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Strengthening economic ties through agricultural collaboration

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In an exclusive interview with Capital, Leo Vinovezky, Israel’s Director of Economic Affairs for Africa, Latin America, and the Caribbean, discusses the evolving trade relations between Ethiopia and Israel. Having previously served as the Deputy Ambassador to Ethiopia, Leo Vinovezky reflects on his emotional return to the country and the significant strides made in economic cooperation since the reestablishment of diplomatic ties in the 1990s. He highlights key sectors of collaboration, including agriculture and technology, and emphasizes the importance of initiatives like “Avocado Diplomacy,” which showcases Ethiopia’s growing export capabilities. As both nations seek to strengthen their economic partnership, Leo Vinovezky outlines future opportunities for collaboration and the role of cultural exchanges in fostering mutual understanding. Excerpts;

Capital: How have Ethiopia and Israel’s trade relations evolved over the years?

Leo Vinovezky: Well, first of all, allow me to begin by telling you that it is my first visit to Ethiopia since 2016. I served in Addis as Deputy m Ambassador of Israel between 2012-2016. For me, coming back is very important and emotional. My family and I love Ethiopia very much. In my current position, I am responsible for the economic ties with Africa and Latin America. Over the years, trade relations between Ethiopia and Israel have grown, with cooperation expanding in sectors like agriculture, innovation and technology, cybersecurity and public health. These relations have intensified, particularly after the reestablishment of official diplomatic ties in the 1990s, with an increasing focus on trade, investment, and development cooperation, notably on horticulture. As a result of this joint effort between Ethiopia, Israel and the US, Ethiopia has begun exporting avocado to European countries. Export quality means the same color, same texture, same taste, same size and so on. I have coined this project “Avocado Diplomacy”.  Our embassy in Addis Ababa works tirelessly promoting economic and commercial opportunities for the ecosystems in the two countries. In the coming days, an important delegation of Israeli businessmen, entrepreneurs and investors will be meeting with Ethiopian high officials.

Capital: How do Israeli agricultural technology and expertise contribute to Ethiopia’s development?

Leo Vinovezky: Israel’s agricultural technology and expertise, particularly in irrigation, water management, tissue engineering culture and crop improvement, have significantly contributed to Ethiopia’s agricultural development. Israeli innovations have helped Ethiopia boost its productivity, conserve water, and enhance food security.

Capital: How have Israel’s diplomatic relations with Ethiopia influenced its economic cooperation?

Leo: Since Israel’s diplomatic relations with Ethiopia were reestablished back in the ‘90s, the two countries have strengthened economic cooperation, with Israel providing support for Ethiopia’s development goals. These diplomatic ties have facilitated trade agreements, investment, and collaborative projects, notably in areas like agriculture, infrastructure, and so on. Even before that, during the ‘60s, many buildings in Addis Ababa were built by Israeli construction companies. Flowers grown in Ethiopia based on Israeli techniques and technologies are exported to the Netherlands, for example. The fact that we have an important and strong Ethiopian-born Israeli community in Israel represents a true bridge of love and friendship between the two nations.

Capital: What role has Ethiopia played in Israel’s policy in Africa, and how does that impact economic relations?

Leo Vinovezky: Ethiopia has been a key player in Israel’s broader policy in Africa, serving as a strategic partner in the Horn of Africa. Its role as a regional leader has bolstered Israel’s presence in the region, fostering economic and diplomatic engagement with other African nations. In a way, Ethiopia is the gate to Israel and to Africa. And of course also because of Ethiopian Airlines. Israel is also the only external country in the world connected geographically to Africa.

Capital: What do you think should be emphasized in a different way during your working visit to Ethiopia? In addition to this, how do you see the economic reform in the country?

Leo Vinovezky:  During previous working visits to Ethiopia, Israeli and Ethiopian teams emphasized strengthening bilateral economic cooperation and focusing on areas such as technology transfer, infrastructure development, and trade facilitation. I personally participated in a roundtable discussion organized by the Israel Export Institute and led by the Ambassador of Ethiopia to Israel. Economic reforms and flexibility may create platforms to attract foreign investment and enhance economic growth. We should share more economic information to better understand the business environment and culture. Every time an Israeli Ambassador is appointed, the Federation of Chambers of Commerce in Israel organizes a round of talks with Israeli business leaders from the different sectors.  We also have a strong bond with the bilateral chambers of commerce and with the Israel-Africa Chamber of Commerce. A few more examples: a year ago, we organized in our Ministry of Foreign Affairs an economic forum honoring the visit of the President of Zambia. Every time our Minister of Foreign Affairs visits a country, we organize a commercial delegation for B2B and G2G meetings. That’s why we also encourage the foreign embassies in Israel to invite their businessmen and businesswomen to join high officials and leaders visiting Israel.

Capital: What is the role of the Ethiopian Jewish community in fostering economic ties between the two nations?

Leo Vinovezky: The Ethiopian Jewish community has played a pivotal role in fostering ties between the two countries, helping deepen mutual understanding, contributing to diplomatic, cultural and economic exchanges between the nations. As I said, a true bridge of love and friendship.

Capital: What are the main sectors in which Israeli businesses are involved in Ethiopia? Also, how much has Israel’s invested in the economy over the years?

Leo Vinovezky: Israeli businesses are involved primarily in sectors such as precision agriculture, food processing, health devices, construction, space, and water management, all of them based on innovation technology. I would like to emphasize that two important entities in Israel lead the manufacturing sector: the Israeli Manufacturers Association and the Kibbutz Industry Association. Regarding Ethiopia, Israel’s investment has focused on those areas to foster development and promote economic growth, though the total amount of investment has grown steadily over time. I want to remind the readers that back in 2013,  Israel was finally accepted to the UNDP Development Partners Group, based on its historical partnership and contribution to Ethiopia.

Capital: What kind of humanitarian aid or development assistance has Israel provided to Ethiopia?

Leo Vinovezky: Israel has provided significant humanitarian aid and development assistance to Ethiopia, particularly in the fields of agriculture, water management, and healthcare. When needed, Israeli aid has also been directed towards disaster relief and poverty reduction efforts. Medical missions from Israel are coming to Ethiopia several times per year, doing diagnostic treatments and surgery in different disciplines.

Capital: How has Israel supported Ethiopia’s efforts in education, health, and technological development?

Leo Vinovezky: Israel has been instrumental in Ethiopia’s education and health sectors, offering technical assistance, training, and expertise. Israel has also provided support in technological development, particularly in the form of innovative solutions for water management and agriculture. Thousands of Ethiopian professionals are alumni of our MASHAV development programs and courses, and we also have many alumni from Israeli universities.

Capital: How do tourism and cultural exchanges between Israel and Ethiopia contribute to their economic ties?

Leo Vinovezky: We can visit each other in 4 hours. Tourism and cultural exchanges between Israel and Ethiopia contribute to their economic ties by fostering mutual understanding, enhancing tourism revenues, and promoting investment. Ethiopia’s rich historical and cultural connections with Israel also provide a foundation for deepened tourism and cultural interactions. Ethiopians are visiting religious sites in Israel. We should multiply this reciprocally. Every Israeli I meet I recommend them to discover Ethiopia, through its landscapes, eskesta dances and music, churches, coffee and so on.

Capital: What challenges have both countries faced in strengthening their economic relationship?

Leo Vinovezky: Both countries face universal challenges in strengthening their economies.  Those challenges, like global political instability or trade barriers, affect the world economy. Regarding egarding our two countries, there is a  need for enhanced bilateral agreements. We are working now to promote professional dialogue between economic institutions from both countries.

Capital: What are the potential opportunities for expanding their economic partnership in the future?

Leo Vinovezky: Opportunities for expanding economic partnership may include greater collaboration in renewable energy, infrastructure development, high-tech industries, and education. Ethiopia’s ongoing economic reforms and Israel’s expertise in these areas create potential for further expansion in trade and investment. Israel would love to continue importing Ethiopian goods and products.

President Macron to inaugurate newly renovated National Palace

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By our staff reporter

French President Emmanuel Macron is set to return to the Horn of Africa for the first time in five years, with a visit scheduled to Djibouti and Addis Ababa from December 20 to 22, 2024. During this visit, President Macron will inaugurate the newly renovated National Palace on December 21, 2024, marking a significant milestone following a year and a half of extensive renovations.

The renovation project for the National Palace began in April 2023 and was originally expected to conclude by February 2024. Sources indicate that the palace will also be visited by the diplomatic corps in Addis Ababa on December 23.

Originally known as the Jubilee Palace, the structure was named in honor of Emperor Haile Selassie’s Silver Jubilee in 1955. Despite its historical significance, the palace has remained inaccessible to the public, serving solely as an official residence for the president and venue for state functions.

The renovation of the National Palace is part of the French government’s broader commitment to support Ethiopia’s cultural heritage. This initiative was solidified after President Macron visited Addis Ababa in March 2019. A formal agreement was signed on July 16, 2020, between Ahmed Shide, Minister of Finance, Valérie Tehio, Country Director of the French Development Agency (AFD), and Frederic Bontems, then Ambassador of France to Ethiopia and the African Union. This agreement secured €12 million in financing from AFD for the first phase of the renovation project.

The rehabilitation efforts aim to preserve the palace’s original architectural beauty while also implementing additional construction work to transform it into a premier tourist attraction in Addis Ababa.

The first phase of the renovation project, which costs €20 million, focuses on making the palace accessible to the public. The palace administration is overseeing this project with support from French experts and organizations renowned for their expertise in international technical cooperation, including those involved with Versailles Palace.

In line with efforts to expand tourism and boost revenue, Ethiopia has previously opened other historical sites to the public, such as Menelik Palace in 2019 after extensive renovations. Similarly, France is providing funding and technical support for ongoing renovation projects at Lalibela’s rock-hewn churches, a UNESCO World Heritage site in Ethiopia.

ERC develops new strategy to alleviate debt burden

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By Eyasu Zekarias

The Ethiopian Railway Corporation (ERC) has announced a new strategy aimed at addressing its significant debt burden, which has been exacerbated by recent economic challenges. The corporation has reported a staggering loss of 264 billion birr, primarily due to loans taken out for various projects. As a result, ERC is actively seeking new project financing to alleviate its financial pressures.

Getu Gizaw, Deputy CEO of ERC, stated that the corporation is currently negotiating foreign loans while also exploring alternative project financing options. He emphasized the urgency of initiating these financing efforts, warning that without action, the corporation’s debt will continue to escalate. Unlike previous funding methods that relied heavily on loans, ERC is now focusing on attracting private investors to support its projects.

In a significant development, the Ethiopian Railway Corporation has signed a memorandum of understanding with Italy’s COIPA Capital OU to enhance railway and logistics capacity. This agreement aims to strengthen infrastructure development and connectivity, marking a strategic phase in modernizing Ethiopia’s railway system.

Among the key projects included in this collaboration are the Endode Logistics Center, Mojo Dry Port, and a Multimodal Center designed to handle foreign cargo. Additionally, the agreement encompasses the Ogaden-Djibouti railway line project.

Vito Favorito Samarella, CEO of COIPA Capital, expressed confidence in leveraging sector experience and financing options to support Ethiopia’s extensive infrastructure development. He highlighted COIPA’s role in ensuring economic growth through adherence to international practices and standards for logistics and rail lines.

Ethiopia repatriates 71% of $149 million in blocked airline funds

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By our staff reporter

Ethiopia has made notable strides in resolving the issue of blocked airline funds, according to a recent report from the International Air Transport Association (IATA). As of October 2024, the amount of airline funds blocked from repatriation has decreased to $43 million, down from $149 million reported in April, marking a 71% decrease.

The IATA’s report highlights a global total of $1.7 billion in airline funds that remain inaccessible due to government restrictions, reflecting a slight improvement from the $1.8 billion reported earlier this year. Ethiopia, along with countries like Pakistan, Bangladesh, and Algeria, has seen reductions in blocked funds, indicating successful efforts to facilitate smoother repatriation processes.

Willie Walsh, IATA’s Director General, emphasized the critical need for airlines to repatriate their revenues to maintain aviation connectivity, which is vital for economic prosperity. “If airlines cannot repatriate their revenues, they cannot be expected to provide a service. Economies will suffer if connectivity collapses,” he stated.

The reduction in blocked funds is crucial for Ethiopia’s aviation sector and overall economy. Airlines depend on the ability to access their earnings to continue operations and provide essential services. The Ethiopian government’s initiatives to address these issues align with broader economic goals, including enhancing trade and tourism.

The report notes that nine countries account for 83% of the airline industry’s blocked funds, totaling approximately $1.43 billion. Ethiopia’s improvements contribute positively to this statistic, showcasing the effectiveness of recent measures taken by the government.

Despite these advancements, challenges persist in other regions, particularly in countries like Mozambique and those within the XAF/XOF zones, where blocked amounts are on the rise. The IATA continues to call for governments worldwide to eliminate barriers preventing airlines from repatriating their revenues in accordance with international agreements.