At the Root of an Odd African War: Money

The war erupted last month between Eritrea Ethiopia largely for economic necessity.

Kebreab Michael was correcting papers in his Asmara University office when the first bombs fell on Eritrea's airport June 5. "I heard planes buzzing overhead," he says, "but I thought they were ours." When his secretary told him Ethiopia and Eritrea were at war, he stared at her in disbelief.

Indeed, the spectacle of two allies engaging in an air war over 250 square miles of barren land in northeast Africa baffled the world.

Here were two countries - one landlocked, the other facing the sea; one with vast agricultural potential, the other eager to develop its industries - that were headed by two men bound by friendship and their successful fight against a harsh Marxist dictatorship.

The two had been haggling over their ill-defined border since Eritrea was given independence from Ethiopia in 1993. But they had done so peacefully, with the customary exchange of niceties one would expect from neighbors.

As MIG jets screamed across the border and three fronts opened in as many weeks, what struck observers is the fact that the dispute over the Badne Triangle could have been easily settled by arbitration. "Call in a few cartographers, run a quick search through Eritrea's colonial maps, and settle it right then and there," says a Western diplomat.

But the border fight may be a war born of economic need.

Mediation efforts by US Undersecretary of State Susan Rice and the Rwandan government failed. The hastily drawn-up deal, announced in Ethiopia's capital, Addis Ababa, June 4, hinged on the withdrawal of Eritrean troops from the Badne Triangle in Ethiopia's Tigray Province and Eritrea's southwestern region. Eritrea refused.

The Italian Embassy in Asmara volunteered to dig out every map drawn during Italy's occupation of Eritrea from 1890 to 1952, but, according to an Embassy official who asked that his name not be used, neither of the two parties expressed much interest.

It seems increasingly apparent that this war - in which hundreds of people have died - was not about 250 square miles of scorched land.

"From what I can make out, there are only stones there, and not especially pretty ones at that," a diplomatic source in Asmara points out.

Then what is the cause of this sudden war in the Horn of Africa? And how could it destroy a US-sponsored partnership that had brought a degree of stability to a volatile region and effectively contained the spread of Islamic fundamentalism out of neighboring Sudan?

What emerges from interviews with diplomats and analysts in both capitals are the outlines of a conflict engineered by Eritrea largely for economic reasons.

It appears to be a conflict with serious political implications for Ethiopia, where, experts suggest, Meles Zenawi's government has the backing of only 5 percent of the population and can scarcely afford the luxury of a protracted war.

This is especially true since a majority of Ethiopians see the war as serving the interests of Prime Minister Zenawi's tiny constituency: the Tigreans, whose recent economic expansion has come at the expense of Eritrea.

Tigray, a region bordering Eritrea, was the birthplace of the Tigrean People's Liberation Front (TPLF), which toppled the Mengistu regime and delivered Zenawi to power after 17 years of armed struggle against dictator Col. Mengistu Haile Mariam.

Benefiting both from the government's ethnic composition - mostly Tigrean - and from its new federalist policies, Tigray "started developing [its] own industries," forcing Eritrea into "a competition which should have never been there in the first place," a diplomatic source in Addis Ababa says.

When Eritrean military jets crossed the border into northern Ethiopia June 5, their main targets seemed to be the newborn industries in Tigray. "It was clear what they were up to: They wanted to wipe out the competition," says a journalist who spent six years in Eritrea and asked that his name not be used.

"As far as [Eritrean President] Isaias [Afewerki] is concerned, this is a war for survival. Eritrea's survival is almost entirely dependent on Ethiopia's economy and agriculture," says Beyene Petros, a prominent leader of the Ethiopian opposition.

When Eritrea gained independence from Ethiopia in 1993, it was said that Zenawi had given up Ethiopia's access to the sea to pay a colossal debt of gratitude. His TPLF had evolved into an efficient fighting force thanks to Mr. Afewerki's Eritrean People's Liberation Army: Historians says every bit of equipment and military know-how came courtesy of the EPLF.

"Meles [Zenawi] and his group were taken in by the EPLF and taught how to fight a war," Dr. Petros says.

For months before Eritrea's independence, Zenawi and Afewerki labored over an ambitious model of economic integration that would bring the best out of both economies. Eritrea would be the industrial powerhouse and use its ports to become an import and export zone, while Ethiopia would be the agricultural supplier. "In exchange, Ethiopia would use Eritrea's ports as if they were their own," a senior Addis-Ababa-based diplomat explains.

Both countries announced amid great fanfare that "all movement of people and goods" would be entirely unfettered. Eritrea was allowed to use the birr, Ethiopia's currency, whose motto - "Ethiopia Before All" - had been Mengistu's response to Eritrea's 30 years of liberation claims.

Two things happened. "Eritreans started coming into Tigray, buying just about everything they could get their hands on and exporting it in dollars," Petros says. "Eritrea became a sort a vacuum cleaner for most hard currencies," an Asmara-based diplomat explains, leaving Ethiopia to ponder the wisdom of the arrangement.

Troubles ensued after Eritrea introduced its own currency, the nafka, late last year, and Ethiopia insisted that all future trading should be done in US dollars.

"For the Eritreans, it was a bad blow," the Addis Ababa-based diplomat says. "Prices soared, and commerce started slowing down."

Eritrea's reaction to what was seen as a Tigrean-sponsored sabotage of the nafka came as no surprise: All import and export duties on Ethiopian-bound goods were raised.

Ethiopia announced it would use neighboring Djibouti as its main port and has started negotiations with the Kenyan port of Mombasa, hundreds of miles to the south. As Petros puts it, Eritrea had been "basically strangled."

Last month, analysts say, Afewerki made a simple political calculation and marched his troops across the border.

"He knew that Meles [Zenawi] was weak internally, and that a war would finish him off," a Sudanese opposition leader in Asmara says. "And he knew that [Zenawi] knew that. That's why [US Undersecretary of State] Susan Rice was so mad. She asked him to pull his troops back to save [Zenawi], and he said no."

At a press conference in Asmara June 19, Afewerki made several references to Ethiopia's political instability.

"We have cooperated in all respects to the stability of the country. So this is why I say, 'Let's defuse this tension, let's go back to stability,' " he said, slipping in what most observers saw as an invitation to loosen Ethiopia's economic stranglehold.

What is unclear is to what extent Afewerki would benefit from the political demise of a former ally, who for years has been trying to reconcile the irreconcilable: mediating between Eritrea and an increasingly aggressive Tigray.

In the opinion of one Western observer speaking in Asmara, "if Meles [Zenawi] falls, he might be replaced by an Ambara or an Oromo" from Ethiopia's two largest ethnic groups. Neither would have much interest in the industrial development of Tigray and both would probably be more inclined to reach a compromise on the use of Eritrea's ports.

In the end, the Western observer says, "Afewerki is the strong one here. He has the support of his people. Zenawi is the one in trouble; he has three guns pointed at him:" The Tigreans on one side, Ethiopia's truculent opposition on the other, and Afewerki, "the kingmaker," right in the middle.