Last month, during the fighting in the northern Tigray region, an explosion at DBL's compound caused significant damage to the factory and forced the company to reassess its business operations. Adbul Waseq, an official at the company, described the terrifying experience of the blast, which led to the suspension of operations for DBL and other foreign garment makers in Tigray. Despite Ethiopia's substantial investments in infrastructure and industrial development over the past decade, the recent violence has disrupted the country's economic growth and stability. A year after Prime Minister Abiy Ahmed took office, promising to reduce the government's control over the economy and open up sectors like telecoms, investors were excited. However, Ethiopia has faced numerous challenges in the past two years, including ethnic conflicts, natural disasters, and the COVID-19 pandemic. The recent fighting between the army and Tigray's former ruling party has caused concerns about prolonged instability, leading investors to reconsider their optimism. The country's manufacturing export efforts have not yet generated enough foreign currency to cover imports or debt service costs, putting it at risk of financial trouble. The IMF had already warned of Ethiopia's high risk of debt distress before the pandemic. Abiy's government in Ethiopia stated that despite facing crises, the country is moving forward with reforms to lay the groundwork for a modern economy. Mamo Mihretu, a senior policy adviser in the prime minister's office, mentioned that the Ethiopian economy displayed impressive resilience despite challenges like the COVID pandemic and ongoing insecurity. Ethiopia's textile production is relatively small, with exports totaling $94 million in 2016 compared to $29 billion for Vietnam and $253 billion for China. The country's main exports include agricultural products like coffee, tea, spices, oil seeds, plants, and flowers. However, Ethiopia's focus on expanding its textile industry in the last decade reflects its aspirations in manufacturing. As the fighting approached Mekelle, the capital of Tigray, textile companies started closing down and evacuating their staff. Cristiano Frati, an electrician from a factory owned by Italian hosiery chain Calzedonia, expressed concern about not being able to leave as the conflict neared the city. Calzedonia announced on November 13 that it had halted operations at the plant, which has about 2,000 employees, because of the conflict. The company has not provided any additional comments on the situation. A broad perspective reveals the Hawassa Industrial Park located in the Southern Nations, Nationalities and Peoples region of Ethiopia on November 17, 2017. Meanwhile, DBL has evacuated its foreign employees from Ethiopia. The managing director, M.A. Jabbar, expressed concern about the uncertainty surrounding the situation and questioned when the war will come to an end. Another international company, Velocity Apparelz Companies, which supplies H&M and Children's Place, has also temporarily closed down, according to a company official interviewed by Reuters. H&M expressed great concern and stated that they are closely observing the situation, mentioning that production has stopped at their three suppliers in Tigray. However, they plan to continue sourcing from Ethiopia, where they have a total of about 10 suppliers. Indochine Apparel, a Chinese company that supplies Levi Strauss & Co, reported that its operations in the Hawassa industrial park in southern Ethiopia are unaffected. Levi Strauss & Co stated that they are monitoring the situation closely and have not experienced any disruptions in their supply chain so far. Ethiopia's clothing industry was already facing difficulties due to the economic impact of the COVID-19 pandemic before the conflict in Tigray. Some factories closed down, while others reduced wages or let go of employees. This downturn was not exclusive to the garment sector, as insurance companies had already stopped offering coverage for political risks beyond certain regions of Ethiopia. A risk consultant advising businesses described Ethiopia's current situation as bleak. Similar to most individuals interviewed by Reuters, the consultant preferred to remain anonymous due to concerns about potential repercussions from government officials. Prior to the conflict in Tigray, Prime Minister Abiy's attempts to improve a repressive political environment had already led to ethnic violence. The escalation of violence in various regions of Ethiopia in 2019 had negatively impacted projects, particularly in agriculture. The head of an agri-industry project that had to postpone its investment last year mentioned, "The fighting began just as we were preparing to start planting." Workers are sewing clothes in the Indochine Apparel textile factory in Hawassa Industrial Park in Ethiopia. IKEA opened a purchasing office in Ethiopia last year but closed it in September due to various factors such as political and social unrest, COVID-19, and changes in the cotton market in Africa. Coca-Cola Beverages Africa, a bottling partner of Coca-Cola, stated that the conflict in Tigray has stopped business in Ethiopia, where it accounts for 20% of sales volumes. Additionally, construction delays for two new bottling plants, part of a $300 million investment plan, have been caused by the pandemic and an excise tax increase. Abiy declared victory over Tigray's former ruling party (TPLF) after the fall of Mekelle at the end of last month. Abiy's adviser Mamo stated that the quick and decisive military operation has effectively addressed any worries about political instability for the investment community. The TPLF has stated their intention to continue fighting. Ethiopia's external debt has increased significantly in the past ten years due to heavy borrowing, particularly from China, for infrastructure and industrial park projects. Foreign direct investment inflows have been decreasing consistently since reaching a peak in 2016 of over $4 billion, falling to approximately $500 million in the first quarter of the current fiscal year. Inflation is currently at approximately 20%. Finding solutions to these economic challenges is difficult, as obtaining additional funds from the IMF or accessing markets are not viable options. Menzi Ndhlovu, a senior country and political risk analyst at Signal Risk, an Africa-focused business consultancy, stated that their best hope is for a global economic recovery next year. Despite ongoing challenges, Ethiopia made significant progress by passing a landmark investment law and implementing currency reforms. The government is also moving forward with plans to liberalize the telecommunications sector, including opening tendering for new telecoms licenses and selling a minority stake in Ethio Telecom. Interested companies are reportedly undeterred by the current unrest, with sources predicting that these measures will provide a substantial boost to the struggling economy. However, at the moment, Ethiopia's ambitious plans for manufacturing have faced a setback. Waseq from DBL, who has gone back to Bangladesh, questioned, "Who would go there in this current situation?" and answered, "Nobody."