The OAU has provided a solution to the conflict that satisfies TPLF's unreasonable demands at the expense of Eritrea. While Eritrea agreed to sign on Ethiopia has refused to do so. The TPLF leadership is threatening a "protracted war" as if the people of Ethiopia and Eritrea can benefit from any war, let alone a protracted one. Here are a few of Ethiopia's problems as they were reported in the media. This is not to say that Eritrea doesn't have any problems, but then again it is not Eritrea that is refusing to sign the peace deal. Many Thanks, to all the tireless Dehaiers who have done an excellent job providing the latest news. The following are quotations, almost verbatim, and my sources are all listed at the bottom.

AID:
Aid is an important factor in the Ethiopian economy. In 1995, the country received a total of US$876 million, net, in official development assistance. Aid represented 18.7 per cent of Ethiopia's 1994 GNP and amounted to US$16 per capita in 1995. Japan, Germany, Italy and the Netherlands follow the USA as major bilateral donors to Ethiopia. [01]

The World Bank has substantial programs worth hundreds of millions of dollars in Ethiopia [02]and now the Bank is refusing to fund any new projects in Ethiopia and Eritrea saying they should be fighting poverty and not each other. [03]

It was reported that President Bill Clinton's administration has suspended, with immediate effect, all direct payments of aid to Ethiopia because of a ruthless use of 'human-wave' tactics in which young, poorly-trained soldiers were sent as cannon fodder to the front-line with Eritrea. The action will result in the loss of $80m in project aid to Ethiopia, in addition to substantial balance of payments support. Proposed relief of some $90m of Ethiopia's debt has also been ruled out. [04]

The Netherlands, one of the major European countries who have been engaged in development in Ethiopia, has canceled all development cooperation with the country. It was cited that the cancellation was related to Ethiopia's refusal to sign the peace deal and Netherlands long stand not to do business in a war torn country. [05]

DEBT:
Ethiopia is faced with a worsening debt crisis, which puts external assistance further into perspective. In 1995, the year in which the country received US$876 million, net, ODA, it paid out US$92 million in debt repayments and US$62 million in interest on its debt. In other words, for every six dollars Ethiopia receives in aid, one is paid straight back for debt servicing. With the total debt increasing, the aid inflow decreasing and the loan element of aid adding to the debt burden, the ratio of debt servicing to net ODA will rise further in future.

Ethiopia's total external debt amounted to US$10,077 million in 1996, or 169 per cent of its annual GNP and more than ten times the value of its annual export earnings. Ethiopia's debt burden is therefore clearly unsustainable. Ethiopia is increasingly falling behind with repayment schedules, with arrears reaching up to US$4,303 million in 1996. Despite substantial debt rescheduling from creditors, Ethiopia's debt burden remains unsustainable and is growing. Ethiopia will not benefit from the Heavily Indebted Poor Countries (HIPC) initiative until 2001 at the earliest. Meanwhile, the debt burden puts serious constraints on the Ethiopian government's spending capacity for basic social services, thus making it difficult for the government to provide quality health and education. [06]

DROUGHT:
Ethiopia needs tens of thousands of tons more food to feed people left hungry by drought. The Ethiopian government had estimated that 7 million people are at risk. [07]

AIDS:
Nowadays, the number of Ethiopians falling victim to HIV/Aids pandemic is very high. No less than 2.5 million of Ethiopians are affected by the disease. The number of Aids-orphaned children is on the rise. This phenomena is spreading not only in the towns but also the rural areas. Unless this situation is reversed, the social, economic and population impact on Ethiopia is going to be severe. [08]

MALNUTRION:
According to WHO's recent report, 48% of Ethiopia's children under the age of 5 are suffering from malnutrition. [09]

FLOODS:
A week ago it was reported that floods have made more than 30,000 people homeless and killed a 10-year-old girl in Ethiopia. [10]

DECLINING INCOME:
Ethiopia earned over 3.5 billion birr (about 442.5 million US dollars) from the export of various commodities during fiscal 1998-99 which ended in June. The amount represented a decline of 14.8 percent in earnings as compared to the preceding financial year. [11]

TPLF's MISPLACED PRIORITY:
Senior TPLF Politburo member Abay Tsehaye, in a lengthy interview repeated by Radio Tigray was quoted saying, "In order to undermine Eritrean support for the government in Asmara, it is necessary to wage a protracted war." [12]

At the same time President Negasso Gidada, in his new year address to the country had said "If Ethiopia's sovereignty is not fully restored in the occupied territories, Ethiopia has an obligation to liberate its territories by force". [13]

He had also said "The main and focal issue of this year is the restoration of our sovereignty. . Failing this, we would like to reiterate that we reserve the right to use force to restore our sovereignty." [14]

The Ethiopian government has also nearly doubled its request for defense spending in its 13.9-billion birr (USD 1.76 billion) budget for 1999/2000. [15]

COST OF THE WAR:
As estimated by the Ethiopian government and donors, Ethiopia's war on Eritrea is going to cost Ethiopia (that too its second-round effects alone) between 1.1 billion and 1.6 billion birr per annum. If this war goes on, coupled with the drought and capacity limitation, it will be a hard-to-come-by deed to see a beaming future for the Ethiopian national economy. [16]

By the end of June, it was estimated that more than $300m has been spent by the Meles government on the war with Eritrea [17]. This figure looks very conservative. But over all it says it all.

In short, Ethiopia's biggest woes are the TPLF's misplaced priority and misguided policy of territorial expansion. As the TPLF rejects peace and walks along the path of war and destruction, we only hope it pauses to take into consideration the plight of the Ethiopian population who have been suffering for ages. For sure they will be served better by peace than war.

Benyam Solomon

[02] Seife Nebelbal, "Amharic newspaper ", September 17, 1999"

[03] BBC, "World Bank aid blow for Horn" (BBC), Monday, September 13, 1999

[04] Africa Analysis, "US axes Ethiopian aid over border war", June 25, 1999

[05] Maysaw, private Amharic newspaper, October 18, 1999 "

[06] Arthur van Diesen & Karen Walker, Christian Aid, "The changing face of aid to Ethiopia past experience and emerging issues in British and EC aid", January 1999

[07] Associated Press (Addis Ababa), "Drought Affects 7M in Ethiopia", OCTOBER 20, 08:29 EDT, 1999.

[08] Negasso Gidada, President of Ethiopia, Address to Parliament, October 11, 1999

[09] World Health Organization, National Institutes of Health

[10] Reuters (Addis Ababa), "One dead, 30,000 homeless in Ethiopian floods" Oct 14, 1999 09:48 a.m. EDT

[11] Pan African News Agency, October 5, 1999

[12] ERINA, Monday, June 15, 1999

[13] BBC, "World Bank aid blow for Horn", Monday, September 13, 1999

[14] Negasso Gidada, President of Ethiopia, Address to Parliament, October 11, 1999

[15] AP Worldstream, "Defense allocation way up in Ethiopia's 1999/2000 budget", June 16, 1999.

[16] The Reporter (Addis Ababa), "Public Expenditure Review 1999" Emrakeb Assefa, October 13, 1999.

[17] Africa Analysis, "US axes Ethiopian aid over border war ", June 25, 1999