Abstract

The purpose of this study is to propose a new and comprehensive analysis framework for understanding Saudi Arabia's economic diplomacy towards Ethiopia. It involves identifying the tools and objectives of Saudi Arabia's economic diplomacy based on national interests, considering changes in domestic policies and the external environment. The study utilizes an analytical methodology and includes an empirical study that examines the impact of this relationship on Ethiopia's economic growth in the short and long term. The Autoregressive Distributive Lags (ARDL) model is utilized for this analysis. The findings indicate that increasing imports from Saudi Arabia is an effective strategy for improving Ethiopia's economic growth. However, the same cannot be said for exports, primarily due to the specific types of goods that are imported and exported between the two countries.