Cablegate: (C-Al7-01035) Ethiopia: Trade Restrictions In

VZCZCXRO8821
PP RUEHDE RUEHROV RUEHTRO
DE RUEHDS #2413/01 2140510
ZNR UUUUU ZZH
P 020510Z AUG 07
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC PRIORITY 7269
INFO RUCNSOM/SOMALIA COLLECTIVE
RUCNIAD/IGAD COLLECTIVE
RHMFISS/CJTF HOA
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHDC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHINGTON DC

UNCLAS SECTION 01 OF 02 ADDIS ABABA 002413

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR AF, AF/E, INR/AA, AND PRM/AFR
LONDON, PARIS, ROME FOR AFRICA WATCHER
CJTF-HOA AND USCENTCOM FOR POLAD

E.O. 12958: N/A
TAGS: PREF PGOV PINS PHUM EAGR EAID ET
SUBJECT: (C-AL7-01035) ETHIOPIA: TRADE RESTRICTIONS IN
OGADEN- PRECURSOR TO A HUMANITARIAN CRISIS?

REF: A. ADDIS ABABA 2343 (AND PREVIOUS)
B. STATE 83346 (NOTAL)
C. STATE 102381 (NOTAL)

1. (SBU) SUMMARY: Results of a Save the Children- UK
assessment representing the donors indicate that, in the
limited areas assessment teams were able to visit, under
current conditions of restrained trade up to 500,000 people
in Ethiopia's Somali Region may need food assistance in the
upcoming months. If the GOE's restriction of commercial
traffic (including commercial food) is lifted, the number of
beneficiaries will be substantially lower (around 41,000).
The study focuses only on rural (not urban or periurban)
populations and was hampered by the inability of assessment
teams to enter into much of the Ogaden, including most of
Gode, Warder, Korahe and Fik Zones. END SUMMARY.

2. (U) On July 30, ECONOFF attended a presentation of the
study, carried out by Save the Children-UK (SC-UK) for the
GOE's Disaster Prevention and Preparedness Agency (DPPA) with
funds provided by USAID. The briefing was attended by
representatives of USAID, SC-UK, and UNOCHA among others.

-----------------
STUDY METHODOLOGY
-----------------

3. (U) The study uses household economy analysis to
investigate the effects of hazards on future access to food
and income at a household level. Food and income are
combined to show a full picture of household income. This
income is then compared to thresholds for intervention and to
baseline years to estimate the number of beneficiaries of
food aid anticipated in the upcoming months. This study
examined the Gu season. (NOTE: Gu is the main rainy season in
the Somali region. END NOTE.)

-----------------------------------------
DATA GAPS DUE TO LIMITED ACCESS TO OGADEN
-----------------------------------------

4. (U) Due to the current security climate, assessment teams
were unable to complete their work in Gode, Warder and Korahe
(i.e., 3 of the 5 Zones where military operations are
ongoing) before the analysis was completed. SC-UK expects
the teams will return from the field and add their data in
the next several weeks. However, the teams were unable to
visit much of Gode, Warder, Degehabur and Korahe Zones. Some
areas of Fik were also inaccessible. Satellite imagery was
used to estimate rainfall and livestock forage in the
inaccessible areas. Additionally, the study focused solely
on rural populations.

---------------------------------
BELOW AVERAGE SEASON, BUT
EMERGENCY INTERVENTION NOT NEEDED
---------------------------------

5. (U) Overall, rainfall was average to above-average in the
west and north, but below average in Warder, Korahe and
Degehabur Zones. The rains were poorly distributed over the
Gu season, which has led to poor crop production. Livestock
forage is at adequate levels and seems to have improved in
Degehabur and Fik, but is scarce in Liben and Jijiga.

6. (U) Crop production is less than the baseline (reference)
year. Livestock are generally in good condition, but milk
production is a bit low. Pastoralists have been able to move
livestock to better areas for grazing. In areas with good
market access, pastoralists have been able to maintain their
purchasing power.

7. (U) This Gu season is rated as below average, and total
income is assessed to be lower than the reference year.
However, emergency intervention is not likely to be required
in the areas studied.

--------------------------------------------- ---
CAVEAT - NUMBER OF BENEFICIARIES NOT LARGE-SCALE

ADDIS ABAB 00002413 002 OF 002

IF PRICES RETURN TO PRE-RESTRICTION LEVELS
--------------------------------------------- ---

8. (U) In the areas assessed, the study findings indicate
that if prices return to pre-trade restriction levels,
humanitarian crisis is not likely in the next three to four
months. The total number of beneficiaries in the zones
assessed is estimated at about 41,000, and no aid is likely
to be needed in Afder or Liben. (NOTE: This number of
beneficiaries is below that of the March 2007 assessment.
SC-UK representatives speculate that the more scientific
approach of their methodology versus the more anecdotal
approach of the last study may account for the difference.
END NOTE.) Under the current scenario where food prices have
roughly doubled and livestock prices have sharply declined,
there will be a substantial deficit in household incomes in
the areas affected.

9. (U) Because the study was funded by DPPA, SC-UK pointed
out that the data is owned by DPPA. They have not conducted
an analysis that is based on the current trade restrictions
persisting and market conditions remaining at the status quo.
Additionally, the data does not cover a large part of the
region where the conditions are thought to be the worst. As
economic conditions (pastoral vs. agricultural) are not
analogous in the un-covered regions and the covered regions,
a precise estimate of the beneficiary count under status quo
is not possible.

-----------------------
"NO TRADE EQUALS DEATH"
-----------------------

10. (SBU) Both SC-UK and USAID representatives estimated that
without the trade restrictions being lifted, over 500,000
people in the Somali Region will need food assistance. In
fact, one SC-UK representative stated in stark terms that "No
trade equals death." He stated that in the region's markets
there was nothing left to purchase. The livestock trade was
nonexistent and the only trade was illegal trade or
smuggling. Additionally, the areas most likely to need
assistance were in the areas not accessible to study teams.
There are reports of the extraordinarily high food prices
declining somewhat in some markets, indicating that some food
is getting into the security zones.

--------------------------------
MIGRATION: AN ADDITIONAL CONCERN
--------------------------------

11. (U) USAID representatives raised concerns about migration
within the Somali region. USAID is concerned about "pastoral
dropouts": pastoralists who have abandoned their former means
of livelihood and migrated to urban and periurban areas in
hopes of making a living. The concern is not only with those
who have migrated, but those who are left behind. Those left
behind have no animals, meat or milk, and with trade
restrictions there is less opportunity for alternate sources
of food. The SC-UK study did not address migration. NGO
reports indicate that there are "pastoral dropouts" in and
around the Jijiga area.

12. (SBU) COMMENT: The SC-UK study results present a good
news/ bad news situation. The good news is that in the areas
assessed, far fewer people than anticipated in the April 2007
study need food assistance. The bad news is that there are
large areas of the region for which there is no information.
The impact of continuing trade restrictions could be
potentially devastating, possibly placing over 500,000 people
in need of food assistance. The message heard throughout the
briefing was that, at this time, humanitarian assistance is
not the answer to the situation--commerce is. END COMMENT
YAMAMOTO

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