While the Saudi official also added that Egypt would be largely affected by this dam, which is scheduled to be completed in six years, because it only has the Nile as a water resource. Constructing this dam in Ethiopia at this location has political rather than commercial motives.
“It also threatens the water and national security for Sudan,” he said.
Six months after Hailemariam assumed the premiership following the death of the late Meles Zenawi, the incident can be regarded as the first major challenge that Hailemariam has been tested with so far.
There have been a number of exchanges of visits over the years by high level government officials between Ethiopia and Saudi Arabia, and a number of agreements have been signed to enhance relations. There is a Joint Ministerial Commission that is meant to meet annually to review the progress in all areas of cooperation. The Commission also has the task of suggesting new areas for cooperation and of working towards their implementation.
Trade relations have been on the rise. At present the total volume of trade stands at just over 12 billion birr but this is expected to increase significantly in both quantity and quality.
Investment is a growing area of cooperation and a growing number of Saudi investors are engaged in different sectors in Ethiopia, with a total of 369 million dollars currently involved. The largest investor is Sheikh Mohamed Al-Amoudi, the owner of Midroc, which has interests in hotels and tourism, construction, mining, agriculture, manufacturing and education. All in all there are some 69 companies, in addition to those of Sheikh Al-Amoudi. Investment is growing but taking into account the long-standing relations and strong cultural ties between the two countries, considerably more investment should be expected.
In June 2011, after Hailemariam Desalegn was appointed Deputy PM and Minister of Foreign Affairs, he visited Saudi Arabia and he was reported to have had fruitful discussions with officials from the Royal Kingdom. At that time he told the Saudi Gazette at the Jeddah Conference Palace that the Kingdom had requested around 30,000 laborers including housemaids, drivers and technical staff from Ethiopia.
He said that his country would make sure all workers sent to the Kingdom were well trained. For this purpose, he added, there are a number of training centers. Hailemariam said that the environment in his country was conducive to investment. “There are huge investment opportunities in mining, agriculture, tourism, construction and real estate.”
Saudi Arabia, he said, is among the top investors in Ethiopia. “Saudi businessmen have invested around SR 2 billion in agriculture in Ethiopia,” he said. He said the number of Saudi tourists has also gone up due to the ongoing unrest in several countries in the Arab world. “We (Ethiopia and Saudi Arabia) will sign three agreements for the promotion of livestock and agriculture, promotion and protection of investment and avoidance of double taxation,” Hailemariam said.
Back then the deputy prime minister said that they were working on a dam project, which would have a capacity to produce 5,200 megawatts of electricity.
With all these relations, still the question remains regarding how well Hailemariam’s administration handled the matter, would it bring a win-win solution as is the usual rhetoric or is there more determination to challenge any potential opponents as far as the country’s national interests are concerned.