Available via license: CC BY-NC-SA 4.0
Content may be subject to copyright.
54
Insignia Journal of International Relations
Vol. 10 No. 1, April 2023, 54-68
P-ISSN: 2089-1962; E-ISSN: 2597-9868
Analyzing the Rationality of Ethiopia in Dealing with China’s Support in
Infrastructure Development: the Addis Ababa-Djibouti Railway Case
Ahda Ayudia Hairisa
President University
E-mail: ahdayudia@gmail.com
Muhammad Farid
President University
E-mail: mfarid@president.ac.id
Abstract
This article analyzes the rationality of Ethiopia in cooperating with China in restoring the Addis Ababa-
Djibouti railway project using rational choice theory in foreign policy making. Despite having several
alternative ports and other parties to support the project, Ethiopia has chosen the fund from China to
support its railway project. The similarity between China and Ethiopia regarding political values is one of
the factors in choosing China to work with. The Ethiopian People’s Revolutionary Democratic Front (EPRDF)
seems to be unapproachable by Western political values that are influenced by the internal condition of the
state and tend to emphasize democracy. Therefore, it tends to work with China. Other than that, depending
on Djibouti’s port as the most viable seaport in the region to access the sea as a landlocked country has
driven Ethiopia to restore the railway as quickly as possible. By considering the Chinese loan system, which
did not have many qualifications to lend money, Ethiopia could quickly restore the railway and not miss out
on the opportunity to grow its trade through developing its infrastructure.
Keywords: African infrastructure development, China’s loan, China in Africa, rational choice
Abstrak
Artikel ini menganalisis rasionalitas Ethiopia dalam melakukan kerjasama dengan China dalam restorasi
proyek kereta Addis Ababa-Djibouti dengan menggunakan teori pilihan rasional dalam pengambilan
kebijakan luar negeri. Meski memiliki beberapa pelabuhan alternatif dan pihak lain untuk mendukung proyek
tersebut, Ethiopia memilih dana dari China untuk mendukung proyek kereta tersebut. Kesamaan antara China
dan Ethiopia dalam hal nilai politik ditemukan menjadi salah satu faktor dalam memilih China untuk diajak
bekerja sama. Front Demokrasi Revolusioner Rakyat Ethiopia (EPRDF) tampaknya tidak dapat didekati oleh
nilai-nilai politik Barat yang dipengaruhi oleh kondisi internal negara dan cenderung menekankan demokrasi.
Karena itu, Ethiopia cenderung bekerja dengan China. Selain itu, bergantung pada pelabuhan Djibouti sebagai
pelabuhan laut paling layak di wilayah tersebut untuk mendapatkan akses ke laut karena negara yang
terkurung daratan telah mendorong Ethiopia untuk memulihkan jalur kereta api secepat mungkin. Dengan
mempertimbangkan sistem pinjaman China, yang tidak memiliki banyak kualifikasi untuk meminjamkan uang,
Ethiopia dapat dengan cepat memulihkan jalur kereta api dan tidak melewatkan kesempatan untuk
mengembangkan perdagangannya melalui pengembangan infrastrukturnya.
Kata-kata kunci: Cina di Afrika, pengembagan infrastruktur Afrika, pilihan rasional, pinjaman Cina,
55
INTRODUCTION
The Addis Ababa-Djibouti railway is
an ancient, 784 km long railway built by
the French. The railway was established
under the joint ownership of Ethiopia and
Djibouti and has always been influential as
the main entry and exit points for
Ethiopian imports and exports. It was
inaugurated in 1917 but stopped
operating in 2008 as the railways fell into
disrepair due to poor maintenance and
management by the local government
(Leviker, 2021). While a major restoration
project was initiated in 1998, the French
government changed the regulations of
development aid resumed the disabled
loans to underdeveloped countries due to
the changes in its internal policy
(Mohapatra, 2016). The new railway
project was initiated with support from
China in the form of a loan. The total cost
for the project is estimated to reach USD
3.5 billion and potentially peaked at even
USD 4.2 billion considering the interest
rate increase and some side works that
need to be completed (Leviker, 2021).
Over the last two decades, China’s
presence in the African continent has been
growing in the number of interactions and
cooperation. China’s position in Africa was
affirmed with the launch of "The Belt and
Road Initiative" (BRI) in 2013, one of the
most ambitious projects to support China’s
political and economic role in
international society (Lisinge, 2020). BRI
aims to expand China’s markets for goods
and services by investing in infrastructure
development across Asia, Europe, and
Africa (Weng et al., 2021). African
countries saw this investment as a way to
fill the gap in their infrastructure
development which has been lacking
funding from the government and private
entities.
One of Africa's most highlighted
Chinese infrastructure projects is the
railway connecting Ethiopia and Djibouti.
In the early stages of the BRI project,
USD2.43 billion loan was given for the
Addis Ababa-Djibouti railway from China’s
Export-Import Bank (EXIM Bank)
(Tarrosy et al., 2018). Ethiopia was the
first country on the continent to hold a
forum for China-Africa cooperation, and in
turn, Ethiopia becomes the center of
China’s BRI project with approximately
400 Chinese projects. Ethiopia became the
second-largest recipient of Chinese
funding on the continent (Nyabiage, 2021)
and has become a unique case to probe
deeper.
Most Chinese investment projects
take place in developing countries like
Africa. Previous studies have found that
the key motivation for China to develop
African infrastructure is resource
extraction (Fei, 2021; Lisinge, 2020;
Mlambo et al., 2016; Qobo & Pere, 2018).
The urgency to get funding for their
lagging infrastructure development
destroyed by the civil war has driven
African countries to let China extract their
resources in return (Mlambo et al., 2016).
In his research, Lisinge (2020) argues that
the connectivity created by the BRI
enables China to ship resources from
African countries.
As the notion of resource extraction
starts to dominate the discussion on
China-Africa cooperation, several scholars
argue that the main motives of Chinese
investment are not necessarily about
resources (Ehizuelen, 2017; Grimm, 2014;
Marson et al., 2021; Weng, 2021).
Research conducted by Marson et al.
(2021) found that China is targeting the
fund-recipient country as an export
market for China’s goods and services, not
as a resource importer. Although Ethiopia
56
is a poor-resource country, China’s
investment in Ethiopia is bigger than it is
in Angola, which is one of the biggest oil
exporters for China (Ehizuelen, 2017).
Studies in Sub-Saharan Africa have
reported that cooperation with China is
actually harming local community and
businesses (Otele, 2020; Wang & Elliot,
2014; Yankson et al., 2018). Based on two
empirical studies on Ethiopia, the main
reason China-Africa cooperation is hurting
the locals is the lack of capabilities from
domestic resources to operate Chinese
technology (Fei, 2021; Wethal, 2019).
Furthermore, field research showed that
local contractors in Ethiopia have been
affected by Chinese projects to allow
materials and labor imported from China
(Ehizuelen, 2017; Tarrosy, 2020). Even
after the constructed infrastructure has
finished, poor capacity to properly operate
and maintain the infrastructure has
further disadvantaged Ethiopia (Donou-
Adonsou & Lim, 2018; Ehizuelen, 2017;
Marson et al., 2021; Qobo & le Pere, 2018;
Tarrosy, 2020; Weng et al., 2021; Wethal,
2019; Yankson et al., 2018). Consequently,
unsustainable infrastructure would be a
challenge for Ethiopia and other African
countries to manage payments for Chinese
loans.
Scholars have criticized the principle
of non-interference in China’s BRI project
that prevents China from meddling with
the domestic affairs of the fund recipients.
China is criticized for being ignorant of any
violations or crimes committed in the
recipient countries, such as dictatorships
and violations against human rights that
may be common in African countries
(Donou-Adonsou & Lim, 2018; Mlambo et
al., 2016; Xu & Zhang, 2020). However,
other field studies have found that the
non-interference principle actually fits the
political values of African countries
(Lisinge, 2020; Otele, 2020; Wang & Elliot,
2014). Therefore, shared political value is
an important factor for China in selecting
the target country for investment.
Regardless of these factors, many
still believe that Chinese funding or
African infrastructure brings mutually
positive impacts for both countries. On one
hand, African countries need to recover
their infrastructure after gaining
independence. Unfortunately, this
recovery is not a priority for the World
Bank and other investors (Marson et al.,
2021). On the other hand, China perceives
infrastructure development as the
primary goal of its BRI initiative.
Therefore, between 2000–2014, China
already invested USD 40 billion funds
higher than the total ever provided by the
World Bank from 1970 to 2014 (Marson et
al., 2021). A couple of studies have
identified China’s support as "soft loans"
and "softer credit" that allow the recipient
countries to extend the grace period as
Chinese banks’ policies are different in
terms of credit risk assessment (Grimm,
2014; Tarrosy, 2020). Moreover, with its
non-interference principle, China gives an
opportunity for funds to countries with
poor governance unable to access funds
from other investors. More specifically, the
principle of non-interference attracted
African leaders because it honours their
authority to manage domestic affairs,
unlike Western investors that tend to
meddle with their government (Tarrosy,
2020; Wang & Elliot, 2014). It is believed
that Chinese support on infrastructure
development will ease the African Union’s
aspiration for accelerated integration,
technological advancement, and trade
(Ehizuelen, 2017; Otele, 2020; Qobo & le
Pere, 2018). Using the fixed-effect and
instrumental variable approaches, Donou-
Adonsou and Lim (2018) showed that
57
China’s support for infrastructure had
contributed to the raised per capita
income African countries. All in all, these
advantages gained from cooperation with
China have shaped the views of African
leaders to positively perceive Chinese
support.
Despite the seemingly optimistic
leaders about China’s support, most
Africans perceive it negatively, especially
the social and environmental impacts of
infrastructure development (Xu & Zhang,
2020; Yankson et al., 2018). This, then,
provides a gap to analyze what really
matters for African leaders by analyzing
the rationality of Ethiopia to deal with
Chinese support on infrastructure
development, focusing on the case of the
Addis Ababa-Djibouti railway.
The increasing number of activities
and cooperation between African leaders
and the Chinese government in terms of
infrastructure development has caught the
attention of scholars. Several studies
highlights the political beliefs that have
driven Chinese cooperation with Ethiopia.
However, most of these beliefs generalized
African countries and tend to uphold
Chinese perspective. Lack of African point
of view and studies that perceive China-
Africa interaction as a bilateral
cooperation have provided an intriguing
opportunity for analysis. This paper aims
to investigate factors that motivate
Ethiopia to take China's investment for
Addis Ababa-Djibouti railway restoration.
The research question to address is, “what
are Ethiopia’s reason for dealing with
China's support for Addis Ababa-Djibouti
railway development?”
Theoretical Framework
The theory of rational choice will be
used to guide the analysis in order to
achieve research objectives and answer
the research questions. Rational choice
theory, also known as rational action
theory or choice theory, is a theory that
interprets individual behavior in social
and economic studies. The study of
rational choice has been one of the most
common perspectives used in
international relations. It perceives the
importance of understanding how one
decision taken by an actor could change
the existing condition, be it world peace or
war in international relations. It also
recognizes that every decision in political
science, including international relations,
is based on complex calculations and
acquired through rational thought that
connects to economic studies (Allison,
1977). The state's actions could be
compared to those of rational individuals
who are seemingly aware of the current
condition and attempting to maximize
their values in achieving their goal (Allison
& Zelikow, 1999; Hindmoor & Taylor,
2018; Petracca, 1991). With regards to
international relations, the goal is seen as
national security (Novelli, 2018) or the
nation’s objective, that could also be an
individual goal of one leader.
On the basis of its existence, the
rational choice theory has been used by
social scientists to explain the
phenomenon of the human nature of
individuals or decision-making units in
making decisions that can be identified as
rational choices that are tied to their own
preferences (Oppenheimer, 2012; Wittek,
2013). The rational choice theory has
emerged since Adam Smith identified his
studies that elaborated on self-interest.
Economist Gary Becker approached this
theory from an economic standpoint,
introducing the concept of wealth and
benefit maximization in human behavior
(Petracca, 1991). The rational choice
theory is combined with the economics
58
approach in the political approach to
explain the behavior of individuals in
politics who believe their self-preferences
are more important than the interests of
their states (Fornasier & Franklin, 2019).
Elaborating the theory by Adam
Smith, Wittek (2013) identified three core
assumptions. The first assumption is that
individuals have a high tendency to act
based on their preferences towards
something. In other words, a selfish act is
not perceived as negative in rational
choice theory. However, if society were
founded on the literal maximization of
only one's own self-interest in money or
power, it would be unable to operate
properly (Goode, 1997). The second is the
pressure on the decision-makers to
maximize the utilization of their resources.
The last assumption is about the
perception of the information gained. It
discusses whether the decision-maker
would acknowledge the input and take it
into consideration before making a
decision. Plans with the highest potentials
to bring more wealth to the country would
be discussed and considered during the
decision-making process (Goode, 1997).
This effort to gain best result could also
lead to several changes in the internal
affairs of the government (Petracca, 1991).
Newly proposed bills and laws tend to
adapt with the condition of its internal
affairs to make a certain decision.
This paper specifically used the
concept of rational choice applied to
foreign policy making described by Morin
& Paquin (2018) with the concept of goal
in rational choice theory in international
relations field by Novelli (2018). In foreign
policy, rational choices tend to taken based
on the agents preference on maximizing
utility. The term "utility" can be
interpreted as wealth, power, and security
in foreign policy field (Novelli, 2018). The
economic rational choice revolves around
three main core: information, resources,
and possibilities. In foreign policymaking,
the availabile policy is an essential part of
rational policies to consider the current
financial conditions, opportunities, and
policy limitations. In addition, potential
profits and less risk and losses should be
considered in making rational choices
(Morin & Paquin, 2018).
The rational choice concept is
applied by exploring three instruments
selected from a number of key points that
define the nature of rational choice theory
in foreign policy. First, Ethiopia’s political
condition will be explored to see any social
or legal norms that could limit the policy
making process or restrict the policy
made. Second, Ethiopia’s trade interest is
analyzed to observe Ethiopia’s financial
condition and the main goal of the project.
Lastly, Ethiopia’s geo-economy and
China’s loan system are observed to see
the potential opportunities considered by
Ethiopia to arrive at rational choices.
Research Methods
This paper used a qualitative method
to dissect the rationality of Ethiopia’s
decision to develop their infrastructure,
particularly the Addis Ababa-Djibouti
Railway by cooperating with China. The
primary data for analysis were derived
from reports and studies from the
governments of Ethiopia, China, and other
countries, as well as institutions, including
like the Infrastructure Consortium for
Africa, the United Nations branch, the
International Trade Centre, and the World
Integrated Trade Solution.
Other sources of data were previous
research findings relevant to this topic,
and news articles to keep track of any
updates on the topic and support the
analysis. The explored topics and
59
information were related to Ethiopia’s
geopolitics and Ethiopia’s political
relations with China. Data time frame was
limited to up until 2011 before the
restoration was initiated to ensure the
relevance of the topic.
Analysis on the limitation of policy
making would focus on the political
system in the Ethiopian decision-making
unit. In this case, the Prime Minister and
the Federal Parliamentary Assembly
would be the objects of observation. The
political environment and limitations of
Ethiopia’s policies would be investigated
as these are represented by the
parliamentary body. Studies on political
affairs in Ethiopia would be the main
source to gain better understanding.
Furthermore, this study would probe
into the enforcement of Ethiopia’s trade
activities and directions of development
reported by official stakeholders and
previous studies. The goal of Ethiopia and
the urgency to develop their railway
would be analyzed to assess the urgency of
taking short-term solution, which
direction the Ethiopian government is
moving toward, and the loan system
offered by China to assess potential
opportunities for Ethiopia.
RESULTS AND DISCUSSION
The Addis Ababa-Djibouti Railway
The Addis Ababa-Djibouti railway is
the first transboundary railway in Africa
(Leviker, 2021), the fully operating railway
powered by Ethiopia’s renewable
hydropower (Yalew & Changgang, 2020).
Primarily built to dispatch passengers and
Ethiopia’s export and import goods, the
railway was officially operated on January
1, 2018, after almost eight years of
construction since 2011. It stretches more
than 750 km, connecting Ethiopia’s capital
Addis Ababa, Ethiopia's dry ports, and
straight to the Doraleh multipurpose port
in Djibouti (Mohapatra, 2016).
The railway between Addis Ababa
and Djibouti existed long before China’s
presence in Ethiopia's infrastructure
development. Then, China offered funding
to transform the French-built old railway
(Mohapatra, 2016) into fully electrified,
which aligns with Ethiopia’s five-year
Growth and Transformation Plans (GTPs)
focusing on economic development policy
(Government of Ethiopia, 2010). The high
demand for well-connected access from
Ethiopia to Djibouti was due to Ethiopia’s
dependency on Djibouti’s port to transport
cargo from Ethiopia. The new railway
evidently increased time efficiency to
transfer goods from Ethiopia’s dry port to
Djibouti’s port.
The Addis Ababa-Djibouti railway is
one of the biggest Chinese projects in
Africa, worth more than USD 3.5 billion in
loans through China's Export-Import Bank
(EXIM Bank), accounted for 70% of the
total share of project funding (Mohapatra,
2016). The Ethiopian government
contributed approximately 30% of the
sharing of funds, accounted for USD 1.5
billion (Africa Manager, 2014). It is
interesting to understand Ethiopia’s
motives to cooperate with China given the
alternatives to collaborate with other
parties eager to support the railway’s
sustainability, like European Union (The
Infrastructure Consortium for Africa,
2007).
Ethiopia’s Dynamic with China
The relationship between China and
Ethiopia has long been established, even
before China’s growing influence on Africa
continent in the early 21st century. It
began in 1991 when the EPRDF, an ethnic-
based party, seized power from the
previous military regime, the Derg. EPRDF
60
is led by the Tigray People’s Liberation
Front (TPLF) known for its "revolutionary
democracy" ideology. Sharing common
values with China in terms of cooperation
with Marxist ideology and scepticism of
Western policy approaches (Cheru, 2016),
Ethiopia attempted to implement China’s
strategy for its rapidly growing economy.
Since EPRDF came to power,
Ethiopia’s political and economic models
have been reshaped. Ethiopia's
government has seen significant changes
in recent years, where official multi-party
politics are introduced, ethnicity is
acknowledged as a political element in
public life, elections are held,
administrative borders are redrawn,
bureaucracy is decentralized, and several
economic sectors are liberalized
(Hagmann & Abbink, 2011). Initially, the
Ethiopian government attempted to adapt
the newly developed political model to the
"democratized" Western model to gain
international donors and a position in
international society. However, the EPRDF
has its own interpretation of
implementing "democracy" in Ethiopian
society. While democracy is among many
fundamental values in Ethiopia, the
government remains under the strict
control of the hegemonic EPRDF as the
ruling party which adopts the model
regime from Marxist-Leninist theory
(Hagmann & Abbink, 2011).
The shifting political model in
Ethiopia has affected its relations with
Western donors and other state partners.
As eastern countries like China, Turkey,
and India gain more influence in Africa,
western donors like the United States and
the European Union have waned. The
Ethiopian government is aware of Western
donors’ interest in issues like human
rights violations and democracy in the
countries they support. Therefore,
disregarding the threat from Western
countries to withdraw their aid due to
democracy issue in Ethiopia (Hagmann &
Abbink, 2011), the government of Ethiopia
strengthens its economic cooperation with
China to ensure one potential donor
because China pays no heed to the internal
affairs of its partner states. Since Ethiopia
has a high level of authoritarianism, China
is presumably committed to work with the
country without concerns about Ethiopia’s
supposed commitment to democracy
(Mlambo et al., 2016). This aligns with
limitation of policy availability by Morin &
Paquin (2018) that some policies may be
avoided or prohibited to be applied due to
administration interest or legal and social
norms.
During Ethiopian Prime Minister
Meles's visit to China in 1995, he stated
that his country welcomed China to come
and invest their money in Ethiopia, and
that Ethiopia is ready to support and
provide anything China needs for their
project. To support Ethiopia-China
relation, the Joint Ethiopia-China
Commission (JECC) was established in
1998 as an economic cooperation and
agreement platform for both countries’
high officials to discuss bilateral relations,
specifically China’s loans to Africa.
Moreover, as Ethiopia chose to make China
its policy role model for state
development, both countries agreed to
work further on their relations.
Approximately 200 Ethiopian officials
would be transferred to China to attend a
training program designed by China to
share and discuss development
experiences and strategies (Cheru, 2016).
During the early stages of its
governance, the ruling party EPRDF
focused on developing the small-scale
agriculture in rural areas because even
cities only experience a little development.
61
However, this development approach
changed in 2005 when the opposition
obtained more seats in the election
(Arriola & Lyons, 2016), thus threatened
EPRDF position and swayed EPRDF’s focus
on rural areas' development.
In response to the growing influence
of their opposition in the parliament and
active discussion on city development, the
EPRDF began to shift its policy from
developing rural area to urban area, and
from agriculture industrialization
approach to industrial transformation.
This new development approach enabled
Ethiopia to engage more with China on
infrastructure development projects
(Leviker, 2021).
Ethiopia launched the five-year
Growth and Transformation Plans (GTPs)
as a strategy for channeling its policy on
urban industrialization development.
Aiming to intensify Ethiopia’s economic
development through industrialization in
cities between 2010 and 2020, Ethiopia’s
targeted developments included railway
restoration. The Addis Ababa-Djibouti
railway project is one of the realizations of
the EPRDF industrialization development
plan under the GTP program (Government
of Ethiopia, 2010).
In 2010, China outperformed Japan
as the second largest economy in the world
(Barboza, 2010), and this has caused
several structural changes in the global
market. China’s rapid economic growth at
the beginning of the 21st century has also
affected other developing countries. Along
with this influential shift, China changed
its approach to cooperation with
developing countries from a single
assistance pattern to comprehensive ways
of cooperation. It can be seen from the
formation of the Forum on China-Africa
Cooperation (FOCAC) (Yalew &
Changgang, 2020) that functions as a
medium for China and African countries to
share values and opportunities to
collaborate in multiple areas, such as
trade, investments, loans, economic aid,
and others.
Since FOCAC, China and Ethiopia
have always been good partners in
economic development for both countries.
Having in several development projects in
Ethiopia, China has also become Ethiopia's
biggest trading partner, with a 23.83%
share of imports and a 13.51% share of
exports in 2010 (World Integrated Trade
Solution 2010, 2022). In 2011, Ethiopia
almost doubled its export value to China
after growing by 45% worth USD268,000
in total, compared to USD185,000 in 2010
(International Trade Center, 2020).
Ethiopia’s economy is dependent on
exported product, and China is the top
export country for Ethiopia’s goods and
the source of Ethiopia’s economic growth.
In general, it would be more beneficial and
less risky for Ethiopia to comply with
China’s plan to establish connectivity
across African regions to ensure the
sustainability of its biggest export market.
One of them is Addis Ababa-Djibouti
railway project that targets goods delivery
to enhance Ethiopia’s trade activities.
Ethiopia’s Geo-Economy
High demand for reliable
transportation to connect Ethiopia and
Djibouti is due to Ethiopia’s dependency
on Djibouti’s port for trade activities and
high volume of cargo. More than 1,000–
1,500 trucks were recorded passing
through Ethiopia-Djibouti road every day
before the railway was operated (African
Research Bulletin, 2015). the Chairman of
the Djibouti Port Authority stated that the
vehicle volume was projected to increase,
so a railway operation was an urgency. The
Chinese railway has cut the 2-3 days of
62
road trip from Ethiopia to Djibouti to 12
hours maximum by railroad (African
Research Bulletin, 2015; Leviker, 2021).
For a landlocked country like
Ethiopia, transportation costs must be
reduced to the lowest point possible as this
affects the price of imported and exported
goods. The railroad has significantly
reduced transportation cost of cargo
between Djibouti and Ethiopia. What was
USD 42,8 per ton by road is now USD 15.3-
35.6 per ton by railroad (The
Infrastructure Consortium for Africa,
2007). Moreover, the cost for road
maintenance increases with the vehicle
volume on the road. According to
Mohaparta (2020), USD 26 million is
needed to maintain and rehab 100 km of
road between Addis Ababa and Djibouti
and is projected to increase with the
growing traffics and incapacitated railway.
Meanwhile, the railroad is rehabilitated
once every 15 to 20 years. Railway also
helps limit the emission levels as it reduces
over 85% of carbon footprint and saves
more than 75% of energy consumption
(Borgo, 2011). Further, fully-electrified
railway enables Ethiopia to reduce fuel
imports.
The Addis Ababa-Djibouti railway
has become the main access to transfer
goods and passengers from Ethiopia to
Djibouti since 1998, following the conflict
resolution between Ethiopia and Eritrea
(Africa Research Bulletin, 2017). A pre-
feasibility study conducted in 2007 by
Hifab International observed the need to
repair some parts of Addis Ababa-Djibouti
railway. Poor maintenance conducted by
both countries, bad management, and lack
of expert operators have contributed to
the declining quality of the railway (The
Infrastructure Consortium for Africa,
2007).
Before China, other parties had
attempted to get the project under their
contract in Ethiopia. Between 2004 and
2007, the Infrastructure Consortium for
Africa (2007) reported that services to
restore the ancient railway were offered
by some construction companies,
including COMAZAR (a South African
railway company) and Al-Ghanim and
Sons Group (Kuwaiti developer company).
Chemin de Fer Djibouti-Ethiopien (CDE) or
the Djibouti-Ethiopia Railway company
had started minor rehabilitation on the
railway using EURO 40 million funds from
the European Union. For further
restoration, China is the only source of
funding available for Ethiopia. Lack of
access to the sea and being heavily
dependent on Djibouti's port, have
rendered Ethiopia dependent on the
quality of the railway to gain national
security (Mishra & Singh 2008).
Figure 1
Horn of Africa (Somalia, Ethiopia, Kenya), 2021.
Besides Djibouti, other countries for
alternative access include Kenya, Sudan,
Eritrea, and Somalia (Figure 1). However,
the Red Sea through Djibouti’s port
remained the best option in 2011. Before
Djibouti, Ethiopia used Assab Port in
Eritrea, a former province of Ethiopia, to
handle no less than 75% of Ethiopia’s
import and export distribution (Snow et
al., 2003) but the access ended in 1998
63
after a war outbreak between Ethiopia and
Eritrea.
The Neighbor’s Situation
Further, the internal conflict in
Somalia has excluded the Berbera Port of
Somalia from the list of viable seaports for
Ethiopia to transfer its cargo. Al-Shabaab,
a terrorist organization responsible for
numerous attacks on the Somali civilian
population and military activities,
continued to pose a serious threat to the
country's safety and stability following the
1992 report from the United Nations
Security Council (1992). Poor
infrastructure development in Berbera
port would cause ineffectiveness of the
port and threaten the sustainability of
Ethiopia’s trade activities.
Distance from Ethiopia’s dry ports to
its neighbor’s seaports was one of
influential factors in selecting the transit
destination to ensure the efficiency of time
and cost for each cargo delivery. Ethiopia
has trusted the transportation of over 70%
of its cargo to Modjo dry port which is
located 73 km in the southeast off Addis
Ababa and included in Addis Ababa-
Djibouti railway stops. The distance
between Modjo dry port and the sea ports
in Sudan is double that of Modjo-Djibouti’s
port (Takele & Tolcha, 2021). Also, from
Modjo to Port of Sudan was 1.859 km
apart, and Modjo to Mombasa Port of
Kenya was 1.913 km according to Google
Maps, so road quality was one of crucial
aspects to consider.
Despite many alternative routes
above, Ethiopia maintains its connection
with Djibouti Port as their main cargo
transit corridor due to Djibouti port
capacity and port management. Mombasa
was the largest and most developed port in
East Africa but it lacked available
container storage capacity, was easily
overrun with no less than 10,000
containers, and the average shipping
waiting time was up to around 5 days. As
of today, capacity issues have forced the
Kenya Port Authority (KPA) to reject
transshipment operations. Therefore,
Ethiopia did not depend on Mombasa due
to impending deceleration of cargo traffic
and increase of cargo costs that may result
in delivery delays (Congestion at the
Mombasa Port, 2010).
Ethiopia’s trade activities can be
handled well in Djibouti port as long as
continued development takes place. In
June 2000, the Dubai Port International
(DPI), an Emirati multinational logistic
company (now DP World), began to
operate in Djibouti port and signed a 20-
year agreement with the Djibouti
government. One year later, the
management of Djibouti port was assigned
to DPI (Mohapatra, 2020). The shifting
management has affected the increase of
Djibouti’s port performance and
developed the infrastructure of the port
extensively to ease the trade activities of
the port’s users and take advantage of the
congestion in Mombasa port.
The Choice to China’s Loans
One of the reasons for Ethiopian to
take financial support from China for the
railway is the loan system. In the Addis
Ababa-Djibouti railway project, the funds
were co-provided by China’s Export and
Import Bank (EXIM Bank) and the Chinese
government, in form of Concessional Loan
(CL) or Government Concessional Loans
(GCLs). This type of loan can only be
offered by the EXIM Bank with an interest
rate generally below the market rate (2-
3%), does not require an upfront payment
from the borrower (Brautigam & Hwang,
2020; Gelpern et al., 2021), and offers 5-
year grace periods and 15 to 20 years of
64
maturity. This type of loans advantaged
Ethiopia because in 2010 and 2011, the
interest rate of China’s loans increased to
5.8-6.6%. However, due to the limited
publication by both China and Ethiopia,
the exact data of loans offered in Addis
Ababa-Djibouti railway project could not
be stated. The data above was obtained
from secondary sources, which are SAIS-
CARI and AidData.
Difficulties to borrow funds from
Western countries or institutions have
granted China opportunities to offer
solution to African countries struggling
with funding deficit in their infrastructure
development. While World Bank could be
a solution, the institution relies heavily on
financial assessment of the target
countries prior to making decision to
provide funding for infrastructure.
Meanwhile, African countries mostly failed
to propose for funding due to
unconvincing likelihood of economic
success of the loan, operation costs by the
operators, and the internal capacity
building of the receiver (Marson et al.,
2021). Due to World Bank’s railway report
of the hit-and-miss infrastructure funding,
the funding in infrastructure development
especially railway is assessed to be
unsustainable and low in benefits.
Accordingly, Ethiopia’s decision to
use China’s funds to restore Addis Ababa-
Djibouti railway was based on China’s
financial system offered by China and
limited options for fund sources. Four
factors to this decision explained above
are interconnected in such a way that
made collaboration China seemed to be
the most suitable option. The urgency to
access the sea for trade has driven
Ethiopia to find alternative routes among
its neighboring countries to establish
connectivity. Upon heavily assessing
advantages and disadvantages of many
options to ensure a sustainable
connection, Ethiopia decided to establish
networking with Djibouti on the joint-
ownership of Addis Ababa-Djibouti
railway, mostly funded by China. This
decision secured China as Ethiopia’s
biggest trade partner and strengthen their
decades-long relations.
CONCLUSION
The rationality of Ethiopia’s
parliament to restore Addis Ababa-
Djibouti railway using Chinese investment,
despite other opportunities to collaborate
with other stakeholders, was mainly
driven by the urgency to access seaports
and Ethiopia’s close relations with China.
As a landlocked country with limited
access to sea transport, Ethiopia decided
to restore the Addis Ababa-Djibouti
railway. This rationale was driven by their
national interest in securing access to the
sea through Djibouti as the most feasible
land route in the region for their
international trade activities.
Working with China is seemingly less
risky for Ethiopia’s regime and brings in
benefits on loan flexibility. Also, Ethiopia's
long-standing relations with China have
shaped its development strategy, in which
China becomes the primary donor for
development projects. Moreover, as China
becomes Ethiopia’s biggest export market,
partnership with China will at least secure
the continuity of Ethiopia’s biggest
exports. Convenient partnership with
China that allows Ethiopia to mind its own
domestic affairs and governance has
influenced the Ethiopian parliament to
maintain cooperation with China. Also, the
communist political basis in Ethiopia is an
obstacle to receive donors from Western
parties which tend to demand the
recipient countries to adopt the so-called
"Western democracy."
65
To conclude, Ethiopia’s decision to
work with China was based on a fully
rational decision of Ethiopia’s parliament
because it has successfully secured
Ethiopia’s national interest to remain
relevant in international trade. This
decision was evident from three points of
rational choice in foreign policy, namely
financial availability, opportunities, and
policy limitations. Ethiopia could savour
economic benefits from China’s low
interest rate loan, and utilized its close
relations with China to accomplish
national goals without interference from
China with domestic affairs and risking its
regime. Lastly, Ethiopia’s decision to work
with China has reflected a rational choice
in its policymaking where it acknowledges
the available policy and considers the
accompanying benefits and risks
References
Book
Allison, G. T. (1977). Essence of Decision.
Little, Brown and Company.
https://ils.unc.edu/courses/2013_spr
ing/inls285_001/materials/Allison.1
971.Essence_of_Decision.pdf
Allison, G. T., & Zelikow, P. (1999). Essence
of decision (2nd ed.). Longman.
Oppenheimer, J. (2012). Principles of
Politics: A Rational Choice Theory Guide
to Politics and Social Justice.
Cambridge University Press.
Chapter in Book
Hindmoor, A., & Taylor, B. (2018). Rational
Choice. In Theory and Methods in
Political Science (4th ed., pp. 39-53).
Palgrave.
Morin, J.F., & Paquin, J. (2018). How Does
Rationality Apply to FPA and What Are
Its Limitations? In Foreign Policy A
Toolbox (pp. 217-254). Springer
Nature
Snidal, D. (2013). Rational Choice and
International Relations. In Handbook
of International Relations (2nd ed., pp.
85-111). SAGE Publications.
Wittek, R. (2013). Rational Choice Theory.
In Theory in Social and Cultural
Anthropology: An Encyclopedia (pp.
688-689). SAGE Publication Inc.
http://www.oxfordbibliographies.co
m/obo/page/sociology
Journal
Arriola, L., & Lyons, T. (2016). Ethiopia:
The 100% Election. Journal of
Democracy, 27(1), 76-88.
Africa Research Bulletin. (2015). Roads
and Railways: Djibouti Ethiopia. Africa
Research Bulletin Economic, Financial
and Technical Series, 52(5), 20858.
https://doi.org/10.1111/j.1467-
6346.2015.06467.x
Africa Research Bulletin. (2017). Djibouti-
Ethiopia: A High Speed Link Opens the
Region to Trade and Opportunities.
Africa Research Bulletin Economic,
Financial and Technical Series, 54(1),
21579.
https://doi.org/10.1111/j.1467-
6346.2017.07539.x
Cheru, F. (2016). Emerging Southern
powers and new forms of South–South
cooperation: Ethiopia’s strategic
engagement with China and India.
Third World Quarterly, 37(4), 592-610.
http://dx.doi.org/10.1080/01436597
.2015.1116368.
Donou-Adonsou, F., & Lim, S. (2018). On
the importance of Chinese investment
in Africa. Review of Development
Finance, 8, 63-73.
https://doi.org/10.1016/j.rdf.2018.0
5.003
66
Ehizuelen, M. M. O. (2017). More African
countries on the route: the positive
and negative impacts of the Belt and
Road Initiative. Transnational
Corporations Review, 9(4), 341-359.
Fei, D. (2021). Networked
Internationalization: Chinese
Companies in Ethiopia's
Infrastructure Construction Sector.
The Professional Geographer, 73(2),
322-332.
Fornasier, M., & Franklin, S. (2019).
Governance, rational choice and new
public management: a general view
(and some critics). Revista Brasileira
de Estudos Políticos, 119(2), 327-362.
https://doi.org/10.9732/P.0034-
7191.2019V119P327
Goode, W. J. (1997). Rational Choice
Theory. The American Sociologist, 28,
22-41.
https://doi.org/10.1007/s12108-
997-1004-5.
Grimm, S. (2014). China-Africa
Cooperation: promises, practice and
prospects. Journal of Contemporary
China, 23(90), 993-1011.
Hagmann, T., & Abbink, J. (2011). Twenty
years of revolutionary democratic
Ethiopia, 1991 to 2011. Journal of
Eastern African Studies, 5(4), 579-595.
http://dx.doi.org/10.1080/17531055
.2011.642515.
Hermann, M. G. (2001). How Decision
Units Shape Foreign Policy: A
Theoretical Framework. International
Studies Review, 3(2), 47-81.
Leviker, K. (2021). Ethiopia: The Addis
Ababa-Djibouti Railway. In
International Perspectives on the Belt
and Road Initiative (pp. 245-262).
Routledge.
Lisinge, R. T. (2020). The Belt and Road
Initiative and Africa's regional
infrastructure development:
implications and lessons.
Transnational Corporations Review,
12(4), 425-438.
Marson, M., Maggi, E., & Scacchi, M. (2021).
Financing African Infrastructure: The
role of China in African railways.
Research in Transportation Economics,
88, 101-111.
Mishra, R.N., & Singh, S. (2008). Defense
and security problems of land-locked
countries (LLCs). India Quarterly,
64(3), 55-74.
https://doi.org/10.1177/097492840
806400303
Mlambo, C., Kushamba, A., & Simawu, M. B.
(2016). China-Africa Relations: What
Lies Beneath? The Chinese Economy,
49(4), 257-276.
Mohapatra, D. R. (2016, January). An
Economic Analysis of Djibouti -
Ethiopia Railway Project. European
Academic Research, 3(10), 11376-
11400.
http://dx.doi.org/10.13140/RG.2.2.3
3952.20480
Novelli, D. H. (2018). Rationalism in
International Relations: Concepts,
Theoretical Limits and Criticism.
InterAção, 9(1), 115-131.
https://doi.org/10.5902/235779753
3219
Otele, O. M. (2020). China, region-centric
infrastructure drives and regionalism
in Africa. South African Journal of
International Affairs, 27(4), 511-532.
Petracca, M. P. (1991). The Rational Choice
Approach to Politics: A Challenge to
Democratic Theory. The Review of
Politics, 53(2), 289-319.
Qobo, M., & le Pere, G. (2018). The Role of
China in Africa's Industrialization: The
Challenge of Building Global Value
Chains. Journal of Contemporary China,
27(110), 208-223.
67
Takele, T. B., & Tolcha, T. D. (n.d.). Optimal
transit corridors for Ethiopia. Journal
of Transport and Supply Chain
Management, 15(0).
https://doi.org/10.4102/jtscm.v15i0.
567
Tarrosy, I. (2020). China's Belt and Road
Initiative in Africa, Debt Risk and New
Dependency: The Case of Ethiopia.
African Studies Quarterly, 9(3-4), 8-28
Wang, F., & Elliot, E. A. (2014). China in
Africa: presence, perceptions and
prospects. Journal of Contemporary
China, 23(90), 1012-1032.
https://doi.org/10.1080/10670564.2
014.898888
Weng, L., Xue, L., Sayer, J., Riggs, R. A.,
Langston, J. D., & Boedhihartono, A. K.
(2021). Challenges faces by Chinese
firms implementing the 'Belt and Road
Initiative': Evidence from three
railways projects. Research in
Globalization, 3.
https://doi.org/10.1016/j.resglo.202
1.100074
Wethal, U. (2019). Building Africa's
Infrastructure: Reinstating History in
Infrastructure Debates. Forum for
Development Studies, 46(3), 473-499.
Xu, Z. P., & Zhang, Y. (2020). Can Chinese
aid win the hearts and minds of
Africa's local population? Economic
Modelling, 90, 321-320.
https://doi.org/10.1016/j.econmod.2
019.12.017
Yalew, M. T., & Changgang, G. (2020).
China's 'Belt and Road Initiative':
Implication for Landlocked Ethiopia.
Insight on Africa, 12(2), 175-193.
Yankson, P. W. K., Asiedu, A. B., Owusu, K.,
Urban, F., & Siciliano, G. (2018). The
livelihood challenges of resettled
communities of the Bui dam project in
Ghana and the role of Chinese dam-
builders. Development Policy Review,
36, 476-494. 10.1111/dpr.12259
Online Article
Asmelash, S. (2019, January 4). (Al Ahram
Weekly) Bab Al-Mandeb Strait: Sino-
American duel in the Red Sea. Dehai
News. http://dehai.org/dehai/dehai-
news/299181.
Barboza, D. (2010, August 15). China
Passes Japan to Become No. 2
Economy. The New York Times.
https://www.nytimes.com/2010/08/
16/business/global/16yuan.html.
Business Daily. (2010, June 6). Congestion
at Mombasa port to blame for slow
pace of Kenya's growth into regional
hub.
https://www.businessdailyafrica.com
/bd/corporate/industry/congestion-
at-mombasa-port-to-blame-for-slow-
pace-of-kenya-s-growth-into-
regional-hub-1963572.
Nyabiage, J. (2021, March 8). Can China
keep investment strategy on track as
Ethiopian railways hit buffers? South
China Morning Post.
https://www.scmp.com/news/china/
diplomacy/article/3124301/can-
china-keep-investment-strategy-
track-ethiopian-railways.
Tarrosy, I., Vörös, Z., & Strangio, S. (2018,
February 13). China and Ethiopia, Part
1: The Light Railway System. The
Diplomat.
https://thediplomat.com/2018/02/c
hina-and-ethiopia-part-1-the-light-
railway-system/.
Website
Africa Manager. (2014, October 16).
Ethiopia: Ethiopia singles out railway
project as biggest infrastructure
project. African Manager.
https://en.africanmanager.com/ethio
68
pia-ethiopia-singles-out-railway-
project-as-biggest-infrastructure-
project/
Borgo, P. O. (2011, April 4). A balance
between public and private sector roles
: the key to a successful rail concession
– Private Sector & Development.
Private Sector & Development.
https://blog.private-sector-and-
development.com/2011/04/04/bala
nce-between-public-and-private-
sector-roles/
Brautigam, D., & Hwang, J. (2020). China-
Africa Loan Database Research
Guidebook. SAIS China-Africa Research
Initiative. http://www.sais-
cari.org/s/ChinaLoansToAfricaSAIS-
CARI-10_7_2021.zip
Gelpern, A., Horn, S., Morris, S., Parks, B., &
Trebesch, C. (2021, March). How China
Lends A Rare Look into 100 Debt
Contracts with Foreign Governments.
AidData at William & Mary.
https://docs.aiddata.org/ad4/dataset
s/how_china_lends_dataset_version_1
_0.zip
Government of Ethiopia. (2010). Federal
Democratic Republic of Ethiopia
Growth and Transformation Plan.
Domestic Animal Diversity
Information System (DAD-IS).
Retrieved October, 2022, from
https://rise.esmap.org/data/files/lib
rary/ethiopia/Ethiopia%20Growth%
20and%20Transformation%20Plan%
20I.pdf
Horn of Africa (Somalia, Ethiopia, Kenya),
(2021).
https://www.eda.admin.ch/deza/en/
home/countries/horn-africa.html
International Trade Centre. (2020). Trade
Map - List of importing markets for a
product exported by Ethiopia.
Trademap.org.
https://www.trademap.org/Country_
SelProductCountry_TS.aspx?nvpm=1
%7c231%7c%7c%7c%7cTOTAL%7c
%7c%7c2%7c1%7c1%7c2%7c2%7c
1%7c2%7c1%7c1%7c1
Snow, T., Faye, M., McArthur, J., & Sachs, J.
(2003). Country case studies on the
challenges facing landlocked
developing countries | Human
Development Reports. Human
Development Reports.
https://hdr.undp.org/content/countr
y-case-studies-challenges-facing-
landlocked-developing-countries
The Infrastructure Consortium for Africa.
(2007, December). Briefing
Memorandum: The Djibouti-Ethiopia
Railway. In ICA Meeting; Financing
Transport for Growth in Africa.
https://www.icafrica.org/fileadmin/
documents/Transport_Meeting/S4-
Djibouti-Ethiopia_Railway-Final-
EN.pdf
United Nations Security Council. (1992).
Security Council Committee pursuant to
resolution 751 (1992) concerning
Somalia | United Nations Security
Council. the United Nations.
https://www.un.org/securitycouncil/
sanctions/751
World Integrated Trade Solution. (n.d.).
Ethiopia(excludes Eritrea) Trade
Summary 2010 | WITS | Text. World
Integrated Trade Solution (WITS).
Retrieved October 20, 2022, from
https://wits.worldbank.org/CountryP
rofile/en/Country/ETH/Year/2010/S
ummaryText
