices shared with our experience in the Yaqui Valley, in Sonora, are of great importance to create drought-resistant crops and develop regions in Ethiopia that are not generally used for agriculture.

Capital: Ethiopia is known for its diverse tourist attractions and historical sites. Has there been any cooperation between the two countries in the field of tourism, such as promoting bilateral tourism or sharing best practices in the tourism industry?

Víctor Treviño Escudero: We promote the tourist attractions of Mexico, as you know we have beach resorts, colonial cities, great nature attractions and of course Mexico City, the second city with the most museums in the world. With 170 museums and 43 galleries, the National Museum of History, the Chapultepec Castle, the Anthropology Museum, and the Templo Mayor Museum, are some of the most visited.

Mexico can offer collaboration in heritage conservation efforts, which could involve sharing expertise in preserving and managing historical sites, monuments, and archaeological treasures. Mexico’s experience in heritage conservation and restoration could provide valuable insights for Ethiopia’s efforts to safeguard its cultural heritage for future generations.

Mexico has also been committed to collaborating internationally to ensure that our cultural property is returned and to combat the sale and trafficking of Mexican cultural objects abroad. The restitution and protection of cultural property is a priority for Mexico, and we are happy to share with Ethiopia and the African Union our legal framework and experiences.

To that extent, we are working in showcasing some of the cultural expressions that are shared between both countries. We are committed with sharing the talent of our artisans and, on a legal scope, to share with Ethiopia the efforts being made to protect traditional knowledge and cultural expressions and avoid cultural appropriation.

Capital: Ethiopia has made significant progress in recent years in areas such as infrastructure development and renewable energy. Are there any ongoing projects or opportunities for collaboration in these areas?

Víctor Treviño Escudero: Mexico has expertise in various aspects of infrastructure development, including transportation, energy, and telecommunications. Collaborative projects could involve sharing knowledge and best practices in infrastructure planning, financing, and implementation. This may include the construction of roads, bridges, airports, ports, and other critical infrastructure to support Ethiopia’s economic growth and development goals.

Both Mexico and Ethiopia have vast renewable energy resources, including solar, wind, hydro, and geothermal power. Collaborative efforts could focus on developing renewable energy projects and promoting sustainable energy solutions. This may involve joint research and development initiatives, technology transfer, capacity building, and investment partnerships to expand access to clean and affordable energy sources.

Collaboration could extend to the development of green infrastructure projects that promote environmental sustainability and climate resilience. This could include initiatives such as green building design, urban greening, sustainable water management, and ecosystem restoration projects that enhance resilience to climate change and contribute to biodiversity conservation.

Capital: Mexico has a strong commitment to human rights and international development. How does the Embassy work to promote these values in Ethiopia, and are there any specific projects or initiatives aimed at supporting human rights and development in the country?

Víctor Treviño Escudero: Capacity building and training: The embassy may support capacity-building programs and training initiatives aimed at strengthening Ethiopian institutions and civil society organizations working in the areas of human rights, democracy, and good governance. This could include workshops, seminars, and technical assistance to enhance their ability to promote and protect human rights.

In recent years, we have partnered with NGOs to become “blue” every April and promote awareness of autism and promoting the right to education and protection of human rights of children in the spectrum. We have also shared our experiences in the process of becoming a feminist diplomacy. Together with UN Women, international organizations, NGOs and fellow embassies, we are committed to the #OrangeTheWorld campaign to end violence against women.

Capital: Ethiopia plays a significant role in regional affairs, particularly in the Horn of Africa. How does Mexico view Ethiopia’s role in regional stability and what are the prospects for enhanced cooperation in addressing regional challenges?

Víctor Treviño Escudero: Mexico follows with great interest the regional developments and the role of each country. We are following closely the recent agreements reached at the African Union Summit and look forward to work together in reaching joint goals.

Ethiopia’s strategic location, large population, and growing economy give it considerable influence and responsibility in addressing regional challenges.

Stabilizing influence: Ethiopia’s stability is crucial for the overall stability of the Horn of Africa region. As one of the largest and most populous countries in the region, Ethiopia’s internal stability has significant implications for neighboring countries. Mexico recognizes Ethiopia’s efforts to maintain peace and stability domestically and sees its role as essential for preventing conflict spillover and fostering regional security.

Mediation and conflict resolution: Ethiopia has historically played a mediating role in regional conflicts and has been involved in peace efforts in countries such as South Sudan, Somalia, and Sudan. Mexico may view Ethiopia’s mediation efforts positively and see opportunities for collaboration in supporting peaceful resolution of conflicts and promoting dialogue among regional actors.

Capital: Mexico and Ethiopia are both members of international organizations such as the United Nations. How do the two countries collaborate and support each other’s positions within these organizations?

Víctor Treviño Escudero; Mexico and Ethiopia may coordinate their diplomatic efforts within UN bodies, including the General Assembly, Security Council, and specialized agencies. They may align their positions on key issues of mutual interest, such as human rights, sustainable development, peacekeeping, and international security.

In multilateral forums, Mexico and Ethiopia may support each other’s resolutions, initiatives, and candidacies to advance shared priorities and interests. They may engage in voting blocs or coalitions with other like-minded countries to strengthen their influence and impact within the UN system.

Capital: Mexico has historically stood with Ethiopia during its challenging time of colonization, with notable support at the League of Nations. As a symbol of this friendship, Ethiopia named a roundabout “Mexico Square,” although the monument no longer exists. Could you share your perspective on this historical connection and the significance it holds for the bilateral relationship between Mexico and Ethiopia today?  And the fate of the monument?

Víctor Treviño Escudero: The historical connection between Mexico and Ethiopia, particularly during Ethiopia’s challenging time of colonization, holds significant symbolic importance for the bilateral relationship between the two countries today. Mexico’s solidarity and support for Ethiopia’s sovereignty and independence at the League of Nations reflected a shared commitment to principles of self-determination, international law, and human rights.

The naming of a roundabout as “Mexico Square” in Ethiopia served as a tangible symbol of the friendship and solidarity between the two nations. It represented a gesture of gratitude and recognition for Mexico’s unwavering support during a critical period in Ethiopia’s history. As brotherly nations, Mexico also holds Ethiopia underground station in Mexico City and palm trees in the southern area of the City –a gift of emperor Haile Selassie to Mexico— as a symbol of our strong friendship.

While the Mexico Square” monument may no longer exist, the historical connection it symbolized continues to resonate in the bilateral relationship between Mexico and Ethiopia. It serves as a reminder of the enduring bonds of friendship, mutual respect, and shared values that unite the two countries. I would like to add that, even if the roundabout has suffered many changes, the Olmec head that was present and represented a gift from the people of Mexico to Ethiopia, can still be admired at the National Museum.

Today, the legacy of Mexico’s support for Ethiopia’s independence remains an important aspect of the bilateral relationship, contributing to a foundation of goodwill and cooperation.

Capital: What are the main goals and priorities of the Mexican embassy in Ethiopia for the coming years, and how do you envision strengthening the bilateral relationship between the two countries?

Víctor Treviño Escudero: Cultural exchange and public diplomacy: Organize cultural events, art exhibitions, film screenings, and educational programs to showcase the richness and diversity of Mexican culture and heritage.

Deepen South-South cooperation in key industries: strengthen the dialogue between education institutes, businesses, and industries to find areas of opportunity that benefit both countries.

Promoting tourism and travel: Highlight tourist attractions, facilitate travel arrangements, and promote tourism packages and exchanges to encourage people-to-people connections and boost tourism revenues for both countries.

Consular services and assistance: Providing consular services and assistance to Mexican nationals in Ethiopia and Ethiopian nationals in Mexico remains a core function of the embassy. Ensuring the well-being and safety of citizens, facilitating consular services, and promoting bilateral cooperation on consular matters are essential aspects of the embassy’s work.

Capital: Any last words?

Víctor Treviño Escudero: Having lived in Ethiopia for 7 years, I have a great affection for its people and their fascinating history.

I see a great future for the Ethiopian People once they manage to resolve their internal conflicts and build a solid notion of unity between regions.

I leave very grateful for everything that I learned in this great country!

ESX nears full capitalization to launch operations

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By our staff reporter

The Ethiopian Securities Exchange (ESX) has announced that it has secured over 95 percent of the required capital to officially commence its operations, marking a significant milestone in the development of the country’s capital market.

According to the regulations governing the capital market in Ethiopia, ESX revealed that it has successfully raised the necessary capital to establish a centralized stock exchange. With a targeted capitalization of 1 billion birr, ESX is poised to begin operations in the near future.

Tilahun Esmael, PhD, CEO of ESX, disclosed that the recent acquisition of a 50 million birr investment from Global Bank has significantly bolstered the exchange’s capital base. Despite the ongoing capital-raising period expected to conclude by March 2, 2024, ESX has already surpassed the 95 percent mark.

“We have fulfilled our capital-raising objectives ahead of schedule,” stated Tilahun Esmael. “While the final subscription forms are yet to be received, we have secured commitments from investors that exceed our initial expectations.”

Over 20 financial institutions have been invited to become shareholders of ESX as part of the initiative to establish Ethiopia’s investment market. However, specific details regarding the number of institutions that have made purchases and the total amount of funds raised have not been disclosed.

ESX experienced a significant influx of investments, with Awash and Global Bank injecting a combined total of 127 million birr within a week. Awash Bank emerged as the top investor, purchasing shares worth 70 million birr, while Global Bank contributed 50 million birr to ESX’s capitalization efforts.

As per the regulations governing the establishment of the capital market, ESX operates as a share company, with financial institutions being prioritized as key stakeholders in the stock market. Private banks such as Zemen Bank, Sinqe Bank, and Global Bank have continued to demonstrate their confidence in the ESX market, collectively investing millions of birr to support its launch.

The establishment of ESX holds the potential to accelerate economic growth in Ethiopia by providing individuals with opportunities to generate income through ownership, management, or transfer of investment assets in the capital market system.

Urgent call to address humanitarian crisis in Tigray as hunger and displacement persist

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By our staff reporter

In a recent report titled “Scars of War and Deprivation: An Urgent Call to Reverse Tigray’s Humanitarian Crisis,” alarming details have emerged regarding the ongoing crisis in the Tigray region of Ethiopia. The report highlights the dire situation faced by the population, urging immediate action to address the escalating humanitarian crisis.

Despite the declaration of peace between the Federal Ethiopia Government and Tigray authorities over a year ago, the region continues to grapple with widespread hunger and displacement. The combination of a two-year-long siege during the war, a severe drought, and a suspension of food aid to combat corruption has plunged many into a state of crisis. Vulnerable groups, including mothers who have survived gang rape, are now left wondering how they will feed their children instead of receiving the necessary physical and mental healing they require.

The conflict in Tigray, which began in November 2020, has resulted in an estimated death toll of over 600,000 people and the displacement of nearly 3 million. Human rights violations and sexual violence have left lasting scars on the population. Despite the cessation of hostilities agreement, Eritrean troops, Amhara forces, and other armed groups have yet to fully withdraw from western and southern parts of Tigray, hindering the return of displaced individuals to their homes.

Adding to the crisis, in 2023, the United States government temporarily paused its food assistance program due to widespread corruption and aid diversion by Ethiopian government and regional officials. While the decision aimed to address these issues, it exacerbated the already catastrophic situation for millions of Ethiopians who rely on food aid. Although food assistance has gradually resumed, it is unable to keep pace with the growing hunger, with reports indicating that only 14 percent of the targeted population had received aid by January 2024, and child malnutrition rates reaching 26.5 percent.

The most vulnerable groups affected by the food shortages are Tigray’s internally displaced people, particularly women, children, and the elderly. Families are resorting to feeding on cattle roots, and children are forced to sleep longer to alleviate hunger pangs. Chronic undernutrition, reflected in high levels of stunting and malnourished pregnant and lactating women, has become prevalent, with 60 percent of households experiencing moderate or severe hunger.

During a recent visit to the region, Refugees International found that women bore the brunt of the crisis, grappling with hunger, sexual violence, and displacement simultaneously. Many displaced households are led by women, as male family members were killed or remain missing. While some victims of sexual violence can access treatment, damaged or non-operational health facilities and limited resources hinder their recovery. The overlapping challenges of unaddressed sexual violence, worsening hunger, and displacement pose significant risks to the well-being and recovery of IDP women in Tigray.

The report emphasizes the responsibility of the Ethiopian government to protect its population, ensure access to basic rights, and uphold commitments made in the peace agreement. It calls for peace to be maintained, the withdrawal of armed groups from Tigray, and the restoration of essential services and infrastructure. Furthermore, it urges the international community to increase its response and support for Tigray, emphasizing the need for increased aid, accountability for atrocities, and the inclusion of local actors in relief efforts.

The situation in Tigray serves as a stark reminder of the urgent need for improved responses and solutions to internal displacement caused by both conflict and climate-related issues. The report concludes by offering recommendations to the United States, aid organizations, and the Ethiopian government, urging immediate action to alleviate the suffering of Tigray’s population and prevent further destabilization of the region.

As the international community grapples with the lack of action in Tigray, the report serves as a wake-up call to address the pressing humanitarian crisis and prevent further loss of life and human suffering in the region.

World Bank report urges Ethiopia to accelerate structural reforms

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By Muluken Yewondwossen

In a recently released report by the World Bank, titled Country Climate and Development Report (CCDR), it is stated that Ethiopia’s transition to a market economy has been hindered, and its external competitiveness has been undermined by a state-led growth model that heavily relied on imports and public investments. The growth model was characterized by pervasive price distortions and an overvalued exchange rate.

The report emphasizes the need for the government to expedite structural reforms to build a climate resilient economy. Ethiopia has been grappling with significant macroeconomic imbalances, financing challenges, a depletion of external reserve buffers, foreign exchange shortages, a growing parallel market premium, and high inflation. Failure to address these issues in a timely manner could lead to an increase in poverty exacerbated by the effects of climate change. The report highlights that efforts to reduce poverty are being impeded by compounding shocks from conflicts, droughts, and rising food prices.

The emergence of the capital market is identified as a crucial step toward developing a climate-change-mitigating economy. The report, released on February 27, indicates that Ethiopia needs to allocate at least USD 27.6 billion over the next 25 years to tackle climate change challenges effectively.

The research suggests that structural changes and macroeconomic stabilization will not only enhance climate resilience but also promote economic growth. It states, “Ethiopia’s current economic situation features serious macroeconomic imbalances, few jobs, and widespread poverty, insecurity, and vulnerability. Without addressing the causes of these problems through a program of macroeconomic stabilization and structural reforms, it will be difficult to undertake actions to build climate resilience.” Implementing these reforms will also help propel the stalled structural transformation of the Ethiopian economy and its transition to a market economy, contributing to inclusive growth and poverty reduction.

The report emphasizes the essential role of the private sector in addressing these challenges. It notes that climate investment needs are significant, considering the resource shortages. The CCDR estimates that sector-specific climate investments, focusing on agriculture, livestock, sustainable land management, urban infrastructure, roads and bridges, and water storage, will amount to USD 27.6 billion by 2050. This represents 3.6 percent of cumulative GDP until 2050, with frontloading of investments necessary to protect against the worst impacts of climate change.

While acknowledging the difficulty in fully ascertaining the volumes of climate finance mobilized by Ethiopia, the report estimates that it ranges from USD 0.6 to 3.2 billion per year, with indications of a decline. The report suggests that in the near term, mobilizing more domestic resources and unlocking access to grant and concessional resources through structural reforms should be a priority.

The report also highlights the importance of grant and concessional finance as the most significant and least expensive source of external finance for climate-related purposes. It recommends that Ethiopia implement stronger policies to support performance-based allocation (PBA) formulas, which will determine resource envelopes from multilateral institutions. Additionally, financial sector reforms are crucial to improve stability and depth, strengthen regulatory frameworks, and address the relationship between state-owned enterprises (SOEs) and state-owned banks. Opening the banking sector to foreign investment, establishing deposit insurance, and increasing insurance market penetration are also key areas for reform. Developing capital markets will further facilitate the issuance and exchange of climate finance instruments such as green bonds, supporting private capital mobilization in the medium term.

The report concludes by emphasizing the need to reform Ethiopia’s social safety net programs to effectively respond to climate shocks and strengthen adaptive capacity, with a priority on the lowlands.

As Ethiopia tackles the challenges of climate change and seeks to build a resilient economy, it is crucial for the government to implement the recommended structural reforms, mobilize resources, and engage the private sector to achieve sustainable and inclusive growth while addressing poverty and vulnerability.

The CCDR aims to support Ethiopia in achieving its development goals while navigating the challenges posed by climate change until 2050. Modeling analysis conducted for the CCDR reveals that climate change will impose substantial costs on the economy, with costs increasing rapidly after 2030.

The report identifies several channels through which the adverse impacts of climate change will materialize. These include more frequent and severe flooding, reduced crop and livestock yields, variable hydropower production, infrastructure damage, and losses in human health and productivity.

If Ethiopia maintains its current policies, characterized by a significant state presence in the economy and slow progress on structural reforms, known as the constrained growth (CG) scenario, the report projects average annual losses to GDP and household consumption ranging from 1 to 1.5 percent annually in the period of 2024-2030. These losses are expected to reach the upper end of the range in a dry and hot climate scenario.

Furthermore, the report highlights that impacts will rapidly increase from 2030 onwards, with average deviations from GDP and household consumption reaching as high as 5 percent during the 2040s. The cumulative economic loss is projected to rise from about 10 to 14 percent of 2022 GDP between 2023-2030, to approximately 20 to 30 percent of average decadal GDP between 2030-2040, and even higher thereafter.

“If current policies are maintained, poverty will also increase due to the impacts of climate change in the absence of macroeconomic and structural reforms,” the report warns. Analysis conducted for the CCDR demonstrates that climate change will lead to larger increases in poverty over the next 25 years without the implementation of structural reforms. Under the CG scenario, poverty is projected to increase by 0.5 to 1.7 percentage points by 2050. However, with the implementation of structural reforms, the increase in poverty would be much smaller, ranging between 0.1 to 1 percent.

The report argues that undertaking macroeconomic stabilization and structural reforms will mitigate the adverse impacts of climate change on economic growth. It emphasizes that structural reforms will enhance resilience and reduce the cost of adapting to climate change. The agriculture sector is highlighted as an example, where implementing reforms would lead to a significant increase in agricultural output, even in the face of climate change. This would result in an excess production that surpasses domestic demand by the end of the decade, generating a substantial marketable/exportable surplus from 2030 onwards.

However, the report cautions that structural reforms alone will not be sufficient. Additional measures will be required to adapt, including a shift away from a center, state-driven development approach. These measures encompass additional policies and incremental investments aimed not only at increasing productivity but also at reducing the costs associated with climate change impacts.

As Ethiopia grapples with the challenges posed by climate change, the report underscores the importance of implementing structural reforms and additional measures to build resilience, adapt effectively, and mitigate the adverse effects on economic growth and poverty levels.