Note: COMESA = Common Market of East and Southern Africa. Eritrea and Ethiopia are both members of this regional economic and trade association.

Addis Ababa, Ethiopia (PANA) - An Ethiopian business group Friday appealed to COMESA on the need to compensate it in millions of dollars for goods "misappropriated" by Eritrea following May's border dispute between the two countries.

The businessmen told a technical team from the organisation that some 137 million tonnes of imported goods and other properties worth over 127.3 million US dollars were lost in Eritrea after the border dispute broke out.

Presenting a petition, the businessmen said imported goods and machinery, including relief food and medicine for drought-affected areas of Ethiopia, were seized at the Red Sea ports of Assab and Massawa by Eritrean authorities.

The group, which petitioned the three-man COMESA technical team, further claimed that demand for compensation by Eritrea did not include "consequential damages."

The items imported by landlocked Ethiopia comprised mainly agricultural machinery, fertilisers, Agro-chemicals, vehicles, industrial raw materials and medicine.

Ethiopia's transport and communications vice minister, Ayenew Bitewlegn, told the COMESA team that the owners of the goods had relevant shipping documents attesting to their claims. Ethiopia formally launched complaints with COMESA in July that the Eritrean action amounted to a violation of international law.

The team, made up of experts from Malawi, Tanzania and Gambia, was set up by the council of ministers of COMESA in December to investigate the claims.

Addis Ababa, Ethiopia (The Monitor) - It was a good thing that the Chamber of Commerce created the opportunity for you to meet first-hand some of the victims of the illegal retention of their cargo by the Eritrean government. It was also a good thing that you happened to come at a time when most people could talk soberly and calmly.

Tempers have been cooled down, and Ethiopians, keeping with their peace-loving and patient tradition have decided to take each day in strides. Although you have heard from the horse's mouth, let me point out some of the consequences of the illegal withholding of Ethiopian cargo by Eritrea.

We have been told by the chairperson of the Ethiopian clearing agents association, that the Eritrean government had plans to withhold Ethiopian cargo in the first place. He said that the port authorities acting upon the premeditated act of confiscation of our goods of their party leaders, put in effected a slowdown of the port.

They had reduced the working hours from 24 hours a day to only 8 hours. This, in effect, was meant to slow down the process and hold as much Ethiopian cargo as possible in Assab.

Moreover, the port authorities limited the number of trucks that are allowed to enter the port in a day to only 25; then they declared a whole week a national holiday and totally stopped work. This made it possible for them to retain most of our stuff.

But that was not all. After the Eritrean port authorities declared they would not allow any Ethiopian truck to load any cargo, they also refused the carrier ships to take back the goods they brought.

Apart from the physical loss of tons and tons of raw materials, merchandise, machinery, fertilizers by Ethiopian businesses, NGOs and government institutions, Ethiopians have had to endure other problems as well. One is the psychological trauma that was weathered by several members of the Ethiopian business community.

This is a very serious problem indeed. But other tangible result includes supplier anxiety.

Several suppliers, from whom Ethiopian businesses had imported goods on a cash against document basis (CAD) have lost a great deal of money as their goods impounded in Assab couldn't be delivered to the intended customers in Ethiopia. In this instance, for example, Ethiopian importers have been doubly punished because they could not buy the foreign exchange they had committed themselves to.

To clarify further, for any business to import goods, it must go to the bank and enter the weekly auction. At these auctions, businesses commit themselves to buy a certain amount of foreign currency at the ruling price of the day.

To guarantee this purchase they had to deposit a refundable 2% of the amount committed at the bank that will be non-refundable if the agreement is not kept. Several businesses have lost hundreds of thousands birr in this manner because they have not received their goods from Assab and they have not bought the foreign currency to pay for the goods that never came.

Dismayed foreign suppliers of goods to Ethiopia will definitely have second thoughts about sending merchandise on cash against document basis. That is not all; banks that have paid for the goods imported on L/C systems have also lost.

Here, the extent of the loss of the banks depends on the margin facility (between 25-40%) the bank gives to its clients. If the margin facility is, for instance, 20%, then the bank allows the client to pay only 20% of the value of the goods imported and the bank will cover the rest 80%.

The logic here is the bank, after the merchandise arrives, will earn an interest rate on the amount it has covered for the client until he pays it all and takes his goods. In this manner, a vast amount of money was lost by the banks, which could not do anything about a gentleman's agreement that was dishonored, (here the non-gentlemen being the Eritrean authorities).

Private banks, especially, which poured out thousands of cash to their clients have been hard-hit because, as you know, they are new altogether. Their liquidity, therefore, or their capacity to have cash on hand is greatly affected.

Ethiopia is a poor country that has been on the brink of famine and hunger for years. The country has been wrecked by a civil war that took its toll in human and economic terms. The country has been busy at reconstruction and development.

Its citizens and especially the business community are a living witness to the positive wind of change that has begun to blow our way. The fiscal and monetary polices and some other vital economic policies that were put in place by the government, though leave a lot to be desired, have allowed Ethiopians and expatriates to work in the country.

More conducive policies that will attract more investment are believed to come. Ethiopia, which has enjoyed thousands of years of access to port, on which it has spent millions of birr, relinquished its ports, to its neighbour six years ago.

It is not a new phenomenon. Eritrea's own economic activity alone is so small that the port will be and is underutilized.

It would have been best for Eritrea to earn revenue from it by rendering gentlemanly service to its neighbour. But a gentleman's agreement has been broken. The Eritrean government had illegally seized Ethiopian goods. It is an act of piracy.

The Ethiopian business community has burnt its hands by trusting its closest neighbour. Moreover, it has been made to suffer bankruptcy due to interest payment accruing from bank loans.

Some have testified that their firms await possible closures soon. Justice has to be done.

Soon.