As symbols of economic globalization, industrial parks occupy a central position in discussions about foreign direct investment from the so-called Global North to the South. The main argument for the park is its potential to absorb a large workforce, build an industrial technology base and stimulate export growth.
Africa's infrastructure boom is reshaping landscapes and physical connections while creating new power relations within elite-led development initiatives. Industrial parks are territorially bounded and administratively exceptional spaces. Copying China's special economic zone model, the Ethiopian government has developed several industrial parks across the country.
The strategy is to attract foreign investors with a “golden reception” of economic incentives and preferential treatment. But behind the allure of bright promises lies a less glamorous reality full of struggle and confusion. Migrant workers, mainly women, who work in these factories feel the brunt of these challenges.
Hawassa Industrial Park (HIP) is one of the leading industrial parks in Ethiopia. Built by the China Civil Engineering Corporation, HIP is located in the city of Hawassa, about 450 miles south of Addis Ababa. Construction on HIP began in July 2015, and the park opened for use on July 13, 2016. Considered a flagship project, HIP is Africa's largest textile and apparel IP, costing him over £200m. About 90 per cent of the factory sheds have been reserved by 23 organizations and major investors from the US, India, China, Sri Lanka and Indonesia.
As of November 2023, HIP employs 28,000 people. The government expected HIP to generate up to 60,000 jobs and export revenues of £790m during construction. Due to a lack of solid analysis and forecasting, parks have not yet achieved this goal. The total number of jobs created by this park is 24,000, and more than 80% of the employees are women.
Shock and how to deal with it
The situation of urban migrants in Ethiopia is undergoing major changes due to extraordinary social, economic and political upheavals. Global and regional shocks such as the COVID-19 pandemic, Ethiopia's exclusion from the U.S. African Growth and Opportunity Act, and the Russia-Ukraine war are putting significant pressure on the country's economy and workforce.
In particular, the new coronavirus infection has had a major impact on parks. Ethiopia's manufacturing industry was under strain as the virus spread across the world, disrupting supply chains and causing an economic downturn. Production delays, exports fell, and factory closures continued. Groups already on the margins, such as women, young people, and low-skilled workers, were pushed further into the margins.
Many migrant workers faced wage cuts and severe food insecurity, forcing them to return to their families in the countryside until factories reopened. Workers have also experienced other challenges during the pandemic, including prejudice and discrimination. Many people mistakenly believed that the coronavirus was a “Chinese” disease and that anyone working in the park would have frequent contact with Chinese people. This misinformation led to repeated evictions from neighbors and severe threats against the workers.
There were also shocks from the geopolitical field. Due to the war in the north and subsequent human rights concerns, the United States suspended Ethiopia's AGOA privileges. The United States abruptly ended Ethiopia's participation in AGOA on January 1, 2022, citing “serious human rights violations.” The sudden termination of AGOA privileges caused significant disruption to international companies that had made strategic investments in Ethiopia based on this preferential trade access.
Foreign companies continue to leave Ethiopia's industrial parks, including PVH, the largest clothing and textile company operating in the country. Since then, more than 11,000 employees have been laid off. Job losses disproportionately hit poor women, who were primarily employed in the garment industry. The combination of job insecurity and social instability creates a sense of alienation among many immigrant women.
In addition, the war between Russia and Ukraine has increased the prices of key goods and energy. Prices for everyday items have more than doubled in Hawassa. However, the only thing that remains unchanged is the wages of the workers. As a result, the woman's survival becomes even more difficult and she begins to have pessimistic hopes for the future. Access to basic human needs remains the most important challenge for migrant workers. In this round, the devaluation of the Ethiopian Birr was cited as an additional burden that would worsen food insecurity for the urban poor.
Ethiopia is making efforts to attract foreign investors and develop industrial capacity, but the current model leaves workers with inadequate living conditions and low wages. The result is a weak workforce that is more susceptible to economic and social shocks, perpetuating the cycle of hardship. The intensification of precarious livelihoods among HIP workers is characterized by increased vulnerability and job insecurity due to disruptions from global shocks.
This highlights the importance of alternative narratives about the future of African development that HIP workers are actively seeking in the face of multiple crises. Workers' stories and livelihood strategies challenge the country's aspirations to become a developed and middle-income country.
If Ethiopia needs to become a manufacturing powerhouse, the government could take several steps. Legislating a minimum wage standard would be an important first step to ensuring a basic income level for these workers.
(Robert Murat is a doctoral student in social anthropology at the University of Gondar.)
