Abstract
AbstractThis article provides an account of the relationship between imperial Ethiopia and Eritrea in the realm of banking governance from the start of the federation to the last years of the imperial regime. It looks in particular at the relationship between the Ethiopian administrations and an Italian bank, Banco di Roma, which had its headquarters in Eritrea from 1948 to 1967 before moving to Addis Ababa. The struggle for control of the economic flows generated by the Italian bank is an index of the changes in centre–periphery linkages between Addis Ababa and the sub-regional centre of Asmara. Archival evidence highlights the multifaced nature of Ethiopian governance and the role performed by the Italian institution in providing alternative sources of diplomatic leverage and wealth accumulation to the Eritrean elite. It is argued that the extraterritorial status enjoyed by Banco di Roma until 1967 was actively tolerated by a section of the Ethiopian establishment, which resorted to an established pattern of imperial governance based on flexibility in return for tribute. This centre–periphery arrangement was harshly opposed by prominent Ethiopian officials from the Ministry of Finance and the National Bank of Ethiopia, who struggled to enforce tighter government control over capital flows within and across the country's borders. The National Bank's final success in the quest for financial centralization drained significant resources out of Eritrea, with adverse effects on the preservation of thepax aethiopicain the former Italian colony.
Highlights
On 11 September 1952, Emperor Haile Selassie ratified the establishment of the federation between Ethiopia and Eritrea, sanctioning the end of British administration of the latter
The trajectory of Banco di Roma offers an innovative perspective on the hidden struggles that underpinned the process of incorporation of the former Italian colony within the Ethiopian Empire
The assertiveness of the supporters of economic centralization in Addis Ababa was accentuated by the widespread perception that Italian business was sympathetic to the activities of Eritrean rebels (Haile Muluken 2014: 382) and by the severe financial crisis that affected the government budget after the closure of the Suez Canal in 1967.54 This marked a turning point in the relationship between the National Bank of Ethiopia and Banco di Roma, because the former’s concern about the reduction in foreign exchange reserves increasingly
Summary
On 11 September 1952, Emperor Haile Selassie ratified the establishment of the federation between Ethiopia and Eritrea, sanctioning the end of British administration of the latter.
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