The Industrial Park Model and Global Value Chain Integration in Ethiopia

How do changes to the global political economy shape the development strategies available to African countries? This paper tackles this question by examining the drivers and outcomes of Ethiopia’s ambitious experiment with integration in textile and garments global value chains through the construction of “plug-and-play” industrial parks (IPs). The paper makes two main arguments. Firstly, I show how the diversification of Ethiopia’s external relations expanded the government’s policy space, while also offering new sources of technical and financial assistance. These coalesced in the Eurobond-financed and Chinese-built Hawassa Industrial Park, which houses the American multinational PVH and provided the blueprint replicated elsewhere in the country. The second part of the paper investigates whether IPs have delivered on intended industrialization goals. By examining the interactions between foreign IP firms and local workers, firms, and municipal authorities, I show how foreign firms’ investment logic and the state-society relations underpinning the IP model disincentivise the forms of social exchange necessary for the diffusion of industrial capabilities. It follows that despite the potentially greater policy space accorded to African states by the contemporary world economy, the modes of economic integration available to them might still not favour sustained industrialization.