ANALYSIS - Ethiopian opposition impotent as elections loom

By Barry Malone

ADDIS ABABA (Reuters) - When Ethiopia's opposition leaders were freed from jail in 2007, the three most prominent were hailed by fanatical supporters as leaders-in-waiting for sub-Saharan Africa's second most populous nation.

Now, Birtukan Mideksa sits in a prison cell, Berhanu Nega is exiled in the United States, convicted in absentia of plotting a coup, and Hailu Shawel only recently re-appeared in public.

That leaves many Ethiopians wondering where a challenge to the almost 20-year-old government of Prime Minister Meles Zenawi could come from when the country holds elections next May for the first time since a disputed 2005 poll ended in violence.

Despite accusations of a crackdown on dissent, diplomats in the capital say the West would be comfortable with Meles staying on -- as long as he remains a loyal ally in the volatile Horn of Africa and liberalises his potentially huge economy.

Secular Ethiopia is Washington's key supporter in the region and sent troops into neighbouring Somalia in 2006 to oust an Islamist group which had seized the capital.

"Most Western governments want Meles to continue because there is no alternative in the opposition," said one diplomat in Addis Ababa who did not want to be named.

"As long as the elections are semi-democratic, they'll probably stay quiet, keep giving aid, hope for liberalisation of the economy and leave full democracy for later," he said.

Foreign investors, who are showing interest in exporting commodities and exploring Ethiopia for probable oil and gas deposits, want stability, analysts say. If the opposition takes power, the future would be uncertain and investments delayed as foreign governments and lenders jostle for influence.