COUNTRY REPORT
Ethiopia Eritrea Somalia Djibouti
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4th quarter 1999
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ISSN 1352-2922
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Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Contents
3 Summary
Ethiopia
5 Political structure 6 Economic structure 7 Outlook for 2000-01 9 The political scene 11 Economic policy and the economy
Eritrea
17 Political structure 18 Economic structure 19 Outlook for 2000-01 20 The political scene 22 Economic policy and the economy
Somalia
25 Political structure 26 Economic structure 27 Outlook for 2000-01 28 The political scene 34 Economic policy and the economy 35 News from the Somaliland Republic
Djibouti
37 Political structure 38 Economic structure 39 Outlook for 2000-01 40 The political scene 42 Economic policy and the economy
45 Quarterly indicators and trade data
List of tables
12 Ethiopia: macroeconomic indicators, official estimates 15 Ethiopia: coffee export earnings 42 Djibouti: macroeconomic targets, 1999-2002
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 2
45 Ethiopia: quarterly indicators of economic activity 45 Djibouti: quarterly indicators of economic activity 46 Ethiopia: foreign trade 46 Djibouti: foreign trade 47 Somalia: trade with major trading partners 47 Djibouti: trade with major trading partners
List of figures
11 Ethiopia: gross domestic product 22 Eritrea: gross domestic product 42 Djibouti: gross domestic product
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 3
29th October 1999 Summary
4th quarter 1999
Ethiopia
Outlook for 2000-01 The current OAU-initiated peace process to end the war with Eritrea will remain stalled, as mutual mistrust is high and both sides appear to be preparing for more fighting. Federal elections are scheduled for May 2000, but they are unlikely to impact the political scene. The war will prevent an agree- ment for a new economic programme with the IMF and any new donor commitments. The medium-term outlook for the economy will continue to depend upon the main harvest.
The political scene Ethiopia has rejected the latest technical arrangements of the OAU peace plan. International efforts to push the plan have continued. Limited fighting with Eritrea has resumed, while both sides have continued to aid opposing Somali militias. The government has said all remaining Eritrean citizens must register.
Economic policy and the The IMF and Ethiopia have concluded Article IV consultations. A public expen- economy diture review has been completed, which has attempted to calculate the costs of the war. A privatisation plan for 1999-2001 has been outlined. The power and telecoms sectors have been opened to foreign investment. Coffee earnings and volumes have declined. Sugar and vegetable exports have shown promise. Initial signals for the main crop harvest have been mixed, as food security has remained a problem.
Eritrea
Outlook for 2000-01 The lull in fighting with Ethiopia is highly likely to end in the near future, as the rains have eased and a diplomatic solution remains remote. The immediate economic consequences of the war will continue to take a toll, while the impact on the economy over the longer term could also be substantial.
The political scene Minor clashes with the Ethiopian forces have occurred. There have been signs that both sides are preparing for renewed conflict. The OAU plan appears to have stalled. Relations with Sudan have cooled again over the issue of harbour- ing opposition groups. Eritrea has had a diplomatic row with Malawi, and has opened an embassy in Libya.
Economic policy and the The economy appears to have stagnated. The port at Massawa has reported economy that it is running well below capacity. Labour shortages have delayed several development projects. The World Bank has suspended fresh lending. Ethiopia has sued Eritrea over goods stranded when the war broke out. Shortages of food supplies have been reported. Some limited mining activity has continued.
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Somalia
Outlook for 2000-01 The arrival of new arms shipments indicates that violence between clan factions will escalate. International efforts at reconciliation will remain stalled. Islamic courts will increasingly challenge the clan militias. Food shortages will be a problem, especially in the southern regions. Somaliland’s case for some form of international recognition will grow stronger.
The political scene Fierce fighting has continued in the central and southern regions. Ethiopian- backed militias have targeted Qoroley and Balidogle airport. General Morgan’s whereabouts have remained unknown. Ethiopia and Eritrea have continued to supply Somali militias with support and arms. Three aid workers have been killed, prompting a series of peace marches, but also threatening the future of humanitarian assistance. Islamic courts have pacified some neighbourhoods of Mogadishu, but security has remained a problem. A new pro-peace political party has been formed, while a new coalition has emerged in Puntland. Djibouti’s president, Ismael Omar Guelleh, has attempted to put Somalia back on the UN’s agenda.
Economic policy and the More bank-notes have arrived in the country, driving up local prices. One of economy Mogadishu’s airports has been re-opened. Food shortages have been reported in southern regions. Puntland has faced weather-related disruptions of trade.
News from the Somaliland President Mohamed Ibrahim Egal has travelled to New York and Washington, Republic DC to seek some form of recognition from the UN and US government. The Sanaag region has opted to join Somaliland. Berbera port and Hargeisa airport have been renovated.
Djibouti
Outlook for 2000-01 The government’s authoritarian response to criticism will continue, but France and other donors could press for improving human rights conditions in the country. Much-needed economic reform will likely be piecemeal.
The political scene President Guelleh has attacked the press and arrested his primary political opponent. Security problems have continued, including the temporary closure of the railway to Ethiopia. The president has addressed the UN General Assembly.
Economic policy and the The IMF has approved a three-year ESAF worth $26.5m. The government has economy set optimistic macroeconomic targets, while reforms have centred on the civil service and privatisation programme. Donors have reported food shortages. France has closed a trade office, but a foreign investor may buy the Sheraton hotel.
Editor: Todd Moss All queries: Tel: (44.20) 7830 1007 Fax: (44.20) 7830 1023 Next report: Our next Country Report will be published in February
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 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 Peoples’ 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 scheduled for May 14th 2000 (federal and regional)
Head of state President, currently Negaso Gidada, 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 People’s Revolutionary Democratic Front evolved from the coalition of armed groups that seized power in May 1991. It includes the Tigray People’s Liberation Front and the Amhara National Democratic Movement, formerly the Ethiopian People’s Democratic Movement). The Oromo Liberation Front withdrew from the transitional government in July 1992 and was subsequently banned. Several urban opposition parties boycotted the 1995 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 Mengistu Huluka (acting) 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 Mohammed Drir (acting) Water resources Shiferaw Yarso
Central bank governor Teklewolde Atnafu
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 6 Ethiopia
Economic structure
Latest available figures
Economic indicators 1994 1995 1996 1997 1998 GDP at factor costa (Birr bn) 26.3 31.4 35.1 38.2 41.4 Real GDP growtha (%) 1.6 6.2 10.6 5.2 –0.5 Consumer price inflationa (av; %) 1.2 13.4 0.9 –6.4 3.7 Population (m) 54.9 54.7 56.4 58.1 59.9 Exports fob ($ m) 372 423 418 588 568 Imports fob ($ m) 926 1,137 1,002 1,019 1,042 Current-account balance ($ m) 125 –10 89 –23 134 Reserves excl gold (year-end; $ m) 544 772 732 501 511 Total external debt ($ m) 10,067 10,309 10,078 10,079 n/a External debt-service, paid (%) 19.8 19.1 42.2 9.5 n/a Coffee productionb ('000 tonnes) 228 230 228 230 232c Exchange rate (av; Birr:$) 5.09 6.15 6.35 6.71 7.11
October 22nd 1999 Birr8.04:$1
Origins of gross domestic product 1998a % of total Components of gross domestic product 1998a % of total Agriculture 45.7 Private consumption 79.2 Industry 11.6 Government consumption 14.2 Manufacturing 4.7 Gross fixed capital formation 18.1 Distribution services 14.8 Exports of goods & services 15.8 Other services 27.9 Imports of goods & services –27.7 GDP at factor cost 100.0 GDP at market prices 100.0
Principal exports fob 1997a $ m Principal imports cif 1997a $ m Coffee 355 Capital goods 515 Gold 64 Consumer goods 323 Leather & leather products 57 Semi-finished goods 270 Khat 34 Fuel 232
Main destinations of exports 1997d % of total Main origins of imports 1997d % of total Germany 22.4 Italy 10.1 Japan 11.5 US 9.3 Italy 9.4 Japan 8.1 UK 4.6 Jordan 5.4 a Fiscal years ending July 7th; hence 1998 is 1997/98. b Crop years (October-September) beginning in calendar year indicated. c Official estimates. d Based on partners' trade returns; subject to a wide margin of error.
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Outlook for 2000-01
The current peace process The Ethiopian government has made it clear that it will not accept the peace will remain stalled— agreement in its current form initiated by the Organisation of African Unity (OAU) aimed at ending the conflict with Eritrea. In the latest delay to the OAU plan’s implementation, the Ethiopians have rejected the “Technical Arrangements”, the second document attempting to clarify the details for the disengagement of forces along the disputed border, originally contained in the Framework Agreement (see The political scene). Although both the Ethiopians and the Eritreans have now accepted the framework, and also the modalities agreement in mid-July, the technical arrangements apparently fail to specify all the areas for Eritrean withdrawal, especially near Zala Ambassa. With levels of trust extremely low, it appears that details over the terms of the withdrawal of troops from disputed areas will remain a sticking point—perhaps broken only after one side or the other gains a strategic advantage (see below).
—as there is no quick or For the Ethiopian authorities, the current impasse over the technical arrange- easy solution in sight ments can be overcome only by yet another redrafting of the agreement specifying an unambiguous Eritrean withdrawal from border areas occupied in June 1998. Yet, even if this is achieved, it is far from certain that the OAU Framework Agreement provides a viable basis for a lasting settlement. The plan leaves considerable leeway for procrastination and provocation from either side. Inflated notions of wounded pride, dignity and self-esteem remain at the root of the conflict. Any settlement that fails to tackle these, essentially subjective, aspects of the war will probably prove short-lived.
Mutual mistrust remains Worryingly, both leaderships have publicly promised not to back down and high— positions seem to have hardened. Ethiopia’s leadership appears united in demanding total withdrawal of Eritrean forces to pre-May 6th 1998 positions as a precondition for any future arbitration. However, doubts and mistrust over Eritrean insincerity are compounded by deep suspicions among Ethiopians about the stance of the US, EU and OAU officials. This stems primarily from the failure by outsiders to condemn the original Eritrean aggression. Foreign diplomats’ insistence on treating the conflict not from the perspective of inter- national law (which the Ethiopians clearly feel is on their side and against Eritrean “aggression”), but rather as a situation for “conflict resolution” requiring arbitration, continues to irritate Ethiopian officials. Mistrust of inter- national actors is exacerbated by the Ethiopian authorities’ inability to wage an effective public relations and propaganda campaign. Despite strenuous efforts, Ethiopian attempts at news management have been invariably eclipsed by the better public relations skills of the Eritreans.
—and preparations for war In September the Ethiopian president, Negaso Gidada, again warned that if by both sides signal a international pressure failed to ensure Eritrean withdrawal, Ethiopia would be return to more fighting “obliged to liberate our territories occupied by force”. Despite these statements, Ethiopia has strenuously denied accusations that it is planning an offensive. Yet, the current situation remains extremely tense and unstable. The resumption of low-level fighting in September and October (see The political
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scene) may signal a testing of the lines by both sides, in preparation for another round of heavy fighting. Indeed, with such a heavy militarised border—estimated troop strengths vary, but upwards of 500,000 troops may be involved—the risk of renewed fighting seems high. With the easing of the rains, military commanders may soon feel that they will be in position to seek a strategic advantage. Politically, pressure may also build for a military solution to the current stalemate, especially in a climate of aggressive propaganda.
Elections are to be held in A final factor in the current impasse is the upcoming Ethiopian federal May 2000 elections, now scheduled to be held on May 14th 2000. These will comprise direct elections for the 550-member Council of Peoples’ Representatives. According to the timetable issued by the National Election Board of Ethiopia (NEBE), the proposal and endorsement of candidates should be completed by November 8th, with lists of eligible candidates being issued by December 21st. Voters will have to re-register by mid-January, by which time campaigning will be under way. The ruling coalition, the Ethiopian People’s Revolutionary Democratic Front (EPRDF), will, as in 1995, dominate the elections. By mid- October 56 parties had registered, 23 of them components of the EPRDF. The various non-EPRDF parties are mostly tiny and local, and will pose almost no electoral challenge whatsoever. Indeed, the war with Eritrea has undermined one of the few common threads uniting disparate urban opposition groups: until the conflict broke out in May 1998, a central allegation of anti- government groups was that the Tigrayan core of the EPRDF was too close to the Eritrean leadership.
The war will prevent any With Ethiopia’s Article IV consultations with the IMF successfully concluded, new donor funding— donors now appear once again to have a fairly positive view of Ethiopia (see Economic policy and the economy). Yet doubts—especially at the executive and board level—in both the World Bank and the IMF reflect the fact that these institutions are under pressure not to be seen to be fuelling, or taking sides in, the conflict. Donor confidence will continue to be tested by the impact of the war, both politically and owing to the likely effect on fiscal policy. For the moment such doubts mean that bolder donor initiatives, including granting Ethiopia debt relief, are clearly on hold. On September 13th the World Bank’s vice-president for Africa, Callisto Madavo, claimed that some donors believed that Ethiopia and Eritrea had “deferred their war against poverty” and that new loans to the belligerents were therefore on hold. Indeed, there has been no new lending by the Bank to Ethiopia since at least April.
—and an agreement for a With Ethiopia’s enhanced structural adjustment facility (ESAF) programme new ESAF with the Fund having lapsed on October 22nd, any new lending appears improbable from the Bank or other donors. Existing projects are likely to continue, especially in social services, poverty reduction and emergency relief. However, it appears highly unlikely that a new ESAF—which would be a precondition for the resumption of new lending, especially for general balance- of-payments support—will be agreed until the war appears to be over. Although the public finances are not yet in dire straits, the government may come under increased financial pressure. In the absence of other inflows—and with declining coffee export revenue (see Economic policy and the
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economy)—the government may have little option other than to allow the birr to depreciate rapidly. Such a scenario could lead to a broader deterioration in the macroeconomic environment, which up to now has been generally sound.
The medium-term Whether the Ethiopian economy meets its medium-term target of 6% GDP economic outlook rests on growth for 1999/2000—and, more critically, whether the bulk of rural people crop harvests avoid starvation—depends almost entirely on the outcome of the main 1999 meher harvest. Initial indications are for average yields. Although the rains started late in key highland grain-producing regions, by mid-October aggregate indications suggested that harvests should be in line with last year’s output, allowing for surpluses to be transferred to marginal highland areas. Food security in such areas as Wollo and Tigray was hit earlier in the year by failure of the shorter, belg harvest (3rd quarter 1999, page 15). These preliminary forecasts presume there will not be unseasonable rains or pest damage, the cause of the disastrous shortfalls in previous years. However, the overall food security situation and relief requirements will not become clear until about December. Pledges from the last appeal in May have now largely been met, although delivery and distribution problems are likely to be significant. Ethiopia’s authorities will again have to reassure donors that the war does not diminish nor detract from food aid deliveries.
The political scene
Ethiopia is dissatisfied with After three weeks of uncertainty and hesitation, the Ethiopian foreign ministry technical arrangements of publicly declared in early September that it was not satisfied with the wording the peace plan— and provisions of the third component of the plan by the Organisation of African Unity (OAU) for ending the conflict with Eritrea. The “Technical Arrangements” document is a follow-up to the “Modalities for the Implementation of the OAU Framework Agreement”, which is itself a clarifi- cation of the original 11-point agreement.
Complexities of the OAU peace agreement—three key documents
Framework Agreement: original plan presented by the OAU in December 1998; accepted immediately by Ethiopia and by Eritrea in February 1999 in the wake of Ethiopian military gains at Badme.
“Modalities” document: an elaboration of the Framework Agreement accepted by both sides at the close of the OAU summit in Algeria in mid-July 1999.
“Technical Arrangements”: further details for the implementation of the peace plan and the disengagement of forces along the disputed border; presented to both sides in early August 99; Eritrea accepted immediately; Ethiopia requested “clarifications”, then expressed public dissatisfaction in early September.
Ethiopian reservations focus on the fact that the technical arrangements do not unambiguously ensure the withdrawal of Eritrean forces from the key
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border town of Zala Ambassa. This town has been under the control of Eritrean forces since June 1998, but Eritrea has made no territorial claim. Instead, Eritrea appears to have held it for strategic purposes. Ethiopian officials apparently believe that international diplomats have been pressured by the Eritreans into focussing implementation details primarily on the Badme region where the dispute originated—rather than including all areas that have been subsequently fought over on the central and southern fronts. Ethiopian authorities also have severe reservations about the capacity of proposed inter- national observer and peacekeeping forces to implement and police the agree- ment in its current form.
—but international efforts Despite disagreements over the technical arrangements, the OAU plan con- continue to back the tinues to have full international support. On August 11th, after a briefing by OAU plan Mohamed Sahnoun, the UN secretary-general’s special envoy for the conflict, the UN Security Council declared its “full satisfaction and support for the continuing efforts of the OAU”. Mr Sahnoun, an Algerian with long experience in the Horn of Africa, is working closely with the OAU, currently headed by the Algerian president, Abdel Aziz Bouteflika.
Mr Sahnoun, President Bouteflika and Algeria’s former prime minister, Ahmed Ouyahia, had managed to get both sides to sign the modalities agreement during the OAU summit in mid-July, which was believed at the time to put the peace plan back on track. However, further disagreements over implementation and the timetable necessitated another agreement. Mr Ouyahia reconvened a meeting in the Algerian capital, Algiers, in late July, bringing together envoys from Algeria, the UN, the OAU, the US and both Ethiopia and Eritrea to draft the “Technical Arrangements” document.
On August 9th Ethiopia’s spokeswoman, Selome Taddesse, said Ethiopia had requested clarification “on some points” from the OAU. In late August the US attempted to nudge Ethiopia into accepting this latest set of arrangements. Three high-level diplomats—the US assistant secretary of state for African affairs, Susan Rice, President Bill Clinton’s special envoy to the Great Lakes, Anthony Lake, and the National Security Council’s Gayle Smith—flew to Addis Ababa to meet the Ethiopian prime minister, Meles Zenawi. However, they apparently failed to reassure the Ethiopian leadership, and on September 6th Ethiopia announced that it could not accept the “Technical Arrangements” in their current form. As of late October, the peace plan appears to be at a deadlock, and a resumption of fighting appears probable as each side seeks to gain a tactical advantage before another likely round of talks (see Outlook for 2000-01 and Eritrea).
Limited fighting has With the easing of the rainy season, reports of renewed fighting have emerged, resumed— especially near Zala Ambassa in early September, and again later that month. Heavy machine-gun and mortar fire was also reported on the Badme front in early October (see Eritrea).
—while both sides are still Ethiopia appears to have pulled its own troops back from the Somali interior to involved in Somalia positions nearer the border. However, Ethiopia is still clearly heavily supporting some Somali factions—mainly the Rahawayn Resistance Army (RRA) and the
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Digil Salvation Army (DSA)—as part of its campaign to root out an Ethiopian rebel group, the Oromo Liberation Front (OLF), and an Islamist group, Al- Ittihad. Eritrea, for its part, has also continued to supply arms to Hussein Mohamed Aideed, one of Mogadishu’s principal faction leaders, and several of his allies (see Somalia).
Citizens with Eritrean links On August 14th Ethiopia’s Security, Immigration and Refugee Affairs Authority are required to register (SIRAA), the body that assumed many of the functions of the interior ministry under the plan for regional devolution, announced that those who had registered with the authorities in Asmara as Eritrean citizens remaining in Ethiopia were now required to register in Addis Ababa as aliens. The move was limited to all those of 18 years of age and above residing in Ethiopia, and who had either taken part in the 1993 referendum on Eritrean independence or had later obtained ID cards issued by the Eritrean authorities. Although many of these people in effect had dual nationality (which is technically illegal under Ethiopian law) until the outbreak of hostilities in May 1998, they had been treated as full Ethiopian citizens. Since then, more than 60,000 people— including many not registered with Asmara as Eritrean citizens, but only suspected of “Eritrean links”—have been deported by the Ethiopian authorities. Tens of thousands more have left fearing discrimination, many joining relatives or seeking asylum in Europe or North America. The rationale and criteria of the expulsions policy remains extremely unclear and incon- sistent (2nd quarter 1999, page 8). Announcing the registration order, SIRAA provided no explanation as to why such a move had not been taken earlier.
Economic policy and the economy
Ethiopia concludes Article In August the IMF published details of its Article IV consultation with Ethiopia. IV consultation with the The Fund’s largely positive evaluation of reform progress since 1997 was IMF— tempered by concerns over the economic impact of war. The IMF executive board praised Ethiopia’s “remarkable progress” in improving economic stability and structural reforms, noting that all but one of the specific policy conditions attached to its enhanced structural adjustment facility (ESAF) had been met. It commended the estimated 1998/99 growth rate of 6.7% in the context of continued low inflation, noting that this was achieved despite disruption caused both by the war and the failure of the 1999 minor (belg) harvest. The IMF noted that while the overall government deficit for 1998/99 (July 8th-July 7th), at just 6.5% of GDP (excluding grants), was below that of the previous fiscal year, this was in large part because increased defence spending had been covered by shortfalls in capital expenditure. This resulted largely from “implementation constraints” and delays in donor funding (see below).
The Fund has also highlighted the continued weaknesses in the external sector—the current-account deficit rose to an estimated 9.4% of GDP in 1998/99, while international reserves have remained less than three months’ import cover. This seems primarily due to falling world coffee prices, as the IMF estimates that Ethiopia’s terms of trade have worsened by 18% in the past year.
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Ethiopia: macroeconomic indicators, official estimates (% change unless specified otherwise) 1997/98 1998/99 Real GDP –0.5 6.7 Agriculture –10.3 n/a Industry 6.3 n/a Distribution services 5.3 n/a Other services 13.3 n/a Consumer prices (average) 3.7 3.6 Broad money 12.7 5.3 Budget balance (% of GDP) –6.8 –6.5 Current account (% of GDP) –4.4 –9.4 Source: IMF, Staff Country Report.
—but the Fund encourages While the Fund praised tariff and investment code reforms, it also called for more reforms— quicker implementation of restructuring in the financial sector, noting that a framework for a foreign-exchange market was in place but not yet operating. It also expressed concern over weak revenue collection, and, more significantly, “the major economic and financial uncertainties”—not to mention lapses in data reporting and policy transparency—attributable to the war with Eritrea. Nevertheless, the Fund was characteristically careful not to appear to be taking a stand on the conflict.
—signalling a modest Some of the Ethiopian press suggested that the IMF was privately warning the warming of relations authorities that fiscal indiscipline was threatening to squander economic progress—perhaps indicating scepticism over the budget data. The prime minister’s chief economic advisor, Neway Gebre-Ab, responded by stating that misunderstandings with the Fund had persisted until April, but that the major multilateral donors now have a clearer appreciation of Ethiopia’s position. Indeed, the conclusion of the Article IV consultation and the release of a substantial IMF Staff Country Report in late September appear to mark the end of three years of fraught relations between the Fund and the government. Disagreements over policy detail and sequencing of reforms had dogged relations, prompting a temporary suspension of the ESAF in 1997 (4th quarter 1998, page 9). Nevertheless, any new lending to Ethiopia remains implicitly contingent upon a cessation of hostilities and a perception that the govern- ment’s priorities have turned back toward economic development and poverty alleviation (see Outlook).
A public expenditure The latest round of Ethiopia’s public expenditure review has been completed, review attempts to having been clearly complicated by the impact of the war with Eritrea on calculate war costs government finances. The review was attempting to estimate the direct and indirect cost of the war. Total defence expenditure in the 1998/99 fiscal year (ending July 7th) has been estimated at 3.8% of GDP. However, this is lower than the 4.7% of GDP (calculated from data contained in the latest IMF Staff Country Report) spent on defence in 1997/98. Since the war only began in May 1998, defence spending would be expected to rise significantly in the 1998/99 budget—raising questions about the credibility of the public expenditure
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review. Even without a resumption of hostilities, defence spending is likely to rise further in 1999/2000.
There are, however, other costs related to the war, including assistance to the almost 400,000 people displaced from the border areas, the replacement of assets and increased transport costs due to rerouting trade via Djibouti. The public expenditure review estimates that these extra costs are the equivalent of some 3% of GDP.
Notwithstanding these figures, the public expenditure review concludes overall that the war has not diverted resources away from priority health and education projects. This is in part due to windfall revenue from privatisation (see below), but also because of chronic capital underspending, which has been a familiar characteristic of Ethiopia’s development strategy since 1991. The inability fully to implement projects appears to be the result of confusion caused by simultaneous civil service reform and fiscal decentralisation to the regions, which has complicated project co-ordination.
The privatisation Around 113 companies are now scheduled to be sold under the second phase programme for 1999-2001 of Ethiopia’s privatisation programme. Most of the 183 state-owned entities is outlined— sold to date were small- or medium-sized retail outlets, beverage and agro- processing plants. Sales from the first phase have raised around Birr2.9bn ($363m). This figure includes the Lega Dembi gold mine, sold in 1997 to Midroc corporation, owned by the Ethiopian-Saudi entrepreneur, Mohamed Hussein Alamoudi, for $172m (2nd quarter 1997, page 13). Companies to be sold under the second phase of privatisation scheduled for 1999-2001 have been separated into three groups. The assets of an initial group of 31 heavily indebted companies are to be sold and the companies liquidated. A second group of 38 larger entities, notably in agro-processing, beverages and pharma- ceutical sectors, is to be sold to international bidders. Sales from this group are now under way; tenders opened on four state-owned breweries and a winery in September. The third group of 44 companies is earmarked to be offered by tender to domestic and African regional investors.
The government has also moved to address criticisms, from both local and foreign investors, of poor transparency. In August the head of the Ethiopian Privatisation Agency (EPA), Beshah Azmite, held meetings with private- and public-sector managers to clarify forthcoming privatisation modalities, notably for the third group of scheduled sales. According to Mr Beshah, the EPA intends to restructure many of these entities and offer them for sale as joint- stock companies. It is hoped that this will boost domestic participation in the sales. Loan and delayed payment schemes will also be put in place in order to facilitate sales to smaller investors.
—although problems Despite a rhetorical commitment by the EPA to increase transparency of the remain privatisation programme, controversy and doubts persists over several issues.
• Access to and ownership of land. The bulk of state-owned farms fall into the third category, yet access to both rural and urban land remains plagued by red tape and co-ordination problems between central and regional authorities.
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Private land ownership is still legally prohibited, and the current urban land lease system has proved inefficient.
• The viability of proposed joint-stock companies given Ethiopia’s under- developed financial sector. Both local business interests and foreign donors are hoping that in restructuring and offering state–owned interests for sale as joint- stock companies, the government will decide to support current proposals from the private sector for the establishment of a stock exchange.
• Compensation for assets nationalised in 1975. Unresolved problems with compensation for assets nationalised by the previous government persist, marring Ethiopia’s full membership of the Multilateral Investment Guarantee Agency (MIGA).
The power sector is opened In 1998 the investment code was amended to allow foreign investment in to foreign investment— Ethiopia’s power generation and telecommunications sectors (4th quarter 1998, page 18). On October 5th the state-owned power utility, the Ethiopian Electric Power Corporation (EEPC, which until recently had “Light” in its name and was known as the EELPA) announced that it had finalised preparations for private investment in power generation and distribution. Foreign and domestic investors will now be able to obtain renewable licences for 40 years to generate power, for 50 years to supply power, and for ten years to import or export power. The Blue Nile and its tributaries offer long-term potential for significant exports of hydroelectricity to neighbouring countries (and perhaps even for a regional grid in the very long term). In September the EEPC announced plans to build seven new dams and to double its generating capacity to 713 mw. Under the new provisions announced in October, the EEPC will have to operate under its own licence, although it will remain responsible for regulating prices and supply conditions.
—as are telecoms On September 28th the minister for economic development and co-operation, Girma Biru, announced that the government would seek to sell a stake in the Ethiopian Telecommunications Corporation (ETC) to a strategic partner as part of a strategy to boost investment. Ethiopia currently has under 300,000 land- line subscribers and one of the lowest telephone ratios in the world. In April the ETC in conjunction with Sweden’s Ericsson launched a mobile telephone service in Addis Ababa (3rd quarter 1999, page 17).
Coffee export volumes and In July the Ethiopian Coffee and Tea Authority (ECTA) announced that total earnings decline— exports for the fiscal year to July 1999 were valued at $319m, a 30% decline from the previous year’s earnings of $453m. Ethiopia exported 122,000 tonnes in 1998/99, down by 10% on both the previous year’s export volume, and below the ECTA’s target. In April ministers had been concerned that speculative hoarding would damage export volumes (3rd quarter 1999, page 16). However, the decline in exports and earnings appears largely due to price factors. The war has had no impact on coffee production, which is concentrated in the west and south-east, and deliveries via Djibouti have progressed smoothly. Ethiopia is hoping to boost earnings by gaining organic accreditation for its coffee, 95% of which is grown by smallholders. Unlike most other African producers, Ethiopia consumes about half of its coffee production domestically.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 Ethiopia 15
Ethiopia: coffee export earningsa ($ m) 1994 1995 1996 1997 1998 1999 Coffee exports 158 288 273 355 453 319 % change 25 82 –5 30 28 –30
a Year ending July 8th.
Sources: IMF; ECTA.
—but sugar and vegetables Ethiopia continues to expand its sugar production capacity. According to offer hope of export reports from the industry, production from the new facilities at Finchaa—the growth country’s fourth sugar plantation and processing plant—is scheduled to reach 80,000 tonnes during 1999/2000, contributing to an expected total crop of 275,000 tonnes, 57% higher than output in 1998/99. If these targets are realised, Ethiopia hopes to export about 100,000 tonnes of sugar, worth an anticipated $22m, during the current fiscal year.
Production of green vegetables for export also continues to rise. Exports of haricot beans reportedly rose by 7% to 30,000 tonnes in the year to July 1999, while export earnings rose by 30% to $18m. While agricultural officials have continued to encourage crop diversification by small-scale farmers away from maize and barley, attempts to establish larger, export-oriented horticulture farms continue to be hampered by problems of land tenure, poor export promotion and poor quality packaging.
Worries persist over main Ethiopia’s overall food security profile continues to be contradictory. By crop harvests— October farmers were anticipating a slightly below average total harvest. Pre- dictions of total grain output from the main (meher) harvest are only slightly below last year’s total of almost 12m tonnes (1st quarter 1999, page 16). A feared armyworm infestation did not materialise and farmers appear to have coped with the disruption caused by the general failure of the short rains by planting shorter-cycle crops. Thus by October initial evidence about yields from farmers in the central areas suggests that adequate rain and generally good harvest conditions has largely compensated for the late start of the rains. However, surveys by donors and Ethiopian officials stress that even if these initial predictions are confirmed, distribution is still a problem and some areas will face severe food shortages. The food and early warning system (FEWS) of the US Agency for International Development (USAID) has published a September bulletin noting that rains in August were intermittent and poorly distributed. The failure of the shorter (belg) rains earlier in the year also dis- rupted the planting of main season crops in many western and south-western maize growing areas. Nevertheless, successful meher harvests in the main grain growing areas should greatly alleviate the overall food security situation, allowing donors to make internal purchases of grain surpluses for transfer, rather than importing grain.
—while delivery of food Ethiopia consists of a wide variety of climatic and cropping zones, with the relief remains a concern aggregate figures concealing huge discrepancies in regional food security conditions. In October the UN Emergencies Unit for Ethiopia reported severe food shortages in the Borana zone of south-western Ethiopia, bordering Kenya
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 16 Ethiopia
and Somalia. Successive harvest failures in the area, coupled with poor grazing, have left several hundred thousand people in need of emergency food assist- ance. The tribulations of those in the south-west are mirrored by difficulties facing many Somali and Afar pastoralists in eastern and southern Ethiopia. The lifting of Saudi Arabia’s livestock import ban has helped steady livestock prices, but herds remain depleted by drought and scarce grazing.
In late September the UN team reported that almost 95% of Ethiopia’s 386,600- tonne emergency food aid requirements for July-December had been pledged. While most deliveries to date had been moved efficiently through the port of Djibouti, preparations are also under way to for additional EU imports of food aid for Ethiopia via the Somaliland port of Berbera (see News from the Somaliland Republic in Somalia).
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 Eritrea 17
Eritrea
Political structure
Official name Eritrea
Form of state Unitary state
Legal system A new national constitution was formally proclaimed on May 24th 1997
National legislature Transitional National Assembly of 150, composed of members of the ruling People’s Front for Democracy and Justice
National elections Last election February 1987 (legislative, within Ethiopia); next election had been scheduled for May 1997 but seems unlikely to be held before 2000
Head of state President, elected by the National Assembly
National government The president and the Council of Ministers, last reshuffled June 7th 1997
Main political parties The People’s Front for Democracy and Justice (PFDJ), which grew out of the Eritrean People’s Liberation Front, is the ruling and, in effect, the only legal party; its third congress in February 1994 confirmed the transition to pluralist elections in 1997, but a law on political parties has yet to be approved
President Isaias Afewerki
Key ministers Agriculture Arefaine Berhe Defence Sebhat Ephrem Education Osman Saleh Energy & mines Tesfi Gebreselassie Finance & development Gebreselassie Yoseph Fisheries Petrus Solomon Foreign affairs Haile Weldensae Health Saleh Meki Information Beraki Gebreselassie Justice Foazia Hashim Labour & welfare Ogbe Abraaha Land, water & environment Tesfai Girmatzion Local government Mahmoud Ahmed Sherifo Public works Abraha Asfaha Tourism Ahmed Haji Ali Trade & industry Ali Said Abdella Transport & communications Saleh Idris Kekia
Central bank governor Tekie Beyene
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 18 Eritrea
Economic structure
Latest available figuresa
Economic indicators 1994 1995 1996 1997 1998b GDP at market prices (Nfa bn) 4.4 4.6 5.1 6.0 6.8 Real GDP growth (%) 9.8 2.9 6.8 7.9 4.0 Consumer price inflationc (end period; %) 6.8 11.0 3.4 10.6 9.0 Population (m) 3.47 3.57 3.67 3.78 3.88 Exports fob ($ m) 65 81 95 53 n/a Imports cif ($ m) 396 404 514 490 n/a Current-account balance ($ m) 18 –53 –131 –37 n/a Total external debt ($ m; year-end) 29 37 44 76 n/a Exchange rated (av; Nfa:$) 6.17 6.29 6.35 7.05 7.30
October 1999b bank rate Nfa10:$1; parallel rate Nfa12.5:$1
Origins of gross domestic product 1997 % of total Agriculture 9.3 Industry 29.5 Manufacturing 11.2 Distribution services 38.6 Other services 22.5 GDP at factor cost 100.0
Principal exports fob 1997 $ m Principal imports cif 1997 $ m Crude materials 18 Machinery & transport equipment 164 Food & live animals 12 Manufactured goods 96 Manufactured goods 9 Food & live animals 85 Chemical & chemical products 26
Main destinations of exports 1997 % of total Main origins of imports 1997 % of total Ethiopia 63.5 Saudi Arabia 15.7 Sudan 16.6 Italy 13.7 Italy 4.9 UAE 13.1 Saudi Arabia 1.9 Ethiopia 9.0 US 0.9 Germany 5.5 a All figures are estimates from official or other sources; all data on Eritrea should be treated with caution. b EIU estimates. c Asmara price index. d The nakfa replaced the Ethiopian birr as Eritrea’s national currency in November 1997 at Birr1:Nfa1.
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Outlook for 2000-01
A lull in the fighting with The lull in fighting in the border dispute with Ethiopia, forced upon both sides Ethiopia is set to break— by the rainy season, is expected to end in the coming months now that the rains have eased. The 1,000-km boundary is still one of the most heavily mili- tarised frontiers in the world. Reminiscent of Europe during the first world war, the battlefields are marked by minefields and trenches. With some 500,000 troops sitting out the rainy season in muddy dug-outs, the prospects for renewed conflict are high. Both sides have already begun accusing the other of mobilising for new offensives.
—as a diplomatic solution The slim hope that a diplomatic solution would be found during the lull in still appears remote fighting has not materialised, despite Eritrea’s acceptance of the Organisation of African Unity (OAU) Framework Agreement and the “Modalities” and “Technical Arrangements” for its implementation (see Ethiopia). In effect, the agreement would return troops from both sides to their positions before the war to allow an international team to demarcate the border while Ethiopia would administer Badme where the conflict first started. However, the Ethiopian prime minister, Meles Zenawi, has been unhappy with the technical arrangements and is demanding further clarifications. The OAU and other diplomats working to broker an agreement still have their work cut out to bring about the implementation of the current peace plan. Both sides appear ready for a renewal of fighting, and it is possible that each will try to gain a significant military advantage to force concessions at the negotiating table.
The economic effects of the The Eritrean economy is slowly grinding to a halt, as many of the nation’s conflict will be severe— development plans are being delayed, which is not surprising as there is a huge diversion of human and financial resources into fighting the war. With labour shortages already appearing at many project sites, it is difficult to see how the economy will be able to generate any significant levels of real growth until attentions can be redirected towards national development (see Economic policy and the economy).
—and long-lasting When a peace agreement is finally agreed—which could potentially be several years away—mistrust between the two nations will linger, as will the economic damage. It does appear that the war has nullified any economic momentum the young nation had gained in its seven years of independence. However, physical reconstruction will not be a major issue since the fighting has been contained along the sparsely occupied border. Eritrea still retains the found- ations for economic recovery: a good base of mineral resources, a well- organised and hard-working labour force, and a strong national identity that has already proved to be a mobiliser of resources. Nevertheless, Eritrea’s war with its closest neighbour and former ally—likened to two bald men fighting over a comb—does appear to be particularly futile and unnecessary.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 20 Eritrea
The political scene
Minor clashes continue in The onset of rain in July brought a lull in fighting over the border dispute the border conflict with between Eritrea and Ethiopia that erupted in May 1998 over a 390-sq km area Ethiopia— called the Yirga triangle (or Badme after the major town in the area). However, minor clashes appear to have resumed on September 1st when Ethiopia accused Eritrea of attacking on the Zala Ambassa front, although Eritrea denied the accusation. The Ethiopian government reported that a nine-hour battle occurred on the same front on September 29th. Again, the Eritrean government denied that any fighting had taken place.
In early October exchanges of heavy machine-gun and mortar fire could reportedly be heard every night on the Badme front. On October 11th Eritrea accused Ethiopia of destroying six villages in the Gash Barka border area, which Ethiopian troops have occupied since fighting in February. The 4,000 inhabi- tants had already reportedly fled, but the villages are among those that Ethiopia would have to return if it agreed to the Organisation of African Unity (OAU) plan to end the war (see below)—perhaps indicating an Ethiopian “scorched earth” policy prior to a withdrawal. However, Ethiopia has made similar accusations against Eritrea, of destroying houses near Zala Ambassa in August.
—as each side accuses the Estimates of total troop numbers on both sides of the disputed border range other of gearing up for a from 200,000 to 500,000. Whatever the true figure, hundreds of thousands of fresh offensive soldiers have been waiting in trenches throughout the rainy season. Now that the rains have eased, military action appears likely again. Even as early as September, Eritrea was accusing Ethiopia of mobilising for a military offensive. Ethiopia denied any such moves, and in mid-October suggested that Eritrea’s accusations were themselves a signal of Eritrean intentions to launch its own military offensive.
The OAU peace plan Both sides continue to proclaim their readiness to resolve their dispute appears to stall— peacefully, but reconciliation does not appear to be any nearer. The peace init- iative by the OAU has continued to be the focus for reconciliation efforts, but divergent interpretations of the peace formula have remained unresolved. The Eritrean president, Isaias Afewerki, appeared to have scored a diplomatic coup in early August by accepting the OAU package in full. This includes the original OAU Framework Agreement and the follow-up “Modalities” and “Technical Arrangements” (see Ethiopia for an explanation of these different documents). Under the plan as it now stands, Eritrea has agreed to redeploy its forces from territories occupied since May 1998, allowing military observers to come in and a UN team to delineate the border, while Ethiopia administers Badme where the conflict first started. However, the Ethiopian government has remained dissatisfied with both rounds of clarification, and has officially rejected the “Technical Arrangements”—effectively deadlocking the process. Ethiopia claims not to have rejected the OAU peace plan altogether, but an Eritrean foreign ministry statement described Ethiopia’s foot-dragging as “tantamount to a declaration of war”.
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—despite intense Negotiators from the OAU have been regular visitors to both Asmara and Addis diplomatic efforts Ababa in recent months, pursuing their aim of getting both sides to agree to all aspects of the OAU Framework Agreement. Libyan and Italian initiatives in this direction (3rd quarter 1999, page 23) ended in July with few results, and were replaced by a flurry of activity from the US. Mr Isaias met the US secretary of state, Madeleine Albright, in Washington to discuss the OAU plan in mid- August, while three high-level American envoys held talks with the Ethiopian prime minister, Meles Zenawi, later that month. In early September Eritrean religious leaders met their Ethiopian counterparts in Oslo, Norway, and both sides returned to their respective capitals with a document that was handed to Mr Meles and Mr Isaias. However, both the US efforts and the religious leaders’ initiatives failed to find a mutually agreeable solution to the conflict.
Other international leaders have also continued to call for a peaceful solution to the conflict, seen by most outsiders as futile and unnecessary. In late September the Russian president, Boris Yeltsin, even offered to mediate in the border war. In addition, Pope John Paul II has called on both sides to overcome their difficulties, while the Finnish prime minister and current EU president, Paavo Lipponen, has reiterated the EU’s strong support for the OAU initiative.
Both sides have continued Credible reports that both Eritrea and Ethiopia are still involved with various their involvement in armed Somali factions have continued to emanate from Somalia (3rd quarter Somalia 1999, page 23). Eritrea appears to be dispatching arms shipments to several militias, including those of Hussein Mohamed Aideed, one of Mogadishu’s principal faction leaders, and General Umar Haji Masaleh, who controls the southern Somali port of Kismayu. Ethiopia appears to have been arming several militias opposed to Mr Aideed and his allies. In addition, Ethiopian troops continue to occupy several central and southern Somali regions in their pursuit of an Ethiopian rebel group, the Oromo Liberation Front (OLF), and an Islamist group, Al-Ittihad (see Somalia).
Relations with Sudan cool The thawing in relations between Eritrea and Sudan—following the signing of again over opposition a Qatari-sponsored reconciliation pact between the two countries in May (3rd groups— quarter 1999, page 23)—appeared to have taken another step forward in August when Mr Isaias reportedly ordered a Sudanese opposition group in the capital, Asmara, to vacate the Sudanese embassy building that it had been occupying since 1995. Mr Isaias also reportedly directed the group not to engage in any political activities while inside Eritrea, but allowed them to remain in Eritrea as refugees.
However, renewed friction between the two countries developed in early October. Egypt apparently sent two Sudanese opposition leaders from the National Democratic Alliance (NDA), which is a coalition comprising the Umma Party and the Sudan People’s Liberation Army (SPLA), to Eritrea just before receiving a request for their extradition from the authorities in Khartoum. Sudan then asked Eritrea for the extradition of the two activists, charged with the bombing of an oil pipeline in September. Yet an Eritrean government spokesperson claimed on October 11th that Sudan had made no formal extradition request, so the two men remained in Asmara. The following day one of the two NDA members expelled from Egypt, Abdel Rahman Saeed,
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claimed in the press that his organisation planned to carry out further attacks against the Sudanese government. Adding to the tensions, a Sudanese governor has also accused Eritrea of allowing concentrations of SPLA forces to amass in Eritrea along the border.
—and Eritrea has a A diplomatic row with Malawi was sparked in August when an Eritrean diplomatic row with national died in prison in the Malawian capital, Lilongwe. In addition, 32 Malawi Eritreans were deported to Ethiopia, despite assurances from Asmara that they would bear responsibility for their nationals. The Eritreans had arrived in Malawi from Addis Ababa, reportedly with visas issued by the Malawi embassy there, although Malawi officials in Lilongwe declared that the visas had been forged. Officials from the International Committee of the Red Cross (ICRC) confirmed that the dead man died of gunshot wounds, although Malawi had originally claimed he died of an illness. The Eritrean Ministry of Foreign Affairs strongly condemned the man’s death and requested an official investigation and compensation for his family. The UN High Commissioner for Refugees (UNHCR) representative in Zambia lodged a strong protest over the depor- tation of the others. However, Malawi claimed that the Eritreans had escaped from an Ethiopian prison, and were therefore sent back to that country.
Eritrea opens an embassy in In a move seen as part of Eritrea’s effort to build stronger ties with the Islamic Libya world, Eritrea opened its embassy in the Libyan capital, Tripoli, on July 1st. The growing ties between the two countries were further reflected in September when Asmara hosted a Libyan cultural exposition.
Economic policy and the economy
The economy nears The economic consequences of Eritrea’s enormous diversion of human and stagnation with Massawa financial resources to fight the war are becoming clearer. One estimate of this port under capacity— year’s military spending, cited in an article in the US-based Philadelphia Inquirer on September 7th, is that it represents about 44% of Eritrea’s GNP, the highest such percentage in the world. Real GDP growth, which fell to 4% in 1998 from 8% the previous year, is likely to be lower for 1999 with stagnation, if not an outright contraction, possible. Both imports and exports appear to be down, as are housing construction and foreign investment. Tourism, formerly a small but growing sector, has virtually disappeared. The government has added a 20% surtax to help pay for the war—a painful move given the pride it took previously in reducing taxes set during the period of Ethiopian rule—boosting the personal tax rate to about 50%. The savings rate has also fallen, defaults on mortgages are reportedly increasing and fewer Eritreans are investing in new homes.
Although reports had indicated that Massawa, the Red Sea port that supplies Asmara, was still busy (3rd quarter 1999, page 25), evidence of the general economic slowdown is now apparent there as well. The port manager, quoted in an October 11th New York Times article, said that the amount of cargo this year was 60% below what was expected before the war started.
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—and labour shortages are Work on the $49m Massawa Housing Complex, where the government is delaying projects building a retail and office centre, new provincial and municipal offices, and more than 500 homes, is a year behind schedule. During the early days of the conflict, foreign contractors withdrew their expatriate workers and most Eritrean labourers were mobilised for the war. As a result, the sprawling water- front construction project lost all but 375 of its 4,000 employees. Contractors have since trained some replacement workers, but the project still has only one-quarter of the staff it had a year ago, according to the Philadelphia Inquirer. A general exodus of workers to the war front has also slowed construction on the $160m Hirigio power plant outside Massawa, a project that will nearly double the nation’s generating capacity. The situation there became so acute that the government exempted power plant employees from war service. Most of the trained labour working to reconstruct the former colonial railway from Massawa inland has also left for the frontline.
The World Bank closes its Prospects for the country’s development programme dimmed further when the coffers to new loans— World Bank’s vice-president for Africa, Callisto Madavo, claimed in September that he foresaw no new lending to either Ethiopia or Eritrea until they ended their border war. He added that existing World Bank projects in Eritrea were being implemented to the best levels possible, but fresh lending was not being considered.
—and Ethiopia sues over its The potentially long-lasting economic fallout from the conflict was empha- stranded goods sised in July when the president, Isaias Afewerki, demanded compensation for more than 60,000 Eritreans and Ethiopians of Eritrean descent deported from Ethiopia—although he added that this was not a precondition for the Organisation for African Unity (OAU) agreement. For its part, Ethiopia filed a lawsuit in October against Eritrea over goods left stranded in Eritrean ports when the conflict between the two countries erupted in May 1998. The suit, filed at a new court set up by the Common Market for Eastern and Southern Africa (Comesa), which is based in Lusaka, Zambia, calls on Eritrea to release immediately the goods it seized illegally and replace damaged property. Ethiopia maintains that goods worth more than $133m had been seized in the Red Sea ports of Assab and Massawa. These are the first formal legal charges to be brought against Eritrea by Ethiopia since the former province was granted independence in 1993.
Food supplies are still short Above-average rains in July-August have improved prospects for the main season cereal and pulse crops to be harvested in November (see map in Ethiopia, page 16). Erratic and inadequate rains earlier in the year, and below- average rainfall in June, had raised fears of food shortages. Despite the good recent rains, however, food supplies remain tight for an estimated 550,000 people affected by the war—including deportees from Ethiopia whose number reached 63,000 by mid-October, more than half of all Eritreans that were residing in Ethiopia). In addition, donor support has remained sluggish (3rd quarter 1999, page 24). An emergency operation by the UN’s Food and Agriculture Organisation and World Food Programme launched in March had received pledges by the end of August for only 35% of the total it required to assist nearly 300,000 people most severely at risk.
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Limited mining has Despite the reluctance of several foreign investors to continue their Eritrean continued operations until the conflict with Ethiopia is resolved, some work is con- tinuing. A Toronto-based firm, Rift Resources, announced on September 17th the completion of two diamond drill holes on the Adi Nefas property, 100% of which was optioned from a French company, LaSource Développement SAS, in May. Genesis Resources has sold its 33% stake in the Zara gold concession to a fellow Australian firm, Dragon Mining, in September despite encouraging initial results from field surveys in the area earlier this year (3rd quarter 1999, page 25).
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 Somalia 25
Somalia
Political structure
Official name Somali Democratic Republic
Form of state In theory a unitary republic; in May 1991 the Somali National Movement (SNM) unilaterally declared the creation of an independent state, the Somaliland Republic, in the north, while the rest of the country remains divided between rival armed factions
Legal system In theory, based on the 1960 constitution; in practice, local authorities or elders enforce laws based on custom; in some areas there is a growing influence of Islamic courts, which claim they will soon implement Islamic sharia law
National legislature People’s Assembly, but not active since 1991
National elections Last elections 1967 (presidential); 1969 (legislative); next elections: none feasible in current circumstances
Head of state None; Ali Mahdi Mohamed and Hussein Mohamed Aideed are the co-chairmen of the Banaadir Regional Supreme Council; Abdullahi Yussuf Ahmed is president of the Puntland administration; Mohamed Ibrahim Egal is president of the Somaliland Republic (see below)
National government None; the Banaadir Regional Supreme Council claims to administer the region around Mogadishu; Puntland is a self-declared autonomous region in the north-east, with Garoe as its administrative capital; the Somaliland Republic in the north was declared independent in 1991, with Hargeisa as its administrative capital (see below)
Main political factions United Somali Congress-Somali National Alliance (USC-SNA); Somali Salvation Democratic Front (SSDF); Somali Patriotic Movement (SPM); Southern Somali National Movement (SSNM); National Salvation Council (NSC); Somali National Front (SNF); Rahawayn Resistance Army (RRA)
Somaliland Republic Created in May 1991 but awaiting diplomatic recognition; led by the president, Mohamed Ibrahim Egal, re-elected in February 1997; a new constitution came into effect in February 1997 for a three-year period, after which a referendum is to be held
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 26 Somalia
Economic structure
Latest available figuresa
Economic indicators 1994 1995 1996 1997 1998 Population (m) 9.1 9.3 9.5 9.6 9.8 Exports fobb ($ m) 143 169 188 178 187 Imports fobb ($ m) 309 279 330 316 327 Total external debtc ($ m; year-end) 2,616 2,678 2,643 2,561 n/a
October 1999d SoSh12,500:$1; SolSh3,000:$1
Principal exports 1990 $ m Principal imports 1990 $ m Livestock 43 Manufactures 204 Bananas 28 Non-fuel primary products 104 Hides & skins 3 Fuels 52
Main destinations of exports 1997b % of total Main origins of imports 1997b % of total Saudi Arabia 57 Djibouti 20 United Arab Emirates 15 Kenya 11 Italy 12 Belarus 11 Yemen 8 India 10 Saudi Arabia 9 Brazil 9 a There are almost no reliable economic data for Somalia; all figures are rough estimates from official or other sources. b Based on partners’ trade returns; subject to a wide margin of error. c There have been no new disbursements of debt since 1991. Statistical changes in the debt stock reflect new arrears from this level and currency fluctuations. d EIU estimate of market rates in Mogadishu and Hargeisa.
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Outlook for 2000-01
Continued arms inflows Prospects remain slim that Somalia’s patchwork of clan factions and their point to more violence— associated militias, most of which have been involved in heavy fighting— particularly in central and southern regions in recent months—will diminish their military ambitions. Numerous reports suggest that the flow of new mili- tary hardware into the country continues apace, suggesting that at least some militias are preparing for heavier fighting. In another sign of the growing supply of weapons in the country, a Kalashnikov assault rifle can now be bought in Mogadishu’s central Bakara market for as little as $45, the lowest level in five years.
—as international efforts at Efforts by the international community to find a peaceful solution to the reconciliation remain Somali crisis appear to have lost momentum. Despite proposals by Djibouti’s stalled president, Ismael Omar Guelleh, for a new reconciliation conference, the UN still appears to be clinging to the hope that the regional grouping, the Intergovernmental Authority on Development (IGAD), will succeed. However, the continued presence of troops from Ethiopia, which is a leading IGAD member, on Somali soil has severely undermined any pretence of IGAD’s neutrality. As such, any initiatives emerging from the regional body will be viewed with suspicion by several Somali factions.
Clan faction militia Shifting clan faction alliances will also continue to confuse and complicate any alliances will continue to outsiders seeking a political solution. General Umar Haji Masaleh’s Somali be fluid— National Front (SNF) forces, which seized control of the southern port of Kismayu in June, already do not appear stable. SNF militiamen have reportedly been fighting among themselves, while a SNF splinter group, apparently now allied with Ethiopian troops in the Gedo region, has clashed with the main SNF faction in Garbaharrey. General Masaleh’s SNF militia is still allied with Hussein Mohamed Aideed, one of Mogadishu’s principal faction leaders. Mr Aideed remains a significant force to be reckoned with, despite attempts by the Rahawayn Resistance Army (RRA) and its allies of the Digil Salvation Army (DSA) to dislodge him from Balidogle airport (90 km west of Mogadishu), a location that will continue to be an epicentre for fighting. The SNF force still holding Kismayu may also expect an attack from Ethiopian-backed militias in the coming months, although the Ethiopians themselves appear to have withdrawn inland.
—although Islamic courts However, domestic efforts for peace and stability may be emerging. In will increasingly Mogadishu, local clan leaders are increasingly being sidelined by new Islamic challenge them courts, and Islamic groups have formed their own militias backed by the local business community (see The political scene). In another sign of some return to normal life, one of the city’s airports has been renovated and recently reopened (see The economy). Recent mass peace rallies in several major towns and cities also reflect the growing discontent and weariness among civilians with the continuing violence.
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Food shortages will Some 300,000 people face severe food shortages in the southern regions of Bay, continue to be a problem Bakool and Gedo, following the poor main (gul) rainy season (April-June) cereal harvest. Imports of new bank-notes have further added to sharp increases in sorghum and maize prices, severely reducing access to food for large sections of the population. In addition, the recent murders of several aid personnel, which have highlighted the continuing hazards faced by the humanitarian effort in areas where clan factions continue to vie for supremacy, may disrupt food aid distribution.
Somaliland’s case for The economic situation in the self-styled Somaliland Republic continues to international recognition is strengthen now that the Saudi Arabian ban on livestock exports has been getting stronger lifted. Politically, Somaliland appears increasingly stable, with the decision of clans in the Sanaag region to side with the administration in Hargeisa as opposed to the new self-declared administration in Puntland. Armed with these positive signs, Somaliland’s president, Mohamed Ibrahim Egal, has been in New York, making his case to UN officials for some kind of international recognition. With de facto partition already a fact on the ground and national rebuilding efforts seemingly irrelevant, Somaliland’s request for at least obser- ver status (along the lines of the Palestinian Authority) may fall on sympa- thetic ears.
The political scene
Fierce fighting continues in Intense fighting between rival clan factions has been reported from central and central and southern southern regions in recent months. Militias loyal to Hussein Mohamed Aideed, regions— one of Mogadishu’s principal faction leaders, have clashed repeatedly with forces of the Rahawayn Resistance Army (RRA) and their allies of the Digil Salvation Army (DSA) in the Bay and Shabeellaha Hoose regions. Following the RRA’s capture of the Bay region capital, Baidoa, from Mr Aideed’s forces in June (3rd quarter 1999, page 29), the DSA appears to be spearheading the advance on Qoroley, near the port of Merca.
—as an OLF base at Qoroley At least 16 people were killed when the DSA attacked Qoroley on July 27th and is targeted— four militiamen were reported to have died the following week when the DSA claimed to have taken control of the nearby village of Awdegle. Mr Aideed’s forces retook the village two days later, but further attacks were launched by the DSA on Qoroley in mid-September and again in early October. As of mid- October Mr Aideed’s forces still held the town where the Oromo Liberation Front (OLF), an Ethiopian rebel group with strong ties to Mr Aideed, has a mili- tary base.
—and Mr Aideed’s Meanwhile, the RRA, backed by DSA forces, have clashed with Mr Aideed’s opponents head towards militia in and around Wanlaweyn in the Bay region, to the north-east of Balidogle airport Qoroley. It appears that the DSA and RRA are attempting to seize Balidogle airport, 20 km east of Wanlaweyn and 90 km west of Mogadishu, from Mr Aideed. Fighting in Wanlaweyn in mid-September left at least 11 dead. An RRA spokesman accused Mr Aideed’s local militia commander, Abdulkarim
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Mohamed Frabadne, of kidnapping and ordering the razing of seven villages around Wanlaweyn. Hundreds of families have fled reportedly Qoroley and the surrounding area after weeks of fighting.
Main political figures in Somalia
Ali Mahdi Mohamed: one of two co-chairmen of the Hussein Haji Bod: a Mogadishu faction leader allied to Banaadir Regional Supreme Council; a principal Mogadishu Mr Osman “Ato”. faction leader whose forces control much of the capital’s northern parts. Abdurahman Mohamed Fodade: a Mogadishu faction leader allied to Mr Osman “Ato”. Hussein Mohamed Aideed: the other co-chairman of the Banaadir Regional Supreme Council; a principal Mogadishu General Ahmed Warsame: Commander of Somali National faction leader whose forces control much of south Front (SNF) forces fighting in southern regions; allied to Mogadishu and large tracts of southern Somalia. Mr Aideed.
Ali Hassan Osman “Ato”: a principal Mogadishu faction General Umar Haji Masaleh: Commander of SNF forces in leader opposed to the Banaadir Regional Supreme Council, Kismayu; allied to Mr Aideed. despite being named as one of its vice-chairmen. Colonel Abdullahi Yussuf Ahmed: president of the new Mohamed Qanyare Afrah: a Mogadishu faction leader Puntland administration based in Garoe. allied to Mr Ali Mahdi and Mr Aideed. Colonel Mohamed Nur Shatigudud: Rahawayn Resistance Hussein Ali Ahmed: the governor of Mogadishu appointed Army (RRA) leader whose forces are fighting Mr Aideed’s militia in by the Banaadir Regional Supreme Council. central regions; allied to Colonel Abdullahi.
Musa Sude Yalahow: a Mogadishu faction leader allied to General Mohamed Siad Hersi “Morgan”: southern faction Mr Osman “Ato”. leader whose forces were ousted from Kismayu in June.
Mohamed Ibrahim Egal: president of the self-styled Somaliland Republic.
Jubbada Hoose also sees Somalia’s southernmost region, Jubbada Hoose, has also seen a significant renewed fighting increase in military clashes in recent months. Entire villages were reportedly destroyed in fierce fighting between local clan factions battling to control terri- tory near the Kenyan border in the first two weeks of September. Various reports from the area put the civilian death toll near 70.
Fighting also broke out among the pro-Aideed militia forces of the Somali National Front (SNF) controlling Kismayu in mid-September when 12 gunmen were killed in a disagreement over the division of “technicals” (customised pick- ups equipped with rocket-launchers and anti-aircraft batteries) captured from the Somali Patriotic Movement (SPM) militia of General Mohamed Siad Hersi “Morgan”, who were ousted from the port in June (3rd quarter 1999, page 30). Local elders reportedly managed to broker a peaceful resolution to the dispute.
General Morgan’s Since fleeing Kismayu, General Morgan’s whereabouts have remained un- whereabouts remain known. A report carried by a Mogadishu newspaper, Xog-Ogaal, from Raas unknown Kaambooni, in the south of Jubbada Hoose, suggested that militiamen loyal to Colonel Ahmed Omar Jess had captured General Morgan’s last base in Somalia
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in September, but General Morgan himself escaped. In August General Morgan was reported to have taken up residence in the Kenyan coastal town of Lamu, while another report in September claimed he was in Baidoa. Several Mogadishu newspapers speculated in early October that militias loyal to General Morgan, having received assistance from Ethiopian forces, were preparing themselves for an attempt to re-take Kismayu.
Reports of Ethiopian Mogadishu’s media have continued to report Ethiopian involvement in involvement continue— Somalia, especially in the central and southern regions. The Mogadishu Times reported on August 24th that Ethiopian troops had captured members of an
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Islamist group, Al-Ittihad, in the Gedo region, while it appears that Ethiopian soldiers were part of a joint force comprising RRA and DSA militia that had advanced into the town of Dinsoor in the Bay region in the first week of September. However, a dispatch in late September claimed that Ethiopian troops had withdrawn from Luuq in Gedo to the border town of Doolow.
—as arms shipments Speculation that the conflict between Ethiopia and Eritrea is partly being continue to arrive played out on Somali territory through the supply of military assistance to rival clan militias (3rd quarter 1999, page 32) has continued to be fuelled by media reports of foreign arms shipments arriving in the country in recent months.
• Several hundred Oromo fighters were reported to have arrived at a port near Hobyo in the Mudug region in June along with a consignment of Eritrean arms, destined for Mr Aideed.
• Xog-Ogaal reported in August that a shipment of Ethiopian ammunition had arrived for one of the anti-Aideed militias.
• In September another Ethiopian arms shipment, this time destined for the DSA, was reported to have arrived at Baidoa airport from where it was taken to the Qoroley area.
• Also in September Xog-Ogaal cited a local militia leader as saying that an Eritrean ship carrying arms and Oromo fighters was headed for Kismayu.
• A report in a Bossasso newspaper, Warsidaha Puntland, on September 29th quoted “highly placed sources” as saying that a ship was shortly due to unload its cargo of arms at a village port near Bossasso.
In a letter to the UN secretary-general on September 13th, Mr Aideed and some of his allies also accused Ethiopia of supplying arms to the RRA, to General Morgan and to Mohamed Ibrahim Egal, president of the self-declared Somaliland Republic. The Kenyan government, keen to stem arms flows from Somalia and control banditry in the area, announced the closure of its border on August 22nd. This initially included all flights, but the ban on humani- tarian flights was lifted after three days.
Three aid workers are Among the many casualties of the fighting in central and southern regions killed— were three humanitarian aid workers. A World Health Organisation (WHO) doctor was killed near Kismayu in late August and a Somali administrator employed by a Dutch non-governmental organisation (NGO) was killed in Garbaharrey in the Gedo region in September. The third aid worker, a Somali doctor working for the UN Children’s Fund (UNICEF), died on September 16th after being shot in a bandit attack, apparently after being caught in inter-clan fighting in the Shabeellaha Dhexe region, north of Mogadishu.
—prompting peace UNICEF’s local office closed its operations for the week following the doctor’s marches— death, and helped to organise peace marches that took place in major towns and cities on September 24th. The rallies in Mogadishu, Baidoa, Jowhar, Bossasso and Hargeisa were both to commemorate the recent deaths of aid workers and to protest against the continuation of violence in central and southern areas. This sign of support among Somali civil society was also seen as
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popular endorsement of the proposals put forward by the president of Djibouti who is proposing a national reconciliation conference that would exclude all those associated with violence (see below).
—but also threatening The Somalia Aid Co-ordination Body (SACB), comprising UN agencies, donors humanitarian assistance and international NGOs, issued a statement on September 23rd recommending the discontinuance of aid activities. Nevertheless, UN agencies resumed their activities in central and southern regions on September 28th, following in- dications from clan elders and civic groups that there was a clear determination to meet the conditions presented to them for establishing a safer environment for humanitarian workers.
Businessmen and Islamic Reports from Mogadishu suggest a mood of growing optimism now that groups bring a semblance Islamic groups have formed militias to bring a semblance of order to the city of order to Mogadishu— (3rd quarter 1999, page 33). The new militia groups, operating under the auspices of Islamic courts and financed by local business leaders, have dismantled numerous checkpoints in the city. The chairman of the Islamic courts, Sheikh Hassan Mohamed, was quoted in the August edition of Africa Today as saying that this was the first step in a move to bring an Islamic government to the country. He claimed that the local business community was providing $1m a month in financing and that these courts would start instituting Islamic sharia law soon. While the courts appear to have brought relative calm to some areas of the city, allowing business to thrive, Mr Aideed is apparently opposed to the new courts, setting up a new power struggle in the city.
—but security remains the Despite these new courts, Mogadishu and its environs have remained capital’s biggest problem dangerous.
• In July a senior Al-Ittihad member was shot dead by unidentified gunmen and several days later one of Mr Aideed’s military commanders was similarly assassinated, both in the south of the city.
• In August a gunfight between two rival north Mogadishu Abgal militias over tax collection left 12 dead.
• Later that month, two Ethiopian officials were killed in an attack on their house in the north of the capital.
• On the same day, a popular local comedian was shot dead by gunmen while on the way to perform at a wedding; two civilians were wounded when militia- men opened fire on demonstrators protesting against this killing the following day.
• At least 23 people were killed during an attack on a bus and a lorry in south Mogadishu on August 31st.
• Gunmen thought to be from the Abar Gedir (Hawiye sublineage) opened fire in the Huriwa district of south Mogadishu, the fiefdom of Mr Aideed, in what was believed to be an act of retaliation for the alleged theft of a bus from Abar Gedir militiamen by rivals from the Abgal.
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• Three people were killed in a clash at a north Mogadishu market on September 14th.
• At least 15 were killed and 21 others wounded in a battle between gunmen from two Abgal subclans on September 20th at the Shabeelle river bank town of Balad near the capital.
A new pro-peace political A new party, the United Somali Republic Party (USRP), was inaugurated in party is formed— August, pledging to overcome the current political stalemate and to set up a transitional government soon. The USRP’s leader, Abdi Nur Darman, a Somali engineering graduate (and a US citizen) said its membership would not be based on clan affiliation but on a commitment to the party’s political agenda. Initial reaction to the party’s formation appeared positive, with more than 500 delegates attending the opening ceremony and 1,500 activists reportedly sending messages of support, including the RRA leader, Colonel Mohamed Nur Shatigudud. Mr Darman, who has made recent visits to Ethiopia, Djibouti and the breakaway Somaliland Republic, claimed to have the support of countries interested in pacifying Somalia. The USRP has already shown some success: on October 6th the party announced the opening of the Mecca Mukarama road, an express route through Mogadishu, which had been closed for nearly ten years, after successfully negotiating between two long disputing factions.
—and a new coalition is A new political and military coalition, the Somali Peace Alliance (SPA), was formed in Puntland— formed in Garoe, the capital of Puntland, on August 16th. The SPA comprises the armed forces of Puntland, the RRA, the Somali Patriotic Movement, a faction of the SNF headed by Ahmed Sheikh Ali Ahmed Buraale, and the Somali Consultative Conference, another recent body set up by Colonel Omar Hashi Aden after the Hawiye reconciliation conference at Beled Weyne failed in June (3rd quarter 1999, page 32). The new coalition, which has named Puntland’s president, Colonel Abdullahi, as its chairman, was immediately denounced by most of the main Mogadishu faction leaders—not only Mr Aideed, but Ali Mahdi Mohamed, Mohamed Qanyare Afrah and Ali Hassan Osman “Ato”. An unconfirmed report in the Paris-based Indian Ocean Newsletter on September 11th suggested that an SPA delegation had already been to Ethiopia and Libya to present itself and its plans to rebuild a central authority in Somalia based on regional administrations.
—as Djibouti pushes The president of Djibouti, Ismael Omar Guelleh, renewed the pressure on the Somalia back on the international community when he spoke at the UN General Assembly on international agenda September 22nd and proposed measures to resolve the Somali crisis. More specifically, Mr Guelleh called for a reconciliation conference in Somalia, for an international tribunal to charge Somali warlords with crimes against humanity and for greater involvement by the Arab League and the Organisation for African Unity (OAU). These proposals will be given further consideration by the Intergovernmental Authority on Development (IGAD) summit scheduled for November in Nairobi.
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Economic policy and the economy
More bank-notes are Following the importation of new Somali shilling bank-notes by Hussein reported to have arrived— Mohamed Aideed earlier this year (3rd quarter 1999, page 34), an unconfirmed report in the Mogadishu Times suggests that SoSh13.5bn (roughly $1.4m) of newly printed SoSh1,000 bank-notes arrived at Puntland’s Bossasso airport in late June. The notes, thought to be the first delivery of a consignment totalling SoSh60bn overall, were said to have been printed in Indonesia.
—driving up local prices The imports appear to have had an immediate effect on the exchange rate. The UN Food and Agriculture Organisation (FAO) and World Food Programme (WFP) crop and food supply assessment mission that visited Somalia in early August reported that the shilling had depreciated by nearly one-third in Mogadishu from SoSh8,500:$1 in June 1998 to SoSh12,550:$1 in June 1999. The exchange rate in Bossasso also rose sharply, from an average of about SoSh8,500:$1 in the first half of the year to SoSh10,000:$1 by June. The increase in the money supply has been partially responsible for rising prices for commodities, especially fuel, sugar and meat.
A Mogadishu airport is A four-month renovation and expansion programme at Issaley airport, 17 km reopened north of Mogadishu, was completed in September. The original runway has been extended and its width increased to accommodate larger aircraft. Somali nationals using the airport will be charged an airport tax of $15 while foreigners will pay $25. Staff of charitable organisations are apparently exempt, but these rates compare favourably with other airports in the country where airport taxes can be as high as $45 or more.
Many face severe food Some 300,000 people face severe food shortages in the southern regions of Bay, shortages in the south Bakool and Gedo, prompting the Somalia Aid Co-ordination Body (SACB) to appeal on October 1st for urgent measures to prevent a worsening crisis. A joint assessment conducted by UN agencies and non-governmental organi- sations (NGOs) has found that a chronic depletion of local resources was rendering the population in these regions increasingly vulnerable, with some 73,000 people “acutely vulnerable”. The FAO-WFP crop and food supply assess- ment mission sent to Somalia in early August forecast the total 1999 main rainy season (gul) cereal production at nearly 136,000 tonnes, 32% below the average for the previous five years, but about 18% above last year’s disappointing harvest. The FAO-WFP report noted that sharp increases in sorghum and maize prices have also severely reduced access to food for large sections of the population. Cereal import needs for the 1999/2000 marketing year (August-July) are estimated at 310,000 tonnes. Commercial imports are anticipated to reach 240,000 tonnes, and food aid pledges total 63,000, leaving a deficit of 7,000 tonnes. (For a map of rainfall forecasts in Somalia, see Ethiopia, page 16.)
Health conditions worsen Displacement of people due to continuing insecurity, poor sanitary facilities across the country and a worsening economy have aggravated the health situation in many regions in recent months. The head of Mogadishu’s Joint Health Authority
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(JHA), Osman Mohamed Dufle, told the Agence France Presse in August that the city’s health situation had deteriorated after the pullout of aid agencies due to poor security and the kidnapping of Red Cross workers in 1998 (3rd quarter 1998, page 36). Mr Dufle noted that, while security remains a concern, waterborne diseases, malaria and tuberculosis killed more people than gunmen did. In another sign of growing shortages of clean water, the World Health Organisation (WHO) has reported nearly 7,000 cases of cholera in Somalia this year, including in new areas such as Bossasso.
Puntland’s weather-related Although sporadic rainfall was reported in parts of the north-east in September, troubles continue water shortages were still being reported in much of Puntland. Adding to the region’s economic troubles, traffic to and from the port of Bossasso—which had been badly hit by a 13-month livestock import ban imposed by Saudi Arabia, which ended in March—was severely reduced in early September owing to heavy monsoon winds and rough seas. Trade reportedly began to accelerate later in the month, but local merchants suffered a major setback when more than 10,000 head of livestock exported to Saudi Arabia were rejected for being too old. According to a report from a local aid office, nearly one-fifth of the animals died on the return journey.
News from the Somaliland Republic
Mr Egal pursues The president of the self-styled Somaliland Republic, Mohamed Ibrahim Egal, Somaliland’s quest for travelled to New York in late September, accompanied by his foreign and trans- international recognition port ministers, where he is believed to have met one of the UN secretary- general’s under-secretaries. Somaliland’s continuing lack of international recog- nition is likely to have been high on Mr Egal’s agenda and he most likely asked for observer status at the UN. Mr Egal has previously sought advice on the issue from officials of the Palestine Liberation Organisation (PLO), which has a similar status.
Mr Egal also travelled to Washington in early October for meetings with US and IMF officials, most notably the US assistant secretary of state for African affairs, Susan Rice. While gaining private support from several legislators and officials at the US State Department for some form of recognition, no firm commitment has been made at the official level.
Sanaag opts for unity with A month-long meeting of clan authorities in the Sanaag region, called to Somaliland debate the rival claims over the region from Somaliland and Puntland, ended on September 11th with a declaration to join the Somaliland Republic. The decision, a boost for Mr Egal’s administration, should help to ease recent tensions with Somaliland’s eastern neighbour (2nd quarter 1999, page 38), but will come as a blow to Abdullahi Yussuf Ahmed, president of the new Puntland administration, who had claimed Sanaag as one of the five regions under his control. Meanwhile, in the neighbouring Sool region, still claimed by both Somaliland and Puntland, Somaliland forces took over the regional admin- istration offices in Laas Anod in September sparking a clash with forces from Puntland. An exchange of gunfire ensued, but no casualties were reported.
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Berbera port is renovated— Media in Hargeisa reported that the port at Berbera was undergoing reno- vations in September in preparation for imports of food aid destined for Ethiopia in October. The port administration was making arrangements for enough porters and trucks to be available to transport the supplies, donated by the EU for Somali refugees across the border in Ethiopia. The food shipment is an effective vote of confidence in the Berbera port authorities from the EU, who had tested the port with a cargo of aid bound for Ethiopia in February (2nd quarter 1999, page 38).
This new business highlights Berbera’s recovery in recent months. Regular ship- ments of livestock bound for Saudi Arabia from the port resumed earlier this year following the lifting of the Saudi livestock import ban in March (3rd quarter 1999, page 36). The upturn in the Somaliland economy is reflected in the improved exchange rate, which averaged roughly SolSh3,000:$1 in September, an appreciation from SolSh3,525:$1 three months earlier.
—and Hargeisa airport is Rehabilitation and expansion work at Hargeisa airport also began in late rehabilitated September, with funding from the UN Development Programme (UNDP). Earlier in the month, a Mogadishu newspaper, Xog-Ogaal, reported that the Danish Demining Group was at work in and around the airport compound. An estimated 1m landmines remain in Somaliland, most of them planted during the rebellion against former president Siad Barre and during inter-clan warfare in 1994.
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Djibouti
Political structure
Official name République de Djibouti
Form of state Unitary republic
Legal system Based on the Code Napoléon. A referendum in September 1992 endorsed a new constitution that provides for a maximum of four political parties
National legislature Assemblée nationale; 65 deputies, elected by universal suffrage, serve a five-year term. An alliance between the RPP and the FRUD holds all the seats
National elections December 1997 (legislative) and April 1999 (presidential); next elections due by December 2003 (legislative) and April 2005 (presidential)
Head of state President elected by universal suffrage; serves a term of six years
National government The president and his appointed Council of Ministers; last reshuffled in May 1999
Main political parties Rassemblement populaire pour le progrès (RPP), the former sole legal party, split in 1996, with dissidents forming the Groupe pour la démocratie et la république, later banned; Parti national démocratique; Parti pour le renouveau démocratique. In 1991 the Front pour la restauration de l’unité et de la démocratie (FRUD) launched an Afar rebellion. In 1994 the government signed a peace agreement with a FRUD faction which was legalised in 1997 and contested the legislative election in alliance with the RPP
President Ismael Omar Guelleh Prime minister & minister for land development Barkat Gourad Hamadou
Key ministers Agriculture & water resources Ali Mohamed Daoub Commerce & industry Elmi Obsieh Waiss Communication & culture Rifki Abdulkader Bamakrama Defence Ougoureh Kifle Ahmed Economy, finance & privatisation Yacin Elmi Bouh Education Abdi Ibrahim Obsieh Employment & solidarity Mohamed Barkat Abdillahi Energy & natural resources Mohamed Ali Mohamed Foreign affairs & co-operation Ali Abdi Farah Health Mohamed Dini Farah Interior Abdallah Abdillahi Miguil Justice, prisons & human rights Ibrahim Idriss Jibril Presidential affairs & investment promotion Osman Ahmed Moussa Public works, housing & construction Saleiban Omar Oudine Transport & equipment Osman Idriss Djama Youth & sports Dini Abdallah Bililis
Non-cabinet advisers Directeur de cabinet Ismael Hussein Tani Chef de cabinet Ali Guelleh Abubaker
Central bank governor Djama Mohamed Haid
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Economic structure
Latest available figures
Economic indicators 1994 1995 1996 1997 1998a GDP at market prices (Dfr bn) 86.6 87.2 88.2 88.4 90.0 Real GDP growth (%) –2.9 –3.6 –1.5 0.0 1.7 Populationb ('000) 580 600 620 630 650 Exports fob ($ m) 56 38 40 43 59 Imports fob ($ m) 237 207 201 204 239 Current-account balance ($ m) 40 –17 –16 –12 –14 Reserves excl gold ($ m; year-end) 73.8 72.2 77.0 66.6 66.5c Total external debt ($ m; year-end) 263 282 296 284 n/a External debt-service ratio, paid (%) 5.1 5.5 5.4 3.1 n/a Consumer price inflation (%; av) n/a 4.5 2.6 1.6 0.1 Exchange rates (av) Dfr:FFr 32.0 35.6 34.7 30.4 30.1c Dfr:$ 177.7 177.7 177.7 177.7 177.7c
October 22nd 1999 Dfr177.7:$1
Origins of gross domestic product 1993 % of total Components of gross domestic product 1996a % of total Agriculture 2.8 Private consumption 74.1 Industry 21.2 Government consumption 33.4 Services 76.0 Gross domestic investment 9.1 GDP at factor cost 100.0 Exports of goods & services 41.3 Imports of goods & services –58.0 GDP at market prices 100.0
Principal exports 1998a % of total Principal imports fob 1996 $ m Re-exports 77 Food & beverages 52 Locally produced goods 23 Machinery 35 Khat 22 Petroleum products 15 Clothing & footwear 14
Main destinations of exports 1997d % of total Main origins of imports 1997d % of total Somalia 41 France 15 Ethiopia 34 Ethiopia 11 Yemen 6 Saudi Arabia 7 United Arab Emirates 2 Italy 7 Netherlands 2 UK 7 a Provisional estimates. b IMF figures, including refugees and expatriates. c Actual. d Based on partners’ trade returns; subject to a wide margin of error.
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Outlook for 2000-01
Authoritarian rule appears As widely predicted, the authoritarian instincts of Djibouti’s president, Ismael set to continue— Omar Guelleh, are likely to dominate domestic politics. Already a wave of arrests has followed the government’s active public relations campaign intended to improve the country’s image abroad (3rd quarter 1999, page 42). It has become evident during the past few months that the government will not hesitate to use its police and legal system to silence opponents, mirroring a pattern established during Mr Guelleh’s rise to power in 1996-99, when he was chef de cabinet for the former leader, Hassan Gouled Aptidon. Sensitivities over the unresolved civil war (1991-94) have continued to linger, so that the government is unlikely to bring to trial accused rebels now incarcerated without trial for over two years.
—but pressure could come With weak and divided domestic opponents—and a powerful regional ally in from France— Ethiopia—there is little to stop the continuation of such repression and detention without trial. However, two external factors could have a moderating effect on the government’s behaviour. First, various forces in France could apply pressure on Mr Guelleh and his close allies. Already, several French lawyers, backed by human rights bodies including Amnesty International, have voiced grave and repeated concerns over the new government’s lack of respect for the bilateral legal agreements between the two governments. French lawyers seeking to represent imprisoned Djiboutians under these agreements were refused visas in October, generating considerable negative publicity. Such criticism, coupled with pressure from French politicians and Djiboutians exiled in France, could act as a lever upon events in Djibouti, as was clearly the case in the release of Aref Mohamed in May this year (3rd quarter 1999, page 43).
—and donors Second, other donors may apply pressure on the government by linking polit- ical and human rights concerns to foreign economic assistance. While the IMF normally avoids making explicit political demands, the major powers that control the Fund’s executive board—and, hence, the decision-making over loans—could make that linkage more directly. However, the agreement of a new IMF programme (see Economic policy and the economy) seems to indicate that this will not become a factor unless the political situation in the country deteriorated significantly or if France were to have a severe change in policy. Nevertheless, the review process for each disbursement will provide a new arena for Mr Guelleh’s critics to highlight the difficult human rights conditions in the country and a forum for lobbying donors to demand a change.
Reform progress may prove Given Djibouti’s poor track record on economic reforms to date, the implemen- piecemeal— tation of the three-year, $26.5m loan and restructuring package agreed in mid- October with the IMF is unlikely to be smooth. In particular, the programme is heavily reliant on the ability of foreign experts working in confidence with Djiboutian officials. Several of the measures required under the terms of the agreement will also have significant political repercussions. These include strict constraints on the state payroll, a deepening of civil service reforms, labour market reform and a weakening in the job security of Djibouti’s relatively
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wealthy, salaried minority. Given the current tension and fragility of Djibouti’s political arena, these changes are likely to prove difficult to implement. Similarly, Djiboutian leaders have survived through a combination of force, political deal-making and creative accounting. Yet if the reform programme is to make any serious headway, the privatisation programme in particular, far greater transparency will be required than has been the norm so far.
—but reforms are essential IMF financial assistance and broader donor support is undoubtedly crucial if for the economy the severe problems of Djibouti’s acute urban and rural poverty are to be addressed. Such problems are currently being highlighted in the starkest fashion as the country faces severe food shortfalls (see Economic policy and the economy). Although presented by donors as an emergency resulting from a drought, in fact this reflects longer-term erosion in food security and general standards of living. Many rural Djiboutians—in a similar situation to pastoral communities in lowland Eritrea and Ethiopia—have been hit by poor rains and the loss of grazing this year. However, longer-term disruption from the civil war and divisive policies have exacerbated the country’s acute imbalances between the tiny, urban elite and the bulk of the population. Indeed, because of Djibouti’s higher costs of living, its poor frequently suffer from worse poverty than those even in neighbouring states.
The political scene
The new president attacks Djibouti’s new president, Ismael Omar Guelleh, has moved swiftly to arrest and the press— silence key critics. The editors of two opposition publications were summarily arrested, tried and sentenced within a five-day period. On August 29th the editor of Le Renouveau, Daher Ahmed Farah, and the co-editor of the monthly Le Temps, Ali Meidal Wais, were both arrested by police. The two men were report- edly charged with having brought the army into disrepute by publishing claims that the rebel group, the Front pour la restauration de l’unité et de la démocratie (FRUD), had shot down an army helicopter in the north of the country. The government maintains that the helicopter was downed by mechanical failure, although a faction of FRUD, led by Ahmed Dini who is in exile in Paris, took credit for the grounding—partially explaining the government’s sensitivity on the issue. On September 2nd the two men were found guilty and jailed (Mr Farah for 12 months, Mr Wais for eight months), and each fined DFr1m ($5,650), while both their publications were banned for six months.
Mr Farah is a leader of the opposition Parti pour le renouveau démocratique (PRD), one of the small, internally divided opposition groupings that backed the umbrella opposition grouping Opposition djiboutienne unifiée (ODU) during last April’s presidential elections. Mr Wais is a prominent and wealthy figure in Djibouti, who had been commander in chief of the armed forces prior to the until 1991, before launching Le Temps with Moussa Ahmed Idriss to support the latter’s candidacy against Mr Guelleh (see below).
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—and arrests his primary While Mr Idriss was beaten in the poll (2nd quarter 1999, page 42), he his political opponent— succeeded in maintaining the unsteady, heavily personalised alliance of factions opposed to Mr Guelleh together—thus constituting the primary chall- enge to the president. On September 16th Djibouti’s Assemblée nationale lifted the opposition leader’s parliamentary immunity, effectively making Mr Idriss liable to prosecution. While his supporters organised a rally to protest against the move, a week later the opposition leader’s house was surrounded and attacked by paramilitary police. Mr Idriss was arrested, his wife was injured and a relative at the house was killed during the struggle. On Oct 6th Mr Idriss and 19 relatives were tried, and he received four months’ imprisonment and a hefty fine. Amnesty International has subsequently expressed concern over the fairness of the trial.
—reflecting the fragility of These arrests reflect both the sensitivities over the unhealed scars of Djibouti’s the political settlement— unresolved civil war and Mr Guelleh’s undoubted determination to quash opposition to his presidency. In justifying the arrests, a government spokesman alleged that by republishing claims that FRUD had shot down the army helicopter—which had already been widely published in the French press—the accused had condoned and supported the rebels.
While it is impossible to verify the true cause of the crash, FRUD guerrillas loyal to Mr Dini remain at large in northern and western Djibouti and have staged sporadic, small-scale attacks on government targets over the past year (2nd quarter 1999, page 43). However, even at the height of their strength in 1992-93 they did not have the capacity or weaponry to down aircraft.
—and continuing security Further evidence of the military uncertainty in northern Djibouti came on problems September 25th, when three civilians were killed by a land mine in the Tadjourah district close the border with Eritrea. The Ministry of Interior accused “elements in the pay of Eritrea” (apparently a reference to FRUD). However, there is to date no evidence of FRUD partisans receiving Eritrean assistance. In addition, the border was heavily mined during Djibouti’s civil war. Over the previous five months, 23 people have been reported killed and a further 35 injured as a result of land mine explosions. Earlier in the year, the French army began limited operations to clear mines, mostly laid by the government in the northern districts of Tadjourah and Obock.
The rail link to Ethiopia is On August 21st a small explosive device derailed a train on the railway line briefly cut linking Ethiopia’s eastern trading city of Dire Dawa to Djibouti. It injured the driver, but none of the 230 passengers were reported hurt. In the past the area, which is populated by ethnic Oromos and Somalis, has been the scene of attacks by groups loyal to an Ethiopian rebel group, the Oromo Liberation Front (OLF). (Although any disruption of the line has an impact upon Djibouti’s economy, FRUD does not operate within Ethiopia.) Much of the foodstuffs and other merchandise imported into Djibouti comes via rail from Dire Dawa in Ethiopia, although the most significant and lucrative commodity traded, the mild stimulant khat, is shipped mostly by plane and road. The line was not seriously damaged and the Dire Dawa-Djibouti passenger service reopened four days later. The railway, which is jointly owned by the Ethiopian
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 42 Djibouti
and Djiboutian governments, has seen an increase in cargo due to trade diversion stemming from the Ethiopian-Eritrean conflict (4th quarter 1998, page 48).
Mr Guelleh speaks to Mr Guelleh used his maiden speech to the UN General Assembly to criticise the UN Eritrea and call for renewed attempts to reconcile Somali factions. Speaking in New York on September 22nd, Mr Guelleh lashed out at Eritrea’s “expansion” (Djibouti broke off relations with Eritrea in November 1998; 1st quarter 1999, page 42). Mr Guelleh went on to call for greater regional and international efforts to reconcile rival Somali factions, but his neutrality is hampered by his close association with Ethiopia, which is heavily involved with some factions in Somalia (see Somalia).
Despite the linguistic and clan affinities with Somalia, in fact Djibouti’s govern- ment under Hassan Gouled Aptidon took an exceedingly pragmatic and cautious approach to Somali affairs, being concerned primarily to try and minimise potential destabilisation—in terms of both political activities and refugee flows—from fighting in the north of Somalia. Despite being anxious to project himself regionally, Mr Guelleh is most likely to continue this cautious approach.
Economic policy and the economy
The IMF approves a three- On October 18th the IMF’s executive board approved a SDR19m ($26.5m) loan year ESAF— to Djibouti under an enhanced structural adjustment facility (ESAF). The loan, Djibouti’s first ESAF, will be disbursed over a three-year period, and is designed to support a medium-term adjustment programme running from July 1999 to July 2002. After a failed attempt at fiscal reform in late 1995, Djibouti had agreed to a stand-by facility from the IMF in 1996, which was extended until mid-1998.
In announcing this latest programme, the IMF noted that Djibouti has made some progress towards structural reform in recent years, notably slimming down the state payroll via demobilising the army and laying off civil servants. However, the Fund is aware that progress is unlikely to be swift, noting that the programme is a “major challenge” for the authorities, and that “substantial technical assistance will be essential for the success of the programme”. In September four French civil servants were appointed as technical advisors to the minister of finance, Yacin Elmi Bouh. They will now apparently be supplemented with additional Fund staff.
Djibouti: macroeconomic targets, 1999-2002 (% annual change; unless specified otherwise) 1999 2000 2001 2002 Real GDP 1.4 2.3 3.2 4.3 Inflation 2.0 2.0 2.0 2.0 Budget balance (% of GDP) -0.4 0.7 0.5 -0.5 Source: IMF.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 Djibouti 43
—and the government sets According to the policy framework paper released with the ESAF announce- optimistic targets ment, Djibouti aims to achieve 2.3% real GDP growth in 2000, rising steadily for the following two years. Consumer prices are targeted to rise by 2% each year for the life of the programme. While these targets are optimistic given the economy’s structural troubles, they do not appear unachievable. The initial problem, however, may not be meeting the targets, but collecting sufficient data to monitor them adequately. Djibouti’s statistical service is exceedingly weak, and many of the key figures are most probably rough guesses by IMF staff.
According to unconfirmed reports, Djiboutian officials are also hoping the World Bank will contribute an additional $20m to core government expend- iture as part of the medium-term reform programme. The World Bank currently has only limited involvement in the country; in March it announced a $15m poverty alleviation programme (3rd quarter 1999, page 45) and it is currently contributing to Djibouti’s protracted programme of military demobil- isation (2nd quarter 1999, page 46).
Economic reforms will The conditions attached to the loan hinge primarily on the swift restructuring focus on the civil service of public finances, notably further restraining state salaries, and the pre- and privatisation paration for sale of key state-owned assets. The government has pledged to maintain a hiring freeze (except in the health and education sectors), and to freeze the total public-sector wage bill.
Delays in reaching agreement on the ESAF loan, which has been in negotiation for several months, were reportedly due primarily to issues over the privati- sation of state-owned companies, notably the heavily indebted water and elect- ricity utilities, and the country’s principal productive economic asset, the port. The government has agreed to provide a formal strategy for their privatisation (plus the airport and the telecommunications facility) by June 2000.
Donors highlight food According to reports issued by the UN in late September, rural Djiboutians shortages currently face acute food shortfalls. A joint mission of UN agencies, which visited three of the country’s five administrative districts, reported aggravated malnutrition, especially amongst children. The mission indicated that drought and lack of pastureland had severely undermined rural and nomadic liveli- hoods, estimating that 80,000 people, nearly 15% of the country’s total popu- lation, required immediate assistance. On October 15th the World Food Programme (WFP) regional headquarters in Nairobi, Kenya, announced an initial emergency programme, comprising 414 tonnes of food to be delivered to 30,000 people deemed to be in the greatest need.
France closes a trade In a telling sign of the times, France’s official economic presence in Djibouti office— has been scaled back with the closure in October of its external trade promotion office. The Poste d’expansion économique (PEE) had not lived up to its name, overseeing a steady decline in French business activity over the past decade, reflecting both the economic repercussions of the civil war and less- ening of France’s military presence in the city state.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 44 Djibouti
—but an investor is Reports in the Paris-based press in mid-September have suggested that an reportedly bidding for the Ethiopian-Saudi entrepreneur, Mohamed Hussein Alamoudi, is in the bidding Sheraton Djibouti to purchase Djibouti’s only international class hotel, the Sheraton. Mr Alamoudi, who over the past eight years has become by far the largest private-sector investor in Ethiopia, built, owns and operates the Addis Ababa Sheraton. (His Midroc conglomerate failed in its attempt to purchase Kampala’s Sheraton, although later alleged irregularities by rival bidders.) Unconfirmed reports also suggest that Mr Alamoudi is interested in investing in Djibouti’s ailing Prisunic supermarket.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 Quarterly indicators and trade data 45
Quarterly indicators and trade data
Ethiopia: quarterly indicators of economic activity 1997 1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr Production Annual totals Coffee ‘000 tonnes ( 228a ) ( 2 3 0 a ) 2 3 2 a Prices Monthly av Consumer prices, Addis Ababa: 1995=100 90.2 91.4 93.2 90.9 94.8 98.1 n/a n/a n/a change year on year % –7.4 –5.2 –2.0 0.0 5.1 7.3 n/a n/a n/a Money End-Qtr M1, seasonally adj: Birr m 9,656 9,604 9,913 10,324 9,959 10,575 9,523 9,543 9,618 change year on year % 3.6 0.6 2.3 9.1 3.1 10.1 –3.9 –7.6 –3.4 Foreign tradeb Qtrly totals Exports fob $ m 113.0 154.0 147.4 133.9 150.3 165.0 128.3 127.2 n/a Imports cif “ 343.9 312.1 351.3 411.2 346.7 347.4 326.2 416.6 n/a Exchange holdings End-Qtr National Bank: goldc $ m 0.5 0.6 0.5 0.5 0.4 0.4 6.5 6.6 6.5d foreign exchange “ 566.3 577.3 531.0 491.4 454.3 429.8 409.7 501.0 464.5 Exchange rate Market rate Birr:$ 6.64 6.80 6.81 6.86 6.95 7.06 7.27 7.50 7.90e
Note. Annual figures of most of the series shown above will be found in the Country Profile. a Estimate. b DOTS estimate. Figures are subject to revision. c End-quarter holdings at quarter’s average of London daily price less 25%. d End-2 Qtr, 6.2. e End-2 Qtr 8.12.
Sources: UN Food and Agriculture Organisation, Quarterly Bulletin of Statistics; IMF, International Financial Statistics.
Djibouti: quarterly indicators of economic activity 1996 1997 1998 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Money End-Qtr M1, seasonally adj: Dfr bn 36.72 36.58 35.93 36.88 32.47 32.29 32.45 26.79 27.23 change year on year % –1.4 –0.4 –3.2 4.3 –11.6 –11.7 –9.7 –27.3 –16.1 Foreign tradea Annual totals E x p o r t s f o b $ m ( 1 3 5 ) ( 1 4 3 ) ( n / a ) I m p o r t s c i f “ ( 3 9 9 ) ( 3 8 7 ) ( n / a ) Exchange holdings End-Qtr Foreign exchange $ m 73.5 70.4 76.8 71.9 71.3 69.6 65.8 61.9 62.7b Exchange rate Market rate Dfr:$ 177.72 177.72 177.72 177.72 177.72 177.72 177.72 177.72 177.72
Note. Annual figures of most of the series shown above will be found in the Country Profile. a DOTS estimates. b End-3 Qtr, 62.1; end-4 Qtr, 66.1; end-1 Qtr 1999, 65.1; end-2 Qtr 1999, 60.3.
Sources: IMF, International Financial Statistics; Direction of Trade Statistics, yearbook.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999 46 Quarterly indicators and trade data
Ethiopia: foreign trade ($ m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1991 1992 1993 Exports fob 1991 1992 1993 Food, beverages & tobacco 24.8 89.3 97.8 Food 126.3 113.2 138.5 of which: of which: cereals & preparations 14.2 76.3 78.9 coffee 116.2 107.3 129.2 Petroleum & products 50.1 149.5 165.6 Hides & skins 25.1 32.3 32.7 Chemicals 72.7 58.3 106.1 Total incl others 188.6 197.2 201.7 Basic manufactures 76.3 99.4 124.2 of which: iron & steel 15.6 13.9 38.6 metal manufactures 17.2 15.7 26.2 Machinery & transport equipment 210.5 192.8 208.9 of which: road vehicles 77.5 96.7 113.4 Total incl others 471.8 656.6 771.6
Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cifa 1995 1996 1997 1998 Exports foba 1995 1996 1997 1998 Italy 221 174 145 135 Germany 156 126 121 139 US 163 163 133 97 Japan 56 52 62 76 Japan 120 123 117 94 US 31 33 66 49 Germany 124 105 105 91 Italy 48 48 51 49 Jordan 18 70 77 87 France 21 18 28 26 UK 93 85 108 81 Saudi Arabia 22 21 24 26 China 34466062UK 23372521 Djibouti 42 49 54 61 Djibouti 14 16 18 21 Total incl others 1,379 1,485 1,408 1,437 Total incl others 472 460 551 571 a DOTS estimates.
Sources: UN, International Trade, yearbook; IMF, Direction of Trade Statistics, yearbook, quarterly.
Djibouti: foreign trade ($ ’000) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1991 1992 Exports fob 1991 1992 Food 45,028 43,789 Food 4,593 3,393 of which: of which: cereals & preparations 17,335 16,307 live animals 2,685 326 Beverages & tobacco 11,603 12,412 Hides & skins 661 124 Crude materials 22,715 23,448 Basic manufactures 457 833 Petroleum & products 19,263 17,427 Machinery & transport equipment 1,978 1,845 Chemicals 12,797 14,855 Total incl others 17,347 15,919 Basic manufactures 36,703 35,208 of which: metals & manufactures 13,179 12,851 Machinery & transport equipment 33,306 42,157 of which: road vehicles 13,989 17,072 Miscellaneous manufactured goods 22,719 18,108 Total incl others 214,403 219,926 Source: UN, International Trade, yearbook.
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Somalia: trade with major trading partnersa ($ m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1995 1996 1997 1998 Exports fob 1995 1996 1997 1998 Djibouti 49 57 63 72 Saudi Arabia 89 89 102 110 Kenya 65 76 35 40 UAE 26 24 27 29 Saudi Arabia 16 25 28 29 Yemen 21 34 15 17 Brazil 13 17 27 26 Italy 20 19 22 12 India 5 27 32 25 Total incl others 169 188 178 187 Total incl others 279 330 316 327 a DOTS estimates.
Source: IMF, Direction of Trade Statistics, yearbook, quarterly.
Djibouti: trade with major trading partnersa ($ m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1994 1995 1996 1997 Exports fob 1994 1995 1996 1997 France 56 55 55 58 Somalia 36 45 53 58 Ethiopia 28 34 40 44 Ethiopia 31 38 45 49 Saudi Arabia 22 23 25 28 Yemen 44 8 28 23 Italy 24242828Total incl others 118 107 135 143 Total incl others 374 419 399 387 a DOTS estimates.
Source: IMF, Direction of Trade Statistics, yearbook.
EIU Country Report 4th quarter 1999 © The Economist Intelligence Unit Limited 1999