What the Ethiopian Diaspora Could Do to Negate an AGOA Sanction
What’s the annual revenue from AGOA-related exports? Immediate Effects?
In 2019, Ethiopia’s AGOA exports (overwhelmingly apparel) fetched about $245M. So, losing the AGOA eligibility status would cost us at most $245M. Once the suspension takes effect, most of these exports would go through the regular channel, paying duties, like our coffee exports. So, total export revenue will not drop by the full AGOA export amount.
Then, there is the effect on employment in the textile industry, which will ultimately hit women and the poor. Yes, the Biden administration opted to hit Ethiopia with a sanction that will disproportionately hit the most vulnerable section of the population. At a time when a terrorist rebel group is committing all kinds of massacres.
What Can the Diaspora Do to Help?
Annual remittance inflows to Ethiopia amount to about $5 Billion per year. Juxtapose our AGOA-export and remittance revenues, and you will see that AGOA exports are equivalent to a meager 5% of our remittances. So, in principle, if the Ethiopian diaspora were to send just 5% more remittances, the effect of losing the AGOA status would be completely offset.
Sending more remittances to our relatives back home is our weapon to neutralize sanctions that might be imposed upon us.
The Ethiopian diaspora, this is THE time your country needs you. Send more money to your relatives through official channels (Remitly, CashGo, and so on are good options). Help your own family. You will concurrently help your country. Two birds with a single stone.
Trade Deficits Against the US
Ethiopia runs a trade deficit against the United States. Roughly, we import about two dollars worth of goods for every dollar we export to the United States. About three-quarters of our imports from the United States are transport equipment. I assume most of these represent aircraft and spare purchases by Ethiopian Airlines from Boeing. Ethiopian Airlines should browse the market for alternative suppliers.
Summing up
The people who hired the lobbying firm that worked to get Ethiopia removed from AGOA donated a full month’s salary to pay for the lobbying fee. If the rest of the Ethiopian diaspora sent a similar amount to their relatives back home through official channels, we could potentially convert this challenge to an opportunity.
Of course, the more pressing issue right now is the total incapacitation of the terrorists that are wreaking havoc in the Amhara and Afar regions. But I thought there is something obvious the diaspora and the government of Ethiopia could do right now on the side: (1) The diaspora — Send money to your relatives to help your country! (2) Ethiopian Airlines — Browse the aircraft market for an alternative supplier.
