Ethiopia clears a vital path to the Red Sea

Ethiopia clears a vital path to the Red Sea

The peace deal agreed between Ethiopia and Eritrea this week is about more than ending a 20-year war. The initial conflict between the two sides, which took place between 1998 and 2000, killed tens of thousands of people and created a major refugee problem. In 2012, Ethiopia bombed three military camps in Eritrea used by the Ethiopian opposition. In 2015, Addis Ababa bombed an Eritrean mine and weapons depot. In June 2016, Ethiopian and Eritrean troops exchanged fire, causing many casualties. A simmering conflict had been brewing until a few weeks ago. Now, Ethiopian Prime Minister Abiy Ahmed and Eritrean President Isaias Afwerki are seeking partnerships on economics, trade and, most importantly, access to sea lanes.

The “Joint Declaration of Peace and Friendship” ending the state of war called on both countries to enter a new era of peace and close cooperation in the political, economic, social, cultural and security spheres. Most importantly, from an economic standpoint, is that trade, transport and communication ties would be re-established and borders are to be reopened, giving landlocked Ethiopia an outlet to the sea through Eritrea. Both countries are slated to jointly develop Eritrea’s Red Sea ports.

The rapid rapprochement between the two countries is the result of several factors. The first involves the ongoing war in Yemen and the use of Eritrea as part of the Saudi-led coalition’s logistical operations. Second is the recent decision by the UAE to end its military training program in Somalia. Third, and most importantly, is the geopolitical struggle over Ethiopia itself, where Addis Ababa is caught between a number of different regional and extra-regional powers.

Specifically, Africa is of great importance to Saudi Arabia and the UAE, as these two countries have set up strategic interests throughout the continent’s many regions. In many cases, Riyadh and Abu Dhabi are benefiting from the support of African allies in regional conflicts, especially regarding Iranian interference in those states.

The real breakthrough between Ethiopia and Eritrea started on the first morning of Eid Al-Fitr, when Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan flew to Ethiopia. That day, the UAE signed agreements with Ethiopia to deposit $3 billion to help jump-start Addis Ababa’s new relationship with Eritrea. Out of that money, $1 billion went to the National Bank of Ethiopia as part of an agreement with the Abu Dhabi Fund for Development. This money is expected to greatly help Ethiopia, which is suffering from a hard currency shortage. The remaining $2 billion is for direct investment in Ethiopia, with a focus on developing its Bole Lemi industrial park into a major hub.

Sheikh Mohammed’s visit marked a milestone in the UAE’s interests in Horn of African politics as an important aspect of security in the Arab world. Abu Dhabi sees the Horn of Africa as a partner in moderation, stability and counter-terrorism and, along with Saudi Arabia, is helping Ethiopia and Eritrea create a hub-and-spoke system of throughput via the Red Sea.

The real breakthrough between Ethiopia and Eritrea started on the first morning of Eid Al-Fitr, when Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan flew to Ethiopia

Dr. Theodore Karasik

To be sure, Ethiopia is Africa’s second-most populous nation, with more than 100 million people, and one of the world’s fastest-growing economies. The much smaller Eritrea, with five million people, is more or less closed off in terms of economic capacity. The two countries share close cultural ties and this fact is a major driver in the current reconciliation. Access to the Red Sea via Eritrea is critical for Ethiopia and, given the country’s economic potential, Gulf states see the requirement for developing the necessary infrastructure to make such a dream a reality. For Eritrea there are real benefits — not only the revenues from Ethiopian trade through its ports, but also the potential for very substantial potash developments on the Ethiopia-Eritrea border that may be very beneficial to the development of both countries.

Most important is that the potential development of the Port of Doraleh will occur as neighboring Djibouti becomes increasingly crowded and militarized. Clearly, given the quickly shifting developments in Gulf-Horn of Africa relations, it is likely Djibouti would want a percentage of revenue from throughput, given that the Djibouti Port Authority oversees the Port of Doraleh. In February 2017, Djibouti seized the Port of Doraleh facility, which forced the UAE’s DP World to vacate its management. The bad blood created by this action is likely to remain part of the political fabric in the Horn of Africa today and has the potential to flare up again.

While Ethiopia relies on Djibouti’s port, which accounts for 95 percent of the country’s imports and exports, the peace agreement will reduce that percentage over time. Addis Ababa’s strategy also involves a push to refurbish and develop other regional ports — including Port Sudan in Sudan, Berbera in the Somaliland region of Somalia, and Mombasa in Kenya — to help fix its import/export requirements. Berbera is probably the most interesting port outlet, given the geography and politics, and because of how the UAE is investing in Berbera’s port infrastructure, as well as making it a debarkation point for some aspects of the Saudi-led operation in Yemen. Interestingly, Ethiopia sees multiple routes to the Red Sea.

Overall, the Ethiopian-Eritrean peace agreement is welcome news. Hostilities can stop and the healing and economic development can begin. As with all states in East Africa, and especially the Horn of Africa, access to maritime sea lanes is critical if a country is to emerge as a more powerful economic player. Enjoy the moment.

• Dr. Theodore Karasik is a senior adviser to Gulf State Analytics in Washington, D.C. He is a former RAND Corporation Senior Political Scientist who lived in the UAE for 10 years, focusing on security issues. Twitter: @tkarasik

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