Gov’t Needs Clear Policy on Integration with Djibouti

The government of Prime Minister Hailemariam Desalegn seems to have faced an unlikely foreign policy contradiction. A rather unenthusiastic administration when it comes to regional integration, it has seen its chief executive proclaiming a fast-track approach to integration with Djibouti. In view of foreign policy, this could be one of the impactful inconsistencies from the EPRDF camp.

Historically, the ruling Revolutionary Democrats are known for their disinterest in speedy regional integration endeavours. Be it at the level of the African Union (AU), a successor to the Organisation of African Unity (OAU), or regional economic and political blocks, such as the Intergovernmental Authority on Development (IGAD) and the Common Market for Eastern & Southern Africa (COMESA), the EPRDFites stood firm in their stance of progressive integration. A showcase to this is the historic alignment of the late Prime Minister Meles Zenawi with former president of South Africa, Thabo Mbeki, in opposing the proposal of the late Libyan dictator, Muammar Gaddaffi, for a speedy African integration.

When it comes to integration, the Revolutionary Democrats prefer to focus on the economic realities. At the core of their belief lies the fact that Africa does not have even the basic economic factors that facilitate integration, such as infrastructure and policymaking independence. Any effort targeting integration, therefore, should first focus on resolving the economic hindrances.

Of course, the Revolutionary Democrats are not singing alone in this. Most experts of regional integration agree that priority has to be given for taking each economy out of the development trap that it is living in. And this entails unlocking the wealth creation potential of economies by providing infrastructure, enhancing productivity, building policymaking capacity and furthering democracy. No doubt that this is a painstaking process that takes time.

Considering their long overdue advocacy of progressive integration, therefore, one would question where the commitment of the Revolutionary Democrats for a fast-track economic and political integration with Djibouti comes from. This surprising move, declared by Hailemariam in his speech for Djiboutian Members of Parliament (MPs), might indicate that the leadership is, slowly but surely, moving away from its established policy lines of integration. Of course, this may also be a special treatment bestowed to Djibouti, which remains to be a key gateway to Ethiopia’s growing international trade.

Both ways, Hailemariam’s administration is vividly standing at a crossroads. Whichever road they take would have a lasting impact on their foreign policy regime. They need to sail through this cautiously.

Things would have been easier had the issue been only about foreign policy incongruity. It, however, is not. The administration lacks clear policy when it comes to economic and political integration with Djibouti. If any, the bargains are not known to the public.

Ethio-Djibouti relationship has rich history. It involves both friendship and rivalry. The relationship has evolved so much over the years that the two economies have become hugely dependent on each other.

Since the independence of Eritrea, Ethiopia becomes reliant on Djibouti for its international trade. As much as this has benefited the landlocked Ethiopia, with its economy growing at an average of 10.1pc annually, it has provided the Djiboutian economy with huge resources to leverage on. It is largely due to this interdependence that the service sector becomes the mainstay of Djibouti’s economy with a 79.7pc share in gross domestic product (GDP). This leaves industry and agriculture with a contribution of 17.3pc and three percent to the GDP, respectively.

In trade terms, Ethiopia serves as a major export destination for Djibouti. About 95pc of the regional export of Djibouti goes to Ethiopia. Ethiopian imports, on the other hand, constitute 76pc of total Djiboutian import. Consolidating this trade partnership is the two billion dollars power interconnection between the two countries that remains to supply Djibouti with about 75Mw of power.

In structural terms, one could see that both economies are biased towards the service sector. But this bias would not affect the complementarities of the two economies significantly. Whereas Djibouti’s service sector is linked to its Port, Ethiopia’s relate to distributional, private and social services. On the other hand, Ethiopia’s largely subsistent agriculture, which levers the huge land resources endowment of the country, could utilise Djiboutian market as a driver to further growth. The same could be said about the Ethiopian industrial base, which, though still infant, could make use of the market in Djibouti.

Regardless of the disposable opportunities, there is no clear policy line from the side of the Revolutionary Democrats. What they are looking for in the fast-track integration with Djibouti and what they are ready to give is not apparent.

After all, integration is a tricky game. It not only brings predictable benefits, but also involves unprecedented negative externalities. Hence, having a thoughtful policy is important to manage it effectively.

As it stands, though, the Revolutionary Democrats lack that policy insight. Little, in the form of economics and politics, for instance, justifies their shift away from the established policy line of progressive integration. Not even reading between the lines of the speech of Hailemariam at the Djiboutian Parliament could give an insight about it.

Some analysts mention that the recent water project agreement between the two countries shows that the focus would basically be on resource complementarities. Others argue that it will purely be based on structural economic advantages. The rumour wheel is rolling with all types of hypotheses about where the stakes are and what kind of integration it could be.

In one way or another, the time demands for the Revolutionary Democrats to clearly put what they are up to in opting for a fast-track approach to political and economic integration with it north eastern neighbour. Having it at the outset would have huge benefits for them and the economy.

In thinking about integration, the role of political systems could not be discounted. Unfortunately, both systems are far from being stable and representative. As much as the overwhelming dominance of the ruling EPRDF in the Ethiopian political space is criticised for its inability to entertain dissent, similar accusations exist about the reign of the People’s Rally for Progress (RPP), chaired by Ismail Omar Guelleh, who has been in power since 1999.

Uncertain is, therefore, how these two political systems, which have their own fissures in terms of representativeness, could be united. Equally unclear is how much of a support the whole effort of swift integration could garner from the political elite, both ruling and opposition, in each of the countries. This, of course, is not to mention the perception of the general public of the two countries on the matter.

From the side of the Revolutionary Democrats, therefore, the issue seems to look for a clear policy line. It is only after having defined policy objectives that they could start to sail through the waters with an equivalent buoyant force.

Failing to have clear policies would have an adverse effect on their effort and on the broader goal of regional integration. This is especially true considering the huge suspicion that exists within the Ethiopian elite on issues of relationship with neighbouring countries.

It, therefore, is time for the EPRDFites to resolve their foreign policy contradictions and craft clear policies on their ambition to integrate Ethiopia and Djibouti, economically and politically. As crucial as these steps is letting the public have a say on the issue.


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