Comparing the Role of FDI Policy in Post-Conflict Recovery in Rwanda and Ethiopia
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Date
2025
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Publisher
Видавничий дім «Гельветика»
Abstract
The present article explores the relationship between foreign direct investment (FDI) policy and post-conflict economic recovery in selected countries of Eastern Africa through a comparative analysis of Rwanda and Ethiopia. The objective of the present study is twofold: firstly, to identify the institutional and policy-related factors that determine the effectiveness of FDI in post-conflict contexts, and secondly, to explain why similar investment strategies can lead to divergent recovery outcomes. The pertinence of this subject is attributable to the mounting cognisance that sustainable recovery following armed conflict necessitates not solely financial inflows but also protracted structural transformation. FDI is frequently regarded as a pivotal mechanism for attracting resources, rebuilding infrastructure, and stimulating development. Nevertheless, the effectiveness of such policies is subject to variation depending on the socio-political context and the extent to which investment policy is aligned with the broader logic of post-conflict transformation. The present study employs a comparative qualitative methodology, with a focus on the analysis of institutional frameworks, policy implementation patterns, and social outcomes in two countries of similar development levels, but with divergent post-conflict trajectories. The research examined how the design and execution of FDI policy influenced the recovery process, with particular attention to issues of inclusiveness, regional equity, and institutional legitimacy. The findings demonstrate that the success or failure of FDI-driven recovery cannot be explained solely by the presence of incentives or the volume of investment attracted. In Ethiopia, investment policy remained disconnected from conflict resolution goals, thus reinforcing structural inequalities and ultimately contributing to renewed instability. Conversely, Rwanda's strategy entailed the incorporation of FDI policy into a comprehensive development strategy that prioritised institutional consolidation, inclusive growth, and social cohesion. This approach was adopted to ensure greater legitimacy, reduce perceived exclusion, and support long-term stabilisation. The practical value of this research lies in its contribution to understanding the conditions under which foreign investment can become a driver of peacebuilding rather than a source of renewed tension. The article provides evidence-based insights for policymakers in fragile and post-conflict settings, emphasising the significance of integrating investment policy within a comprehensive framework of structural transformation, equity, and institutional reform.
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Keywords
FDI, intensification of foreign investment, post-conflict recovery, investment promotion policy, special economic zones, industrial parks
Citation
Hramotniev V. Comparing the Role of FDI Policy in Post-Conflict Recovery in Rwanda and Ethiopia / Vitalii Hramotniev, Tetiana Obolenska // Економіка розвитку систем : наук. журн. / ТОВ «Вид. дім «Гельветика» ; [редкол.: Мельник Л. Г. (голов. ред.) та ін.]. – Одеса : Вид. дім «Гельветика», 2025. – Т. 7, № 1. – С. 159–168.