Ethiopia to Compensate U.S. Firms for Nationalized Property

Ethiopia’s Marxist government has agreed to compensate American companies for property nationalized after the 1974 revolution, the U.S. Embassy in Ethiopia said Friday.

A spokesman said the agreement was signed Thursday in Addis Ababa by the acting U.S. charge d’affaires, Joseph O’Neill, and Ethiopia’s commissioner for compensation, Getahon Terrefe.

The spokesman declined to give any details of the agreement, but diplomatic sources said it calls for Ethiopia to pay about $7 million in installments as compensation for nationalized American property.

U.S. officials said previously that they were seeking compensation of about $20 million, although the actual value of the nationalized property was said to be far higher.

Since the 1974 revolution that toppled pro-Western Emperor Haile Selassie, the issue of compensation had been kept alive by various lawsuits filed by American companies.

The dispute over compensation has been cited by American officials as one of several obstacles in the way of possible long-term U.S. development assistance to Ethiopia, one of the world’s poorest countries

Bars Development Aid

Under a law known as the Hickenlooper Amendment, the United States is prohibited from providing development aid to countries that refuse to make compensation for expropriated American property.

However, U.S. officials have indicated there would be no immediate push to provide development aid to Ethiopia, saying that is a policy decision likely to be debated in Congress.

Early this year, as severe drought and famine devastated much of Africa, Congress waived the Hickenlooper Amendment for a special appropriation to Ethiopia and other African countries for short-term aid projects providing such things as farming supplies and sanitation facilities. The waiver did not permit major long-term projects or advanced technical programs.

The legal restraints on development aid for Ethiopia have no effect on emergency assistance, and the United States has been by far the largest donor of food to help combat Ethiopia’s famine.

During 1985, the United States sent 440,000 tons of food to Ethiopia, one-third of the total it received and nearly three times as much as the next-largest individual donor, Canada.