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Ethiopia Eritrea Somalia Djibouti COUNTRY REPORT Ethiopia Eritrea Somalia Djibouti December 2000 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1007 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.20) 7499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: http://www.eiu.com Electronic delivery This publication can be viewed by subscribing online at http://store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office London: Jan Frost Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 New York: Dante Cantu Tel: (1.212) 554 0643 Fax: (1.212) 586 1181 Hong Kong: Amy Ha Tel: (852) 2802 7288/2585 3888 Fax: (852) 2802 7720/7638 Copyright © 2000 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1352-2922 Symbols in tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 Contents 3 Summary Ethiopia 5 Political structure 6 Economic structure 6 Quarterly indicators 7 Annual indicators 8 Outlook for 2001-02 8 Political outlook 9 Economic policy outlook 10 Economic forecast 10 The political scene 12 Economic policy and the economy Eritrea 15 Political structure 16 Economic structure 17 Outlook for 2001-02 17 Political outlook 17 Economic forecast 18 The political scene 20 Economic policy and the economy Somalia 22 Political structure 23 Economic structure 23 Annual indicators 24 Outlook for 2001-02 25 The political scene 29 Economic policy and the economy 31 News from the Somaliland Republic © The Economist Intelligence Unit Limited 2000 EIU Country Report December 2000 2 Djibouti 32 Political structure 33 Economic structure 33 Annual indicators 34 Quarterly indicators 35 Outlook for 2001-02 36 The political scene 38 Economic policy and the economy List of tables 13 Ethiopia: coffee production List of figures 10 Ethiopia: gross domestic product 18 Eritrea: gross domestic product 36 Djibouti: gross domestic product EIU Country Report December 2000 © The Economist Intelligence Unit Limited 2000 3 Summary December 2000 Ethiopia Outlook for 2001-02 As expected, affiliates of the ruling Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) dominate the new federal assembly, which will continue to be a largely powerless body. The decision of the prime minister, Meles Zenawi, in October to retain his cabinet unchanged indicates that political decision-making remains outside formal channels. The coming year will further boost the importance of commercial conglomerates linked to the ruling party. The government will continue clumsily to stifle dissent and debate. Ethiopia is expected to be awarded PRGF and HIPC deals in 2001, leading to an increase in real GDP growth over the forecast period. Lower military expenditure in 2002 should help to narrow the current-account deficit. The political scene The first session of Ethiopia’s federal legislature—the Council of Peoples’ Representatives—opened on October 9th, almost five months after the elections. The lack of urgency in convening the Council reflects unchanged membership and affiliation. Economic policy and the Ethiopia’s annual food-assessment exercise began in early November, with economy initial estimates of the year’s main-season meher crop, and thus the likely size of food-aid requirements for 2001, which are expected to be announced in mid-December. Meetings with IMF and World Bank staff indicate that donors will resume lending now that the fighting has stopped. Work on Ethiopia’s PRSP is under way. Eritrea Outlook for 2001-02 The government has announced that the country’s first general election will take place in December 2001, although complaints that this is too far in the future may create political tension. The World Bank board is considering a three-year US$288m aid package, which will focus on technical assistance to internally displaced people. Aid and normal weather patterns will be essential for real economic growth in 2001-02. The political scene Military observers from 22 countries were deployed in September and October in Ethiopia and Eritrea, under the auspices of the UN Mission in Ethiopia and Eritrea. Economic policy and the Estimates from the Ministry of Agriculture in September revealed a sharp economy decrease in the area cultivated and crops produced in 2000. There was a further blow to the economy in September when Saudi Arabia, Yemen and other Gulf states imposed a ban on livestock imports from Eritrea because of an outbreak of Rift Valley fever on the Arabian Peninsula. The war-affected and drought- © The Economist Intelligence Unit Limited 2000 EIU Country Report December 2000 4 affected people are likely to require emergency assistance well into 2001 and possibly until the end of that year. Somalia Outlook for 2001-02 Domestic opposition will make it difficult for the TNA to assert its authority. Prospects for peace will remain poor. A ban imposed by several Gulf states on imports of Somali livestock will hit the economy. Somaliland will remain wary of the new parliament and, while the TNA exists, the prospects for its international recognition will remain slim. The political scene A new parliament has opened. Key ministerial positions in the government have been filled. Fighting between rival clans has continued throughout the country. The cabinet has been reshuffled in Puntland. Economic policy and the An outbreak of Rift Valley fever in the Gulf has led to several countries banning economy imports of Somali livestock. Large quantities of banknotes have been imported, increasing inflation. The UN has unveiled a reconstruction plan. Mogadishu has been hit by a fuel crisis. News from the Somaliland President Egal has refused talks with President Hassan of Somalia. A member of republic the TNA has been released from prison after being convicted of treason for attending the Arta conference. Somaliland citizens have a new passport. Djibouti Outlook for 2000-02 The success of the Somalia peace conference will lift the international standing of President Guelleh. The domestic political scene will remain tense, and even limited political reforms appear unlikely. Despite the interim settlement between Eritrea and Ethiopia, the latter’s trade will continue to be routed through Djibouti. Economic reform will proceed at a very slow pace and will be subject to setbacks; thus the IMF reform schedule is likely to be revised. The economy is not expected to show any dynamism or substantial growth. The political scene President Guelleh has received considerable international praise for his role in convening and hosting the Somali peace conference. Violence against Ethiopian and French interests broke out at a pro-Palestinian march. The prime minister has returned home after six months of medical treatment. Full diplomatic relations with Eritrea have been restored. Economic policy and the Two visits by IMF delegations have failed to resolve concerns over the lack of economy financial transparency and poor basic statistical reporting. A new port facility has been opened in the northern town of Tadjourah. A trade war with Ethiopia has broken out. Editors: Christopher Eads (Ethiopia, Eritrea); Paul Gamble (Somalia, Djibouti); Douglas Mason (consulting editor) Editorial closing date November 22nd 2000 All queries: Tel: (44.20) 7830 1007 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule EIU Country Report December 2000 © The Economist Intelligence Unit Limited 2000 Ethiopia 5 Ethiopia Political structure Official name Federal Democratic Republic of Ethiopia Form of state Federal republic Legal system The federal constitution was promulgated by the transitional authorities in December 1994. In May 1995 representatives were elected to the institutions of the new republic, which formally came into being in August 1995 National legislature The 548-member Council of Peoples’ Representatives is the federal assembly. The nine regional state councils have limited powers, including that of appointing the supervisory Federal Council National elections National elections: May 2000 (federal and regional); next elections due in May 2005 Head of state President, currently Negaso Gidada, who has a largely ceremonial role and is appointed by the Council of Peoples’ Representatives National government The prime minister and his cabinet (Council of Ministers), appointed in August 1995 Main political parties The Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) evolved from the coalition of armed groups that seized power in May 1991.
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