LIV. Although the bloody border war between Ethiopia and Eritrea (1998-2000) formally ended with the signing of the Algiers agreement, the two nations of the Horn of Africa remain locked in an apparently intractable stalemate. The current state of “no war, no peace” in a fragile cross-border environment can only be of limited value and tentative duration. LV. Ethiopia is the crucible of regional cooperation and development and a leader in the promotion of good governance in African regional affair. With knowledge and deep appreciation of these and other successes, the CRM is confident that the resourcefulness and resolve of the Ethiopian people and the entrepreneurship of their leaders can once again be employed to inspire and lead a sustained initiative that will take the Ethiopian-Eritrean conflict beyond the fragility of “no war, no peace,” to the normalisation of relations between Ethiopia and Eritrea. LVI. The Ethiopian leadership is called upon to be inspired not only by the prospects of ending a war with Eritrea but more importantly by the opportunities to begin the political, economic and social transformation of the Horn. This is Ethiopia’s challenge. Promoting Inclusion and Managing Diversity LVII. Ethiopia’s federalism, based on a principle of autonomy and self-determination of nations, nationalities and peoples, is designed to rely for its strength, cohesion and sustainability on its ability to effectively ensure meaningful and inclusive participation of all of its constituent nations, nationalities and peoples in the critical institutions of governance, especially those institutions that are charged with the responsibility to address the challenge of managing the country’s diversity, coordinating its multiple levels of governance and ensuring the equitable provision and distribution of public goods and services LVIII. The challenge which faces Ethiopia’s federalism is deepening inclusive participatory processes and strengthening institutions of political, social and economic governance that manage diversity and build national cohesion. This will ensure social justice for all, democratic governance and the provision of public goods and services in ways that are considered to be fair and equitable by the people of its diverse constituent regional states and administrative units. LIX. Managing diversity and ensuring all-inclusive governance has to also be achieved through establishing and strengthening symmetrical relationships between the federal government and the regional states and between regional states themselves so that regional inequalities and historical imbalances among national groups can be effectively addressed. Effective symmetrical relationships are particularly critical in the area of fiscal governance - 35 -