Date=6/28/98
Type=Background Report
Number=5-40809
Title=Ethiopia war economy
Byline=Scott Stearns
Dateline=Addis Ababa

Intro: the border war between Ethiopia and Eritrea has become a commercial windfall for neighboring Djibouti. As correspondent Scott Stearns reports, Ethiopia's economy also is beginning to adjust to the military footing.

Text: There are more militiamen on the roads of northern Ethiopia these days than commercial truckers. War along the border with Eritrea has cut the road to the port of Masawa where Ethiopian imports accounted for half the business.

What trucks there are in northern Ethiopia carry mostly ammunition and troops to the front. After years of remarkable economic growth, Tigray region's commercial route to the sea is now a military highway.

A new truck plant in the regional capital, Mekelle, has run out of imported engines, so workers are just making bodies. There is gasoline rationing in some places, no gasoline at all in others.

Tigray's biggest economic accomplishments also appear to be targets for Eritrea's bombers. There was an attack near a cement factory in Mekelle and a bombing raid on the town of Adigrat that fell 300-meters short of a new 24-million-dollar pharmaceutical factory.

B-vitamins roll down an Italian steel chute into a Swiss packaging machine and onto long tables where women box them for sale throughout the country.

The plant has only been open 18-months, so it is not yet producing things like cough syrup and glass vials. But even the simple tablets the plant does produce are threatened by the interruption of chemical imports through Masawa

Manufacturers in Tigray, and throughout Ethiopia, are turning to the neighboring port of Djibouti. There may not be commercial truckers headed north, but Ethiopia's road authority says more than 200 trucks a day are making the run east to Djibouti.

Port authorities are building a second storage area to handle the excess cars and tractors, cement, and consumer goods bound for Ethiopia. In the past, most of those goods would have come through the southern Eritreans port of Asab. But now, more than one-thousand extra dock workers have been hired in Djibouti to back up the 25-hundred already working overtime.

Ethiopian chamber of commerce president Kebour Ghenna says the capital, Addis Ababa, is now full of Djibuotian businessmen looking to profit from Ethiopia's border war with Eritrea.

"Djibouti is very much actually benefiting from this crisis and we have seen quite a lot of business people coming from Djibouti to Addis. They are very much aggressive in their offer as an alternative to the Asab port."

The economic shift to Djibouti has had little impact on central and southern Ethiopia, where gasoline supplies are at 75-percent of normal levels, and there has been no rationing or price rises.

The commercial windfall for Djibouti has also been shared by Ethiopians in the eastern town of Dire Dawa. They are clearing more than 12-thousand tons a month of exports to Djibouti, including coffee, vegetables, and grain. That is almost two-million-dollars more business for dire dawa than last year.

While Ethiopian business leaders hope the border war with Eritrea ends soon, they are redirecting commercial traffic through Djibouti for the next few months. (signed)

NEB/SKS/JWH/RAE
28-Jun-98 9:38 AM EDT (1338 UTC)
Source: Voice of America