Economic sanctions will not resolve Ethiopia’s conflict

On September 17, declaring the ongoing civil war in Ethiopia a national security threat to the United States, President Joe Biden signed a sweeping executive order authorising sanctions on the Ethiopian government, the Eritrean government, the Tigray People’s Liberation Front (TPLF) and several other entities the US government deems to be contributing to the conflict.

Furthermore, the Biden administration suspended Ethiopia’s trade privileges from the Africa Growth Opportunity Act (AGOA) – which came into effect in 2000 and allows duty-free imports of selected products from the continent – signifying the deterioration of the relationship between the US and Ethiopia.

Home to Africa’s second-largest population and located in the volatile Horn of Africa, Ethiopia’s stability is critical to the security and stability of the continent and the strategic Red Sea region, through which cargo ships carrying merchandise accounting for more than 10 percent of the global trade pass. Its military forces, one of the most powerful in Africa, have played a critical role in the fight against the hardline group al-Shabab in neighbouring Somalia. Ethiopia’s troops also contributed to many other important UN peacekeeping missions across the continent, including those in Sudan and Rwanda. Until the outbreak of the ongoing conflict, Ethiopia was one of the closest allies of the US in Africa. Thus, Washington’s efforts to bring an end to the war in Ethiopia are both understandable and judicious.

Nevertheless, economic sanctions – such as the suspension of the country’s eligibility under AGOA that business leaders warn may result in a permanent loss of about a million jobs – will not resolve the crisis. Such sanctions will only worsen the economic hardship of Ethiopians already struggling in an economy under severe strain due to double-digit inflation, mounting external debt, the COVID-19 pandemic, and high youth unemployment.

Furthermore, resource constraints that will undoubtedly arise from economic sanctions will significantly reduce the capacity of the Ethiopian government, which already has limited means, to execute its most basic function: protecting the lives and property of its citizens.

In Ethiopia, where ethnic divisions run deep, and inter-communal conflicts coupled with environmental disasters have already displaced close to two million people, the collapse of the government can lead to genocide, the disintegration of the country, and mass migration. All this would not only cause much more suffering for Ethiopians but also destabilise the region.

Even if the government can avoid total collapse, the inevitable reduction in government expenditure in basic services – such as the provision of clean water, health, education, and agricultural services – would disproportionately harm the poor, and deepen existing divisions.

Moreover, the main mechanism through which economic sanctions are expected to cause a change in government policy – by fomenting public discontent against the government – is unlikely to be effective in a country with fledgling democratic institutions, where citizens have little influence over the actions of the government.

In fact, given the absence of a viable opposition party that commands widespread popularity to govern the country, the Abiy government which was recently sworn in for a five-year term is unlikely to lose political support in the short term. The immediate beneficiaries of a weak central government will be armed groups such as the deeply unpopular TPLF – removed from power in 2018 following widespread protests against its 27-year authoritarian rule, and whose return to power will very likely render the country ungovernable – and other separatist forces, whose military edge over the government threatens the territorial integrity of the country.

Faced with heightened security threats, the government is likely to resort to heavy-handed approaches towards peaceful dissenting voices and opposition parties, actions that undermine the development of democratic institutions in the country and threaten the reversal of the political reforms the Abiy administration has undertaken since 2018.

In addition, sanctions carry the risk of reversing or delaying the ongoing economic reforms by the government, including its deregulation and privations efforts, as a cash-strapped government would likely hold on to its revenue-generating state-owned monopolies and private firms face restricted access to cheaper loans to finance their acquisition and development of government enterprises. An example of such detrimental measures is the suspension of a $500m loan by the US International Development Finance Corporation (DFC) to finance the entry of a Vodafone consortium Into Ethiopia’s telecommunication market that is currently monopolised by the state-owned Ethio Telecom.

Most importantly, sanctions do not alter the fundamental calculus of the Ethiopian and Eritrean governments. They perceive the TPLF – which has promised to chase its enemies to the capitals of the two countries – as an existential threat and are thus unlikely to change their behaviour because of them.

Economic sanctions are not only dangerous and ineffective, but they are also ill-suited to resolve an urgent problem like ongoing conflict, for they take too long to yield results.

Therefore, US policymakers should be mindful that their punitive economic measures against the government of the day, aimed at solving an immediate problem, do not cause long-lasting damage to the requisite institutions for the development of democracy and free-market economy in Ethiopia, exacerbate the sufferings of civilians, and threaten the territorial integrity of Africa’s oldest independent country and the seat of the African Union with far-reaching consequences for the continent and beyond.

*Assistant Professor of Applied Economics at Oregon State University

**The views expressed in this article are the author’s own and do not necessarily reflect Isalnews's editorial stance.

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