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Ethiopia Eritrea Somalia Djibouti COUNTRY REPORT Ethiopia Eritrea Somalia Djibouti 3rd quarter 1996 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 Publishing 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 © 1996 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 authors and the publishers ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1350-2922 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 Summary Ethiopia, Eritrea, Somalia, Djibouti 3rd quarter 1996 August 23, 1996 Ethiopia Political and economic structures pages 3-4 Outlook: The Somali border will remain tense, with the Ethiopian govern- ment encouraged by US backing to embark on further intervention. Property law and other obstacles will constrain the flow of new investment. pages 5-6 Review: Ethiopian raids on militia bases in Somalia have followed attacks on state personnel and property in Addis Ababa. A leading trade unionist has been arrested. Tensions with Sudan have persisted. The USA has pledged support for the air force. Healthy growth and inflation figures have been reported for fiscal 1995/96, and partial census results published. The investment code has been revised. Coffee exports have improved. Prospects for increasing gold production appear good. The system of foreign exchange auctions has been reformed. pages 6-17 Eritrea Political structure page 18 Outlook: The presidents calls for hard work and sacrifices will remain convincing with Eritreans at home, while the diaspora will maintain its wait- and-see stance. page 19 Review: A draft constitution has been finalised. There has been a setback in mediations with Yemen. Relations with Sudan remain tense. The government has high hopes of IGADs new role. Progress with privatisation has been slow. There have been further improvements in the infrastructure, notably at airports and in the energy sector. The rains this year have been good. The banks have extended their services. Remittances continue to dominate foreign exchange earnings. pages 19-25 Somalia Political and economic structures pages 26-27 Outlook: The prospects for reconciliation in the south are poor since Mr Aideed seems determined to pursue his late fathers search for a military solution. Any progress towards reconciliation in the south would undermine the self-styled Somaliland Republic. pages 28-29 Review: General Aideed has died, and been has replaced by his son, Hussein Mohamed Aideed, who shares his fathers belligerence. Mogadishu is wholly under sharia. Ethiopian government forces have attacked Islamist groups inside the Somali border. International organisations have pursued their attempts at national reconciliation. Substantial food aid is required for 1996. In the self- styled Somaliland Republic, Mr Egal is to stand down as president, and fresh incidents involving armed opponents have been reported. pages 29-37 EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 2 Djibouti Political and economic structures pages 38-39 Outlook: The power struggle will exacerbate the slide towards clan and family- based political confrontation, heightening the likelihood of sporadic urban violence. Against this background, progress on economic reform will remain piecemeal. pages 40-41 Review: Ismael Omar Guelleh has used the courts to silence political rivals. Dissident politicians have been expelled from the ruling party. The progress of the demobilisation programme is uncertain. IMF reforms have got off to a slow start. There has been confirmation of a revival of plans to build an oil refinery. pages 41-45 Statistical appendices pages 46-47 Editors: Gregory Kronsten; Kristina Quattek All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Ethiopia 3 Political structure: Ethiopia 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 Peoples Representatives is the federal assembly. Nine regional State Councils have limited powers including appointing the supervisory Federal Council Last elections: June 1994 (Constituent Assembly); May 1995 (federal and regional) Next elections: 2000 (federal and regional) Head of state: president, Negaso Gidada, largely ceremonial and 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) is the coalition of armed groups which seized power in May 1991. It includes the Tigray Peoples Liberation Front (TPLF) and the Amhara National Democratic Movement (ANDM, formerly the Ethiopian Peoples 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 Tamrat Layne Deputy prime minister for economic affairs Kassu Illala Key ministers agriculture Teketel Forsido 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 planning & economic cooperation Girma Biru public works & urban development Haile Aseged trade & industry Kassahun Ayele water resources Shiferaw Yarso transport & communications Abdul Mejid Hussein Governor of the National Bank of Ethiopia Dubale Jale EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 4 Ethiopia Economic structure: Ethiopia (incl Eritrea) Latest available figures Economic indicators 1991 1992 1993 1994 1995 a GDP at factor cost Birr bn 19.4 24.5 25.3 n/a n/a a b Real GDP growth % 8.7 12.3 1.4 5.6 7.7 Consumer price inflation % 35.7 10.5 3.5 7.6 10.0 c Population m 49.4 50.9 52.4 54.1 55.7 Exports fob $ m 168 170 199 405 n/a Imports fob $ m 471 993 706 937 n/a Current account $ m 103 120 52 n/a n/a Reserves excl gold $ m 55 232 456 544 772 Total external debt $ m 4,179 4,363 4,703 5,059 n/a External debt-service ratio % 17.9 13.4 11.7 11.7 n/a d b b Coffee production 000 tons 184 210 222 228 300 Exchange rate (av) Birr:$ 2.07 2.81 5.00 5.09 6.15 August 23, 1996 Birr6.34:$1 a a Origins of gross domestic product 1992 % of total Components of gross domestic product 1993 % of total Agriculture & forestry 54.3 Private consumption 84.0 Trade, hotels & restaurants 10.1 Government consumption 11.3 Manufacturing 4.6 Gross fixed capital formation 15.0 Public administration & defence 7.1 Exports of goods & services 11.7 Banking & insurance 6.2 Imports of goods & services 22.0 GDP at factor cost incl others 100.0 GDP at market prices 100.0 a a Principal exports 1994 $ m Principal imports 1993 $ m Coffee 320 Food & live animals 111 Hides & skins 68 Crude petroleum 79 Gold 23 Petroleum products 64 Chemicals 44 a a Main destinations of exports 1993 % of total Main origins of imports 1993 % of total Germany 18.0 Saudi Arabia 13.3 Japan 13.3 Italy 11.6 Djibouti 10.4 USA 10.2 Saudi Arabia 7.7 Germany 9.1 a Fiscal years starting July 8. Fiscal years are widely used by national statistical sources, while calendar years are favoured by international b c d publications. Official estimate. Excluding Eritrea, based on a Ministry of Planning estimate of 54.1 million in 1994. Crop years (October- September) beginning in calendar years.
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