Foreign Economic Potential of Ethiopia

Abstract

Over the past few years, Ethiopia’s economy has been one of the fastest growing in the world. The country has great potential to boost national economy by increasing its participation in international trade and expanding foreign economic relations. The following article is dedicated to the resources, capacity, and opportunities of Ethiopia to produce goods and services, export them, enhance their competitiveness in a foreign market, and thus contribute to socio-economic development of the country. At the beginning of the article the definition of the notion «foreign economic potential», as well as its main characteristics are given. In other sections a detailed overview of key factors that define and form the foreign economic potential of Ethiopia is presented. The author gives a short description of major natural resources of the country, their exploitation and managing, the prospects of hydropower generation and the development of transport infrastructure. The last one is particularly important, as it shows to what extent this landlocked country is integrated into regional and international economic. The government aims at developing transport corridors, establishing an efficient and profitable transport communication system that connects Ethiopia with the port infrastructure of her neighbors by creating national railway network and expanding road lines. The article emphasizes the significance of foreign investors in this process and studies the role of foreign direct investment and its possible impact on economic development. It is also noted that Ethiopia has a huge youth potential as more than 70% of its population is under 30. This human capital, if properly used, may become an economy-boosting asset. Overall, Ethiopia’s priority objective is to reach its full potential and put all the existing ideas and projects into practice.