Basic

There is a lot of money, or at least the prospect of it, flowing into East Africa and the Horn from the Gulf Arab states these days. The UAE deposited $1 billion into the central bank of Ethiopia in the last year. The UAE and Saudi Arabia have committed $3 billion to Sudan and the UAE has committed another $2 billion to Ethiopia in aid and foreign direct investment. The Emirati investment push into Ethiopia has been ramping up at least since 2013. The numbers are overwhelming, and their deployment will be fraught with challenges of governance and transparency.

But a more pressing transfer is also underway. The movement of people across the Red Sea corridor is a destabilizing force in the domestic politics of countries like Ethiopia. As Saudi Arabia continues to calibrate its labor and immigration policies in an effort to increase employment among nationals, the ripple effects are reaching the other side of the Red Sea. According to reports by Arab News, the Saudi government has been on an immigration crackdown, particularly targeting Ethiopian and Yemeni illegal migrants in the kingdom. Three million migrants have been arrested, deported, or fined for overstaying visas or entering illegally in the past two years.

There has long been a pattern of migration from the Horn to the Arabian Peninsula, often via Yemen. But new patterns suggest a return of migrants from the Gulf is stressing the fragile social and physical infrastructure of Ethiopia, particularly in its frenetic capital city, Addis Ababa.

In conversations in Addis last week, analysts and international organization officials reported a visible increase among homeless and unemployed people on the streets of the capital, especially of young men returning from the Gulf. There are informal estimates of hundreds of thousands of Ethiopian migrants returning from the Gulf in the last two years. Arrests in Saudi Arabia for illegal border crossing are on the rise, targeting Yemeni and Ethiopian migrants.

The Ethiopian government is struggling to generate jobs and opportunity for citizens, even with the wide interest of foreign investors, many of whom are constructing high rise apartment buildings and taking stakes in manufacturing and retail interests. China is also part of the surge to invest in Ethiopia, with its own $2.3 billion in FDI announced in May.

Karen Young, Addis Ababa, June 21, 2019.

Like most of the African continent and the Middle East, the youth bulge challenges the social infrastructure of education and health systems. Seventy percent of the over 100 million strong population in Ethiopia is under age 35. Urban migration and displacement from rural areas are rising, often acerbating existing socioeconomic differences among ethnic and religious communities.

Prime Minister Abiy Ahmed has promised to shepherd a major democratic transition, with new elections planned for next year, but his plate is full. He is the regional diplomat in demand. He has tried to broker negotiations between the Transitional Military Council and protesters in neighboring Sudan and promises to increase trade with Somalia, all while his breakthrough success in achieving a peace deal with Eritrea may be falling apart. Ethiopian domestic politics are fractured, with reports of increasing militarization among different regional leaders, and even ministers in the government taking measures to create their own private security forces, according to think tank experts in Addis. As a confirmation of their warnings, there was a coup attempt against the leadership of the Ahmara regional government and the assassination of the Ethiopian head of the army on June 22.

As the domestic political and economic challenges mount, the role of external actors becomes more critical to understand. The Saudi and Emirati economic interventions in Ethiopia have fallen into traditional tracts in which Saudi Arabia supports Islamic charities and schools, while the UAE targets investment as a counterweight to political Islam’s growing force in domestic politics. From briefings last week with UAE military and foreign affairs leadership, it is clear the Emiratis are pivoting from their engagement in Yemen, with a notable drawdown in forces based in the South, to concentrate on threats to the homeland and to expand their regional objectives of non-ideological development and investment through the Horn and East Africa. But their development project in Ethiopia will need to be fast-tracked if it is to make an impact before national elections next year, to protect the political leadership and development agenda of Abiy.

Saudi Arabia is not really helping, except perhaps in a recent reversal in the trend of its expatriate labor force. The first quarter of 2019 has revealed a peculiar spike in foreign workers in Saudi Arabia, after two years of expatriate exodus. Domestic workers are back in force, with new jobs for drivers and household servants. While Saudization has struggled to place citizens in retail and some service sector positions, low wage domestic work seems impenetrable. Hospitality in the home is a cultural institution in Saudi society and it requires staff. But domestic work environments remain wholly unattractive to Saudi citizens.

The General Statistics Authority has not provided data by nationality on the increase of foreign household workers in 2019, but it is reasonable to assume that some may be Ethiopian. Wages for domestic workers in Saudi Arabia (and the wider Gulf Arab states) vary by nationality, as sending countries can set minimum salaries for their citizens. African workers are routinely paid less than workers from the Philippines or Malaysia. Given the cost-saving measures taking place across Saudi households since the imposition of energy subsidy reform and new taxes, cheaper household help may have some advantage in the current re-hiring boom. But the uptick in hiring low wage domestic workers is not long-term development for Saudis or their vulnerable domestic workers, especially those coming from the Horn.

The people problems are just going to get more difficult, especially in Ethiopia and the Red Sea corridor. Yemen is both a transit point and a source of transferable conflict and vulnerability. The rise of ethnic and religious tensions in Ethiopia can easily layer with outside ideological and identity-based conflicts of donors and investors. Some analysts warn of the export of the intra-GCC conflict, which now seems inevitable and ripe for exploitation. While the UAE has conceptualized its economic and security needs as tied to the Red Sea corridor, the Gulf and the Horn are becoming more interconnected and exposed to each side’s vulnerabilities.