Ethiopia’s so far managed to stay neutral and balance its relationships with opposing Gulf partners. But it’s engaged in an unpredictable game.

Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed meets with Ethiopia’s PM Abiy Ahmed in Addis Ababa in June. Credit: Mohamed Al Hammadi/Crown Prince Court – Abu Dhabi

This is the fourth part of The Thin Red Line, an African Arguments series focusing on dynamics around the Red Sea.

For the past two months, Ethiopians and Eritreans have been trying to make sense of their governments’ sudden declaration of peace. After 20 years of hostility, citizens on both sides of the border are waiting to see what the momentous rapprochement will mean and what the two leaders will do next.

But the neighbouring populations are not the only ones keeping a close eye on the events. Nor are the Ethiopian and Eritrean governments the only players determining the future direction of their relationship and how it affects the broader Horn of Africa region.

Further afield, several Middle Eastern nations are watching developments unfold and trying to ensure their interests in the region are well-served going forwards.

In fact, the United Arab Emirates played a key behind-the-scenes role in facilitating the deal between Ethiopia’s Prime Minister Abiy Ahmed and Eritrea’s President Isaias Afwerki. Both men met with Emirati leaders on several occasions before and during the reconciliation, and they have stayed in regular contact ever since.

In late-July, for example, Abiy and Isaias paid a joint visit to the UAE where Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, bestowed the nation’s highest civil honour on them. Last week, Abiy hosted the UAE’s Minister of State for International Cooperation. That meeting came just a day after he received the foreign minister of Saudi Arabia, the UAE’s main ally.

After decades of disengagement, countries east of the Red Sea are scrambling to gain a greater footprint along the opposite coast. In response, states on the Horn such as Ethiopia are trying to leverage these rapidly changing geopolitical dynamics to enhance their own influence.

The return of the Red Sea’s geopolitical importance

Relations between the Horn of Africa and Arab nations east of the Red Sea date back over millennia. They took a turn for the worse following the 1973 “Oil Crisis”, triggered when oil-producing Arab counties cut down production to punish Western countries that supported Israel in the Yom Kippur War. Horn countries became collateral damage as inflation skyrocketed.

To overcome economic devastation and soaring debt, they began to court oil-rich Gulf States, offering political loyalty and natural resources in return for aid. Countries such as Somalia, Djibouti, Egypt, and Sudan invoked their cultural and religious connections with the Gulf in a bid to gain help in dealing with their balance of payment crisis and political instability. Arab nations seized the opportunity, using their wealth and newfound geostrategic importance to expand their influence in the Horn and secure key loyalties.

With the end of the Cold War in the early-1990s, relations shifted again as the Horn of Africa underwent several changes. The Marxist-Leninist regime in Ethiopia collapsed. Somalia imploded into protracted civil war. Eritrea gained independence. And Sudan experienced an Islamic Revolution. With revenue from oil declining, Gulf nations decided to retreat, rendering the strategic waters of the Red Sea insignificant and inconsequential.

This is how things stood for the following two decades. But profound geopolitical shifts have now renewed the Middle East’s interest in the Horn and reinvigorated the strategic significance of countries west of the Red Sea. The two main reasons for this are the war in Yemen and deepening intra-Gulf rivalries. These factors have led three main groups to vie for influence in the Horn: the Arab axis (led by Saudi Arabia and UAE, but including Egypt and Bahrain); the Iran axis; and the Qatar-Turkey axis.

[Beyond the Red Sea: A new driving force in the politics of the Horn]

The Arab Axis – mostly Saudi Arabia and the UAE – has been the busiest recently, as explained in more detail in ‘The politics of ports in the Horn: War, peace and Red Sea rivalries’.

Saudi Arabia is reportedly developing a military base in Djibouti and is considering Ethiopian requests to supply it fuel for a year with delayed payments. Meanwhile, the UAE has agreed to provide Ethiopia with huge loans, investment and infrastructure support; it has upgraded Eritrea’s Assab port and constructed a military headquarters nearby from which it has launched offensives into Yemen; and its company DP World has secured contracts worth hundreds of millions of dollars to develop the ports in Berbera and Bosaso, located in the semi-autonomous regions of Somaliland and Puntland respectively.

One of the motivations for the Arab Axis’ aggressive strategy is commercial, but the primary goal is political. Its main aim is to isolate Iran, with which it has a long-standing feud, and contain the influence of the Qatar-Turkey Axis, which it accuses of promoting “political Islam”.

Qatar and Turkey also have deep footprints in the Horn through development aid, trade, and investments in infrastructure. Both are heavily involved in Somalia, where Turkey manages the capital’s ports and airports and has a military base. And both are investing heavily in Suakin in Sudan, with Qatar announcing a $4 billion plan to develop the port this March. There are reports that Qatar has also financed Ethiopia’s Grand Renaissance Dam, drawing anger from Egypt and its Arab allies, though Ethiopia has denied these claims.

Ethiopia’s balancing act

In the last few years, the Horn of Africa has become a battleground on which Middle Eastern rivalries are played out. Different groupings have engaged with the region in pursuit of their own interests. Some have been more successful than others, but the question for many is whether African countries are able to make these relationships work for them.

On the one hand, many governments have certainly seized opportunities and managed to secure huge investment deals for their ports. But on the other, their weak positions have meant that most have been forced to take sides when required. Last week, for instance, Saudi Arabia successfully pressured Somalia and Eritrea into condemning Canada following its spat with the Canadian government over human rights issues. Somalia has been particularly affected by intra-Gulf rivalries as some regional governments have pulled in opposite directionsin an aim to consolidate alliances across the sea.

The one exception to this turmoil so far has been Ethiopia. Amidst the growing competition for influence among the Middle Eastern axes, Addis Ababa has managed to avoid taking sides – at least publicly – and leverage its geostrategic significance as the region’s hegemon to attract much-needed investment from several different partners.

As it attempts to foster greater regional integration, Ethiopia has courted both the Qatar-Turkey and Arab axes to fill funding gaps for critical infrastructure and free trade zones. It has managed to maintain close ties to Qatar. And it has been Turkey’s favourite investment destination for the past several years, attracting nearly half of Turkey’s $6 billion investments in Africa.

At the same time, however, it has exploited its diplomatic muscle and importance to simultaneously strengthen ties with Saudi Arabia and the UAE. The various leaders have met on several occasions recently. And this June, the UAE agreed a $3 billion deal in which it would deposit $1 billion into Ethiopia’s National Bank to help with the forex crisis and invest the remaining $2 billion in various key sectors.

Ethiopia has also positioned itself well to benefit from the complex scramble for Red Sea ports. The land-locked country relies on Djibouti for nearly 97% of its imports, but now has clear avenues for diversifying its routes to sea. The rapprochement with its neighbour should give it access to Eritrean ports, while the UAE’s development of Berbera in Somaliland will give it another crucial option. Ethiopia defied the Somali federal government’s objections when it supported the UAE’s deal with the semi-autonomous region, but in return it has acquired a 19% stake in the project.

Thus far, Ethiopia appears to have been able to balance and profit from the Middle East’s renewed interest in the Horn of Africa. It has cemented alliances and attracted crucial investment whilst maintaining its independent foreign policy. But it is engaged in a dangerous game. The combination of Gulf’s transactional politics and Africa’s often kleptocratic leadership could prove treacherous as historic rivalries take on new twists and matters develop beyond the Horn’s control.

The Arab Axis, for example, might soon decide to capitalise on the US’ re-imposition of Iranian sanctions to pressure its cash-strapped African partners to freeze relations with its nemesis. For now, Ethiopia is able to hold off such demands, but its smaller neighbours are struggling. And things may only get ever tougher and more unpredictable as the Middle Eastern battle for supremacy plays out in the Horn of Africa