The Economist - USA (2020-11-07)

14 Leaders The EconomistNovember 7th 2020

1

I

t started asa borderskirmishin1998,betweenEthiopianpo-

licemenandEritreansoldiersinBadme,a smallvillageona

barrenmountain.Oneobserveratthetimelikenedit to“twobald

menfightingovera comb”.It grewintoa two-decade-longwarin

whichtwooftheworld’spoorestcountriesbledthemselvesto

exhaustion.Wavesofyoungmenchargedacrosstheno-man’s-

landbetweentheirtrenches,inbattlesreminiscentofthefirst

worldwarinEurope.Perhaps100,000soldiersdied,andhalfa

millioncivilianswereforcedfromtheirhomes.

AmongthosewhofoughtinBadmewasa youngEthiopianra-

diooperatorwhobrieflylefthisfoxholetopositionhisantenna.

Whenhecamebacktoit,hefoundhisunithadbeenwipedoutin

anartillerystrike.“Waristheepitomeofhell,”saidAbiyAhmed,

theradiooperatorwhoisnowEthiopia’sprime

minister.“IknowbecauseI wasthere.”Heended

thatpointlessconflictin2018,bypromisingto

withdrawEthiopiantroopsfromBadmeandre-

storingrelationswithEritrea.In 2019 Abiywon

theNobelpeaceprize.

Yetnowthepeacemakerhasturnedmartial.

EarlyonNovember4th,whiletheworld’seyes

werebogglingatAmerica’selections,Abiyor-

deredhistroopsintoactionagainsttheTigrayanPeople’sLibera-

tionFront(tplf), whichrunsTigray,a northernregionofEthio-

pia(seeMiddleEast&Africasection).Heaccusesthetplfof

attackinganarmybasetostealweapons.“Thelastredlinehas

beencrossed,” hesaid.“Thefederalgovernmentistherefore

forcedintoa militaryconfrontation.”

Abiyarguesthatarmedactionisneededtobringthetplfto

heelandtoholdtogetherEthiopia’sfractiousfederationofeth-

nicallybasedstates.Yetinresortingtotanks,ratherthantalks,

herisksrollingEthiopiaintoanotherpointless,hellishwar.

Sucha warcouldleadtothebalkanisationofAfrica’ssecond-

most-populouscountry(with110mpeople).Itcouldalsospread

instabilityintoneighbouringcountries.

Startwiththebalanceofforces.BecauseTigraywasonthe

frontlineofthewarwithEritrea,ithasa largemilitiaandpara-

militaryforcemannedbyveterans.Thearmy’sNorthernCom-

mandinTigraycontainsmorethanhalfofthefederalarmy’s

fightingmenanditsbestdivisions,accordingtotheInternation-

alCrisisGroup,anngo. Manyoftheofficersandmeninthe

NorthernCommandareTigrayan.Iforderedintobattleagainst

theirownregion,manymightchoosetodefendit instead.

Fighting in Tigray could draw in neighbouring Amhara,

whichhaslong-standingdisputesovertheborderbetweenthe

tworegions.It couldalsofanethnicconflagrationselsewherein

Ethiopia.EventhoughOromos,anotherethnicgroup,currently

dominatethefederalgovernment,Oromoactivistsaredemand-

ingmorepowerandautonomyfortheirregion.

Theirmobshavebeenkillingmembersofother

groupsinmulti-ethnictownsandcitiesinOro-

mia.AmnestyInternationalhasreportedthat

onNovember1stOromogunmenroundedup 54

people,mostlywomenandchildren,andkilled

theminaschoolyard.Smallerethnicgroups,

suchastheSidamainthesouth,arealsoagitat-

ingforgreaterautonomyandhavemountedpo-

gromsagainstminorities.Conflictcoulddrawinneighbouring

countries,suchasEritrea,whichhasa scoretosettlewiththe

tplfdatingbacktothewarit foughtwithEthiopia.Andit could

destabiliseSomalia,whereEthiopiantroopsarebattlingtheji-

hadistsofal-Shabaab.

Foralmost 150 yearssinceEmperorMenelikII wagedthewars

ofconquestthatcreatedthebordersofmodernEthiopia,the

country’svariousgovernmentshaveusednakedpowertoholdit

togetheragainstthecentrifugalforcesofethnicnationalism.

Now,however,violenceismorelikelytospeedupthegyre.To

slowit,Abiyandthetplfneedtostandtheirforcesdown.That

wouldallowtimeforEthiopianstotalkabouthowtomendtheir

country’smanyrifts—withoutshooting. 7

Ethiopia is poised to unravel

SOMALIA

SOUTH

SUDAN ETHIOPIA

UGANDA KENYA

SUDAN

DJIBOUTI

ERITREA YEMEN

Addis

Ababa

Badme

Tigray

500 km

Prime Minister Abiy Ahmed may be starting a civil war. He should stop and talk

War in the Horn

T

his has been an extraordinary year for American govern-

ment debt. The Treasury market is usually the world’s most

liquid bond market and a haven in stormy times. But in March it

seized up as panic about the pandemic led to fire sales and failed

trades. The Fed fixed the problem by buying, in two months,

nearly as many Treasuries as it did during five years of quantita-

tive easing after the global financial crisis. The market is now be-

ing drenched with new issuance as the federal government

spends like mad. Since the start of April it has raised a net $3.3trn

to fund its stimulus programmes, expanding the outstanding

stock of bonds by 19%. Over the past week bond yields have see-

sawed as investors have weighed and reweighed the likelihood

of more stimulus after the election.

An even more extraordinary decade lies ahead (see Finance

section). Regardless of whether a big stimulus is passed in 2021,

the budget deficit will probably stay above 8% of gdp. An ageing

population will continue to lift health-care spending. And with

the Federal Reserve unable to cut rates much more, bigger defi-

cits might be necessary to stimulate the economy during future

downturns. A supersized bond market will amplify both the

probability of more market stress and its consequences. Randal

Quarles, the vice-chairman of the Fed, recently warned that the

Fixing the plumbing

A well-functioning Treasury market is crucial—whoever is in the White House. Time to fix how it works

Financial markets