– Eritrean Ports, Assab-Addis oil pipeline threaten Djibouti’s Ethiopian trade lifeline.
By Thomas C. Mountain
16 Aug 2018 – Djibouti has been landlocked Ethiopia’s only access to the sea and depends on port taxes paid by Ethiopia for most of its income and with the Eritrean ports of Massawa and Assab on the Red Sea about to open finds itself faced with losing most of the Ethiopian trade it has enjoyed a monopoly on for the past twenty years.
For a country of less than a million mostly poverty-stricken people the over $1.5 billion a year coming in from unloading cargo for Ethiopia’s almost one hundred million people is almost three quarters of its income and facing competition from Eritrean ports more conveniently located and better yet, tax free, most of the Ethiopian trade will be lost. Why should Ethiopia pay for services from Djibouti when they get Free Ports in Eritrea and can use the money saved to help with their balance of trade deficit? The just-announced UAE funded oil pipeline from Assab to Addis Ababa is another nail in Djibouti’s coffin.
To try and diversify its economy Djibouti has taken to offering its services to any and all armies, hosting military bases for the French, its former colonizer, the USA and now China and its 10,000 troops. Even Turkey, the UAE and Saudi Arabia are rumored to be planting their flags in Djibouti soon.
Being right next door to the strategically critical Ba’ab al Mandeb, the “Gate of Tears” straights between the Red Sea and the Indian Ocean and a chokepoint for the worlds largest trading partners, Europe and Asia, it is in the “national interests” for any government with imperial ambitions to have a base in Djibouti.
Still, $500 million a year in base rents cannot make up for what could be a 75% loss in Ethiopian trade and port tax revenue. What this will mean to China’s new $3.5 billion railroad running from Djibouti to Ethiopia is a good question, with specters of it becoming a white elephant with little freight to carry and Ethiopia expected to pay what turns out to be an odious loan?
This railroad deal was made with the former TPLF gangster regime ruling Ethiopia since 1991 and was made without consideration taken for peace between Eritrea and Ethiopia breaking out. Now that “Ethiopia’s Peaceful Revolution” has taken root, a railroad between the Eritrean port of Assab and Addis Ababa is what is needed, not the now redundant one built by China under its shortsighted foreign policy. How is debt overloaded and foreign currency strapped Ethiopia supposed to pay for another multi-billion dollar loan for a project built by the funding country that is now going to be a money-losing operation from the start? Sometimes you really have to question just how well informed the Chinese Foreign Ministry is, with “economics for dummies” desperately needed.
Eritrea has been on a foreign policy offensive, by all appearances successfully directing a “soft coup” in Ethiopia, followed by a rapprochement with Somalia with Djibouti next on the list for either another soft coup following the dark days to come or maybe some sort of foreign intervention under the watchful eyes of a few major imperial powers.
As 42-year-old Ethiopian P.M. Abiy Ahmed said, don’t worry about all these problems we Ethiopians face, Eritrea’s “Issias [Aferworki] is leading us”. What he is saying is rest assured a plan is in the works and when it is enacted it will serve the best interests of the almost 200 million people of the Horn of Africa and not those of imperialists large or small. Having spent his whole adult life, over 50 years now, fighting for a real peace based on respect and cooperation between neighbors free of domination and exploitation, Issias today is leading a fundamental change in how the future will be decided here in what has been called Africa’s Horn of Hunger. Hope that we will finally break free from war, famine and chaos here in the Horn of Africa is finally becoming a reality.