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Last month Ethiopia’s new Prime Minister, Abiy Ahmed, surprised many by unexpectedly announcing his country’s unconditional acceptance of a 2002 boundary commission, which had awarded the town of Badme to neighboring Eritrea. In 1998-2000 the two countries fought a bloody and brutal war over the town, which never officially ended. After Algiers Peace Agreement in 2000, Ethiopian troops continued to occupy Badme despite the boundary commission report, creating a nearly-two-decades longstalemate. In response, the Eritrean government broke off relations with Ethiopia, leading to its own isolation and depriving  Ethiopia of vital port access.

The Not So Sudden Rapprochement: External Actors                                    

On the surface, the peace agreement seemed to be sudden and spontaneous. There were not even rumors of peace talks, certainly no official announcements. Prime Minister Ahmed’s unexpected peace announcement was quickly cemented by an historic visit to the Eritrean capital of Asmara, followed by an equally speedy reciprocal trip by Eritrea’s President to Addis Ababa. The two leaders then meet in Abu Dhabi to receive awards for their peace efforts. The rapid pace of developments was underscored by the resumption of direct flights between the two countries and the granting to Ethiopia of access to Eritrea’s ports. Opposition groups hosted in both countries have been requested to immediately cease political activities and in some case to leave. In reality, the build-up to the peace accord has been years in the making.

Since late 2013, the United Arab Emirates (UAE) and Eritrea have maintained close military co-operation. The relations were a strategic reaction to Djibouti blocking the UAE military from launching operations against Yemen from its soil. This was followed by the abrupt cancellation of UAE’s contract to manage Djibouti’s highly lucrative port.

Since 2015, the Eritrean government has hosted a joint UAE-Saudi military facility in its strategic Red Sea port city of Assab, principally for their  war in Yemen. The Eritrean government has also reportedly provided logistics and personnel for military activities. In exchange, both the Gulf governments have provided Eritrea with scarce foreign currency, refined fuel products and investments in the Eritrean power grid.

The burgeoning relationship between the wealthy Gulf states and Eritrea seriously worried the Ethiopian government. They viewed the increased importance of Eritrea to Arab geopolitics as a threat to Ethiopia’s internal and external stability. With Ethiopia locked in a significant dispute with Egypt, a key ally of UAE and Saudi Arabia, over its Grand Renaissance Dam, they believed Eritrea could be used as a proxy to disrupt construction.

In 2015, Ethiopia began diplomatic engagements with the Gulf states in effort to slow Eritrea-Gulf relations relations. Common ground was found in the port city of Berbera (Somaliland). In exchange for guaranteed trade volumes from Ethiopia, UAE agreed both to invest in modernizing the port, and to shift military materiel to Berbera. For Ethiopia, the dual goals were to dilute the importance of Assab and to secure an international investor for a much-needed export terminal.

United States Involvement

Djibouti’s rejection of military-economic cooperation with UAE was followed by a sudden increase in activities with China. Large port modernization contracts were awarded to Beijing. Additionally, to the ire of the US, China’s first overseas military base was opened in Djibouti. American officials, irritated at the decision to host both U.S. and Chinese military facilities in the same city, began looking for other regional solutions. As early as January 2018, the possibility of renewing previously-strained relations with Eritrea for military and economic cooperation began to appear as a viable possibility.

In the months leading up to the peace agreement, a flurry of diplomatic activities took place involving the UAE, Saudi Arabia and the United States, as well as Ethiopia and Eritrea. In April, the U.S. Assistant Secretary of State for Africa made visits to both African capitals in an effort to find common ground. Senior officials from Ethiopia and Eritrea made frequent visits to both Riyadh and Abu Dhabi to work out details.

In June, UAE Crown Prince, Mohammed bin Zayed al-Nayhan visited Addis Ababa, announcing a USD$1 billion injection to Ethiopia’s Central Bank to ease critical foreign currency shortages. Major infrastructure and aid deals were discussed during that visit.

The Meaning of Peace

Eritrea viewed a peace agreement as the only viable way to end its long and painful international isolation. Both the UAE and Saudi Arabia agreed to make significant infrastructure investments within Eritrea in exchange for peace with its neighbor. The UN has publicly committed to reviewing the sanctions, with a high likelihood they will be remove. The US has begun talks to reopen an embassy.

For Ethiopia, peace means increased security and, more importantly, a greater chance of succeeding with its ambitious economic transformation. To expand its manufacturing sector as planned, Ethiopia needs reliable and inexpensive port access to facilitate exports. Increased port competition in the horn of Africa will drive costs down. In addition, no port in the region is closer than Assab, 75km away from the border.

For the US and its Gulf allies, peace means increased influence, if not outright control, of one of the world’s most strategically important military and commercial shipping lanes. With over 10 per cent of global trade flowing through the Red Sea, peace in the region is crucial for the allies’ security. American officials also want to dilute Chinese economic and military influence along the Red Sea, which China sees as vital to its One Belt One Road policy. Militarily, renewed relations with Eritrea provides the US with an important non-Arab ally on the Red Coast, a positive development for Israeli security as well.

The importance of the peace agreement between Ethiopia and Eritrea cannot be understated. It finally ends the state of war between two of Africa’s most heavily militarized countries. Eritrea stands to benefit from the end of international isolation and increased, and badly needed, infrastructure investment. Ethiopia has significantly reduced its external security risks and enhanced its economic diversification strategy. However, events are always fluid. Badme is still under Ethiopian military control and the border has not been officially demarcated. The conflict in Yemen is entering its 4thyear with no signs of ending. The official role of Eritrea in the war coupled with its proximity to the fighting could make it a target of Yemeni reprisals. Egypt is still anxious over Ethiopia’s damning of the Nile River and could be prepared to increase the stakes if they feel there are no alternatives. Overall, the large role of foreign actors in the peace agreement with varying interests can lead to destabilizing issues in the future. Only time will tell the true impact of the peace accord but for now a cautious optimism is healthy.

Author: Negash Haile