Feature - Hope for border business boom

Adigrat was a once thriving border town from where merchants travelled every day to do business with their counterparts in Eritrea. But a bitter two-year border war has seen trade collapse and rising unemployment among the people of this town in Ethiopia's northern Tigray region. However now, with demarcation just months away, many are hoping that business will boom once again. “At the moment business in Adigrat is not as it was before the border dispute with Eritrea,” said the town’s Dashen Bank manager Zerihoun Ghessese. NATURAL TRADING PARTNERS “This town was very busy but after the dispute over the border, things changed,” he told IRIN from his quiet office overlooking the town’s market square. Like many, he recognises that Ethiopia and Eritrea are natural trading partners. In 1993 they had both signed up to a free trade agreement and by early 1998 some 67 percent of Eritrea's external trade was with Ethiopia. “It was very active around here but these days it has been very much affected," Zerihoun said. "People now have to travel a long way to Addis to bring certain things, consumer things." He added that trade with the Eritrean capital Asmara makes sense because of its close proximity to Adigrat and the main road linking the countries. The border itself – now patrolled by several thousand UN peacekeepers - is a little over 35 km away. “As you know Addis is about 800 km away so there are also transport costs," the bank manager said. “It means that consumer goods are a bit more expensive.” He said that businesses had closed down, but added that the local people were hard working and were making the best of a difficult trading climate. “For things to get back to how they were, peace is the most important factor,” he said. “We hope that peace will prevail in the area and things will go smoothly with demarcation then we can get back to what we do best which is business.” FINANCIAL IMPACT The financial impact alone of the conflict between Ethiopia and Eritrea has been enormous. It is estimated that it cost both countries US $1 million a day. Overseas direct assistance plummeted and foreign direct investment in Ethiopia slumped to an all-time low of US $20 million in 2000 – the year the peace agreement was signed with Eritrea. Yet while all acknowledge the benefits that peace will bring, few believe this crucial stage of the Ethiopian-Eritrean peace process will be without setbacks. The town – like many on both sides of the border – was bombed during the war leaving bitter memories among some. Berhe Gebrehiwot, who heads Adigrat’s Trade, Industry and Urban Development Sector, said the town has been hard hit by unemployment. He says that around 30,000 of the 124,000 population are unemployed. Hundreds of young men hanging around the town square and roads during the day, aimlessly wondering from place to place, clearly illustrate his point. Berhe also said the numbers of displaced people who fled from areas hit by the fighting had also placed an enormous burden on the town’s tiny budget. “If the border opened it would improve things here because people would be able to move around freely, meaning that trade would increase,” he noted. HEALING WOUNDS Yet while everyone in the town calls for an open border and trade, they say demarcation will not heal deeply felt wounds. “The border not only benefits Ethiopia, it also benefits Eritrea, so if the border is open there may be mutual benefits between the two countries,” said Dr Wolderufael Alemayehu, deputy head of the Adigrat district. But he added: “Demarcation will not resolve the problem between the two countries." “The root cause is not whether the demarcation process is in doubt, I think mutual understanding between the two governments is also important," he said. “I think there is a need for mutual understanding to resolve the conflict, and the effects of the war need to be resolved first.”