Uncertainty at the World Bank

Demands by Ethiopia and Eritrea that their affairs at the World Bank be handled by different departments rather than one Horn of Africa department could delay Bank-supported programmes, including a second tranche of loans to Ethiopia worth US $500 million. The two neighbouring Horn of Africa countries have remained suspicious of each other since ending their war two years ago.

Quoting the 'Indian Ocean Newsletter', the BBC on 15 October reported that the Horn of Africa department at the World Bank, headed by Oey Meesok, had been disbanded. Management of the affairs of Eritrea has temporarily been handed over to the World Bank's representative in Kenya, Harold Wackman, while a new department is to be created to take charge of Ethiopia and Sudan. However, as a new director has not yet been found for Ethiopia, Meesok will remain in charge of Ethiopia, although she has been appointed head of human development for the Africa region.

According to the ION report, a delay in the Bank's programmes in Ethiopia will directly affect disbursement of $200 million for rehabilitation of the power grid in the capital Addis Ababa and four other cities, $250 million for repair of rural roads, $40 million for paediatric care and $13 million for privatisation. It will also disorganise Eritrea's economic outlook further, coming at a time when uncertainty over aid from the European Union (EU) has grown because of the recent expulsion of the EU representative to Eritrea, who was also Italy's ambassador, Antonio Bandini, and the subsequent recall of all EU ambassadors.