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Paper Example on Background of Ethiopia

4 pages
877 words
Carnegie Mellon University
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Foreign aid refers to money transferred voluntarily by one country to another, and it takes the form of a loan, grant or gift. This case study focuses on Ethiopia which is the highest populated landlocked country in the world, and it is the second regarding population in Africa. The question of regional, national and worldwide peace has been a significant factor for consideration among politicians, scholars, economists and military strategists (Alger, 2014). Scholars have estimated that Ethiopia has enjoyed over 100 years of peace. However, the peace and tranquility in Ethiopia have recently been threatened by ethnic conflicts, scarcity of resources, colonial ambitions, and the country's geopolitical location. On the same note, punitive actions from religious groups and terrorist attacks have led to the loss of peace in some Ethiopian parts. Ethiopia is regarded as one of the first countries in Africa to suffer from terrorist attacks from Al-Shabaab (Bandyopadhyay, Sandler & Younas, 2013). Regardless of these national shortcomings, Ethiopia has continued to register growth which has been promoted by prevailing economic development and peace during this period.

How War Affects the Distribution of Foreign Aid in Ethiopia

The war that Ethiopia had with Eritrea devastatingly affected the economy of the country, which incurred costs of over $2.9 billion (Jones & Naylor, 2014). There was the destruction of social and economic infrastructures and the disruption of human lives. In the aftermath of the war, the Ethiopian government was pushed to the wall, forcing it to mobilize material, human resources and financial resources to help with the war. These are types of foreign aids. To defend Ethiopia, the army's size incredibly increased to 350,000 from 60,000, which also translated to the increment in the defense expenditure. War impacted foreign aid in Ethiopia by increasing the deficit of the budget, the increment in borrowing domestically and the gap in payment of balance. The war led to the constraints in the allocation of foreign exchange for essential and reduction of spending for all sectors in the country (Woodward, 2016). Furthermore, the war led to the erosion of the confidence of foreign investors in Ethiopia which subsequently affected the rates of investment. The fundamental question from this analysis is that Does the provision of aid in conflict zones promote war or peace?

Impact of Peace on Foreign Aid Distribution in Ethiopia

Ethiopia is involved in the process of foreign aid, which she uses in pursuing objectives of foreign policy. The importance of peace in the distribution of aid in Ethiopia rests on the fact that funding can be withdrawn for purposes of creating hardships on the economy or destabilizing unfriendly regimes. Peace fosters the provision of aid for the bolstering and rewarding a system that is compliant. Many aid programs in Ethiopia are offered depending on the commercial and strategic interests of the donating nations. Ethiopia emphasizes peace because she does not want to lose the multilateral and bilateral aid. The level of governance of Ethiopia is a significant determinant of the foreign aid type. The denial of foreign assistance on the grounds of unfriendliness and lack of compliance is the primary reasons why Ethiopia has continued to have sustained peace levels, which increase the distribution of aid (Woodward, 2016).

Actions from Ethiopian Leaders to Alleviate Warfare-Related Problems

Ethiopian leaders have more capital at their disposal. These capitals are in the form of social connections and knowledge related to age. Effective leadership from the Ethiopian government is attributed to successful collective action. The government has restructured the national army which was founded on the concept of the army of a people. The environment of security has been assessed, and it has helped with the identification of threats in the country. Additionally, the leaders have ensured that there are punitive measures that deal with the identified threats to the peace and tranquility which is enjoyed in the country. This is because the lack of unity leads to the denial and withdrawal of financial aid to Ethiopia from the donor countries such as the United States of America. Finally, the government has tried to attract foreign investment which has hit a snag as investors wait on the resolution of the existing conflict between Eritrea and Ethiopia (Cunha, 2014).

Foreign Aid Has Failed to Reduce Poverty and Warfare

According to David Cameron on international aid, the eradication of poverty involves a lot of changes to the system, integrity in the government, and rights for minorities and women. Poverty has been created through the economic institutions which have increasingly blocked opportunities and incentives for poor people to benefit individually. Categorically, foreign aid has failed in reducing warfare and poverty in Ethiopia. This is because it has been unable in overseeing the prevention of mass displacement in Ethiopia, damages to infrastructure, and even the loss of property.


Alger, C. F. (2014). Peace studies as a transdisciplinary project. In Peace Research and Peacebuilding (pp. 69-90). Springer International Publishing.

Bandyopadhyay, S., Sandler, T., & Younas, J. (2013). Foreign direct investment, aid, and terrorism. Oxford Economic Papers, 66(1), 25-50.

Cunha, V. D. J. M. F. (2014). The state under the new wars reality: perspectives and repercussions (Doctoral dissertation).

Jones, A., & Naylor, R. (2014). The Quantitative Impact of Armed Conflict on Education: Counting the Human and Financial Cost. CfBT Education Trust.

Woodward, P. (2016). US foreign policy and the Horn of Africa. Routledge.


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