In an Eritrea – Ethiopia common market, who wins?

The past is not a sure means of predicting the future, but it is an important indicator. So what happened during the Ethio-Eritrea Common Market which existed between the effecive independence of Eritrea and the outbreak of the border war (1991-1998)?

Here is one assessment by Professor Worku Aberra, of Dawson College, Westmount, Quebec. If anyone has reached a different conclusion, please get in touch.

Below is the conclusion and the full paper can be found here: The Ethio-Eritrea Common Market (1991-1998)

Conclusion

“The decision of the transitional government to enter into a preferential trade agreement with the EPLF that benefitted Eritrea was not due to its carelessness, negligence, indifference, naiveté, hubris, or incompetence. It was a rational political decision that the TPLF leadership made to consolidate its grip on power in the early 1990s, but it resulted in a net economic loss for Ethiopia and a net economic gain for Eritrea.

The common market allowed the EPLF to transfer a large amount of Ethiopia’s resources, worth billions of dollars, to Eritrea over eight years. The transferred resources generated income, foreign exchange, and employment for Eritrea. Khadiagata (1999, p. 43), for example, asserts that the common market produced some 300,000 jobs in Eritrea.

Beyond the common market, the strategic alliance that the two fronts forged in the early 1990s, in part based on their shared negative attitude if not outright enmity towards Ethiopia, enabled the EPLF to acquire Ethiopia’s physical assets in Eritrea and to forego Eritrea’s share of Ethiopia’s national debt without any compensation or obligation to Ethiopia.

The preferential treatment of Eritrea at the expense of Ethiopia by the TPLF-controlled government is emblematic of its resolve, even today, to stay in power by pursuing policies that undermine Ethiopia’s economic interests, national unity, and political transformation to democratic governance.”

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