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Ethiopia Eritrea Somalia Djibouti COUNTRY REPORT Ethiopia Eritrea Somalia Djibouti 1st quarter 1997 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 40 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, USA 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 Electronic delivery EIU Electronic New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) Tel: (1.415) 254 7000 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1997 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 5 Political structure 6 Economic structure 7 Outlook for 1997-98 9 Review 9 The political scene 15 The economy 17 Agriculture and mining 19 Infrastructure and tourism 21 Foreign trade and payments Eritrea 23 Political structure 24 Outlook for 1997-98 24 Review 24 The political scene 28 The economy Somalia 35 Political structure 36 Economic structure 37 Outlook for 1997-98 38 Review 38 The political scene 43 The economy 44 News from the Somaliland Republic Djibouti 46 Political structure 47 Economic structure 48 Outlook for 1997-98 49 Review 49 The political scene 52 The economy 55 Quarterly indicators and trade data EIU Country Report 1st quarter 1997 © The Economist Intelligence Unit Limited 1997 2 List of tables 9 Ethiopia: regions 54 Djibouti: current account 55 Ethiopia: quarterly indicators of economic activity 55 Djibouti: quarterly indicators of economic activity 56 Ethiopia: trade with major trading partners 56 Somalia: trade with major trading partners 56 Djibouti: trade with major trading partners List of figures 8 Ethiopia: gross domestic product 22 Ethiopia: breakdown of exports, July 1995-March 1996 49 Djibouti: gross domestic product EIU Country Report 1st quarter 1997 © The Economist Intelligence Unit Limited 1997 3 February 21, 1997 Summary 1st quarter 1997 Ethiopia Outlook for 1997-98: Continued improvements in agricultural output will fuel growth, although food security remains precarious. The government has pledged to accelerate privatisation and land-allocation policies. Review: The disgraced defence minister has not been charged. Rivalry has resurfaced within the OPDO leadership. The Sudanese government has accused Ethiopia of participating in military raids by opposition forces across the Blue Nile border. Punitive raids on Somali militia have continued in the south-west. The main, meher harvest produced a record crop, reducing dependence on food aid. Foreign investment has remained weak, but a further gold concession has been awarded to a Canadian company. Donors at December’s Consultative Group meeting have pledged $2.5bn in assistance over the next three years and the Paris Club has awarded “Naples terms”. Eritrea Outlook for 1997-98: It looks improbable that the constitution will be final- ised by May 1997, and the elections are therefore unlikely to be held under a multiparty system. Eritrea should benefit financially from good relations with the USA. Review: Tensions between Sudan and Eritrea have been heightened by the defection of a senior Sudanese politician to Asmara and growing crossborder operations. The USA has lent its support to Eritrea and has praised the govern- ment’s way of doing business. An anti-corruption drive has led to the downfall of the RSTC management. Regional elections have seen a high turnout, and relations with Yemen have recovered. Reforms in the banking sector have taken shape, and European project support has been promised. South Korea will build an aluminium extraction and processing plant, and other mining concessions have been offered for bids. Somalia Outlook for 1997-98: The Sodere peace deal and the renewal of the ceasefire may be undermined by Mr Aideed and his overtures to Al-Ittihad and by the CCRS’s rejection of the offer to include Somaliland in the negotiations. Review: Some 26 faction leaders have signed a new peace agreement, al- though Mr Aideed has refused to participate. The Nairobi ceasefire has been reinstated, but fighting has continued and claimed many lives. Al-Ittihad initi- ated a crossborder raid into Ethiopia and subsequently declared itself a political party. Piracy has continued to be a problem. A new humanitarian crisis is looming, and an accord for the return of refugees has been signed. Somaliland has set out the requirements for the election of a new president. Djibouti Outlook for 1997-98: Progress on economic reform will continue, but the fiscal and debt targets set for 1997 are unlikely to be met. Djibouti will fail to capitalise on its position as host to the increasingly active regional association of states, IGAD. EIU Country Report 1st quarter 1997 © The Economist Intelligence Unit Limited 1997 4 Review: Dissident RPP members have been released from prison. An oppos- ition leader had died. The president of Yemen has visited. Disbursements of French and IMF assistance have been delayed by the inability of ministers to meet economic conditionality. France has begun to contemplate reducing the size of its garrison. The EU has granted Djibouti Ecu22m ($28m) under its current financing programme. Editor: Kristina Quattek All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 1st quarter 1997 © The Economist Intelligence Unit Limited 1997 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. Representatives were elected to the institutions of the new republic in May 1995, which 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 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 which 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 exists 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 & cooperation Girma Biru Education Guenet Zewde Finance Sufyan Ahmed Foreign affairs Seyoum Mesfin Health Adem Ibrahim Information & tourism Wolde-Mikael Chamo Justice Mehetema Solomon 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 Dubale Jale EIU Country Report 1st quarter 1997 © The Economist Intelligence Unit Limited 1997 6 Ethiopia Economic structure Latest available figures Economic indicators
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