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Why Getting Back The Port Of Assab Matters To Ethiopia

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Why Getting Back The Port Of Assab Matters To Ethiopia
The port of Assab is now Eritrean territory

Progress in many landlocked developing countries has also been slow. In the Human Development Report, twenty out of twenty-seven landlocked countries with adequate data are considered ‘top priority’ or ‘high priority’ due to their lack of progress towards the internationally agreed-upon Millennium Development Goals (MDGs).

Brining it all closer, according to the aforementioned Sudan Tribune report, the Port of Djibouti is used not only as a gateway for Ethiopian transit cargo, but also as a point of destination. The volume of Ethiopia’s import and export cargo has risen from 3.9 million tons in 2006/07 to 4.6 million tons in 2007/08.

With the volume of this import-export projected to grow by 20pc in 2009/10, the total annual fee would was then projected to be in excess of 1.2 billion dollars – a very huge and unsustainable expense for a resource-constrained country like Ethiopia.

It is thus clear that Ethiopia’s trade flow, as a function of both the cost of using alternative sea ports of other countries and distance traveled, would stifle any genuine policy of economic development. The huge fees paid out annually to the coastal countries for port services are drain the economy of the country, which is a net importer.

This is, of course, money that could instead be invested internally for port service improvement, infrastructure development and other related transportation projects. The latter in turn could immensely improve the trade balance and flow of the country by reducing the cost of exports and imports, and could increase the aggregate demand for domestic goods and services related to the infrastructure development and port services.

The prudent investment of the money paid as port fees could also necessitate increased employment of labor and other resources to meet the accompanying increased demand. With a very conservative estimate of 95pc increased consumption spending (which entails a 0.95 marginal propensities to consume) for any amount of additional income Ethiopians get on the average, one would have a corresponding large spending multiplier of 20.

This implies that the total fees lost in the form of direct payment for the use of the port of Djibouti could add billions of dollars to the GDP of Ethiopia annually. Evidently, the unnecessary leakage in the national revenue reduces the value of export, and increases the cost of imports, thereby shrinking the volume of the GDP and depressing the economic growth and development prospects of Ethiopia for years to come.

In addition, the landlockedness imposed on the country has deprived the people of other economic opportunities. Most notably, the loss of access to the sea was accompanied by the loss of maritime resources, including fisheries, as means of food security, and revenues from tourism. In a country like Ethiopia that has experienced vicious cycles of famine and drought, it is hard to overestimate the significance of healthy fish stock as a critical alternative for food security and for sustaining economic prosperity and social and cultural well-being.

In the backdrop of these unfavorable economic realities, to a degree resulting from the landlockedness of the country, the ruling party in Ethiopia does not appear to be poised to seek a framework that will address effectively the loss of the country’s legitimate access to the sea. Tragically, our beloved country still ranked as one of the poorest nations in the world by almost all measures of economic development.

The deplorable economic condition of the country is expected to continue in this hapless path as long as it remains landlocked and a meaningful and balanced policy of economic development cannot be implemented through good governance. Therefore, it is of paramount importance to revisit the adverse impact of being landlocked on the economy of Ethiopia.

There is mounting evidence that the bogus international treaties that the people of Ethiopia have been forced to accept have no binding force from a legal, historical or economic standpoint. It is, therefore, incumbent upon the international community and the peoples of the concerned countries to seek a lasting solution to the problem that has been an impediment to peace and prosperity in that part of Africa.

In the search for a viable solution, I believe, it is critical that the pros and cons of all available options be explored, taking into account the historical, socioeconomic and national security imperatives in the region. Such a methodical and unbiased approach to the issue is guaranteed to lead to an incontrovertible solution that will affirm the unconditional and rightful return of the port of Assab to Ethiopia, thereby heralding a new era of peace, stability and prosperity for the brotherly peoples of Ethiopia and Eritrea whose common heritage is much more deep-rooted than the shortsighted machinations of politicians that purport to divide them.

 

By: Eidmon Tesfaye

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