Abstract

Understanding West German-Ethiopian business relations in the 1960s through the lens of security and insecurity

Establishing business relations between industrialized and non-industrialized countries in the 1950s and 1960s was often a challenging endeavor. On the one side, private investors stated political instability and a lack of security for their capital, assets, and profits. On the other hand, governments of developing countries were cautious to not give away concessions to land and other resources as well as trade privileges too liberally, so as to not lose their main assets for industrialization and development. Fuelled by a global economic boom and cold war dynamics, security became a central concern for business actors, and a large number of extraordinary measures for mitigating insecurity became a key characteristic of business relations in the post-colonial period. They were padded by a tightly woven safety net of extensive diplomatic involvement, government-paid consulting firms, and state-backed trade credit insurance schemes. This paper takes as an example the case of West German companies in Ethiopia in the 1960s, a time when political measures were implemented that aimed at a prosperous economic partnership, negotiated in the previous decade, so as to premeditate future industrial growth in Ethiopia and future export markets for West-German enterprises. Using files from German and Ethiopian political and corporate archives, the paper traces the efforts of German companies and economic experts in diplomatic roles acting on their behalf. They developed specific tools and strategies to make the country safe to invest in, such as feasibility studies by German engineers, the placement of German experts in Ethiopian financial institutions, and using development aid funding to strengthen Ethiopian orientation towards Western economies, away from Eastern Block partnerships, so as to pave way for nascent German business interests. The findings demonstrate that business actors linked political concerns related to security to their economic interests and called for increased political support when it came to expanding business operations to new international markets in developing countries, so as to combat the perceived insecurities of non-Western markets.