Technology Transfer on the Belt and Road: Pathways for Structural Transformation in Ethiopia’s Standard Gauge Railways

Abstract

In the surge of outward finance that coalesced into the Belt and Road Initiative (BRI), this article examines how the intersection of Ethiopia’s industrialisation ambitions, in tandem with Chinese infrastructure investment, can potentially promote processes of structural transformation. Drawing from a comparative case study of the Chinese-built Addis-Djibouti standard gauge railway (SGR) and a subsequent Turkish-built Awash-Weldiya railway, this article highlights the potential channels, and challenges, of railway investment for technology transfer and structural transformation. Railways bring knowledge spillovers through training in construction and operation, though this varies by contractor. We find that, whilst Chinese finance brings a more holistic package of technology transfer, significant barriers remain to long-term capacity building, and spillovers through firm linkages and competitive effects have been weaker. The catalytic potential for rail in Ethiopia’s industrialisation also face domestic challenges that are technical, but also deeply structural, throwing into question the impact, and promise, of China’s BRI.