In 2019, the SIRAYE Programme was launched as an ambitious One ILO initiative to improve working conditions and promote inclusive industrialization in Ethiopia’s garment and textile sector. Against a challenging backdrop of conflict, COVID-19, and economic shocks, the programme was tested in ways few of the originators could have foreseen.

In 2024, the programme was independently evaluated by Carlos Oya – Professor of Political Economy of Development at SOAS University of London, and Florian Schaefer – lecturer in International Development, at King’s College London. Better Work spoke with Professors Oya and Schaefer to learn more about their work and what the results reveal about the future of integrated development efforts.

What attracted you to work on the evaluation of the SIRAYE programme?

Carlos: Florian and I had already spent years working on a comparative analysis of working conditions between Chinese firms and other firms in manufacturing and construction centres. This research, based in Angola and Ethiopia, built our interest in workforce management in industrial parks – particularly around firms that are integrated into global production networks. 

We knew the actors in Ethiopia very well, and, of course, we had plenty of contact with the ILO, so when the opportunity was presented it seemed like a natural fit.

Can you briefly explain the methodology you used to evaluate SIRAYE?

Florian: When you look at those baseline and end line surveys and you compare treatment and control groups, you get a number representing an average effect … whether the indicator went up or down.  This is the “what.” Our ILO colleagues are also very interested in the “why and how”, that is to say, what are the causal mechanisms and relationships. To understand this, we used a method called process tracing.  Using this method, you trace indicators (progress, backsliding, or maintaining) over time and try to put together an explanation of why changes are happening and the causal factors behind them. It was a way of filling out the details between the baseline and end-line and understanding why these indicators actually changed.

Carlos: This process tracing allowed us to look more in detail into some of the dynamics of implementation. And why this was particularly significant in this evaluation was that the programme was implemented at a very, very particular time in Ethiopia’s textile and apparel history and certainly in Ethiopia’s history.  It was a period of different kinds of upheavals.

How did some of these external events impact the programme and your evaluation? 

Carlos: Well, for example, the (COVID-19) pandemic was an opportunity to look into what kinds of adaptations had taken place… what sort of outcomes had been achieved from those adaptations and mitigations in the implementation of the programme.

Florian: Later that same year, in November you have war breaking out in Tigray.  Generally, the security situation since then has deteriorated massively. 

Then, in January 2022, following sanctions from the US on (then President) Abiy’s regime, AGOA was suspended.Many of the companies involved in the sector, and which were part of the programme, were directly impacted because the US one of the main export markets.

And, going back to 2018, a change of leadership within the ruling party was followed by a period of prolonged churn in senior government positions. And so essentially, they lacked the background knowledge and institutional memory to make informed, effective decisions.

I think it’s fair to say the (overall) impact of these events has been profound and negative.  This was a sector that before these shocks was on a growth path.  For example, Hawassa Industrial Park was one of the flagship government-sponsored apparel parks. By 2019 it had increased employment quite rapidly to 36,000.  The plan was to go all the way up to 90,000… and then they started declining… the numbers now are lower than when they started.  There has been a significant decline. Which makes some of these results all the more remarkable.

Let’s take a look at the results – what stands out? You report nearly 22 per cent higher wages for survey programme workers compared to control group workers. What do you believe drove this wage growth? Was it labour standards compliance, better productivity, or something else?

Florian: I think it’s a combination of factors, as you alluded to. One thing to understand is that throughout the period from 2014 to 2018, at least, and probably after that, wages were very, very low in these industrial parks. They were so low that they led to recruitment problems. Some level of upward wage adjustment was going to be necessary. So, that’s one factor, that there was a structural pressure for wages to rise.

That doesn’t necessarily explain why the SIRAYE firms did better, though. I think other factors then are around compliance, but also around trying to maintain industrial peace.

At the time, Ethiopia had a very weak system of union representation. And the ILO played a significant role in bringing about a unionization drive. Before then, if workers wanted to express their grievances, a wildcat strike was more or less one of the only opportunities they had. So, there were a lot of work stoppages. There were a lot of wildcat strikes. There was a lot of pressure from below, fuelled by low wages.

And so, you have buyers from above seeking compliance. You have pressure from below from workers seeking better wages. And all of this is happening in a sector where margins for supplier firms tend to be very low, and the timeliness of orders is everything.

Most buyers can choose which supplier they want to use. And so, suppliers that aren’t able to meet price and delivery demands in a timely manner will risk being cut out of supply contracts. So, there are strong incentives for supplier firms to keep a workforce that is actually at the machines making the clothes rather than in the courtyard having a dispute about wages.

So, that takes us on to freedom of association. Explain the progress there and the role of unions in improving that industrial relations landscape.

Carlos: That’s one of the most interesting aspects of this study and also the timeline that we analysed. And it is particularly remarkable in the case of industrial parks where many of these companies were located.

Initially, the levels of unionisation were very, very weak. This was partly a result of policy. The government discouraged the presence of unions in some of the new industrial parks. There was a lot of fear that the mixture of politics and workplace grievances could lead to a state of permanent conflict in which the unions were perceived to be potential contributors.

But the reality is that there was labour conflict, mostly around wages, for example. That was one of the most significant grievances, but also employee management relations, communication issues, etc. There were plenty of reasons why workers might mobilise.

So, the level of disruption of this form of labour conflict was such that more and more companies started considering the possibility that having a union representation in place might be helpful in terms of getting more harmonious relations. At the very least, in terms of managing these different sources of conflict and making sure that workers worked through elected representatives.

And the SIRAYE programme had a role to play within that process, lobbying behind the benefits of having a union in place, of having more harmonious industrial relations.

What was the government doing to respond to these early conflicts?

The firms localized a lot of their middle management. The government had to hold meetings with the management of many of these firms to explain – you localize management and create a more enabling environment for management-employee relationships or you need to adapt and understand the culture of ordinary Ethiopian workers.  So this was communicated by some high-level government officials in various meetings to foreign company managers.

What are the recommendations coming out of your research?

Florian: The first thing to underline is that I think this integrated approach (One ILO) is really valuable. In the report, we point to a number of advantages that it’s had, some of which we’ve spoken about, but I think especially the coordination across the different interventions prevents not only inefficiencies in terms of doubling of work but improves the strengths of the interventions. It also becomes easier to communicate to stakeholders, both in factories and in government.

One of the key things that also came out is that, especially for buyers that are export-orientated, t in these sophisticated global production networks, there’s really little point with targeting them with productivity interventions, because these are large established firms, they operate in, frankly, quite cutthroat competition sectors. They know how to run a factory.

So one thing that kept coming up was the responsiveness of Better Work trainers, the fact that they don’t just go through the factory with a clipboard, and leave you with a report and never come back, but they actually work with you on improving compliance issues rather than just identifying them.

Carlos: I think one point we made that came out, especially from the interviews with workers and some management is an issue of sustainability of these interventions, particularly the question of training. The ILO did indeed accelerate that process of learning-by-doing – shortening the time that it takes for workers, local managers, etc., to get used to the rhythms of a factory, to get used to the kind of labour processes that you find in a factory.

But the question is for how long, right? In the ideal world, you would have an embedded training system both directed to workers and managers, especially local managers, with training of trainers and so on, that evolves over time according to the shifting needs of the workforce and the organization. And I think that’s missing. 

On the back of what Florian said on the dynamics of supply chains in the apparel sector, it’s quite clear that one of the most effective mechanisms for compliance is fairly strong and institutionally embedded global framework agreements between buyers and global unions, such as IndustriALL.  However, these global framework agreements have red lines. And one of them is a minimum wage – and Ethiopia does not have a minimum wage. That’s a key issue for Ethiopia’s sustainability in the sector.

Professors Carlos Oya and Florian Schaefer – thank you very much for your time.