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  • The Real Winner of the Ethiopia peace deal is Ethiopia, five points to think
    The Real Winner of the Ethiopia peace deal is Ethiopia, five points to think

    The peace agreement ends hostilities between Ethiopia’s federal government and Tigrayan forces, restoring law and order.

    On Tuesday, the Ethiopian government and the Tigray People’s Liberation Front (TPLF) agreed to a “permanent cessation of hostilities”, effectively ending ten days of negotiations – led by the African Union in South Africa – and a civil war that began in November 2020.

    Both parties in the conflict which has left thousands dead and displaced millions in the northern region of Tigray agreed to “orderly, smooth and coordinated disarmament” and “restoration of law and order”, according to former Nigerian President Olusegun Obasanjo, the lead mediator in the talks.

    Ethiopian Prime Minister Abiy Ahmed hailed the breakthrough and said his “commitment to peace remains steadfast”, in a statement released afterward.

    “Our commitment to collaborating for the implementation of the agreement is equally strong,” he added.

    The landmark deal brings an end to the conflict in which “war crimes and crimes against humanity” were committed by both sides, according to a United Nations commission of human rights experts.

    Here are five key takeaways from the agreement which stipulated that both sides reject “violence as a method of resolving political differences” in the future.

    ‘Ethiopia has only one defense force’

    War broke out in November 2020 when Ethiopia’s federal government sent troops into the region after TPLF accused Prime Minister Abiy Ahmed of centralizing power at the expense of the regions. It pitted the regional force from Tigray against Ethiopia’s federal army and its allies from other regions and neighboring Eritrea.

    In Tuesday’s agreement, both sides “agree and recognize” that the Federal Democratic Republic of Ethiopia has “only one defense force”. Consequently, there will be a disarmament, demobilization, and reintegration (DDR) program for TPLF fighters.

    Both sides have 30 days after the agreement is signed to agree upon the schedule of overall disarmament of TPLF including light and heavy armaments.

    Representation and inclusion for Tigrayans

    Based on the agreement, both sides agreed on the restoration of Ethiopia’s federal government in Tigray.

    TPLF committed to respecting the constitutional authority of the federal government and to “cease all attempts of bringing about an unconstitutional change of government”.

    In return, the Ethiopian government committed to stopping military operations targeting TPLF, restoring essential services in the region, and lifting the “terrorist” designation on the TPLF fighters.

    The federal government also agreed to ensure and improve the representation of the Tigray region in national institutions, including the parliament, which could prove crucial as the region has complained for years of marginalization by the federal government in Addis Ababa.

    Humanitarian aid

    Since June 2021 when Tigrayan rebels recaptured the region from federal forces, Ethiopia’s government has cut off essential services there, leaving people to struggle with food shortages and no access to basic utilities.

    Due to that and continuing violence, trucks carrying humanitarian aid have not been able to deliver food in the area.

    In September, a truck belonging to the World Food Programme was hit by debris from a drone attack and injured the truck’s driver. Hospital officials have also previously raised the alarm about food and medical supplies being exhausted in some facilities in the region.

    According to the UN, more than 13 million people need food assistance across northern Ethiopia.

    Now, the federal government has committed to allowing unhindered access to aid, with the help of humanitarian agencies, to address these needs – especially for women, children, and the elderly. The government also agreed to facilitate the return of those displaced outside the region in due time.

    Ethiopia and Tigray leaders are to ensure that the aid is used only for humanitarian purposes.

    ‘Immediate and permanent cessation of hostilities

    The federal government and TPLF both agreed to “the cessation of overt and covert acts of violence” and to also end “hostile propaganda, rhetoric and hate speech” towards both sides.

    Both sides agree to not only respect the FDRE constitution but also respect fundamental human rights to protect civilians and ensure accountability in accordance with the constitution and the AU’s Transnational Justice Policy Framework.

    Protection of civilians

    The agreement also covered the protection of civilians, especially millions of people who have been displaced due to violence in Tigray.

    The deal also stipulated an end to sexual and gender-based violence and violence against children, women, and the elderly, as well as the recruitment of child soldiers. There have been numerous reports suggesting that TPLF had recruited child soldiers and that federal and allied forces have been using rape as a weapon.

    In April 2021, the United Nations Security Council issued its first joint statement on the continuing crisis, expressing “deep concern” about allegations of human rights violations, including reports of sexual violence against women and girls.

    SOURCE: AL JAZEERA

Economy

  • Breaking News: Djibouti suspends China and other loan repayments Debts
    Breaking News: Djibouti suspends China and other loan repayments Debts

    Strategically important Horn of Africa nation is struggling under mounting financing pressures.

    The decision affects two of its bilateral creditors, with China holding the vast majority of Djibouti’s debt

    Djibouti’s location on the Horn of Africa’s Bab-el-Mandeb Strait, which controls access to the Red Sea and the Suez Canal, has made it a major destination for Chinese capital. Photo: AP
    Djibouti’s location on the Horn of Africa’s Bab-el-Mandeb Strait, which controls access to the Red Sea and the Suez Canal, has made it a major destination for Chinese capital. Photo: AP
    Djibouti – the tiny nation at the intersection of the Red Sea and the Gulf of Aden where China has vast commercial and military interests – has suspended debt repayments to two of its main bilateral creditors as it struggles under mounting financing pressures.
    In its latest report on Djibouti, the World Bank said the country’s external debt servicing costs tripled in 2022 – from US$54 million last year to US$184 million – and predicted a further increase to US$266 million next year.
    Behind the rise is the expiration of the G20’s Debt Service Suspension Initiative (DSSI) at the end of 2021, and the start of principal loan repayments for Djibouti’s water pipeline to Ethiopia.
    As a consequence of the DSSI, Djibouti’s external arrears increased by 26.4 percent year on year to US$101 million in June 2022, corresponding to 3 percent of its GDP.
    REDD Intelligence senior credit research analyst Mark Bohlund said the two creditors referred to in the World Bank report were likely to be China and Kuwait, “although it doesn’t matter which the other creditor is, as Chinese debt widely surpasses that owed to other creditors”.
    Bohlund said Djibouti’s action was unsurprising, given the sharp projected increase in its external debt servicing. “The International Monetary Fund declared Djibouti’s debt as being unsustainable in late 2021,” he said.

    Djibouti owed a total of US$2.68 billion to external creditors as of the end of 2020, according to the World Bank.

    Its strategic position – on the Horn of Africa’s Bab-el-Mandeb Strait that controls access to the Red Sea and the Suez Canal – has made Djibouti a major destination for Chinese capital, especially in the maritime and free-trade zones.

    As a crossroads between Africa, the Middle East, and Europe, Djibouti has been a crucial hub for China’s Belt and Road Initiative, the multitrillion-dollar infrastructure plan behind numerous mega-projects across the continent.
    Data from Boston University’s Global Development Policy Centre shows Djibouti took US$1.5 billion from Chinese lenders between 2000 and 2020.
    Much of the money was advanced in 2013 – US$492 million to finance the construction of its portion of the Addis Ababa-Djibouti railway, and US$322 million for the 101km (63 miles) water pipeline from the Ethiopian town of Hadagalla to the Djiboutian interior.

    Djibouti borrowed a further US$344 million in 2016 for the construction of the multipurpose Doraleh port. All three of these loans were extended by the Export-Import Bank of China.
    In 2017, another US$150 million was provided by China Merchants Port Holdings Company Ltd, to build the Djibouti free-trade zone.

    Other Chinese companies have also invested in the country’s maritime industry and free-trade zones. China Merchants Group has pumped money into turning the Port of Djibouti into an international business district. It has also funded the port’s mega extension – the US$590 million Doraleh multipurpose port – just west of the capital.
    China’s first overseas military base opened in 2017 next to the Chinese-operated port of Doraleh. The country also hosts US, French and Japanese bases, and it is the presence of so many facilities that may be behind its debt servicing decision.

    Bohlund said the Djibouti government was likely to reason that it’s hosting of a “multitude” of military bases would keep it safe from any repercussions, as “Beijing prioritizes its military presence on a key trade route over any pecuniary losses on its Djibouti claims”.
    “While this is likely to be true, Beijing is likely to be concerned that other Belt and Road Initiative creditors will also suspend payments,” he said.

    Alex Vines, head of the Africa program at London-based think tank Chatham House, said Djibouti continued to be disproportionately affected by the steep rise in global food prices and the war in Ukraine, including disruptions to food supply chains.
    Djibouti is a net importer of food and fuel, covering up to 90 percent of its food needs through imports.

    “The spillover effects of conflict in Ethiopia have also led to periodic shortages of produce imports and a depressed Ethiopian market, on which Djibouti is highly reliant,” Vines said.
    “Soaring global oil and food prices have pushed up inflation – the year-on-year rate at the end of June 2022 was 11 percent.”
    On top of these shocks, along with the DSSI’s expiration, “it is unsurprising that Djibouti is having repayment troubles”, Vines said.
    “China is likely to renegotiate its debt bilaterally with Djibouti – given the slowness of the follow-on Common Framework initiative following the DSSI – this is likely to be the preferred option,” he said.
    “China’s lending to Djibouti has also been due to its geostrategic location and so Beijing will wish to continue to build its influence.”

    Tim Jones, head of policy at British-based charity Debt Justice, said Djibouti’s debts were always going to be difficult to pay, “but have become unpayable because of the impacts of the Covid-19 pandemic and other economic shocks on the economy of Djibouti”.
    “The suspension of debt payments to bilateral creditors, including China, in 2020 and 2021 helped, but did not deal with the fundamental need for some of the debt to be canceled,” Jones said.
    Djibouti’s decision to suspend its bilateral debt payments adds to concerns about the growing number of countries in Africa facing repayment troubles. In 2020, Zambia became the first African country to default on some of its debts. Kenya and Ethiopia are also feeling the squeeze.
    Jones said that while China was a significant lender in other countries, so were others, including Western private lenders and multilateral institutions. “Djibouti is unusual in that China is by far the largest creditor – 65 percent of Djibouti’s external debt payments in coming years are to China.”

    Tim Zajontz, a research fellow at the Centre for International and Comparative Politics at South Africa’s Stellenbosch University, said the sustainability of Djibouti’s debts was questionable long before the pandemic further curbed its debt-servicing capacities.
    “Skyrocketing global inflation, an economic downturn in neighboring Ethiopia, and the severe drought in the region have in recent months further depressed Djibouti’s economic situation,” Zajontz said.
    “It is likely that Djibouti will not be the last African country not able to service its loans. The acute social and economic repercussions of multiple global crises demand multilateral debt relief from Africa’s main creditors, including China.”

    Zajontz said Djibouti was of “immense geopolitical and geoeconomic importance to China, as it hosts a Chinese naval base and is the most important logistical entrepot for China in the Horn of Africa”.
    “To maintain sound relations, it is possible that Beijing will accommodate the Djiboutian government with a debt restructuring plan, as they previously did in the case of neighboring Ethiopia,” he said.
    In 2019, when Djibouti faced similar debt challenges, it reached a deal with China’s Exim Bank to restructure the railway loan, according to the IMF.
    In the same year, Kuwait also announced an agreement had been reached to reschedule some of the loans made to Djibouti by the Kuwait Fund for Arab Economic Development.

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