Foreign Direct Investment as Development: A Human Rights-Based Critique of the Structural Misalignment between FDI Promotion and Labour Rights Protection in Ethiopia
Year: 2026
Type: preprint
Abstract: Since the mid-2010s Ethiopia has pursued export-oriented industrialisation through state-built industrial parks, treating foreign direct investment (FDI) as a principal vehicle for realising the right to development. This article asks whether a strategy that markets low labour costs to transnational investors can be reconciled with the labour-rights guarantees that the Ethiopian state is bound to secure. Using doctrinal and documentary analysis, and drawing on a human rights-based approach (HRBA) to development and the UN ‘Protect, Respect and Remedy’ framework, it argues that the strategy exhibits a structural misalignment in three registers. The first is normative: a gap between arts 41, 42, 43 and 89(8) of the FDRE Constitution and the continued absence, on the published sources consulted, of the private-sector Wage Board contemplated by art 55(2) of Labour Proclamation No 1156/2019. The second is institutional: limited evidence of functioning workplace representation and of inspection capacity proportionate to the industrial-park workforce. The third is transnational: external pressure from the EU Corporate Sustainability Due Diligence Directive, as amended in 2026, and from US trade-preference conditionality is currently attenuated. The article concludes that FDI-led development is difficult to reconcile with art 43 of the Constitution, or with Sen’s capability conception of development, for as long as a living wage and freedom of association remain unsecured. It proposes tripartite reforms addressed to the state, transnational corporations and trade unions, and sets out the evidentiary limits of its analysis, which rests on secondary and documentary sources rather than primary fieldwork.
Source: Research Square
Author: Ansar Sherif Abafita
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7225795964
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