Ethiopia announced that it had negotiated a peace deal with a large faction of the ONLF (Ogaden National Liberation Front). Last month, the Ethiopians signed a peace deal with one of the smaller Somali rebels groups in Ogaden province. This area, on the Somali border, is populated largely by Somalis and has long been claimed by Somalia. There is oil in Ogaden (worth up to $100 billion or more), and Ethiopia is willing to wheel, deal and fight to protect this resource. As fierce as the Somalis are, the Ethiopians can match them in combat. So the Somalis have been offering gifts, and peace, to make deals with the Ogaden rebels. This approach has apparently included some nasty violence against Ogaden rebels, to make the point that the alternative to peace is very painful. The ONLF denies that there has been any peace deal, but the Ogaden has been quiet over the Summer, and calls talk of peace government propaganda. Lack of violence is what passes for peace in this part of the world.
Eritrea continues to wallow in dictatorship, poverty and paranoia. The government is currently denying that there is a major drought and food shortage. The government's main concern is hanging on to power, and keeping opposition non-existent. The situation is not much better next door in Ethiopia, where there is a bit more prosperity, attention to the drought and political opposition. But Ethiopia also has one party rule. Nevertheless, inflation and food prices are down in Ethiopia, and up in Eritrea.
While Ethiopia and Eritrea host each other's rebels, Eritrea has the most to fear from this. Ethiopia is a larger place (a million square kilometers and 79 million people, versus 118,000 square kilometers and 5.7 million), and the various rebel groups have plenty of places to hide. Not surprisingly, Eritrea is a major source of refugees in the region. Those with money flee across the Gulf of Aden to Yemen and exile in the Middle East and beyond. Those without money go to Ethiopia, where the government there recently allowed these 36,000 refugees to live outside the refugee camps.
Ethiopia continues to maintain thousands of troops on the Somali border. Since these troops are also in Ogaden, they keep Somalis out, and local ethnic Somali rebels under control. Islamic rebel groups in Somalia still talk of invading Ethiopia, but none have tried it in months.
China has replaced Germany as Ethiopia's biggest export customer. China bought 36 percent of these exports (which totaled $2 billion in the last year), the biggest item being sesame seeds. Coffee and khat (an addictive leaf that is chewed fresh to obtain the narcotic effect) are the two biggest exports overall. Eritrea's economy is increasingly dependent on gifts from Iran, which uses Eritrea as a base to support Islamic radicals in the region.
August 15, 2010: The ONLF claims attacks on Ethiopian troops in four Ogaden towns, killing 44 soldiers. But there was no way to confirm this, and the Ethiopians denied any such activity. The ONLF has claimed non-existent attacks in the past, and this appears to be more of them.
July 29, 2010: The Ethiopians signed a peace deal with the UWSLF (United West Somali Liberation Front) to reduce the amount of violence in Ogaden.
July 11, 2010: In Uganda, Somali Islamic terrorists set off several bombs, killing over 70 people. Most African nations condemned this, but not Eritrea, which supports Somali Islamic terrorist groups. Eritrea provides safe bases for Somali Islamic terrorist groups and allows illegal arms to be brought to Eritrea, where they can be flown into Somalia. In the face of these attacks on Uganda, Eritrea is even more isolated.