Country Report Ethiopia May 2011

The political scene: Egypt resorts to different tactics

The situation is precarious and the final outcome is not yet clear, although it appears likely that a new agreement will redistribute control over the Nile's water away from Egypt and Sudan. Six of the countries upstream have successfully forged a fairly united front against Sudan and Egypt. In an attempt to find a more inclusive solution, the Ugandan president, Yoweri Museveni, stated that the new accord would not be ratified until Egypt elected a new government, giving it a chance to reverse the stance of the Mubarak regime and become a signatory to the CFA. The threat of Egyptian military action against countries building on the Nile has prevented projects from reaching fruition in the past, but the country's military might is no longer as effective a deterrent. Egypt recently demanded that Ethiopia share the technical and environmental studies for the Renaissance Dam, but Ethiopia rejected the request, stating that it will only deal with Egypt through the CFA. Egypt may need to adopt a more pragmatic approach or risk being frozen out of future discussions.

That said, while it seems unrealistic to expect that Egypt and Sudan will retain rights to 90% of the Nile waters-the two countries remain vehemently opposed to any changes-they may resort to other tactics to maintain the status quo. There have been complaints that Egypt has been exerting pressure via the US and others on creditors not to finance construction of the Renaissance Dam project-a tactic that appears to be working at present. In response, Ethiopia has pledged to fund the US$4.8bn project by itself if necessary, but this is unrealistic. China has reportedly provided financing for feasibility and technical studies, but this accounts for only a small fraction of the project's cost. Both Egypt and Sudan have been invited by Ethiopia to become partners in the project and share costs, stating that it will benefit them through flood control and higher electricity production in the region, but both countries have rejected this suggestion and the dispute over control of the Nile risks becoming the defining issue between these countries in the coming years.

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