This article focuses on the great power involvement in the region, especially insofar as it affects Ethiopia and its conflicts with Eritrea. It first characterises the military regime in Ethiopia as a form of ‘state capitalism’, conceived as a transitional and unstable formation becoming increasingly common in Third World countries struggling with the contradictions affecting their development in a period of capitalist crisis and declining US hegemony. On both sides, therefore, the relationship between Ethiopia and the USSR is opportunistically based on nothing more permanent than state‐to‐state relations. A survey of US calculations globally and in the region shows that despite the more aggressive stance of the Reagan administration the way is left open for a rapprochement with Ethiopia, an outcome made more likely given the Ethiopian regime's inability to seek anything other than a military solution in Eritrea and its incapability of achieving that.
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