The Impact of Chinese Investment in Ethiopia: Party Capitalism and the Informalisation of Institutions

Abstract

This chapter is focused on the Chinese capital entrenching the EPRDF regime in the sphere of informal politics. It analyses the patterns of political power in Ethiopia that have come about as a result of the impact on state-society relations of Chinese investment in Ethiopia since the coming to power of the EPRDF in the early 1990s. Such impact is a direct result of the new modalities of state intervention in Ethiopia discussed in the previous chapter. The book has so far highlighted Ethiopia’s increasing engagement with Chinese investment and particularly the role of the internationalization of Chinese capital. This internationalization has been felt—in line with the overriding framework—in its internalization in the organization of social forces and the power they exercise within state institutions. In this chapter, we locate some key centres of authority, power and institutionalisation within the state in relation to how they have been impacted by Chinese capital. In this respect, two key interrelated processes are identified: the entrenchment of party-oriented capitalism as well as the informalisation of institutions in Ethiopia. I define party-oriented capitalism as an economic system where the (ruling) party, oriented to capital and endowed with multiple vehicles of investment, both publicly known and unknown, is heavily involved in the major sectors of the economy as a player, enforcer and regulator within a politico-economic system in which government and party have fused, duplicating in all major state institutions but with the party overall in command.