The Cause of the Eritrean-Ethiopian Border Conflict

PART I

by Alemseged Tesfai

I. Introduction

Two premises or assumptions have governed Ethio-Eritrean relations of the past sixty years. First is the notion carved into the minds of generations of Ethiopians by the Haileselassie regime that Eritrea is, by nature and logic, part of Ethiopia. The well known arguments of a common history, religion and culture is invoked here and Eritrea is defined as Ethiopia's natural "outlet to the sea".

The second premise, which is linked to and complements the first, regards Eritrea as economically weak and unviable, such that its very survival totally depends on Ethiopian resources. This line of thinking further depicts Eritrea as an ethnically, linguistically and regionally divided "Italian creation without the makings of a state"....

These two Ethiopian assumptions gained international currency in the 1940's, when leading Powers like the U.S. and Britain adopted them mainly to satisfy their own strategic needs and led the fledgling UN into passing a resolution federating Eritrea to Ethiopia "under the sovereignty of the Ethiopian crown".

The people of Eritrea were not consulted in this decision over their fate and, consequently, they spent the next forty years, thirty of these in armed struggle, fighting for independence. When in 1991 the EPLF led a united Eritrean people to their hard-earned freedom from Ethiopian rule, Ethiopia's fallacious premise that Eritrea forms an "inseparable part and parcel of Ethiopia" was finally defeated.

The economic argument too had, of course, no basis in Eritrean reality. As an Italian colony and a British occupied territory, Eritrea had a developed industrial and infrastructural base. These were systematically dismantled by successive Ethiopian administrations, such that, in the 1950-1960's, Eritrea became a big source of skilled manpower mainly to Ethiopia, but also to Saudi Arabia, Yemen and Sudan. Most of the Eritreans being expelled from Ethiopia to-day are the migrants of those years. To-day, Eritrea's natural resource, tourism and services potentials are showing signs of great future and promise.

In 1991, when the TPLF assumed power in Ethiopia, there was every reason to believe that the above mentioned Ethiopian fallacious assumptions would come to a final rest. Indeed, all the pronouncements of the TPLF leadership at the time left no room for doubt or apprehension in Eritrean minds that they were genuine. It appears, however, that there was more to these than met the eye.

In an interview he gave to the American writer, Paul Henze, in March 31 and April 1, 1990, Meles Zenawi, then head of the TPLF, expressed his feelings about post-independence Eritrea. He told him, first, that he did not expect Eritrean unity to hold, once the Derg was expelled from Eritrea. The main reason he gave for this was that Eritrea was a religiously divided nation and that he expected to see internal conflict once the enemy had gone. Second, he also expressed his unreserved preference to see, not an independent Eritrea, but one linked to Ethiopia in a federal arrangement. In explaining this, he told Paul Henze,

"We look at this from the viewpoint of the interests of Tigre, first, and then Ethiopia as a whole. We know that Tigre needs access to the sea and the only way is through Eritrea .... There are many Tigreans in Eritrea ..... They don92t want to be treated as foreigners there ... They have the same history. We are worried about Eritrea because we are not sure that differences among different groups can be kept under control". (Paul B. Henze, Conversations with Meles Zenawi, J3 26/002/92/3 31 March/ 1 April 1990).

The above comments, expressed slightly over a year before Eritrean independence are self-explanatory. Its public declarations notwithstanding, it appears from Meles's thinking that the TPLF had, itself, never been free from the old fallacies of Ethiopian ruling classes. One exception is that, the TPLF wanted Eritrea, not for Ethiopia as a whole, but, again according to Meles's own admission, to enhance the interests of Tigrai.

Since the start of the border conflict between Eritrea and Ethiopia, this hitherto hidden agenda has been consistently coming to the fore in Tigrayan propaganda literature and the utterances of the TPLF leadership. In fact, according to TPLF propaganda, the issue is no longer their allegations that "Eritrea occupied by force, Ethiopian territory at Badme". It is, rather, Eritrea's internal political and economic problems, which presumably, is to be "corrected" by the TPLF's declared war on Eritrea. In short the re-occupation of Eritrea or parts thereof is the real reason for the present conflict.

This paper will try to set the record straight by disproving the fallacy of "the economic argument" and proving, instead, that the border dispute is the direct result of the TPLF's expansionist policies and disposition. The first part of this paper deals with the most relevant aspects of the post-1991 cooperation agreements between Eritrea and Ethiopia. The second part will narrate, in summary form, the events that led to the border dispute at Badme. These are separate papers, but should be read together so that the real cause of the war may be firmly established.

II. A Commentary on Selected Aspects of Post-1991 Eritrean- Ethiopian Cooperation

A. A Selected Look at the Agreements

1. The Agreement of Friendship and Cooperation between the Transitional Government of Ethiopia (TGE) and the State of Eritrea signed in July 1993 is precisely a testimony to the spirit of friendship and cooperation that characterized, at the time, the relationship between the two states, governments and peoples. It foresaw activities of "mutual advantage" in practically every field with the ultimate aim of "gradual evolution of the two economies and societies into a higher level of integration in accordance with ".....the commitment of both countries to bring about regional economic integration and political cooperation" (Art.1).

The Agreement further called on the gradual elimination of all trade barriers between the two countries and the harmonization of customs policies, as well as the use by Ethiopia of Assab and Massawa as free ports (Art 4). The free movement of people and the harmonization of immigration laws was also agreed upon (Art.5). Cooperation in the financial and monetary fields (Art. 9); cooperation and consultations in "realizing common objectives" in matters of foreign policy (Art 10); cooperation at the national and regional levels in border areas (Art. 12); ....were all important parts of the Agreement.

2. Subsequent to this, several agreements were signed by respective joint ministerial committees set up in accordance with the July Agreement. One of these dealt with the harmonization of economic policies, signed in September 1993. This is where it was agreed that the Birr continue as a common currency until Eritrea issues its own money (Art. 1). Here too, the agreements were wide-ranging and quite forward-looking. The harmonization of "exchange rate policies..... with the aim of establishing uniform exchange rates" (Art. 1.1.); harmonization of interest rate structures (Art. 1.2.); the creation of common inflation-control mechanisms (1.3); synchronization of policies related to foreign exchange (1.4).... were all laid down.

In the field of trade (Art.3), the free movement of goods and services for local consumption in both countries was agreed upon, with the exception "of those goods in short supply whose movement depends on their supply availability and related trade policies...." (Art. 3.1). Goods imported from third countries were to move freely (Art. 3.2), but there was to be no re-exportation of goods and services originating from one contracting party to a third country. (Art. 3.3).

In the area of investment, besides the call for joint-investments, there was an agreement, in principle, that national investors of both countries have the same and equal treatment in both countries. (Art.4). Another Protocol Agreement on Cooperation in the Field of Planning and Economic Development was signed on 27 September 1993, where the two parties agreed to "endeavour to coordinate planning in social policies and the usage of human, material and financial resources (Art. 2,3); the planning of strategic industries, railway, roads, ports, air transport, major financial institutions....", including the exchange of "social and economic statistics to coordinate their planning and development endeavours were all important. (Arts. 4,5).

The Protocol Agreement on the Free Movement of people and Establishment of Residence of 23 September 1993 is another important document. Here, it was agreed that visas would not be required for nationals of both countries to enter or leave Eritrea and Ethiopia. A valid passport or ID card was all that was required (Art.1). Unlimited residence to both nationals was granted without the requirement of work permits (Art. 2). Each country was to "allow citizens of the other to engage in commercial, business and other similar gainful activities in its territory. In furtherance of this objective, each contracting party undertakes to grant no less favourable treatment than that accorded to its own nationals" (Art.3). The only restriction appears in Article 4 where it was provided that "each country reserves the right of refusal to enter or remain in its territory to (sic) any citizen of the other country where it considers the entry or presence of such citizen undesirable."

Other agreements covered a wide-range of fields of cooperation, but for the purposes of this presentation, the above will suffice.

B. Who Benefited More from the Agreements?

The argument is often heard that the agreements favoured Eritrea more than they did Ethiopia. Let us look at some facts:

1. Ethiopia enjoyed full and unrestricted use of the port of Assab. Assab has been, by agreement and practice, its free port. The Ethiopian Shipping Lines handled its own cargo, paying the Eritrean authorities in Birr, for consignment fees it received in foreign currency. At the same time, the agreements allowed Ethiopia the use of the port of Massawa for its northern regions at negligible fees and payments - a transit charge of only 1.5%. In later years, the Ethiopians were asking that this charge be reduced further. In both of these port cities, but especially in Assab, the rate of employment for Ethiopians was high. In Assab, Ethiopia was privileged to open four schools operating under its own curriculum.

2 The Agreement on air services allowed Ethiopian Airlines to take Eritrea's quota of IATA flight space and privileges - "the fifth freedom rights" as they are called. Eritrea was a major region for the Airline, and Eritreans were some of its most frequent and faithful passengers.

3. Surface or land transport also worked heavily in favour of Ethiopia, as no embarkation or other charges were levied on Ethiopian trucks running to and from Massawa and Assab. One ought to keep in mind that Eritrea inherited totally dilapidated roads from years of disrepair and destruction by the Derg's military campaigns. The task of repairing them was entirely Eritrea's own responsibility.

4. In these three instances, Eritrea's benefits in financial terms were the various agreed revenues accruing to it from port activities and the fringe benefits thereof. This cannot compare with the privileges of the freedom of access to the ports that Ethiopia was enjoying. Eritrea actually saw the arrangement more as a gesture of friendship and cooperation and as the grounds on which the projected move towards economic integration, currency union...etc., was to proceed. Maintenance of the peace and security of the area was also of prime consideration in this matter.

5. On 3-4 April, 1995, the Joint High Ministerial Commission led by Minister Mahmoud Sherifo of Eritrea and the then Prime Minister Tamrat Layne of Ethiopia met in Asmara to evaluate the 1993 agreements. The Commission "expressed its profound satisfaction on the progress made." Indeed, in the areas of education, culture, air-line services, telecommunications..... etc., the agreements were assessed to have worked well.

The Commission, however, identified two problem areas - the issue of citizenship and the commodity or trade sector.

C. The Issue of Citizenship

4.1 The first case, raised in the joint Political Committee, regarded "a few minor problems in the areas of security and justice. Here, the Commission noted,

"In the area of security, the Ethiopian side presented that the free movement of people has been hampered due to unclarity of ID cards. It also raised the issue that a significant number of Eritreans who have already taken Eritrean Nationality are still carrying Ethiopian passport and are requesting for its renewal."

The point was actually the result of the divergent policies of the two parties regarding the issue of nationality. Eritrea recognized the dual citizenship of all its citizens living everywhere else in the world. Eritrea automatically accepts as its citizens, those of Eritrean parentage on both or either side. Nationals of other countries may also be granted Eritrean citizenship by law.

Ethiopia does not allow dual citizenship to its nationals; or so it is claimed, for it is hard to believe that all the Ethiopian exiles who have adopted various citizenships are no longer Ethiopian. But, with respect to Eritreans also holding Ethiopian citizenship, the Ethiopian Government had been wavering. On the one hand, the present Ethiopian Government saw them as strong allies in its own struggle against its opposition, but on the other, and for reasons that are becoming clear only after the conflict, it wanted to curb their activities.

Be that as it may, the Ethiopian Government never took any legal steps to put the matter to rest by either asking its citizens of Eritrean origin to drop their Eritrean citizenship and become only Ethiopian, or by allowing them to choose which citizenship they wanted to adopt. Since this was not done, Ethiopians of Eritrean origin continued to consider themselves also as Ethiopian citizens and the Ethiopian Government continued to accept them as such.

This situation did raise some problems, especially in the issuance of licenses in both countries. To put it simply, the Ethiopian side felt that Eritreans in Ethiopia were taking a fairer advantage of the free movement, residence and business agreements and demanded reciprocity in Eritrea. Eritrea insisted that those Eritreans were mostly holders of Ethiopian citizenship. Thousands of Eritreans of Ethiopian origin were enjoying the same rights as Eritreans in Eritrea. The latter had, and still has, no problem recognizing them as Eritreans. The reciprocity, therefore, was already there.

The problem arose when it came to the issuance of new licenses to citizens of one country only wanting to do business in the other. According to the Eritrean side, equality and reciprocity of treatment was needed here.

A great percentage of the tens of thousands of Eritreans who have been expelled from Ethiopia to date, fall under the first category, i.e., they are Ethiopians of Eritrean origin. No similar measure has been taken on any Ethiopian living in Eritrea. Eritreans of Ethiopian origin have full Eritrean citizenship rights and do not even come into question.

D. The Commodity or Trade Sector

This is the sector that showed some signs of incompatibility right from the outset. The agreement of 23-27 September provided for the following:-

 

Here, the Eritrean side found the restriction on "goods in short supply", which was an Ethiopian inclusion, difficult to understand and work with, as any product could be so declared at any time, thus hampering free trade movements. The ban on the re-export of the other country's products was also noted as overly restrictive by Eritrean negotiators, as it left "traders at the mercy of the staff of the customs administration." Re-exporting products is a common practice of international trade and Ethiopia was the beneficiary of Eritrean re-exports to Ethiopia. Nevertheless, the Eritreans went along with the restriction.

Subsequent agreements in May and November 1994 tried to work around these problems. A memorandum of understanding signed by the two sides on 7 October 1994, indicates that the Ethiopian delegation expressed appreciation for the following measures taken by the Eritrean Government:-

"1. Goods and commodities originating from Ethiopia will not be subjected to any customs tariff payment,

 

2. Ethiopian traders who have valid Ethiopian trade licenses will personally, without going through Eritrean traders, purchase goods and commodities from Eritrea, and

3. One point five percent (1.5%) transit charge (sic) levied on goods and commodities coming through the port of Massawa destined for Ethiopia.

4. There will be no hindrance to border trade activities carried out between our two countries."

In this agreement, it was further stipulated that no additional intermediate and local payments were to be imposed on goods and services traded between the two countries. The setting up of a joint customs committee to oversee this was also agreed upon. The request by the Eritrean delegation for exemption form indirect (sales, excise....) taxes on all locally produced goods and services traded between the two parties was referred by the Ethiopian side for further study. But, both countries agreed that the free movement of goods not be impeded or distracted by the "short supply" limitation.

In spite of all these seemingly genuine attempts at moving towards higher levels of trade cooperation, however, the problems persisted. In its meeting of 3-4 April, 1995, the Joint High Ministerial Commission headed by Eritrean Minister Mahmoud Sherifo and Prime Minister Tamrat Layne of Ethiopia also raised the trade issue. The Eritrean side complained that contrary to the letter and spirit of the free trade agreement, Eritrean products were being made to pay indirect taxes and intermediate payments of various descriptions in every Ethiopian region or Kelil they entered. To this, the Ethiopian response was as follows:-

"The Ethiopian delegation reiterated its position that Indirect Tax levied in Ethiopia is non-discriminatory and thus cannot be lifted.

"It further stated that indirect tax are not considered to be a hindrance to free trade and services in FTA (Free Trade Area). It is an internal tax. Removing or changing these taxes will have serious implications for Ethiopia. It should be understood that changing domestic tax policy on grounds of trade relations will create problems for Ethiopia.

" The Eritrean side reasserted that indirect taxes are trade barriers and must be lifted. It further argued that indirect taxes levied under a policy of import substitution as a protective fiscal measure is a trade barrier and impressed upon the Ethiopian delegation to reconsider its position".

On the issue of intermediate payments at the Kelil level, the Ethiopian delegation again insisted that the payments would be adjusted or lifted only if they were discriminatory.

These two problems, which eventually developed into major stumbling blocks standing on the way of the attainment of the original vision, had their roots in the divergent directions in economic policy and strategy that the two sides were moving. Eritrea had adopted an outward looking, export and free market-oriented strategy. It saw Ethiopia not as a competitor, but as a partner and ally in the global market. The Ethiopian strategy, as officially expounded, was based on the development of its agricultural potential and the building up of a chiefly agriculture-related industry. Consequently, it was protective of its local products, which it saw as substituting various imports, including those from Eritrea. In other words, for Ethiopian policy-makers, Eritrea was a competitor in their own local markets and not, as the agreements seemed to originally indicate, an ally and a partner.

This difference in policy and practice had the net effect that Ethiopian goods were entering Eritrea with full freedom, whereas Eritrean products were being made to pay both indirect taxes and the embarkation charges and development fees imposed especially by the Tigrai region. This put the competitiveness of Eritrean goods in Ethiopian markets at a disadvantage. The problem does not stop here. Eritrean products were mainly industrial in nature, whose materials and chemicals were paid for from its own foreign currency reserves. Its re-exports to Ethiopia too were always similarly paid for from Eritrean reserves. That all these were exchanged for Birr in Ethiopia was an added disadvantage to Eritrean trade.

Total value of imports from Ethiopia to Eritrea for the years 1995, 1996 and 1997 stood at 146.8, 261.8 and 274.6 million Birr, respectively. Total value of Eritrean exports to Ethiopia for the same years show 259.7, 273.4, 218.2 million Birr. Total value of re-exports from Eritrea to Ethiopia, again for the same years, stood at 94.57, 69.0 and 19.8 million Birr, respectively.

In view of the fact that there was Eritrean foreign currency in almost every item exported or re-exported to Ethiopia, the favourable balance of trade apparent in the 1995 and 1996 figures is deceptive. In any case, these had dropped from 100 million to 10 million in just one year, 1995-1996. We should also note that the value of imports from Ethiopia exceeded those of Eritrean exports by about 60 million Birr in 1997. At the same time, the value of re-exports fell to an all-time low of 19.8 million Birr, a drop of 50 million Birr from that of the preceding year. This was, of course, not accidental as it resulted from Ethiopia's increasingly protectionist measures and from the stringent controls and harassment of Eritrean traders at the various check-points in Tigrai.

The fact is that, by 1995-1996, the Eritrean side was already realizing that progress in the trade sector was not likely to proceed as intended. Eritreans were being delayed at check-points, goods classified as "export items" were barred form entering Eritrea..... and so Eritrea was, by 1996, already de-escalating its traditional intensive trade practices with Ethiopia and expanding its market alternatives. Hence, another reason for its unfavourable trade balance in 1997.

Considering again the fact that most Eritrean exports and all of its re-exports to Ethiopia involved payments in foreign currency being exchanged for the Birr, Ethiopia's advantages in the trade sector were significant.

Add to this the use of free port and transport services, the employment of thousands of Ethiopians throughout the country, but especially in Assab and Massawa, and the non-payment by Ethiopian traders of Eritrean indirect taxes and intermediate payments, and the picture will be clearer.

The Cause of the Eritrean-Ethiopian Border Conflict

PART II

by Alemseged Tesfai

6. The Monetary Arrangement

Eritrea used the Birr until it introduced its own cur rency, the Nakfa, on November 8, 1998. The relevant provision for this agreement was signed in the Protocol Agreement on Harmonization of Economic Policies on September 1993. It provides as follows:-

Article 1

The Use of the Ethiopian Birr until Eritrea has its own currency.

In so far as a common currency is in use, the Contracting Parties agree:

1.1 To harmonize exchange rate policies including consideration of pooling of reserves with the aim of establishing uniform exchange rates within the currency area.

1.2 To harmonize interest rate structures in both countries.

1.3 To work out a mechanism by which the increase in money stock is consistent with the growth and inflation objectives of the two countries.

1.4 To work out a scheme to synchronize policies related to foreign exchange surrender requirements, allocation of foreign exchange to importers, capital flows and external debt management.

We have been hearing and we will yet hear allegations that this arrangement favoured Eritrea more than it did Ethiopia. How a country that uses someone else's currency can be deemed an exploiter is yet to be convincingly explained. It is like the US feeling raped because its dollar is spread all over the world.

In actual fact, throughout its use of the Birr, Eritrea was a victim of the Ethiopian monetary policy as it had no say in its formulation. Here, again, differences in economic policy between the two states created incongruities in the use of the Birr. On this topic we refer to an Eritrean economist's expert opinion, that of Dr. Woldai Fitur of the IFC, who says:-

"....it was clearly Ethiopia that benefited more from arrangements concluded between the two countries. For instance, the arrangements in the de facto currency union, which did not allow Eritrea a voice in Ethiopia's conduct of monetary policy, worked more in favour of Ethiopia. All seigniorage associated with issuing new Birr notes accrued to the National Bank of Ethiopia, while the costs associated with the overvalued exchange rate and unreasonably high interest rates imposed by the Ethiopian Government on the Birr area spilled over to the Eritrean economy, forcing Eritrea to adopt an independent exchange and interest rate structure.

It is important to appreciate that this interest and exchange rate structure was necessitated by the divergent economic (fiscal, monetary, trade, investment, etc.) policies that the two countries have chosen to pursue. Immediately after liberation, Eritrea adopted liberal trade, investment, and financial and foreign exchange regimes. These policies were quite different from those of Ethiopia. Under such circumstances, it behooved Eritrea to issue its own currency and pursue independent interest and exchange regimes for an effective management of its economy. Ethiopians should not have any reason to resent Eritrea's independent monetary, interest and exchange rate policies. The development of an active black foreign exchange market, which hadn92t existed for decades, was the natural consequence of the distortions by Ethiopia's foreign exchange policy. The Eritrean Government has in no way contributed to the development of this black market and should not be blamed for it. Moreover, Ethiopia paid in Birr for all Eritrean exports, including re-export of goods imported from third parties in hard currency. In view of this, it was Ethiopia and not Eritrea that benefited more form the de facto currency union. (Eritrea Profile, Vol. 5 No 1, August 15, 1998).

The Nakfa-Birr "controversy" is actually an Ethiopian creation. The accusation leveled on Eritrea by the Ethiopian government and media is that it sought to force upon Ethiopia a Nakfa convertible with the Birr on parity and that it insisted that both currencies circulate freely in both countries. Why the Ethiopians would think such a suggestion, though it was never made, a blasphemy cannot be rationalized. However, the records show that Eritrea never presented such a proposal or suggestion to the Ethiopian government. In March, 1997, the National Bank of Eritrea had entertained the following three points as payment options that "could be considered depending on the level of political commitment for closer cooperation and prospects for accelerated harmonization of economic policies of the two countries". These options were:

1. a foreign exchange-based payment system, as is the case with the rest of the world;

2. freely convertible Nakfa-Birr payment system in which trade between the two countries could be conducted with or without opening a letter of credit with a bank; and

3. a partial convertibility of Nakfa-Birr system in which trade between the two countries could be conducted only by opening a letter of credit with a bank. (Bank of Eritrea, "Progress Towards the Introduction of Nakfa and the Disposition of the Birr, March 13, 1997, Asmara, Eritrea. P.14.)

The Bank of Eritrea did not make a secret of its preference for the second option which it saw as "the most appropriate for stimulating rapid expansion of trade and greater economic integration between Eritrea and Ethiopia." By the "free convertibility" of Nakfa-Birr in this option, it was not suggesting parity or the free circulation of both currencies. It was, rather, to put it in layman's terms, giving traders in either country the opportunity to agree on the use of the currency of their choice for settlement and to do so through the intermediary of banks in both countries. Any imbalances accruing from such a practice, according to this option, would be settled in foreign currency through the banking systems of Eritrea and Ethiopia. The assumption here, of course, was that the trade would be carried out without resorting to the opening of letters of credit.

In the joint committee meeting of 19 November, eleven days after the Nakfa had been introduced and the new Ethiopian Birr put into effect, the Ethiopian delegation presented the LC option as its final preference except in limited petty-trade. The US dollar was to be the official medium of exchange between the two countries. Later, the Ethiopians stipulated that the border petty-trade was not to exceed the value of 2000 Birr in each instance. The Eritreans felt that the Ethiopian preference was not in the interest of the people of both countries as it would encumber the traditional free flow of goods.

When the Nakfa came into operation, Ethiopian reaction was unexpectedly and astonishingly violent. Holders of that currency were harassed at all Ethiopian points of entry, the Nakfa was confiscated and sometimes torn or burned and the atmosphere of the complete break-down of trade created by Ethiopian authorities. In fact, trade from Eritrea to Ethiopia came to a virtual halt.

Nothing approaching that level of irrationality was seen prior to the Nakfa incident - not even at the time of Eritrean independence, especially by the TPLF cadres and their supporters. Suddenly, pictures of an economically weak Eritrea trying to get an easy ride on the back of Ethiopia started to be painted. Eritrea was now "the exploiter", a bully that "coerced" Ethiopian authorities into unbalanced and unfair agreements". The idea, apparently, was to teach Eritrea the lesson that (the old fallacy) its existence was irrevocably and forever tied to Ethiopia's abundant resources; that what amounted to a trade embargo, would bring it down to submission.

The mood in Eritrea was different.

The old traditional trade ties with Ethiopia, which were re-enforced by the mutual friendship apparent at independence had, in a way, clouded Eritrea's vision in many ways. So, the strain in trade relations following the Nakfa, though obviously lamentable, was a good thing, as it widened the nation's perspective and alternatives. That was how the incident was assessed and explained to the Eritrean public.

F. Concluding points

In the areas of trade and currency policies, the post-1991 agreements between Eritrea and Ethiopia did not work and, in fact, led to some confrontations. In other areas, including the issue of citizenship, no insurmountable problems were encountered and, one may say, they were generally successful.

We now hear a lot of "learned analysis" surmising that the root cause of the border crisis of May 1998 is Eritrea 's "failed" economy; that "the Badme Incident" was a tactic by the Eritrean Government to divert its people from its internal problems....etc. These are all Ethiopian allegations, so often repeated and so made wide-spread through the relentless use of every media, propaganda and diplomatic resource at their disposal that they, initially, confused quite a few people.

The facts are different. The latest economic indicators issued by the independent studies of the IMF and the World Bank attest to the following:-

The IMF Executive Board, which met on July 13, 1998, issued its official findings on July 16, 1998. Here it expressed its concern over the border conflict but, otherwise, fully endorsed the Eritrean government's policies and practices in every field of economic activity. Eritrea's "impressive progress made in economic reconstruction and social rehabilitation during the past six years" was welcomed by the Directors. They also welcomed the "further progress" made in 1997 "particularly in implementing structural reforms, reducing the fiscal deficit and successfully introducing the Nakfa." They also commended the "authorities92 strong commitment to strengthen macroeconomic performance and reform the institutional framework." Looking ahead, the Directors saw the present conflict as an impediment to the Eritrean authorities92 plans of "further reducing macroeconomic imbalances and accelerating growth." They also noted the adverse effects the conflict can play on the nation's fiscal policy, in spite of "the commendable reduction of the budget deficit in 1997." (IMF, No.98-277, July 16, 1998.)

The IMF further noted the boost that the private sector got through the privatization of 700 small-scale and 39 big and medium-scale manufacturing enterprises. It further stated, "Prices were decontrolled while differential interest rates between private and public sectors were eliminated." Consequently, the IMF pointed out, "the role of the private sector was boosted, resulting in buoyant growth in manufacturing and services exports."

With the benefit of these reforms, the report continued, "real output growth averaged 7 percent during 1993-96 and rose to 8 percent in 1997, translating into significant growth in per capita income".

The report also found the annual inflation rate for 1993-96 to have been at less than 4 percent. The reduction of government expenditure by about 10 percentage points and the increase in revenues by 6 percentage points was also noted as a result of both "the completion of some programs and the intention of the authorities to bring down the deficit to sustainable levels ", and the "broadening of the tax base and the ongoing strengthening of the collection effort respectively". As a result, "the deficit came down sharply from 16.4 percent in 1996 to 5.5 percent of GDP in 1997". Finally, the report notes, "the medium-term targets of real output growth of 6-7 percent per annum, annual rate of 3-5 percent and a built-up of reserves to 5.5 months of imports are quite ambitious and consistent with the authorities92 track record of perseverance with implementation of good economic policies."(IMF, BUFF/ED/98/105, July 10, 1998.)

The World Bank has more recently also given high marks to Eritrea's implementation of programs and projects. Last August, the Bank's representative for Eritrea, Ethiopia, Somalia and Sudan declared that Eritrea was one of the five countries in the world with whom the World Bank maintains exemplary relations. Its "impressive economic performance", the official also noted, "mainly emanates from its effective implementation of home-grown development strategies." (Eritrea Profile, Vol.5 No.24, August 22, 1998.) The virtual absence of corruption in the country and the safety and stability prevalent even in spite of the border conflict are invariably mentioned as great assets for Eritrea's future development.

There is, in short, no evidence whatsoever of the Ethiopian government's continuous claim that the Eritrean economy is in dire straits. At the time of writing this paper, mid-August, 1998, the Nakfa stands at 7.45-7.50 to the US dollar, still maintaining its pre-conflict levels. At this particular time (August, 1998), the Ethiopian Birr's position vis--vis the dollar is about the same. The price of fuel in Eritrea stays constant at 2.80 Nakfa per litre and bread is available at 0.20 cents Nakfa or about 0.03 cents US apiece, a price maintained since independence. Whereas it would be self-deceiving to claim that the conflict is not adversely affecting the Eritrean economy, the fact that it is still withstanding this adversity attests to its strong base.

Why, then, would a government that is doing so well on the economic, social and political fronts, want to start a border conflict and create problems for itself? Why would it want to dismantle all of its achievements of the past seven years?

The answer, definitely, lies somewhere else - on the border conflict that has its own background and history, not directly related to the cooperation agreements discussed above or to the performance of the Eritrean economy.

We now turn our attention to the events leading to the border conflict of May 6, 1998, where the real cause of the hostilities lie.

The Cause of the Eritrean-Ethiopian Border Conflict

Part II (Final part)

by Alemseged Tesfai

III. Events Leading to the May 6 Incident at Badme

1. Incidents and disputes along the border between Eritrea and Ethiopia are not a new phenomenon and they were never about the boundary. Like all colonial divides the boundary between Eritrea and Ethiopia is, at points, an arbitrary line that separated people who once lived together; people related by blood and intermarriage for whom international borders mean very little.

The nature of the conflicts in these areas, therefore, was never different from any similar conflicts within Tigrai or within Eritrea - for the population, that is. Problems usually arose when one coveted the others 92 grazing area or places of settlement. Thus one cannot accuse simple farmers of deliberately crossing boundaries to cause international conflicts and the same with those who rise to defend what they consider their own.

Previous administrators on both sides of the border, even during the Italian and British periods in Eritrea, understood this very well and never gave more attention to land disputes around the border than they deserved. In the 1950 92s, during the decade of the Ethio-Eritrean federation, the Ethiopian Ministry of Interior is known to have issued directives warning against alterations of the old Italian boundary lines as it thought such an act would give rise to serious complications.

Border incidents, therefore, were seen as problems that required careful and proper handling, probably also ways of creating an atmosphere whereby both sides could develop disputed areas together. Upon Eritrean independence and the coming to power of the TPLF, there was every reason to believe that old border disputes would finally come to rest.

2. However, that is not what happened. Ever since its creation in the 1970 92s, the TPLF had given to the border issue an attention that was not reciprocated by the EPLF. Whereas the TPLF invariably exacerbated existing border problems, EPLF people chose a different approach. They were of the opinion that border misunderstandings were not an urgent matter, that they could be deferred to the settlement of the whole issue at the state level. There was, however, no reciprocal disposition on the other side.

Thus, beginning in 1990, when the TPLF took over Tigrai, new conflict areas were added to the old ones. This is particularly true of the upper Indeli (a border-demarcating river), where bands armed by the TPLF invaded an Eritrean village inhabited by the unarmed Hazo. On this incident of 30 December, 1993, 32 Hazo houses were completely destroyed and the inhabitants driven out of their original habitat. Attempts at compensating the victims and resettling them, undertaken by joint efforts, were often frustrated by a lack of commitment of the TPLF and by the insistence of its members that the village invaded was Tigrayan and the rebuilding should take place on what they pointed out as Eritrean territory.

3. At this same time, the rumblings of a dispute were being heard from Badme. By now, everyone knows that the village of Badme forms a small part of the Badme Plains, through which the Ethio-Eritrean border crosses, joining the Tekezze-Setit river with the Mereb at Mai Anbessa. The town itself is on the north-eastern side of the border, secure in Eritrean territory. Decades ago, this wild country, a haven for wild animals, started to be settled by Eritreans descending from the highlands. These even crossed deep inside the Tigrai side to establish settlements.

Until the mid-1990 92s, movement along this border was probably the freest as no cause ever arose for strict border controls. Eritrean administrators never doubted where the boundary lay, and always deferred that issue to the more formal demarcations expected to be effected by both governments. From 1993 onwards, however, some incidents started to take place and these caused a lot of concern for Eritrea.

In 1992-93, Tigrayan authorities in the Lower Adiabo area, adjoining the Badme sections of Eritrea, started to talk about a demarcation line. Eritrean farmers who had lived in the area for decades were reporting that they were being penalized and their property confiscated for "illegal entry".

4. On 20-21 July 1994, a high-level meeting was held between the EPLF and the TPLF, led by Secretary Alamin Mohammed Said and Politbureau member Tewelde Weldemariam, respectively. Regarding the border issue, they agreed:-

- that both parties should work towards the strengthening of the relationship between the people, officials of the two fronts and government administrators in the border areas; ways of solving minor misunderstandings existing in those areas were also to be found.

- that the disputes between neighbouring villages and people on both sides of the border were similar to those found within one country and, in order to solve the problems in conflict resolution seen amongst officials on both sides, the political activities of the fronts were to be strengthened and misunderstandings to be quickly avoided in the spirit of friendship

- cadres from both fronts in the border area were to meet every three months to discuss issues of common interest.

5. The meetings foreseen by the above decision did not take place as soon as expected. Two meetings scheduled for first and 15th November 1994, the records show, had to be postponed because the Tigray side sent minor officials to meet with high-level delegates from Eritrea, and it often turned out that the former had no authority to decide even on minor matters.

In the meantime, 1995 saw the unabated continuation by the Tigrai authorities of the harassment of Eritrean farmers for "trespass" into unilaterally demarcated territory.

6. In 1996, TPLF officials intensified their campaign of harassment and expulsion of Eritreans from border villages. A few examples follow:-

- On June 7, 1996, 12 villagers of Adi Mahrai (Zibra) were taken into custody

- On July 19, six armed TPLF members entered Gheza Sherif, and demanded that 34 farmers leave the village. These had lived there for 15-20 years. When the farmers refused, a confrontation ensued and this was stopped by the intervention of the Eritrean administrators of the sub-region.

- On August 4, 1996, 16 armed TPLF soldiers again entered Gheza Sherif and demanded that all the inhabitants move out. When they refused, three "representatives" including a woman, were taken under custody.

- On 17 June, 1996, 24 farmers of Adi Mahrai (Zibra) were ordered not to work fields already plowed and cultivated, rendering 66 hectares of harvest totally out of use.

- At this same time, 29 farmers of Denbe Himbrty, were forced to leave their habitat by similar orders of TPLF armed administrators and militiamen.

A total of 18 items of similar acts of arbitrary expulsion and harassment are listed in the report of the rainy and cultivation season of 1996 alone.

7. When the destruction of houses and expulsion of Eritreans continued deep into the first quarter of 1997, a joint-meeting of high level administrative officials was held in Shire, Tigrai, with the aim of finding a temporary solution to the problem. This meeting, which was led by the Vice President of the Tigrai Region, Ato Tzegai Berhe and the Deputy Administrator of the Gash-Barka Region of Eritrea, Ato Tesfamichael G.Medhim lasted for two days, 20-21 April 1997, and included all the major officials of the corresponding border districts.

In this meeting, the Eritrean side expressed its opposition and misgivings about the series of unilateral demarcations effected by the Tigrai Administration inside Eritrean territory. It pointed out that these "demarcations" were neither known nor acceptable to the Eritrean government. It also demanded that the arbitrary expulsions of Eritrean nationals stop immediately. The Tigrai representatives insisted that the demarcations had been laid down in 1986-87, during the struggle, and that the EPLF had known about them. After a serious discussion and exchange of views, it was decided to set up a sub-committee from the adjacent districts to study the matter on the ground and to see if some intermediate solution could be found.

8. In accordance with the Shire decisions, the designated sub-committee met from 22-27 June, 1997 to make a tour of the "demarcations", a length it determined at about 40 kms. At the preliminary meeting of the 22nd, the Tigrayan representatives argued that the purpose of the meeting and the tour was for the Eritrean side to visit and accept the line as demarcated by the Tigrayans. That, they said, was how they understood the Shire agreement.

The Eritreans rejected this. The purpose of the tour, they said, was for them to see the Tigrayan unilateral demarcation and compare it with what they believed to be Eritrean territory. They were not there to be told where their boundary lay. Although this disagreement threatened to disrupt the meeting the tour was made all the same.

It was established then that, not just one, but a set of at least three demarcations, each creeping deeper into Eritrea had been laid on the ground. This was, naturally, highly objectionable to the Eritrean representatives.

During the armed struggle, many EPLF fighters had seen or known about a the map of a larger Tigrai that included parts of Eritrean territory. It had been taken note of but, obviously, the more urgent matters of those days took precedence over raising it as a matter of contention. Since, after independence, the two governments were on very friendly terms, most of the border incidents were consistently being down-played by Eritrea, as the excesses of some border officials.... Now, the Badme demarcations started to bring the issue to the fore. As a border where Eritreans formed the clear majority on both sides for decades, movement had been fluid. For the Eritrean government or regional officials, the location of the border and what belonged to whom was never a question. Raising it as a point of difference, when such lofty objectives like breaking the trade barrier, creating the free trade area (FTA), moving towards economic harmonization.... were being discussed was simply seen as inappropriate and counter-productive. This is what all the directives and internal Eritrean circulars show.

The Badme demarcations and the Tigrayan insistence that that was the border, however, sent an ominous warning to the Eritrean side. The Eritrean sub-committee consequently suggested that since matters affecting the border should not be decided by border and district officials, the issue be very seriously taken up and quickly settled at central government levels. It also advised and demanded that the Tigrayan side stop any further moves at harassing and expelling Eritreans.

The Tigrayan sub-committee in its response demanded that no armed Eritrean enter the line of demarcation. In addition, it ordered that no Eritrean farmer was to plough fields or build houses or sheds beyond the line and that the inhabitants of two villages, Gheza Sherif and Enda Tchi 92a, were to be evacuated.

All the elements of a border conflict were, thus, put in place.

9. By July, 1997, the harassment of Eritrean inhabitants in the whole "unilaterally demarcated" areas was intensifying. The exchange of letters between the Eritrean administrator of the Shambuko sub-region and his counterparts in Sheraro, Tigrai, tell an interesting story. One of these, written by the Eritrean administrator on July 16, 1997, appeals for restraint on the part of Tigrayan authorities and police, as tensions were running high amongst the inhabitants from what they saw as unwarranted expulsions from land they had developed over lifetimes. He calls on the Tigrayans to "observe maximum care and to wait for the meeting of a higher-level committee so that the situation does not go out of control."

The July 17 reply of the Tigrayan counterpart was to warn the Eritrean administrator that in the event of any worsening of the situation, he would be held responsible, since, as he put it, "the incursions into our demarcated territory are being carried out with your full knowledge."

10. On 18-19 July 1997, three truckloads of Ethiopian troops entered the Badme area and planted radio communications equipment. Toyota pick-ups were also reported to be bringing in light and medium arms. Eritrean territory inside the "unilaterally demarcated" area was, thus, put under patrol.

On the following week, 26-27 July 1997, 15 Eritrean families that had lived in Gheza Sherif for at least 30 years each were evacuated and sent across what the TPLF now determined was the new Ethio-Eritrean border. 11 wells belonging to the village were destroyed. The same day, 30 families were evacuated from Enda Tchi 92a - their doors were broken, their silos destroyed and their cultivated fields uprooted and opened up for grazing.

Document No. 62 01/90 of 21/8/1997 (or 16/12/1989 Ethiopian calendar), written by a Tigrayan police chief of the border sub-district refers to the campaigns of 11, 19 and 20 July. Here, he gives the following figures as the result of the campaign of the said dates:-

The officer further indicates that a total of 755 campaigners, that is, Tigrayan soldiers, members of the police force, militiamen and farmers participated in the operation. "We only have ten trespassers on the Deda side still at large," he concludes "In other areas, no person or crop has been spared. Our mission has been accomplished."

The Case of Adi Murug

11. The date of 19 July, 1997 ought to be noted as very significant. On this same day of the arrival of Tigrayan troops into Badme and their subsequent massive expulsion of Eritreans, a potentially more dangerous situation was developing at Adi Murug (Bada), at the northern tip of the former Denkalia, but now within the North Red Sea Region of Eritrea.

Historically, Adi Murug has figured as the fourth village of the Bada district - Boleli, Li 92en and Irimali are the three remaining and there was an Eritrean administrative unit at Adi Murug. Prior to July 19, Ethiopian administrators from the Afar Kelil had asked permission to assemble the inhabitants of Adi Murug for various purposes, but the Eritrean administrators had turned them back since the matters they wanted to discuss did not concern the inhabitants of Adi Murug.

On July 19, two battalions of the Ethiopian army came to Adi Murug and its commander met with representatives of the Eritrean army in the area. The Ethiopians explained that they were there to chase armed Ethiopian opposition elements whom they believed to be in the Bada area, and requested entry. The battalions were let in on this understanding.

Five days later, July 24, Ethiopian administrators from the Afar Kelil moved into Adi Murug and instructed the Eritrean Administrators to disband - they were taking over. The Eritreans resisted, but on July 28, at a meeting of the whole Adi Murug inhabitants, the Ethiopians declared Adi Murug Ethiopian territory and appointed their own administrative committee. The inhabitants 92 objections that they were Eritrean citizens with proper ID cards and that they had known Adi Murug as Eritrean territory did not matter.

The Eritrean military commander tried to reason with his Ethiopian counter-part, but to no avail. To the argument that border matters ought to be referred to the central government and not be handled so high-handedly, the Ethiopians replied that the Afar and Tigrai Kelils had declared Adi Murug Ethiopian territory and there was nothing they could do to change the decision. That the Adi Murug and Badme incidents fell on the same day or week cannot be a coincidence and it certainly was not. Something was cooking in the minds of the TPLF leadership. This could no longer be downplayed as the excesses of ambitious or troublesome border officials. Although, as a trend, it had been there, it was suddenly assuming a character that needed urgent attention.

12. On 8 August 1997, about three weeks after the Adi Murug and Badme incidents, Secretary Alamin Mohammed Said and Political Affairs Head Yemane Ghebreab of the PFDJ travelled to Addis Ababa to discuss the matter with Tewolde Welde- mariam of the TPLF (EPRDF). Here, they tried to impress upon the other side that what was happening at Adi Murug and in Badme was inconsistent with the friendly relationship between the two sides. They argued that using force to create facts on the ground was not acceptable. They also asked that the Ethiopian government reverse the steps it had taken. Any outstanding matters, they maintained, could be handled in a spirit of understanding and taking the welfare of the border population into consideration

Mr. Tewolde 92s answer at the time was to flatly claim Adi Murug as Ethiopian territory. On Badme, he alleged that the source of the problem were Eritrean Administrators who were continuously instigating their farmers to cross demarcated lines. He further refused to accept Eritrea 92s suggestion that steps taken by the Ethiopian authorities be reversed.

13. Less than a month after the Adi Murug and Badme incidents of July 19, Eritrea 92s President Isaias Afeworki wrote the following letter to Prime Minister Meles Zenawi of Ethiopia on August 16, 1997:-*

Comrade Meles;

Greetings.

I am being compelled to write you to day because of the preoccupying situation prevailing in the areas around Bada.

It cannot be said that the border between our two countries is demarcated clearly although it is known traditionally. And we had not given the issue much attention in view of our present and future ties. Moreover, I do not believe that this will be a cause of much concern and controversy even in the future.

Be this as it may, there have been intermittent disputes in the border areas arising form different and minor causes. Local officials have been striving to defuse and solve these problems amicably. However, the forcible occupation of Adi-Murug by your army in the past few days is truly saddening.

There was no justification for resorting to force as it would not have been at all difficult to settle the matter amicably even if it was deemed important and warranting immediate attention. It would also be possible to quietly and without haste demarcate the boundaries in case this is felt to be necessary.

I, therefore, urge you to personally take the necessary prudent action so that the measure that has been taken will not trigger unnecessary conflict.

Best Regards

Your comrade

Isaias Afwerki

16/08/97

Prime Minister Meles 92s undated terse reply came subsequently. It read as follows:

Comrade Isaias,

Greetings.

I have seen the letter you sent me. I had also heard that the situation in the border areas does not look good. I was also informed that the matter was discussed between your colleague (Yemane), who had come here, and ours (Tewolde). We did not imagine that what happened in Bada could create problems. This is because the areas our comrades are controlling were not controversial before and we believed that prior consultation was only necessary for disputed areas. We moved to the areas to pursue the remnants of Ougugume (Afar Opposition) who were obstructing our peace efforts from positions there. We believe we can ease the tension concerning the borders on the basis of the understanding reached previously between your team and our colleague (Tewolde). Perhaps, it is also necessary to settle the border demarcation issue after the necessary preparations are carried out by both sides.

In the meantime, the situation was worsening in Badme and President Isaias felt obliged to, once more, write to Prime Minister Meles on 25 August 1997:-

Comrade Meles,

Greetings.

Regarding the situation in the border areas, my information establishes that the measures taken at Adi-Murug were not in areas that are undisputed but in our own areas and by expelling our officials and dismantling the existing administration. Concerning the Ougugume, your action (in Adi-Murug) came as our Defence was preparing to co-operate on the basis of the request from your Army. Moreover, similar measures have been taken in the Badme area.

I had indicated to you, these measures are unjustified. In order to expediently check any further deterioration and pave the way for a final solution, we have assigned on our part three officials (Defence Minister Sebhat Ephrem; PFDJ Head of Political Affairs, Yemane Ghebreab; and National Security Advisor, Abraha Kassa) I suggest that you also similarly (or in ways you think best) assign officials so that both sides can meet as soon as possible to look into these matters. I await your thoughts.

Best regards

Your Comrade

Isaias Afewerki

25/08/97

14. In accordance with President Isaias 92 suggestion, the Joint Border Commission was set up - the Eritrean side to be led by General Sebhat Efrem, Minister of Defence. The first meeting was scheduled for November, 1997.

Before this took place, the October 17 (12 October, 1990 Ethiopian calendar) issue of the TPLF magazine Weyin, printed the new map of the Tigrai Kelil. The official map of the Kelil, showing a much more enlarged Tigrai - from large expanses carved out of Begemider, Wollo and Eritrea - was also printed by the Ethiopian Mapping Authority. Here, the straight line linking the Tekezze-Setit with the Mereb at Mai Anbessa had disappeared and was replaced by an oblique line entering deep into Eritrean territory. Not only the "demarcated" area that was causing concern, but large chunks of other Eritrean land had been included. Besides this, Eritrean territory like Alitena, Bada and areas south of Tzerona were also demarcated as Ethiopian domain. The old colonial borders of Eritrea had been changed by the unilateral actions of the TPLF government.

15. In November, 1997, the Joint High Commission met in Asmara and agreed to meet again within three months. There was no discussion on substantive matters. In the meantime, in January 1998, Ethiopian troops were deployed to the border on the Assab line to demand that the Eritrean border post situated on the Assab-Addis Ababa road move several kilometres towards Assab, as the area was being claimed by Ethiopia. A patient handling and quiet diplomacy on the part of Eritrea averted a what could have been a dangerous confrontation.

16. When all this was happening, tension was building up in and around Badme. Land confiscated from Eritreans evacuated from the unilaterally demarcated areas was being re-allocated to Tigrayan farmers who moved into the area. A letter by the Administrator of Tahtai Adyabo, Ato Abraha Berhane, written on March 10, 1998, clearly indicates that that practice was government policy and was to be encouraged. By May 1998, tensions had run quite high.

On May 6, 1998, Ethiopian troops fired on an Eritrean platoon on routine duty along the border around Badme. Several of its members were killed. This triggered off a chain reaction on both sides that culminated in the May 13, 1998 declaration of war by the Ethiopian Parliament.

The Eritrean Government has already invited neutral parties to examine the circumstances that led to the incident of May 6. That is, of course, meant to determine who made the first move as far as the armed clashes of that date is concerned. As this paper has attempted to show, however, all the elements of the conflict had been put in place by the TPLF 92s continuous and provocative incursions into Eritrean territory and its cadres 92 willful harassment of Eritrean inhabitants of the border areas.

17. As suggested in the introduction to this paper, the border issue had nothing to do with the post 1991 cooperation agreements between the two sides. The trend that this problem had been following has its own origin and runs way back to the time when the TPLF was still in the process of formation.

The genesis and development of the border conflict being what it is, nothing can explain the Ethiopian military build-up at Zalambessa, the Assab border and elsewhere along the boundary when the area of conflict, according to the Ethiopian Parliament 92s decision and subsequent declarations by Ethiopian officials, is Badme. Nothing can ever justify the hate-campaign against Eritrea and Eritreans immediately launched by the Ethiopian government. Nor can the Ethiopian boycott of Assab and Massawa port facilities, the cancellation of Ethiopian Airlines flights, the bombing of Asmara on June 5, and, worst of all, the expulsion of thousands of Eritreans from Ethiopia ever be rationalized.

The border conflict is senseless and neither party is likely to gain from its continuation. It has its roots in the TPLF 92s persistent incursions into Eritrean territory, an act that can only be explained in terms of the expansionist tendencies of that Front 92s leadership.

The chance for peace lies in the immediate cessation of hostilities, direct talks, demilitarization, demarcation of the whole border in accordance with existing international treaties and, as a final resort, adjudication by international courts. War will only further complicate a simple problem.