Recent developments in the Ethiopia-Eritrea bilateral relationship suggest that matters are at last moving in a positive direction. The relationship remained volatile even after their 1998-2000 war, a conflict that was grounded in territorial disputes, economic issues, diverging government ideologies, differing state structures, the prevalence of authoritarianism and ethnic differences. Certain historic events, as well as the diversity of actors involved, help to contextualise the current improvements in the relationship and the possible future course that it may take.

Key points:

• For the first time since the 1998-2000 war, Eritrea and Ethiopia have broken from their “no war, no peace” stalemate to fully restore diplomatic relations.
• In Ethiopia, the prime ministership of Abiy Ahmed has brought new prospects for social and political reform and countering the influence of the traditionally more authoritarian Tigray People’s Liberation Front.
• Improved relations between the two Horn of Africa countries could have a stabilising effect on Somalia, which has historically fallen victim to the inter-state rivalry.
• The resolution of the historic conflict between Ethiopia and Eritrea could bring significant economic opportunities from the Gulf States and the European Union, as they seek to forge greater ties in the region.