Both Ethiopia and Eritrea claim to be the victims of hostilities in the recent clashes of the past weeks. The fighting is taking place in territory claimed by both sides, which was one of the main fronts during the 1998-2000 war. Indeed, already in 1998 the dispute over the exact location of the border escalated into a military conflict, leading to the deaths of around 80,000 people. A peace deal was signed in 2000. However, it has not been fully implemented. As a result, occasional clashes occurred along the frontier but these have never escalated until now.

Impact on country risk

In the last months significant domestic and international shifts in both countries have been fuelling the prospects of renewed conflict. In Ethiopia, tensions in the authoritarian system have begun to show, as illustrated by demonstrations across the Oromiya region, which have been brutally repressed. The protests highlight the difficulties of centralised economic planning, despite leading to promising results in the past years by reducing poverty, supporting high economic growth and expanding infrastructure. Eritrea, for its part, is pressurised by the European Union to reform its military institutions, especially after a UN report accused Eritrea of crimes against humanity. Though the recent fighting has not resulted in a clear outcome, both countries will be reluctant to escalate the conflict further into a full-scale war. Eritrea, on the one hand, is not in the position to act more aggressively as Ethiopia is better armed and resourced. Ethiopia, on the other hand, wants to avoid triggering a disorderly collapse of the Eritrean regime.

Analyst: Jolyn Debuysscher, j.debuysscher@credendogroup.com