ESAT News (January 19, 2016)
“Ethiopia’s relations with the US may be taking a turn for the worse, despite the two countries’ strategic counter-terror relationship,” Global Risk Insights (GRI), an online publication which provides expert political risk analysis for businesses and investors said in its publication today.
In its article titled “Rising instability in Ethiopia could impact markets,” RGI said “Ethiopia’s relations with the US may be taking a turn for the worse, despite the two countries’ strategic counter-terror relationship. There have been increasing reports of heavy handed government responses to journalists expressing dissent, including imprisonment. In response, the US spoken out, an unusual move as the US rarely addresses human rights issues in Ethiopia. Consequently, the US decision to comment on the Ethiopian government’s actions may represent a growing rift between the two.”
“Increasingly strained US-Ethiopia relations may have also influenced the US decision, on 4 January, to shutdown drone operations in Arba Munch, Ethiopia. These emerging trends would not bode well for Ethiopia economically, with Western investors likely to be discouraged from entering an increasingly controversial market,” the article said.
“However, the recent increased incidences of social unrest could spark a degree of political instability undermining growth, in the short to medium term, if the government fails to ensure that communities affected by development plans are compensated for disruption,” it said.
“The government’s continued management of social unrest will be decisive in determining its long-term stability. If the government fails to manage human rights issues sensitively, then increased frequency of protests and crackdowns could cause substantial problems economically. Foreign investors may be deterred in an attempt to avoid reputational risks, a problem which would be enhanced if the US begins to pull back from supporting the Ethiopian government.”