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Eritrea November 18, 2019
Country Reports

Status Index
(Democracy: 1.2/ Market economy: 1.9)
3.1 Management Index 1.5
System of government Autocracy Population 3.8 mill.
GDP p. c. ($, PPP) 1,030
Voter turnout n/a Unemployment rate n/a
Women in Parliament 22 % (2003) HDI 0.446
Population growth a) 2.3 % UN Education Index 0.49
Largest ethnic minority 33 % Gini-Index n/a
Data for 2001 – if not indicated otherwise. a) Annual growth between 1975 and 2001. Source: UN Human Development Report 2003.

1. Introduction


The last five years in Eritrea have been defined by the outbreak of a war with Ethiopia that began in May 1998 and ended in June 2000, when the peace treaty was signed. In addition to such direct effects of war as the displacement of segments of the population, immense humanitarian and material losses, and destruction of the infrastructure, this war has had some indirect effects on the development of democratic and market-economy reform.


National-level democratic elections were announced several times, but they have never actually taken place. This was justified at first by the war with Ethiopia and later by the lack of election and political party legislation, the passage of which was stalled, however, by President Isaias Afworki. The vice president and Minister of Local Government at the time, Mahmud Sherifo, was removed from office after he presented a bill to the national assembly as chairman of the election committee without obtaining the president’s consent ahead of time. The elections announced for December 2001 were postponed to an unspecified later date.


On the heels of a temporary revival and intensification of domestic-policy discussion in 2001, in September of that year came a wave of arrests that included pro-reform politicians within the ruling party, traditional civic and religious dignitaries who had tried to mediate between the parties to the conflict, and free-press journalists. This meant a violent end to the attempts at democratic reform, which in turn had a negative effect on the transformation to a market economy. Business and industry are now increasingly dominated by enterprises that are controlled by the ruling party and the military. This must be seen as a regression for the country during the observation period. At present there are a number of fundamental deficiencies in Eritrea in the areas of market economy and especially democracy, and the remaining leadership elite does not appear to be ready for reform.



2. History and characteristics of transformation


Eritrea was the last African country to achieve political independence, in 1993. The EPLF (Eritrea People’s Liberation Front) took power following the military victory over the Ethiopian Derg regime and formed a provisional government. The party changed its name to PFDJ (People’s Front for Democracy and Justice) at its party congress in 1994. The EPLF adopted the socialist economic structures of the previous Ethiopian government, but it did introduce various reforms.


Part of their economic reform was the creation of a development strategy that was based on self-reliance but also integration into the world market. The government began to privatize state-owned enterprises, but the ruling party continued to espouse the importance of state investment in business and industry to balance out regional disparities and the lack of investment in economic areas that are not very profitable.


In reality, the party steadily became more involved in business, in that it brought all of the larger enterprises in the country under its control; these include Nacfa Corporation, Segen Construction, Red Sea Corporation, Afenbo and Sawa-Agro-Industry, Anberber (a car dealer), Auwghet Printing Press, and the Himbol Bank. By this method, private industry has grown ever more marginalized and, furthermore, it has been burdened with high taxes and import duties, which the quasi-state-owned party enterprises do not have to pay. This has led to a downturn in private investments and a growing command economy.


In politics, Eritreans voted for independence in a 1993 referendum that was supported by the overwhelming majority of the people. Consequently, a constitutional commission was set up that developed a constitution over the next four years; it was ratified by the national assembly in May 1997, but was never implemented.


Therefore, it must be concluded that, as far as political transformation is concerned, some efforts have been made to foster popular political participation, but they have not been implemented. To date, elections have been held on only a subregional level. The country’s political culture was initially defined by broad political consensus that allowed the ruling party, the PFDJ, to contain emerging domestic-policy opposition and to prevent the exiled opposition, especially those who were part of the splinter groups that arose from the ELF (Eritrean Liberation Front), from gaining a toehold in the country.


Furthermore, the repatriation process for the more than 750,000 refugees living in Sudan and other Arabic states was purposefully delayed by the Eritrean government. The PFDJ government did not consider these refugees as Eritrean people since they did not take part in the independence referendum and did not pay the special tax for Eritreans living abroad of 2 % of their monthly salary. The government also feared that this population group, whose majority consisted of former ELF adherents, could jeopardize the PFDJ’s internal monopoly on power, since in case of their return the balance could change to the disadvantage of the Christian Tigrinya Leaders. On the other hand, the government provided a perfect integration with jobs and financial support for the 75,000 Eritreans that have been deportet from Ethiopia.


The border war led to temporary national unity, with the slogan “One people, one heart,” which was tied to the consensus to postpone implementing the constitution until after the war was over. Immediately after the war was over, a lively political discussion developed regarding the country’s future, to which the increasingly active private press also contributed greatly. In addition, lines of conflict became more visible within the PFDJ, which led to the division of the top leaders into two camps: pro- and anti-reformers. In 2001, the pro-reform politicians and the elite civic and military groups that supported them were systematically eliminated by means of detention and intimidation.



3. Examination of criteria for democracy and a market economy


3.1 Democracy


In the period between 1993 and 1997, some steps were taken toward a democratic transformation. In 1993 a constitutional commission was convened that developed a draft of a democratic constitution taking into account the local populace, and it was ratified in 1997 by the national assembly. The constitution provides for a unicameral presidential system, wherein the president is elected by the national assembly and not directly by the people. The national assembly has not been elected, but consists of persons appointed by the PFDJ, a majority of them belongs to their central committee.


The constitution does allow for the founding of political parties (Art. 9, Para. 6), but thus far no political party legislation has been adopted. Therefore, the PFDJ is the only permitted party. After the border war broke out with Ethiopia in 1998, the democratic transformation was stalled, which was tied in with the detention of leading reform-minded ministers and members of the military, along with journalists who were members of the free press.



3.1.1 Political organization


(1) Stateness: The state monopoly on the use of force has largely been achieved in Eritrea, although it is increasingly threatened by the armed activity of opposition groups operating from neighboring countries. These groups are composed of members of the Eritrean diaspora in northern industrial countries, Arabic states, and the neighboring countries of Sudan and Ethiopia, from which increasing guerilla operations can be noted in recent times. In rural regions, a nighttime curfew has been introduced, which can be interpreted as the state being on alert.


Eritrea is a multi-ethnic society. Nine ethnic groups with varying cultural and linguistic backgrounds live within the state’s territory. The populace is composed of approximately equal parts Christians and Muslims. Despite the populace’s cultural diversity, the concept of a political nationality is strongly anchored in the people and can be largely attributed to the 30-year struggle for independence from the Ethiopian occupying powers.


Eritrea, a former Italian colony, was annexed by Ethiopia in 1962 in contravention of international law. However, on the part of the state, there is a trend toward linking the awarding of citizen rights to certain conditions: participation in the referendum on independence; working free of charge in the civil service for a certain period of time; fulfilling the National Service requirements (a combination of military and civil service); and payment of special taxes for rebuilding the country (which also applies to the diaspora). Via this system, civil rights are systematically withheld from certain segments of the population: religious minorities, such as Jehovah’s Witnesses and the Wahabi Muslims; and adherents of political opposition groups that refused to participate in the independence referendum.


Officially, Eritrea is a secular state that maintains a neutral stance toward the existing religions. In reality, the dominance of Christian groups can be seen in the public sector; that is, state institutions are not unaffected by religious affiliation.


The existing administrative structures were largely adopted after independence, but in the process, Ethiopian government employees and suspected Eritrean collaborators were removed from duty. The positions that became free were then occupied predominantly by ex-combatants. It was possible to maintain the nationwide administrative structures, but a lack of skills meant that decision-making bottlenecks often occurred. The government is making an effort, however, to improve the employees’ qualifications through numerous continuing education programs (for example, the certificate program at the University of Asmara). Local provincial governments are dominated by members of the Tigrinya group, who are not from the local ethnic group. This often leads to distrust and a lack of cooperation between the people and the administration.


(2) Political Participation. There have been no national elections since Eritrea became politically independent. The EPLF armed liberation movement assumed provisional power to govern in 1991 and continues in that capacity to this day. The name change to PFDJ, which occurred at their party congress in 1994, has no practical meaning whatsoever. President Isaias Afworki was previously the EPLF’s general secretary and was elected as leader of the PFDJ.


The officeholders, who were not democratically elected, have complete control of the power to govern, and this power is increasingly concentrated in the hands of the president and his inner circle of politicians and members of the military. The national assembly, which also was not democratically elected (most members were appointed from the ranks of the PFDJ central committee), is in fact meaningless and did not meet for a single session in 2002. Political decisions are made by the cabinet, which is dominated by the president. The political influence of high-ranking officers has been growing, especially since the end of the border war in 2000, and in fact they have dominated regional government since 2002.


Eritrea has a single-party system. Although political opposition parties are not officially forbidden and the constitution legitimizes their establishment, no laws have yet been passed that govern the founding of parties. The activities of the numerous Eritrean opposition parties are therefore limited to what can be handled in exile. Freedom of assembly also does not really exist.


The existence of civic groups is limited to the quasi-state organizations that emerged from the EPLF’s former mass organizations. These groups include NUEYS (National Union of Eritrean Youth and Students), NUEW (National Union of Eritrean Women), NCEW (National Confederation of Eritrean Workers) and EWDFA (Eritrean War-Disabled Fighters Association). These groups fundamentally support the regime, and they participate in implementing government programs. Grassroots civic groups that articulate the interests of the people do not exist.


The media in Eritrea are dominated by the state. A rudimentary free-press environment began to develop around 1996, and following the cease-fire in summer 2000 it experienced a short heyday that lasted until September 2001, at which time all free newspapers and magazines were forbidden, under the pretense that they compromised national integration. This development was linked to the contemporaneous detention of critics of the government from within the party. Approximately 13 journalists were arrested and have been under arrest ever since without being charged. At the same time, the government strengthened its control over the reporting of the official state media, which resulted in the arrest of several employees and their flight abroad.


(3) Rule of law: There has thus far been no democratic transformation. Although the institutions of the executive branch, legislative branch and judicial branch exist on paper, these organizations are, in reality, completely controlled by the ruling party, the PFDJ. These institutions are not separated from one another functionally. The executive branch, which consists of the president and his cabinet, also carries out the functions of the legislative branch and enacts legislation by proclamation. The legislative branch (national assembly) meets only sporadically and exerts neither a controlling function nor a representative function.


The judicial branch is divided institutionally into traditional dispensation of justice, civic dispensation of justice and the special court that was created in 1995. At this court, justice is dispensed by high-ranking members of the military who are not subject to civil laws. There is no court of appeal. The special court tries mainly cases of corruption, but is sometimes also used to try alleged members of the opposition.


The modern justice system delegates civic and minor criminal offenses to traditional mediation authorities. Cases that affect the interest of the state are referred to the special court. The Chief Justice of the Supreme Court at the time, former EPLF fighter Teame Beyene, was dismissed in 2001 for having made critical remarks about the independence of the judiciary. The Supreme Court does not perform any control functions vis-à-vis the executive branch. Thus, it is clear that there is no function-specific division of labor in a rule-of-law sense and that there are no checks and balances at work on the state powers.


In Eritrea there is no independent judiciary. Not only does it play second fiddle to the executive branch, but also there is a close integration of personnel between political rulers and the jurisdiction, especially in the case of the special court. Furthermore, the legal system suffers from a lack of professionalism, which is largely due to the fact that ex-combatants who have only a minimal legal education have been put into the judicial system, while professional lawyers and judges have only very limited access to the legal system.


Officially, the Eritrean government follows strict anti-corruption policies and proclaims the country to be largely free of corruption. In reality, however, a continual increase in corruption can be observed since the country’s independence, especially since the outbreak of the border war in 1998. Numerous high-ranking members of the armed forces and employees of the party’s own business enterprises (for example, Red Sea Corporation, Segen Construction Company, Nacfa Corporation, etc.) are ensnarled in cases of corruption. As a rule they are protected from criminal prosecution, so long as they demonstrate loyalty to the government. Behavior that is critical of the government can, however, lead to being arrested for actual or alleged corruption. The intentional creation of opportunities for abuse of authority is therefore also used as a mechanism for enforcing political assimilation.


In Eritrea prior to independence, the Derg regime carried out massive human-rights abuses. Those who participated were deported to Ethiopia following independence, where some of them were arrested by the EPRDF government or transferred back to Eritrea. Details regarding the number of people who continue to be arrested in Eritrea without ever being tried are not available; the topic is taboo. In less serious cases, collaborators were required to work for no pay without being prosecuted further. Immediately following independence there was an improvement in the human-rights situation, but this was not protected institutionally.


The free press was banned completely in September 2001, and at least 13 journalists were arrested, while countless others fled the country. Increasing authoritarian tendencies soon cropped up and the incidence of human-rights abuses escalated. The following examples illustrate this fact: Also in September 2001, 12 high-ranking PFDJ politicians and members of the armed forces were arrested; they belong to the group that founded the EPLF and had criticized the president in an open letter. They were accused of treason related to the Ethiopian-Eritrean border war, but as of yet, no official charges have been pressed.


While these cases have been documented to a great extent by international human-rights organizations, numerous other civilians have been arrested, especially in rural areas near the border with Ethiopia, for having supposedly collaborated with the Ethiopian government. When civil opponents of the government were arrested, the reason for their arrest – that they allegedly cooperated with the Ethiopian government – was only a pretense. The real reason is the support for Eritrean opposition movements operating from Ethiopia, like Sagem, ELF (Abdallah Idriss), der DMLEK (Democratic Movement for the Liberation of Eritrean Kunama), und RSADO (Red Sea Afar Democratic Organization). While the existence of sympathizers of such opposition movements is a taboo, they are called “enemy collaborators”.


The events of September 11, 2001, were used as a tool to arrest members of the Muslim community under the pretense that they supported active jihad fighters in Eritrea, although these groups actually have very few supporters in the country. All these episodes make clear that the civil and human rights of Eritreans have been seriously curtailed; the possibility of suing is not available.



3.1.2 Political patterns of behavior and attitudes


(1) Institutional stability of democracy: Eritrea’s state institutions have proven to be stable and functional, but not in a democratic sense.


(2) Political and social integration: A multi-party system does not exist in Eritrea; the PFDJ is the only party permitted. As a “mass party,” it takes responsibility for articulating and aggregating all societal interests.


The interest groups that are officially registered in Eritrea are the following national unions, which emerged from the EPLF’s former mass organizations: NUEYS (National Union of Eritrean Youth and Students), NUEW (National Union of Eritrean Women), NCEW (National Confederation of Eritrean Workers) and EWDFA (Eritrean War-Disabled Fighters Association). These unions purport to reflect and stand up for the interests of the groups that they represent. A certain amount of alienation can be observed between the leaders of these unions and the regular members, however, especially in rural areas. Nevertheless, they can be interpreted as a mediation entity between the people and the political system. Other than the official interest groups, there are no groups that are involved in a dialogue with the government.


No survey data exist regarding the degree to which the people approve of democracy. National-level democratic traditions do not exist, with the exception of the time as a British protectorate (1941–1952), when several parties were established. Therefore, it can be assumed that a common agreement regarding Western democratic values can at best be found among the diaspora and the urban elite.


Beyond the authoritarian government structure, a high level of societal organization prevails at the local level, and traditional societal customs of self-help and conflict resolution are brought to bear. These traditional organizational forms compensate at least somewhat for the deficiencies in the functionality of state administrative structures. Mutual trust or respect between various societal groups exists to a relatively high degree. Despite Eritrea’s cultural heterogeneity, the customs of solidarity and mutual assistance, which were strengthened during the struggle for independence, persist and were revived during the border war.



3.2 Market economy


After it achieved independence, Eritrea adopted the socialist/planned-economy economic structure of the previous Ethiopian Mengistu government. Initial steps were taken toward market-economy reform, such as the privatization of state-owned enterprises. These reforms made sluggish progress, however, and can be considered stalled since the outbreak of the border war with Ethiopia in 1998.


Serious restriction of the labor market continues due to the failure to a large extent to demobilize the army (at least 300,000 persons out of a total population of about 3.5 million are serving in the military). They have been drafted in 1998 unter the pretense of a “National Development Campaign” and are with the military since. Their number exceeds 500,000, adding 12,000 school-leavers every year. In addition, army and police comprise re-mobilized former fighters.While there is a major shortage of skilled labor in the free economy, large segments of the population who are of the right age for productive earning are being used in government reconstruction programs whose success in the medium term appears questionable at best.



3.2.1 Socioeconomic level of development


The level of socioeconomic development in Eritrea is low. The country placed 148th on the UNDP Human Development Index (HDI) in 2001, which was a jump of nine places over the previous year (in 2000, Eritrea placed 157th out of 173). Statistics regarding the Gini index and absolute poverty are not available; the GDI is 133 (UNDP 2002). Eritrea’s economic structure is characterized by an agrarian subsistence economy, and approximately 80 % of the population is accounted for by settled farmers, agropastoralists, nomads and fishermen. These activities, however, account for only 17 % of the GNP, while industry accounts for 29 % and the service sector for 54 %. The social exclusion of women puts them at a disadvantage, which is expressed also by their educational status: 66 % of women and 33 % of men are illiterate. Women are nevertheless not excluded from gainful employment.


There are no official figures for the labor market and unemployment, but women in urban areas definitely find employment in industry and, especially, in the service sector. Although traditional restrictions on the economic activity of women exist in rural areas, these customs are eroding due to an increase in households headed by women (because of war, displacement and the drafting of men into the military). As for ethnicity, the dominance of the numerically strongest group, the Tigrinya, can be seen in high positions in the government and industry; however, the other ethnic groups are not, on principle, excluded.



3.2.2 Market and competition


State intervention in free-market competition is still present to a relatively great degree, whereby the ruling party (the PFDJ) and, increasingly, the military are involved in economic activities, handicapping the private entrepreneurs’ scope for action. Although the government officially promotes its liberal investment climate for foreign investors, the extensive red tape has a negative effect on the extent of foreign investment. In particular since the border war, attempts are being made to regulate pricing in order to check inflationary trends. Large private concerns do not exist in Eritrea; there are merely a few joint ventures, Coca-Cola for example, and some state-owned enterprises. After licensing for private businesses was liberalized in 1996, stricter limits have been seen in this area in recent years.


Despite a rudimentary industrial sector, government-owned enterprises can be observed stealthily forming monopolies. Private competitors for state-owned enterprises are not allowed in quite a few fields (for example, the beverage industry and road construction).


Eritrea’s balance of trade is negative; imports exceed exports by far. As a result, the country depends heavily on foreign trade, and it would be impossible to withdraw from the world market. Despite a formally liberal trade policy, there are a multitude of state regulations and special rules. Import duties on upscale consumer goods are relatively high, which does not have any protectionist effects on domestic industry, because it manufactures only simple consumer goods. In 2001 the port city of Massawa was declared a free-trade zone, which has thus far done little to increase trade activities.


The banking system in Eritrea is underdeveloped and inefficient, and it is to a large extent controlled by state banks (Bank of Eritrea, Commercial and Housing Bank) and the party’s own bank (Himbol). The degree of government regulation is high, although a capital black market that thrives based primarily on bank transfers from the diaspora does exist. In recent times, however, the government has arrested private currency traders in an attempt to stem the tide of currency trade not controlled by the state.



3.2.3 Stability of currency and prices


Controlling inflation is a priority of Eritrea’s economic policy. Inflation was contained relatively successfully until the border war erupted, although it must be pointed out that Eritrea continued to use the Ethiopian birr as its currency up until fall 1997, when it introduced its own currency, the nakfa. The slightly lower value of the birr compared with the Ethiopian exchange rate contributed to the economic friction between the two governments in advance of the border war. The nakfa is not pegged to the US dollar.


The war has caused the inflation rate to rise steadily since 1998, but the government holds only the “misconduct” of private importers responsible; according to the official interpretation they are driving up the prices of goods by importing them through third countries and hoarding them. The shortage of foreign currency continues apace, and it is eased only by bank transfers from the Eritrean diaspora. The state does have a stability policy, however, which was able to prevent hyperinflation despite the devastating effects of the border war with Ethiopia.


In the years immediately following independence, macroeconomic stability did exist. The immense costs of the war rapidly led to new indebtedness along with slowly recovering economic growth, however. There is a danger that macroeconomic stability could be threatened by increasing state interference in business and industry.



3.2.4 Private property


Property rights and regulation of the acquisition of property are defined on various overlapping legal levels. Modern civil law exists alongside the traditional land rights; this modern civil law functions in urban areas particularly as a parallel settlement authority in conflicts over property (mostly regarding land and buildings). The land reform of 1996 transferred all land to state ownership, but the public is awarded usufructuary rights. The government uses land for commercial agricultural enterprises, which leads to conflicts of property and interest with agropastoralists.



3.2.5 Welfare regime


Eritrea’s state welfare systems are rudimentary. Only the war-disabled and families of soldiers killed in the war for independence receive compensation. No state social security system has been introduced in the last 10 years. On the contrary, the old-age pension systems that existed under the Ethiopian government were reduced, in that no new rights to a pension can be acquired from now on. There is a stable private social network, however, which is based on family structures and region or ancestry.


The diaspora is another important component to cushion social need. All in all, despite the low per capita income, income distribution is comparatively egalitarian, and social impoverishment has been avoided for the most part, also due in part to the strength of the civil society. Social services are lacking, although the state is keen to guarantee at least basic medical care. Regional disparities have not yet been abolished, though the government had advertised such abolishment as its fundamental goal. In fact, the disparities were actually strengthened by investments that were concentrated mainly in the capital city of Asmara and the surrounding regional subcenters.


Eritrean society is quite heterogeneous; there is fragmentation along ethnic lines (nine ethnic groups), and also the society is split into ex-combatants, returned refugees, several hundred thousand Eritreans and Ethiopians of Eritrean heritage deported from Ethiopia during the war, internally displaced persons, and others. In almost all Eritrean cultures, women were clearly disadvantaged, and efforts are now being made to give them equal access to education and jobs, but success is coming slowly and almost exclusively in urban areas.


Equality of opportunity exists formally, but in terms of access to education and public services there are some vast differences that result, in part, from ethnic affiliation. Thus, residents of the western and eastern lowlands are disadvantaged when it comes to educational opportunities and other public services, while those in the capital city of Asmara and in parts of the Eritrean highlands, which are inhabited mainly by members of the dominant Tigrinya population, are more privileged in this respect.



3.2.6 Economic performance


While the GDP showed regular high growth of about 7 % from 1991 to 1998, the war induced negative growth and, later, stagnation. Statistical data is insufficient overall, and certain macroeconomic data, such as employment figures, is lacking. It is clear, however, that the macroeconomic situation, which was stable at a low level until the border war, suffered considerable damage because of this conflict. While Eritrea’s balance of trade has always been negative because of the country’s low level of industrial development and the low agricultural productivity, before the war the country had a relatively even balance of payments and low debt, thanks to bank transfers from abroad. War-related expenditures increased the debt level considerably.


The employment situation is characterized by a high degree of mobilization (military and national reconstruction service) and a high proportion of subsistence agriculture. A free labor-market exists only to a limited extent. Furthermore, the economy does have potential for growth if the appropriate economic policy is used. Up until the end of World War II, Eritrea had, compared with other African regions, a highly diversified industrial sector, a high degree of urbanization and agricultural export potential. Since then its development has been hindered steadily by Ethiopian occupation, the struggle for independence and, following a short interim period, the border war. Some aggravating factors include the climatic conditions, which have influenced agricultural production negatively, as well as the government’s increasing curtailing of the economic policy, which was liberal to a certain degree during the 1990s.



3.2.7 Sustainability


An environmental management plan was announced in Eritrea in 1995, but it exists mostly just on paper. The environmental sustainability of growth is difficult to judge because of the country’s low level of industrialization. The rather advanced state of deforestation is the main problem in the non-industrial realm; attempts are being made to counteract it with a selective reforestation program, but this has not resulted in any real improvement. Plantations are becoming increasingly common in the river valleys of the western lowlands; they are having a negative effect on the water table, and they are jeopardizing the precarious ecological balance through the logging of doum palms, which play an important role in the subsistence economy and the environment.


Although the government is placing the highest priority on promoting and developing human resources, investments in education are low, which can be blamed in part on the general shortage of resources. A private education sector exists to a limited degree among Christian (Orthodox, Catholic and Protestant) and Muslim religious communities. The government is critical of developing a private education sector. The highest degree awarded by the university is the bachelor of arts, and a full-fledged medical degree cannot be earned in Eritrea. Numerous career-oriented continuing education programs are available at the diploma and certificate levels, in order to provide the employees of state institutions, especially former combatants, with additional qualifications. There are few opportunities for a scientific or technical education. Research capacities are very limited.



4. Evolution


The period from 1998 to 2003 in Eritrea was defined by the outbreak of a war with Ethiopia that erupted in May 1998 and ended in summer 2000 with a cease-fire. The war ended a seven-year period of peace following the country’s 30-year struggle for independence. To date there has been no political rapprochement between the two former enemies; the border is controlled by UN troops (UNMEE – United Nations Mission to Ethiopia and Eritrea), and a 25-kilometer-wide temporary security zone between the two countries has been established on Eritrean soil. The war not only had immense humanitarian and material costs, but it also appears to have put a stop to the (admittedly slow progress that was being made in the transformation to democracy and liberalization.


At the moment, Eritrea is undergoing a regression. On the other hand, it must be acknowledged that the country did not suffer economic collapse, despite the flight of massive segments of the population to other countries, internal displacement and the mobilization of large portions of the populace of working age into the army, along with immense costs for the war. The political situation also remained stable, and a trend toward national disintegration cannot be observed, but anti-reformers are continuing to gain power in the ruling party. These events form the background of transformation in Eritrea and its temporary suspension.


(1) Democracy: Eritrea became independent from Ethiopia in 1993 and is thus the last decolonized state in Africa. It was necessary to create democratic and market-economy structures on the foundation of the socialist structures of the previous Ethiopian regime and those of the (until 1987, at least) Marxist-oriented EPLF liberation movement. The now-ruling EPLF/PFDJ has formally declared its belief in these new forms. A constitutional commission was formed, and a democratic constitution was adopted in 1997, but never implemented.


National elections have thus far never been held in Eritrea, and opposition parties are not authorized in the country. During the period, the rule-of-law situation worsened, and special courts were increasingly dominated by the influence of the military and the top political leaders, but the state monopoly on the use of force remained in effect for the most part.

Table: Development of socioeconomic indicators of modernization

GDP Index 
UN Education Index 
Political representation of women 
GDP per capita ($,PPP)  
10.5% (quota) 

Sources: UNDP Development Report 2000: . UNDP Development Report 2002: (



(2) Market economy: The situation concerning Eritrea’s economic data is unsatisfactorily. Most data are simply not available (unemployment rate for example), and if they are, the seem doubtful. The development of the economy as a whole worsened measurably because of the border war. In 2000 the GDP decreased by 8 % and increased by only 5 % in 2001. In the postwar period the economic development deteriorated in quality due to increasing state dominance of the economy and decreasing foreign investments. The dependence on foreign donors rose sharply on account of the war, and the previously promoted goal of self-reliance with simultaneous integration into the world market had to be abandoned.



5. Evaluation of transformation management


5.1 Level of difficulty


With a GNP of about $190 per capita, Eritrea is clearly a low-income country. The population’s educational level is also low, especially in the case of women; there is also a difference between the urban and rural populace. Eritrea’s UN Education Index is 0.44. The Eritrean society is composed of nine ethnic groups, of which the Tigrinya and the Tigre are the greatest in number; in addition, about half of the population is Muslim and half Christian, with the majority of the latter belonging to the Orthodox Church.


There are no irreconcilable ethnic, religious or social conflicts. The peoples are relatively tolerant toward one another, but there is a certain danger that latent cleavages could lead to violent conflicts if the restrictive domestic politics continue. Eritrea has a strong civic tradition of community-oriented involvement. The people’s participation in the struggle for independence is an example of powerful civic involvement under adverse conditions. Local NGOs were not tolerated by the government after independence, and therefore they do not exist; nevertheless there are some traditional civic organizations.


Eritrea has not implemented a system for the rule of law, but the state administration’s efficiency under the given circumstances is moderate. The overall level of difficulty of the transformation is high because of the negative macroeconomic baseline conditions and the lack of democratic traditions at a national level, and some of the constructive approaches that were visible after independence increasingly fell victim to the top leaders’ strategies for remaining in power.



5.2 Reliable pursuit of goals


In the period from 1993 to 1998, the government set clear strategic priorities that were expressed in the Eritrean Macro Policy of 1996 and in the PFDJ’s 1994 party platform. One of the priorities was a development strategy for integrating into the world market while at the same time emphasizing self-reliance, which implied a critical attitude toward donor organizations, especially NGOs. Loans with conditionalities were not accepted. Eritrea’s role model in development strategy was Singapore. Since the end of the border war, however, an increasingly negative view must be taken of the implementation and focus of these priorities.


The increasingly restrictive domestic politics, whose aim is to maintain the power of the leadership elite, are becoming noticeable in the development strategy. A development campaign announced in fall 2002 allows for more members of the public to be conscripted to work on rebuilding the country for no pay as part of the National Service program. This strategy not only appears dubious from a standpoint of market-economy criteria, but also it is meeting with resistance from the people, which could lead to political destabilization.


While the government followed a relatively consistent and coherent reform policy in the years immediately following independence, all reform strategies are now stalled. A group associated with President Isaias Afworki was able to prevail in the party’s internal power struggles; this group wants to expand control from the top to all areas of society, which has led to the military’s increasing influence on politics, the dispensation of justice, and business and industry. Because Eritrea’s state budget is not public, it is difficult to quantify any statements regarding the reform policies. But it is certain (1) that the costs resulting from the war and the effects of the current drought are seriously limiting the allocation of resources to sectors that are relevant to development and (2) that those factors will lead to more debt.


The citizens’ reliability of expectations has decreased in the latest five-year period. This is true not only during upheaval caused by the war, but also on the postwar period. Regional peace is in no way guaranteed, and 2.2 million people out of a total population of 3.5 million are currently threatened acutely by famine and are reliant on food aid. The rule of law is not guaranteed, and entrepreneurs feel abandoned by the government’s erratic interventions in the market economy. The rural populace, especially agropastoralists and pastoralists, does not have the assurance of justice for land and water-use rights.



5.3 Effective use of resources


The Eritrean government has made an effort to use resources efficiently in the time since the country achieved independence, and its development strategy has partly consisted of the employment of volunteer workers, including ex-combatants. For the last five-year period, it is key to note that the war with Ethiopia, whose cost to Eritrea is estimated at $300 million, vastly exceeded the country’s resources, even though the diaspora took an active role in helping to finance it. According to UNDP 2002 data military expenditure in 2000 amounted to 22.9 % of the GDP in 2000.


Corruption among government employees increased during the postwar period, while its prosecution increasingly incorporates political elements (undesirable persons are arrested on suspicion of corruption).




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