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Ethiopia Eritrea Somalia Djibouti COUNTRY REPORT Ethiopia Eritrea Somalia Djibouti 2nd quarter 1998 The Economist Intelligence Unit 15 Regent Street, 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 subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; 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 Street 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: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 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 EIU Electronic Publishing New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Jeremy Eagle Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases Microfilm FT Profile (UK) NewsEdge Corporation (US) World Microfilms Publications (UK) Tel: (44.171) 825 8000 Tel: (1.781) 229 3000 Tel: (44.171) 266 2202 DIALOG (US) Tel: (1.415) 254 7000 CD-ROM LEXIS-NEXIS (US) The Dialog Corporation (US) Tel: (1.800) 227 4908 SilverPlatter (US) M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1998 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 for 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 4 Political structure 5 Economic structure 6 Outlook for 1998-99 9 Review 9 The political scene 11 The economy Eritrea 18 Political structure 19 Economic structure 20 Outlook for 1998-99 21 Review 21 The political scene 23 The economy Somalia 26 Political structure 27 Economic structure 28 Outlook for 1998-99 30 Review 30 The political scene 34 The economy 36 News from the Somaliland Republic Djibouti 39 Political structure 40 Economic structure 41 Outlook for 1998-99 42 Review 42 The political scene 44 The economy 46 Quarterly indicators and trade data EIU Country Report 2nd quarter 1998 © The Economist Intelligence Unit Limited 1998 2 List of tables 46 Ethiopia: quarterly indicators of economic activity 46 Djibouti: quarterly indicators of economic activity 47 Ethiopia: foreign trade 47 Djibouti: foreign trade 48 Somalia: trade with major trading partners 48 Djibouti: trade with major trading partners List of figures 12 Ethiopia: gross domestic product 41 Djibouti: gross domestic product EIU Country Report 2nd quarter 1998 © The Economist Intelligence Unit Limited 1998 3 April 25th 1998 Summary 2nd quarter 1998 Ethiopia Outlook for 1998-99: A new investment code is being prepared. Donors may put pressure on the government and the IMF to resolve their differences over financial sector reform. Poor harvests will hold economic growth under 3% in the fiscal year to July. Bureaucratic and other bottlenecks need to be removed if plans to boost private-sector investment are to be successful. Review: The security forces have continued to arrest journalists perceived to be critical of the government. The prime minister, Meles Zenawi, met with Bill Clinton on his tour of Africa. The government and IMF have failed to resolve their differences over ESAF funding. Poor harvests have led to requests for 400,000 tonnes of food aid from donors. Fertiliser prices have been deregulated. Eritrea Outlook for 1998-99: Libya’s offer of mediation in the dispute between Sudan and Eritrea is unlikely to succeed, although relations with Yemen may improve. More difficulties with the new currency are expected. Review: Violent clashes on the border with Sudan have continued and Libya has emerged as a mediator. Government visits have been exchanged with Yemen. A mass mobilisation campaign to improve the country’s infrastructure has been launched. The government’s human rights record has been con- demned. The new currency has caused a build-up of Eritrean debt to Ethiopia. Somalia Outlook for 1998-99: While the implementation of the Cairo accord looks a long way off, Ethiopia and Egypt will maintain the pressure to secure peace between the warring factions. Efforts by Somaliland to solicit international recognition are likely to proceed slowly, although not without success. Review: The scheduled Baidoa peace conference was postponed again, frus- trating international observers. Violence has flared up in Baidoa, Kismayu and Gedo. Further reports of alleged atrocities by US, Belgian and Italian troops in Somalia in 1994 have been made. Somaliland is inching closer to international recognition and securing foreign aid, but relations with Egypt have soured and the economy is suffering from the livestock import ban by Saudi Arabia. Djibouti Outlook for 1998-99: Sporadic armed attacks by guerrillas loyal to Ahmed Dini’s faction of the rebel FRUD are likely to continue. These attacks will delay the army demobilisation programme, which is an essential element of the economic reform programme designed to reduce government expenditure. Review: The army has clashed with FRUD militants in both eastern and northern Djibouti. Regional leaders met in Djibouti. France’s defence minister has confirmed that there will be troop reductions in the Djiboutian garrison. Transit trade with Ethiopia has increased. Editor: Piers Haben All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 2nd quarter 1998 © The Economist Intelligence Unit Limited 1998 4 Ethiopia 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. Representatives were elected to the institutions of the new republic in May 1995, and it formally came into operation in August 1995 National legislature The 548-member Council of People’s Representatives is the federal assembly. Nine regional State Councils have limited powers, including that of appointing the supervisory Federal Council National elections June 1994 (Constituent Assembly); May 1995 (federal and regional); next elections due by 2000 (federal and regional) Head of state President, Negaso Gidada, largely ceremonial and appointed by the Council of People’s Representatives National government The prime minister and his cabinet (Council of Ministers), appointed in August 1995 Main political parties The Ethiopian People’s Revolutionary Democratic Front (EPRDF) has evolved from the coalition of armed groups that seized power in May 1991. It includes the Tigray People’s Liberation Front (TPLF) and the Amhara National Democratic Movement (ANDM, formerly the Ethiopian People’s Democratic Movement). The Oromo Liberation Front (OLF) withdrew from the transitional government in July 1992 and was subsequently banned. Several urban opposition parties boycotted the last elections. A myriad of exiled political factions exist Prime minister Meles Zenawi Deputy prime minister & minister of defence Tefera Walwa Deputy prime minister for economic affairs Kassu Illala Key ministers Agriculture Seifu Ketema Economic development & co-operation Girma Biru Education Guenet Zewde Finance Sufyan Ahmed Foreign affairs Seyoum Mesfin Health Adem Ibrahim Information & tourism Wolde-Mikael Chamo Justice Worede Woldu Wolde Labour & social affairs Hassan Abdullah Mines & energy Azedin Ali Public works & urban development Haile Aseged Trade & industry Kassahun Ayele Transport & communications Abdul Mejid Hussein Water resources Shiferaw Yarso Central bank governor Teklewolde Atnafu EIU Country Report 2nd quarter 1998 © The Economist Intelligence Unit Limited 1998 Ethiopia 5 Economic structure Latest available figures Economic indicators 1993 1994 1995 1996 1997 GDP at factor costa (Birr bn) 25.2 26.2 31.4 35.7b n/a Real GDP growtha (%) 1.7 4.8 7.7 5.6b 2.0b Consumer price inflation (%; av) 3.5 7.6 10.1 –6.4 n/a Populationc (m) 53.2 54.9 56.7 n/a n/a Exports fob ($ m) 199 372 423 418c n/a Imports fob ($ m) 706 926 1,148 1,235c n/a Current-account balance ($ m) –50.0 125.0 –9.7b –102.3c n/a Reserves excl gold ($ m; year-end) 455.0 544.2 771.5 732.2 501.1 Total external debt ($ m) 9,703 10,067 10,308 10,077 n/a External debt-service ratio, paid (%) 18.5 19.8 19.1 42.2 n/a Coffee productiond (’000 tonnes) 222 228b
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