Index (Export) Finance and SalesForeign Direct Investments (FDI)Human Resources ManagementRepatriation of profits and purchase of raw materialsBureaucracy and Corruption in doing businessManagement of the Intervention GovernmentLimitations and ConclusionThe success of exports largely depends on the availability of adequate and functional logistics infrastructure which includes roads, railways and shipping vessels. Natural openness that comes with easy access to coastlines is also very important, but as a landlocked country with a sparsely populated area, Ethiopia usually faces difficulties and high import costs (Aschenaki, 2004, p. 9). The port of Djibouti, which is approximately 700 km from the capital Addis-Ababa, handles 95% of Ethiopia's imports and exports (Cannon & Rossiter, 2018). The movement of goods between the capital and the port of Djibouti is highly dependent on road transport (UNIDO, 2016, p. 8). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The increased use of technology in customs and clearance can help improve efficiency in logistics processes. Investment regulations in Ethiopia, however, increase costs and limit the entry of suppliers with modern logistics technologies and have led to ESLSE's business inefficiency and rising prices of logistics services. In 2008, the import tariffs charged by ESLSE were approximately 70% higher than the average shipping costs of other transportation companies (Kassahun, 2014, p. 171). The processes involved in clearing goods through customs also involve high costs and long processing times (World Bank, 2017, p. 6). Just submitting documents for customs clearance takes on average 8 days, while in sub-Saharan Africa it takes only half that time. In total, it takes about 15 days to clear the goods from the port and costs $1,488 without freight and inland transportation costs (Appendix 1). Importers also usually incur additional costs for paying demurrage charges as the ESLSE only provides a storage grace period of just 8 days from the day the goods are unloaded at the port (World Bank, 2011, p. 442) . Internal transportation from the Djibouti-Ethiopia border to Galafi costs approximately $500 and takes only 2 days (World Bank, 2018). The ESLSE calls at the ports of Hamburg and Bremen in Germany, so GSMEs exporting to Ethiopia have no choice but to use the ESLSE. The costs and delays involved would make it difficult to import GSME products at competitive costs as the logistics sector is inefficient and dysfunctional (Gani, 2007, p. 282). The high costs incurred in importing the products would lead to an increase in market prices as importers would have to profit from their sales. Higher prices of products make them less competitive as customers would preferably resort to other cheaper alternatives in the market, decreasing the market size of GSME products. While most of these hardships would be experienced by customers or local distributors/partners/agents importing GSME products into Ethiopia, GSMEs exporting to Ethiopia become the collateral victims as they would also have to bear some shipping, customs clearance and transportation costs. This, however, depends on the Incoterms agreed between the exporting and importing parties. For example, if GSMEs sold their goods with duty paid delivery service (DDP), they would have to bear all costs from their warehouse to their partner/agent's warehouse in Ethiopia. If the goods comesold with free carrier (FCA), only the cost up to customs clearance at the port of departure must be excluded. In case GSMEs export to their own sales offices, they would have to bear all transaction costs since they act as both an importer and an exporter. (Export) Financing and SalesExport financing is the process of obtaining short-term loans to make an export sale. Especially SMEs that receive large orders need financing to be able to process the shipment of an order. Exporters obtain financing from commercial banks and other government agencies/programmes; However, success in obtaining export financing depends on certain factors which include the creditworthiness of the exporter and importer. In trade with developing countries, for example, exporters may have difficulty obtaining export financing because payment risks may arise when an importer fails to pay its debt or when exchange control regulations are imposed. These restrictions prevent the importer from acquiring foreign currency, which results in payment difficulties (Cavusgil et. al, 2017, p. 222, Root, p. 98, 1994). Given the current foreign exchange restrictions, GSMEs would face difficulty in financing their export sales to Ethiopia as their importing partners face difficulties in receiving foreign currency for trade payments. Importers are required to apply for an import permit before obtaining an LoC for the full value of the goods before an order can be placed. In some cases, import permits are not always granted (Lighthizer, 2018, p. 157). Bureaucratic delays in this case could mean that import permits could take one or more months to obtain before finally granting the importer the right to import. GSMEs exporting to Ethiopia may miss key strategic windows in which they could respond to market demand due to delays in receiving and processing orders due to delays in the route of their importing partners – meaning fewer sales and therefore less revenue. However, not all GSMEs exporting to Ethiopia would be negatively affected by government intervention. Importers of machinery needed for finishing and secondary production of raw materials in sectors that the GoE deems important under its GTP II (leather, textiles and agricultural processing) find it easier to obtain foreign exchange (Lighthiz-er, 2018, p. 149). GSMEs producing equipment required for further production and other value-added services of the above commodities will have an easier time financing their export sales to Ethiopia with fewer delays. Furthermore, cash subsidies or tax breaks provided by the GoE to the textile industry would benefit GSMEs: demand for their products would increase as both local and foreign investors in the textile industry would have more money available to spend on machinery which translates into higher sales and a larger market for GSMEs in that particular industry. Export subsidies in the textile sector would reduce the price of Ethiopian textile exports on the world market, making them cheaper than other alternatives and increasing demand for them. Ethiopian textile producers would also like to take advantage of the high demand and produce more, which means they may need to import machinery to make extra production possible, thus increasing demand for GSME products in the sector. Foreign Direct Investment (FDI)Human resource management Local labor regulations play an important role in how FDI enters. Regardless of whether a new branch is created or another company is acquired, it will be necessary to staff it in order to start the business. Given regulations regarding the employment of expatriates, GSMEs would be forced to train and use local staff in their operations. First, training is associated with costs and there is no guarantee that locals will perform the job as citizens of the home country would have done, due to differences in education levels. Differences in the working cultures of foreigners and locals could result in conflicts as locals may not understand the common values ​​and working practices of GSMEs. GSMEs also risk losing intellectual property that could easily be dissipated if they came into contact with the local population, as the country is in crisis. They are currently experiencing problems of trademark abuse and infringement (Lighthizer, 2018, p. 150). Current exchange regulations also make it difficult to compensate expatriates in top positions in euros, which would reduce the attractiveness of working in Ethiopia for German citizens, especially when the local currency is less valuable and remittance of earnings is limited. Repatriation of profits. and purchase of raw materials Profit repatriation is the return of profits earned abroad or financial assets to the home country of a foreign business and plays a decisive role in determining whether the investments are actually worth it to the parent company foreign direct. Companies that are unable to take money out of the country see little point in investing there (World Bank, 1997, p. 35). The ability to repatriate profits gives foreign companies the ability to choose where to reinvest profits. For profit repatriation to be successful, home country earnings must be easily convertible into the foreign currency accepted in the parent company's home country. However, given the currency restrictions available from the Ethiopian government, GSMEs would have difficulty converting the Birr earned into euros as the private and commercial sectors have the lowest priority in receiving foreign exchange, also taking away the ability to choose where to transfer it. invest and, in turn, force them to reinvest in the country. GSMEs operating in the manufacturing/production sector may also not be able to acquire foreign exchange for the purchase of raw materials which are only available abroad for further production – this however depends on the sector in which they operate. As seen from the Export example, GSMEs that are active in processing natural resources that are important under GTP II would experience less or no difficulty in obtaining foreign exchange to import raw materials needed for production. Bureaucracy and Corruption in Doing Business Regardless of whether GSMEs acquire existing local companies or create their own subsidiary, regulations present in the local business environment would act as barriers and could present GSMEs with costs and delays that may arise from bureaucratic and administrative procedures. For example, it takes an average of 33 days to register/start a business, not including the time needed to gather information on the necessary documents and learn about the processes. In other sub-Saharan countries it takes 24 days (Appendix 2). GSMEs that acquire local companies would be free from bureaucracy and administrative procedures at this stage, but will later face other complications that may arise in registering ownership and paying taxes (World Bank,2018). As foreign organizations operating in Ethiopia, GSMEs must interact with host country institutions, including the government and bureaucracy of its institutions (Johnson, 2004, p.5). These complicated and bureaucratic administrative procedures provide government officials with the opportunity to bend or break rules and regulations (Johnson, 2004, p. 5) and create an environment conducive to corruption to induce the payment of bribes for personal gain. Given that Ethiopia ranked 107th out of 180 countries in the Corruption Performance Index (CPI), it can be said that Ethiopia is quite corrupt and GSMEs may be forced to pay bribes to obtain certain documents needed to conduct business they could handle. they risk being harassed by officials if they do not comply with their request and face even longer and more expensive procedures. Bureaucratic corruption also causes uncertainty which in turn further increases the costs of doing business since the payment of bribes is not a confirmation that necessary services would be provided (Johnson, 2004, p. 5). Managing government intervention Given the effects detailed above on market entry methods, how could these effects be managed by GSMEs? Traditional methods of managing government intervention suggest the complete elimination of countries with government intervention. However, GSMEs cannot simply ignore countries like Ethiopia because they possess a multitude of emerging fields along with new businesses and are close to Europe, making them major sources of growth (Khalil, 2017, p. 4). Some scholars such as (Jimenez et al, 2014) also argue that government intervention does not necessarily discourage investment. Businesses can manage government intervention and turn it into opportunities (Holburn & Zelner, 2010). SMEs interested in investing in Ethiopia could create joint ventures with local partners. With joint ventures, GSMEs would enjoy the benefits of collaborating with local partners who fully understand the local business environment and have the ability to navigate complex corporate administrative procedures. Local partners have knowledge of the local language and culture and may have useful connections with the host country government. This may be important as the government may not intervene uniformly. Local partners would be able to identify any gaps in intervention methods and take advantage of them. By creating joint ventures, GSMEs could also gain immediate access to their local partners' existing distribution systems and customers. However, caution must be exercised here: GSMEs should only enter into joint ventures with local partners in whom they have full trust. Innovative ideas, brands and patents run the risk of being imitated by local partners who may end the joint venture and start their own businesses, possibly creating competition for GSMEs. Cooperative exporting could also reduce the severe costs incurred as a result of monopoly. oly of ESLSE by collaborating with other SMEs to jointly export and promote their products. The costs of exports would then be shared among all members, making it easier to overcome financial tensions. They could also partner with larger companies exporting to Ethiopia with an already established distribution network and pay commissions for using the services. Repatriation problems could be solved by purchasing products in Ethiopia and exporting them to Germany for sale. In this case, a good example would be buying Ethiopian coffee, since it is one of the most traded goods between Germany and Ethiopia, and exporting it to.