78. Despite some amount of safety and security since 1991, Ethiopia currently faces a multitude of security challenges that could yet impede national development. It is still technically at war with Eritrea, its former province-turned neighbour. The country fought a costly and brutal war with Eritrea between May 1998 and June 2000 resulting in tens of thousands of casualties (exact estimates of casualties for the conflict are disputed by both sides). Tension between both countries, blamed on Ethiopia’s alleged refusal to accept the independent UN-backed border arbitration ruling to award the small town of Badme to Eritrea, still remains high.12 Ethiopia also has a longstanding rivalry with neighbouring Somalia. A fullscale war was fought between the two countries in 1977 and 1978 and, since then, there have been many instances of cross-border fighting. In July 2006, Ethiopia intervened in Somalia’s civil war when it moved troops into the country to support the weak, albeit recognised, interim government struggling to fight off the military advances of the Islamic Courts Union and other militia. 79. In addition, Ethiopia has its own domestic security problems in the form of lowlevel insurgency from two secessionist movements – the Ogaden National Liberation Front (ONLF) and the Oromo Liberation Front (OLF) – both allegedly backed by Eritrea. With the Asmara government increasingly desperate over the current deadlock, and Ethiopia becoming increasingly irritated over Eritrea’s alleged backing of anti-government forces in both Ethiopia and Somalia, there are fears that a new round of fighting could erupt at any moment. With Eritrea currently lacking the military capability to wage another war or have its cause endorsed by the international community, it seems to have chosen to wage war against Ethiopia by backing proxies in both Ethiopia and Somalia, including radical Islamists with links to Al Qaida.13 The security situation has not been helped by the continuing political fallout that followed the May 2005 general election, with the government’s brutal crackdown on opposition supporters. Establishing a Clear Role for the Private Sector 80. The formal or organised private sector in Ethiopia is recovering from its decimation under the Derg regime. Yet, it remains both weak and in an uneasy or ambivalent relationship with government. Despite steps that have been taken to bolster the private sector, such as simplifying administrative procedures, clarifying rules regulating business activities, and shortening the time required to obtain 12 HS Global Insight, Monday 24 August, 2009. 13 Ibid.p.2. - 60 -