Ethiopia’s fast-growing economy will be a victim of the Tigray war – Quartz

Ethiopia’s Prime Minister Abiy Ahmed is under pressure to end the conflict with his northern state of Tigray as the regional dispute moves closer to escalating into a full-blown civil war that would affect millions of ordinary Ethiopians and devastate a economy that has regularly been hailed as one of the fastest growing in the world for the past decade.

In Tigray, hundreds of Ethiopians were reported to have died when the government took military action, which Abiy insisted this week as part of his government’s effort to enforce the rule of law, as the federal government suspended all modes of communication and all banks remained closed.

Human rights group Amnesty International said on November 12 that “probably hundreds” of people were stabbed or stabbed to death in a town called Mai-Kadra in the southwestern part of the Tigray region on the night of November 9 as part of the escalating conflict based on images I had obtained Due to the lack of conventional communications, Amnesty said it confirmed that the gruesome images were recent and used satellite images to geolocate them..

Abiy said on Thursday that a military offensive had “liberated” the western part of the Tigray region, where Ethiopian federal troops had been fighting with local Tigray forces for a week.

Tensions between the federal government and Tigray’s ruling party, TPLF, have been on the rise for the past three months, sparked when the state held regional elections even after Addis Ababa suspended national elections due to the coronavirus pandemic. The country’s Chamber of Federation, the upper house of parliament, later banned the elections and described them as “null and void,” but the TPLF, which won, ignored the federal government and went ahead.

Things came to a head after an attack allegedly carried out by the regional state of Tigray against the national army forces, the situation escalated to a deadly armed forced confrontation, followed by an airstrike. The prime minister, who won the Nobel Peace Prize last year for ending the conflict with Eritrea, now insists international concerns about the escalating conflict are the result of observers not having a deep understanding of the context of his country.

There is great concern in Ethiopia and around the world that the crisis could spread south to other politically fragile regions of the country, including Oromia and Amhara, where there has been a combination of protests and militant activity over the past year.

Sudan has offered to negotiate with the federal government and the TPLF as Ethiopia sets the conditions for any ceasefire, including that the now-outlawed leadership of Tigray be turned over to the federal government for trial.

This would have a significant impact on a once dynamic economy, analysts warn.

“Civil conflicts generally have a negative impact on economic growth, so we could expect it to weaken a bit due to widespread insecurity and especially significant are the conflicts in Ethiopia’s currencies, as it has been one of the biggest constraints. for growth “, Jos Meester. , Senior Researcher at the Clingendael Institute.

“Ethiopia’s internal conflict in the Tigray region risks undoing years of economic and social progress, at a time when weak incomes and high external vulnerability as a result of the global coronavirus crisis are already putting pressure on solvency.” says Kevin Dalrymple, sovereign analyst at Moody’s.

The Horn of Africa country, home to the second-largest population on the continent, had been through a decades-long reform that had seen the country overcome its years of economic turmoil and famine during the 1980s under the Marxist Derg regime, to become one of the countries in the world. fastest growing nations in this century. The country’s economy grew on average by 10.8% between 2004 and 2014.

In early 2020, Quartz Africa noted that the one-time miracle economy was slowing down and was poised for a bumpy ride, but the economic crisis in the wake of the pandemic has certainly been much more challenging and the IMF cut its forecast from growth at 3.2%. from 6.2%.

But all of this was before recent events challenging its federal political system brought the country to a point where there is a real possibility that economic growth is unlikely if some of its largest or most powerful regions are at war with each other. yes or with the national government. .

“The way the current crises between the federal government and the TPLF are handled will certainly set a precedent for future federal-regional interaction,” says Ann Fitz-Gerald, director of the Balsillie School of International Affairs and a veteran of previous internally sponsored peace talks in the region. “That precedent must take care to avoid increasing risk instability in other regional states and / or inviting similar levels of regional security structures elsewhere.”

The current situation will leave the Ethiopian government with few options to manage the economy, says Fitz-Gerald: “Already faced with the impact of a weak global economy, a predatory financial model that underpins Chinese investment in the country and high levels of debt acquired during During the last decade, the current instability without prioritizing the rule of law will limit direct foreign investment and the few levers that the country had to go through the crises ”.

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