For decades, the Horn of Africa has comprised a jumble of political and economic systems, ranging from failed statehood to isolationism, rentierism and development based on authoritarian dictate. Relations between states have been uneasy at best, influenced by border conflicts, ethnic tensions and competition for resources. Now, rapid change is sweeping across the region, reflecting internal changes, regional dynamics and the influence of external actors. Three major developments lie at the heart of this shift: a change of leadership in Addis Ababa, rapprochement between Ethiopia and Eritrea, and the increasing influence of foreign powers.
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Ethiopia: leadership change
Ethiopia is Africa’s second-most populous country, one of Africa’s fastest-growing economies, the largest economy in East Africa and the largest contributor of uniformed personnel to United Nations peacekeeping missions in the world.
In 2018, following three years of intense protests, Prime Minister Hailemariam Desalegn unexpectedly announced his resignation. Abiy Ahmed Ali succeeded him as prime minister and as leader of the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF), a coalition of four ethnic-based parties. Mr. Abiy is from the Oromia region, where huge protests erupted in 2015, driven by feelings of political and economic marginalization. The rise to power of an Oromo represented a rupture with tradition, and Prime Minister Abiy’s first year was marked by swift change: the country’s state of emergency was lifted, political detainees were released, exiled dissidents were allowed to return, and websites and television channels were unblocked.
Prime Minister Abiy wants to open strategic economic sectors to private investment
Reforms on the economic front are expected soon. After decades of state-driven capitalism, Prime Minister Abiy announced that he wants to open strategic economic sectors (energy, telecommunications, logistics and aviation) to private and foreign investment. He also promised to liberalize the banking system and reduce Ethiopia’s dependency on China.
Ethiopia and Eritrea: a new leaf
From a geopolitical standpoint, the most important change was the Abiy government’s decision to withdraw troops from territory awarded to Eritrea by the boundary commission established as part of the 2000 Algiers Agreement. The move ended a two-decade state of war between the two countries. In September 2018, in the presence of UN Secretary-General Antonio Guterres, Prime Minister Abiy and Eritrean President Isaias Afwerki signed a peace and cooperation agreement in Jeddah, Saudi Arabia. Diplomatic relations were reestablished, the border was reopened and flights between Asmara and Addis Ababa resumed.
For landlocked Ethiopia, the peace agreement restores access to the Eritrean ports of Assab and Massawa on the Red Sea. Currently, 97 percent of Ethiopia’s imports are brought in from Djibouti.
For isolated Eritrea, peace with Ethiopia could shake the political status quo. In November 2018, the UN lifted sanctions against the country, which were imposed in 2009 based on its alleged support of the al-Shabaab terrorist organization. President Afwerki had consolidated his dictatorship based on the (real or perceived) threat posed by Ethiopia. Eritrea became highly militarized and isolated. Under the new circumstances, President Afwerki will likely face increasing pressure both internally and externally to loosen his grip on power.
Events in Eritrea will also affect Europe. In 1994, the Afwerki regime introduced mandatory military service for adults. Hundreds of thousands of Eritreans have fled their country fleeing indefinite conscription, a policy which has led many countries to consider them refugees rather than economic migrants. In 2017, about 10 percent of Eritrea’s population of approximately 5 million – some 486,000 people – were living outside the country as refugees. Eritreans figure among the top five asylum seekers in the EU and accounted for 14.9 percent of the sea arrivals to Italy between January 2018 and February 2019. They were surpassed only by Tunisians, who accounted for 23.8 percent.
Somalia: fragile transition
After decades of civil war, interclan fighting and state failure, Somalia has adopted a federal system. While the new structure may be the only way to restore stability in a country deeply fragmented along clan, ethnic and regional lines, the road has been tortuous. In 2017, Mohamed Abdullahi Mohamed won the presidential election, which was conducted according to a clan-based formula rather than the “one-person, one-vote” system. This has led to a very fragile balance between the federal government and the states, which frequently contest the allocation of resources and power.
At the same time, the factors that caused state failure are still present. Control over the territory and taxation remain split between the federal government, clans and terrorist groups like al-Shabaab and Islamic State (also known as ISIS or Daesh). Despite the progress made by the African Union Mission to Somalia (AMISOM), al-Shabaab’s ability to carry out attacks remains significant, as reflected by their number and lethality. Though its control over Mogadishu has shrunk, al-Shabaab has ratcheted up operations in Puntland, a semi-autonomous coastal region that serves as an entry point of arms and intersection of criminal and terrorist groups.
Furthermore, the gains achieved by the transitional process may be compromised by three factors. First is the withdrawal of 1,000 AMISOM soldiers, expected to occur in 2020. Second is the potential discovery of oil reserves – Somalia has opened its first round of offshore licensing. There are two main risks associated with oil exploration: the fragility of Somalia’s political and economic institutions in a context of persisting clan and regional tensions, and Somalia’s ongoing maritime boundary dispute with Kenya over a 100,000 square kilometer area with large deposits of oil and gas and supplies of tuna. After Somalia auctioned off oil blocks in the disputed area, Kenya expelled the Somalian ambassador and recalled its ambassador to Somalia.
Groups like al-Shabaab still exert significant control over parts of the territory
Third, and perhaps most important, is the connection between aid, corruption and insecurity. Somalia, which ranks dead last out of 180 countries in Transparency International’s 2018 Corruption Perceptions Index, is also among the top aid recipients in the world. According to official government data, Somalia received a record high of $1.75 billion in aid in 2017. While aid flows have not significantly improved development, they do have two negative consequences. First, they generate political and economic inefficiencies, as government and military posts become privileged positions to access aid money. In December 2017, for example, the U.S. announced the suspension of aid to the Somali Armed Forces due to widespread corruption. Second, because groups like al-Shabaab still exert significant control over parts of the territory, they directly benefit from aid flows and humanitarian relief, either through taxation and extortion or through the ability to determine which relief agencies are allowed to operate and who receives aid.
Beyond the Horn
Several factors – both fixed (geography) and circumstantial (the war in Yemen, the shifting balance of power in the Middle East and China’s Belt and Road Initiative) – have made the Horn of Africa increasingly important. Djibouti, for example, is home to American, Chinese, French, Italian, Japanese and Saudi military bases. The UAE has a military base in Eritrea and in the Somaliland autonomous region of Somalia, while Turkey recently opened a military base in Somalia. Besides their strategic geographic position vis-a-vis Yemen, these countries also grant privileged access to the Bab el-Mandeb strait, connecting the Red Sea and the Gulf of Aden.
The region has also become a space for competition between two coalitions with opposing interests: Saudi Arabia, the UAE and Egypt versus Qatar, Iran and Turkey. The fact that the peace agreement between Ethiopia and Eritrea was mediated by the UAE and signed in Jeddah was no coincidence. For Saudi Arabia and the UAE, Eritrea is valuable due to its location. Furthermore, the Horn of Africa is a natural space for Saudi Arabia’s economic expansion, in line with the economic transformation envisaged in the country’s Vision 2030 strategy. Eritrea, Ethiopia and (more reluctantly) Somalia also see clear benefits in closer ties with the Gulf countries. In 2018, for example, the UAE announced a $3 billion aid and investment package to Ethiopia, which was critical in addressing the country’s foreign currency shortage.
The most important factor in determining the region’s future will be how Ethiopia, the Horn’s biggest power, will evolve under the leadership of Prime Minister Abiy. Meles Zenawi, prime minister of Ethiopia from 1995 to 2012, implemented a model of “authoritarian development,” based on the assumption that development was a precondition for democracy. The coming years, which will likely see a gradual process of political opening, will test this assumption.
Along with the resilience of Ethiopia’s state-led capitalist economy, its political stability will also be tested. While the Tigray people represent just 6 percent of the Ethiopian population, they have dominated Ethiopia’s political, military and economic institutions. There are several reasons for this state of affairs, including the Tigray people’s role in the formation of the EPRDF and in the overthrow of Mengistu Haile Mariam’s brutal dictatorship. Many of Prime Minister Abiy’s decisions – including the rapid peace process and the arrest of 60 senior military and intelligence officers in November 2018 – have been strongly criticized by prominent Tigray figures, who accuse him of succumbing to external influence. While the most likely scenario is that of a stronger Ethiopia (both economically and politically), the accelerated pace of reforms and the loss of status among Tigray leaders could escalate ethnic tensions.
The loss of status among Tigray leaders could escalate ethnic tensions
In Eritrea, stability will depend not only on what happens in Ethiopia (instability in Ethiopia would likely reverse the rapprochement), but also on how President Afwerki manages his country’s emergence from isolation. The regime has lost its most powerful justification for authoritarianism and militarism. At least in the short to medium term, a combination of economic gains (based on the higher investment and trade flows brought by greater regional stability), the lifting of mandatory conscription and increasing security cooperation with regional and international powers may allow President Afwerki to continue his rule. However, these factors could be compromised either by regional events or the regime’s inability to adapt to change.
Furthermore, Eritrea is one of the world’s least appealing destinations for investment and business (ranking 189 out of 190 countries in the 2018 World Bank Ease of Doing Business Report). While this may not dissuade investors like Saudi Arabia or the UAE, it significantly limits the country’s potential for growth and development.
Despite the recent progress, prosperity in the region will remain compromised by endemic corruption, a rent-seeking culture and political volatility – factors that drastically increase economic risk. In February 2018, for example, Djibouti decided to prematurely terminate the concession for the Doraleh container port, which had been awarded to Doraleh Container Terminal, a company controlled by the Dubai-based global port operator DP World. The decision was allegedly made at Beijing’s behest. As the region has become an arena for military and economic competition among states, these types of situations are likely to continue.
On the security front, the most likely scenario is that of increasing cooperation within the Horn of Africa region, with Saudi Arabia, the UAE and to a lesser extent the United States. This will have a positive impact, since the region is a hot spot for transnational criminal activities, including terrorism, piracy and illicit trading.
While recent events are expected to increase regional stability, the outlook for Somalia remains uncertain. The 2020 elections will test the country’s modest progress, but even without major incidents, crucial goals like political stability and security sector reform will remain out of reach. For Somalia, the influence of Gulf countries is a double-edged sword. The UAE’s plan to partner with Ethiopia and expand the Berbera port in Somaliland, for example, has been vehemently opposed by the Somalia government, which alleges that Somaliland (a self-declared state that the international community considers an autonomous region of Somalia) does not have the authority to enter into international agreements. For a small but relatively developed economy like Somaliland’s, these investments could be a significant boost and increase its leverage with Mogadishu.
Since the region has become a stage for military competition, stability will also depend on foreign actors. Recent events suggest that Iran and Qatar are losing influence in the region. But while diplomatic ties, military cooperation and economic partnership with Saudi Arabia, the UAE and the U.S. may help increase regional security and economic growth, they could also destabilize the region.