Is Berbera Port stake purchase worth Ethio-Djibouti economic and political relation?
Last week, Ethiopia announced appropriation of 19 percent stake from Berbera port after accord was reached with Doraleh Ports (DP World) and the the Republic of Somaliland ; they have 51 percent and 30 percent stakes respectively.
The authorities in Ethiopia claim that the deal is predicated on the need to have an alternative port to cater for, according to government position which is cited by pro-government news portal -The Reporter, growing business demand and population ; trying to put the matter squarely as an economic decision as opposed to geopolitics.
The minister of transport,Ahmed Shide, is quoted by the Capital,Business news paper, as saying that “The agreement [over the port of Berbera] will help Ethiopia secure an additional logistical gateway for its ever increasing import and export trade driven by its growing population and economy”
Ethiopia’s move angered Djibouti and Somalia but for different reasons. Somalia says that Somaliland is part of its territory and Ethiopia’s business deal violates the sovereignty of Somalia. Somalia is vowing to take the matter to international arbitration while lobbying members of Arab League to do something about it, according to The Reporter.
Djibouti is also not too happy about the deal apparently for political and economic reasons.
Politically, Djibouti has disputes with DP World which claims to have signed a thirty years concession contract over container terminal. Djibouti apparently wanted the company to renegotiate it on grounds of corruption of some officers, according to reports by The National. The matter has already gone to court, and in London, and the outcome was not apparently favorable to Djibouti which moved the latter along the path to reject the whole thing. So Ethiopia’s deal with DP World over Berbera possibly sounded like betrayal to Djibouti.
Economically, the bulk of Ethiopian import, if not in its entirety, came through Djibouti and the country has been making billions of dollars from port revenue. Alternative port for Ethiopia, if the plan success, represents dwindling revenue for Djibouti which is not what Djibouti was expecting from Ethiopia apparently. “Deepening” economic relations between the two countries was making headlines in Ethiopian state media.Ethiopia and Djibouti have recently inaugurated a new railway line. At one point, the authorities in Ethiopia pledged free water and electricity to Djibouti.
So the TPLF government, which actually made Ethiopia a landlocked country in 1991, is sending reportedly sending a diplomatic mission to Djibouti with a goal to renew Djbouti’s faith on the regime in Ethiopia.
The regime made the deal at a time when a popular movement in the country is demanding a change in government which prompted the government to declare a state of emergency on February 16.
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