Back in July 2015, construction started on the Hawassa Industrial Park (HIP) (pictured) about 280 miles south of Ethiopia's capital, Addis Ababa. Now the largest textile industrial park in Africa, the $250m project is widely seen as symbolic of the Ethiopian government's attempts to spark the country's industrialisation, encourage foreign direct investment (FDI), and boost economic growth.
Ethiopia's industrial parks are modeled on the "special economic zones" which China established in the 1980s as it began to open up its economy to the outside world. The idea was to create designated areas - the most famous example being Shenzhen, which grew to become a global manufacturing and electronics hub - where investors could benefit from tax breaks, lower land costs, and lighter-touch regulation.
These zones also involved devolving power from Beijing to local governments in cities like Shenzhen, so they could make quicker economic decisions and build critical infrastructure without having to wait for approval from the central government.
Ethiopia now has 22 industrial parks, which operate on a similar basis to China's special economic zones. Academics at Peking University have noted that the industrial parks are designed to be "geographically delimited zones equipped with serviced land, power, regulatory incentives, and streamlined administration, designed to create localised pockets of competitiveness that attract firms, especially foreign investors."
Originally published by African Business.