Eritrean/Ethiopian War

Johannes Schneider Johannes.Schneider at gmx.net
Fri May 14 04:28:48 PDT 1999


Michael, I am happy you alerted list members on this ongoing carnage in Africa. I think the article you posted is quite interesting, but for me it has some setbacks. First it concentrates to much on the personalities of the two leaders, Meles and Isaiyas. Secondly it is mainly descriptive, failing to explain much. To me the crucial time was reached two years ago, when Eritrea started to introduce its own currency. Perhaps some list member can shed some light on the economic consequences of this decision:

_Begin Quote: Ethiopia was afraid it would become a pool of cheap labour for Eritrean industry and that its own industries would be vulnerable to cheap Eritrean exports. The government began to impose tariffs. Eritrea increasingly found that the two countries' common currency, the Ethiopian birr, was overvalued for its exports. Looking back, Mr Issaias and Mr Meles both say "We were too kind." Each seems to think his country's generosity was being exploited by the other.

In 1997, Eritrea introduced its own currency, the nacfa. It expected, at launch, a one-to-one exchange rate with the birr, but Ethiopia refused to touch the new currency, insisting that all large transactions should be in dollars. That wrecked commerce between the countries and deepened the gulf between them. Ethiopia also accused the Eritrean oil refinery at Assab of overcharging for its products, and said that Eritrean traders were smuggling coffee across the border and re-exporting it. _End Quote

How can both leaders say 'we were too kind'?

BTW: For those ones who are interested in the conflict. This site is quite interesting: http://www.visafric.com/news.htm It is operated by Eritreans so it is somewhat biased.

Regards Johannes



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