Eritrea

Politics:

• Analysis

  Eritrea politics: Quick View - The national football team disappears in Uga

  Event

  Eritrea's entire national football team has disappeared, probably prior to an asylum claim, while playing in a tournament in Uganda.

  Analysis

  Officials of the Council for East and Central Africa Football Associations (CECAFA) have notified Ugandan police that Eritrea's 17-member national football squad has disappeared along with the team doctor after a shopping trip in the Ugandan capital, Kampala. The team, which had been participating in the CECAFA Cup, is expected to make an asylum claim according to a player interviewed in hiding by local media. The unidentified player cited Eritrea's indefinite national service requirement and its poor human rights record as reasons for the decision not to return.

  Thousands of, mostly young, Eritreans flee the country each year because of the harsh national service conditions, and footballers have defected before. In 2011, 13 players from the Asmara-based Red Sea Football Club absconded while playing in a tournament in Tanzania, and 12 players claimed asylum in Kenya in 2009. In an attempt to curb defections, in 2007 the Eritrean government introduced a condition whereby all athletes have to pay a Nfa100,000 (US$6,502) surety before travelling abroad. The disappearance of the national team in Uganda follows the defection to Saudi Arabia in early October of two military pilots and an asylum claim in August from four athletes who attended the Olympic games in London. Such defections are not reported in the state-owned media in Eritrea.

  December 05, 2012

• Background

  Eritrea: Key figures

  Isaias Afewerki

  State president and chairman of the central and executive councils of the People's Front for Democracy and Justice (PFDJ).

  General Sebhat Ephrem

  Defence minister and member of the PFDJ's Central Council.

  Tesfai Gebreselassie

  Energy and mines minister, and member of the PFDJ's Executive Council.

  Osman Saleh

  Foreign affairs minister and member of the PFDJ's Central Council.

  Ali Abdu Ahmed

  Information minister and member of the PFDJ's Central Council.

  Berhane Abrehe

  Finance minister and member of the PFDJ's Central Council.

  Democracy index (for methodology, see Appendix)

  The Economist Intelligence Unit's 2008 democracy index ranks Eritrea 154th out of 167 countries, putting it among the countries considered "authoritarian regimes". This designation includes other African states such as the Central African Republic, Chad, Angola, Rwanda and Zimbabwe. Overall, Eritrea has the fifth-poorest ranking in the Africa region behind the Central African Republic, Chad, Equatorial Guinea and the Democratic Republic of Congo. The country scores lowest in the political participation and civil liberties categories; the score of zero in the electoral process category is due to the fact that Eritrea is a one party-state and has not held elections since the country's founding in 1993. Opposition is not tolerated and all independent media were closed down in 2001. Numerous journalists and individuals speaking against the government have been arrested in recent years with no trial and most remain in detention without access to international agencies or family members.

  Democracy index
  	Overall score	Overall rank	Electoral process	Government functioning	Political participation	Political culture	Civil liberties	Regime type
  Eritrea	2.31	154	0.00	2.14	1.11	6.25	2.06	Authoritarian
  Overall and component scores are on a scale of 0 to 10; overall rank is out of 167 countries.

  Download text file (csv format)

  June 27, 2008

• Structure

  Eritrea: Political structure

  Official name

  Eritrea

  Form of state

  Unitary state

  Legal system

  A national constitution was formally proclaimed on May 24th 1997

  National legislature

  Transitional National Assembly of 150, composed of members of the ruling People's Front for Democracy and Justice (PFDJ)

  National elections

  Last election February 1987 (legislative, within Ethiopia); election scheduled for December 2001 postponed; new date to be decided by electoral commission (established January 2002)

  Head of state

  President, elected by the Transitional National Assembly

  National government

  The president and the Council of Ministers; last reshuffle in March 2009

  Main political parties

  The People's Front for Democracy and Justice (PFDJ), which grew out of the Eritrean People's Liberation Front, is the ruling and, in effect, the only legal party; in January 2002 the Transitional National Assembly accepted the principle of political pluralism but did not pass a law on political parties

  Key ministers

  President: Isaias Afewerki

  Agriculture: Arefaine Berhe

  Defence: Sebhat Ephrem

  Education: Semere Russom

  Energy & mines: Ahmed Haj Ali

  Finance & development: Berhane Abrehe

  Foreign affairs: Osman Mohamed Saleh

  Health: Amina Nurhusein

  Information: Ali Abdu

  Justice: Fawzia Hashim

  Labour & welfare: Salma Hassen

  Land, water & environment: Tesfai Gebreselassie

  Maritime resources: Saleh Meki

  Tourism: Askalu Menkerios

  Trade & industry: Vacant

  Transport & communications: Woldenkiel Abraha

  Central bank governor

  Tekie Beyene

  November 01, 2012

Economy:

• Background

  Eritrea: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2002	2003	2004	2005	2006
  Agriculture	12.9	14.7	14.0	22.6	17.5
  Industry	25.0	25.3	25.9	22.6	23.0
  Services	62.1	60.0	60.1	54.8	59.5
  Source: World Bank.

  Download text file (csv format)

  June 27, 2008

• Structure

  Eritrea: Economic structure

  Economic structure: Annual indicators

  	2008a	2009b	2010b	2011b	2012b
  GDP at market prices (Nfa bn)	19.0	30.1	36.0	45.3	51.9
  GDP (US$ m)	1,233.5	1,959.0	2,341.8	2,946.0	3,378.0
  Real GDP growth (%)	-9.8	3.6a	4.0a	17.0	2.5
  Consumer price inflation (av; %)	19.9b	20.0	18.0	20.0	17.0
  Population (m)	4.9b	5.1	5.3	5.4	5.6
  Exports of goods fob (US$ m)	23.4b	26.2	29.0	415.4	378.2
  Imports of goods fob (US$ m)	615.8b	590.0	689.5	900.0	953.1
  Current-account balance (US$ m)	-192.5b	-147.3	-282.3	-128.0	-212.7
  Foreign-exchange reserves excl gold (US$ m)	57.9	90.0a	114.2a	114.8a	163.2
  Total external debt (US$ m)	961.5	1,018.9a	1,009.8a	1,006.4a	1,003.9
  Exchange rate (av) Nfa:US$	15.4	15.4a	15.4a	15.4a	15.4
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2009a	% of total	Components of gross domestic product 2007a	% of total
  Agriculture	14.4	Private consumption	86.2
  Industry	22.2	Government consumption	31.4
  Services	63.4	Gross domestic investment	10.6
  		Exports of goods & services	6.3
  		Imports of goods & services	34.5
  Principal exports 2003	US$ m	Principal imports 2003	US$ m
  Food & live animals	2.4	Food & live animals	175.2
  Raw materials	2.1	Manufactured goods	104.0
  Manufactured goods	1.8	Machinery & transport equipment	97.2
  		Chemicals & chemical products	26.2
  Main destinations of exports 2008b	% of total	Main origins of imports 2008b	% of total
  Italy	35.2	Saudi Arabia	10.0
  China	26.7	Italy	6.1
  France	9.4	China	5.0
  		Russia	3.0
  a World Bank. b Derived from partners' trade returns.

  Download the numbers in Excel

  Download text file (csv format)

  November 01, 2012

• Outlook

  Eritrea: Country outlook

  Eritrea: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: Eritrean political affairs will continue to be dominated by the sole political party, the People's Front for Democracy and Justice (PFDJ), and the president, Isaias Afewerki. There will be little improvement in the country's strained relations with the three other states in the Horn of Africa-Ethiopia, Somalia and Djibouti. Sanctions by the UN Security Council (UNSC) on Eritrea-imposed in late 2009 and late 2011 in response to the country's role in destabilising the region-are likely to remain in place, notwithstanding its reduced support for the Somali Islamist militia, al-Shabab. The large-scale diversion of resources and manpower to the military is likely to continue in the 2013-14 forecast period, partly through an indefinite national service requirement. This will retard efforts to achieve economic normalisation. Real GDP growth is forecast at 8% in 2013 and 6.5% in 2014 driven by activity in the mining sector. This is unlikely to have a substantial impact on average income levels given the continued lack of opportunities outside mining. The current-account deficit is forecast at 5.7% of GDP in 2013 and 6.4% of GDP in 2014 as imports continue to dwarf exports, despite steady growth in mining activity, and remittances are curtailed slightly by the UN sanctions.

  DOMESTIC POLITICS: The PFDJ and the president, Mr Isaias, will continue to dominate the political scene. The president-assisted by a small circle of senior advisers and military commanders-will continue to exercise almost complete political control, and the National Assembly will remain little more than a talking shop. The PFDJ's autocratic style of governance will mean that all forms of opposition will be harshly suppressed and the steady flow of Eritreans seeking asylum outside the country will continue. Domestic dissatisfaction with the status quo, particularly with the high level of military conscription and economic hardship (notwithstanding rapid economic growth last year), is unlikely to wane. However, such discontent is most unlikely to be displayed given the strict level of government control on all aspects of daily life. The opposition, based outside the country, is likely to remain divided and largely ineffectual. The main prospect for a transfer of power is from a change in the military's affiliations and a weakening in its loyalty to Mr Isaias, although, at present, there is little reason to think that this will occur in 2013-14. Despite the political pluralism enshrined in the national constitution, the country has never held an election for the legislature or the presidency. National elections, planned for 2001, have been postponed indefinitely and the government's deeply entrenched authoritarianism indicates that there is virtually no chance that they will take place in 2013-14.

  INTERNATIONAL RELATIONS: The country's relations with most of the international community, particularly the three other states in the Horn of Africa-Ethiopia, Somalia and Djibouti-are likely to remain strained in 2013-14. The death of Ethiopia's long-standing prime minister, Meles Zenawi, in September 2012 is unlikely to have a substantial impact on relations. Although Meles' successor, Hailemariam Desalegn, is likely to face some pressure from within the ruling coalition to take a firmer stance on Eritrea, he has indicated that the country's foreign policy stance will stay unchanged. Tensions between the two countries increased in mid-March following the incursion by Ethiopian armed forces into Eritrean territory and an implicit threat from Ethiopia that it will conduct similar sorties for as long as Eritrea remains a base for Ethiopian rebel groups. Despite this new level of antagonism, another war with Ethiopia is unlikely. The deeply-entrenched bitterness is underpinned by the unresolved border dispute between the two countries and Ethiopia's long-standing non-compliance with the verdict of the UN-backed Eritrea-Ethiopia Boundary Commission (EEBC) in 2002, which declared that the town of Badme was part of Eritrea. Although Ethiopia's attack in March has given Eritrea some of the moral high ground in support of its diplomatic efforts to regain Badme, this will not be enough. Ethiopia will remain a key ally of the US and other Western governments in the volatile Horn of Africa, which will continue to give it considerable leeway in the region. Western powers, and indeed the UN, have not, therefore, acted on Ethiopia's non-compliance with the EEBC or responded to the incursion into Eritrea. The latest report of the UN Monitoring Group on Eritrea and Somalia, published in mid-2012, said that Eritrea has reduced its direct support for al-Shabab in response to greater international scrutiny, as well as friction between the Eritrean government and al-Shabab's leaders. However, it also found that the country had continued to play a destabilising role in the region, including by deploying Ethiopian rebel groups via Somalia and selling weapons to Sudan-based smuggling operations. This, together with Djibouti's recent complaints about Eritrean intransigence over its border dispute, suggests that the UN sanctions are unlikely to be lifted in the near future. The country's support for armed opposition groups in the Horn of Africa, Sudan and possibly Uganda, combined with the country's reluctance even to acknowledge its border dispute with Djibouti, led the UNSC to impose a second set of sanctions on it in December 2011. Both sets of sanctions were imposed at the behest of African governments. This is significant given the customary reluctance of African heads of state to take a stand against their counterparts, and a notable indication of the country's regional isolation.

  POLICY TRENDS: The large-scale diversion of resources and manpower to the military is expected to continue, partly through an indefinite national service requirement. This will retard progress towards the achievement of economic normalisation and growth, and will also continue to contribute to severe macroeconomic imbalances, notably high inflation, foreign-exchange shortages and unsustainable public debt. The government will continue to operate what is, in effect, a command economy dominated by the PFDJ-the state's alter ego-although foreign investment in mining will be encouraged. Under the mining law, the government has the right to acquire a 10% non-contributing stake in all mining operations in the country and to buy a further 30% stake. These ratios are unlikely to be raised in 2013-14 for fear of deterring investment in the nascent mining sector. Food insecurity will remain widespread, despite the government's considerable efforts to redress this, and Eritrea will require significant amounts of food aid, although the regime will continue to deny this. The lack of official statistics will continue to obfuscate the severity of food insecurity, as it does in other areas of the economy. National budgets are not published, which inhibits assessments of fiscal policy. The IMF estimates that Eritrea has suffered from chronic fiscal deficits since independence, with an average deficit of 18% of GDP in 2000-10. This has led to a highly unsustainable public debt burden, most recently estimated by the Fund at 142% of GDP in 2009. In 2013-14 public revenue will be boosted by the mining sector, from which the government will benefit through tax collection and its 40% stakes in the Bisha and Koka gold mines. Having narrowed substantially in 2010 and 2011 (largely owing to activity in the mining sector), the fiscal deficit is estimated to have widened to 11.5% of GDP in 2012 and is forecast to narrow to 10% of GDP by 2014, driven by developments in the mining sector. The deficits will remain unsustainable and it is clear that mining will not be a panacea for the country's fiscal difficulties, at least in the short term. Monetary policy has largely been geared towards accommodating the fiscal deficits. This policy of deficit financing, combined with chronically large deficits, has resulted in rapid money supply growth, which has severely undermined price stability. No significant change is expected on this front in 2013-14.

  ECONOMIC GROWTH: The diversion of resources to the military, negligible foreign investment (outside the mining sector) and declining aid inflows, driven by the country's policy of self-reliance, will continue to constrain the country's economic performance severely. Nevertheless, the economy is forecast to grow by a robust 8% in 2013 and 6.5% in 2014 driven by the onset of copper production at the Bisha mine and gold production at the Zara mine, as well as continued strong growth in exploration activity and investment in the sector. Growth is unlikely to be affected by the new round of UN sanctions, which are not stringent enough to affect Eritrea's mining sector in any significant way. It is also unlikely to result in substantial improvements in the living standards of the average citizen given the lack of economic opportunities in sectors other than mining. Inflation is estimated to have remained firmly in double digits over the past decade, as the government has monetised its chronic fiscal deficits, leading to rapid growth in the money supply. This trend will continue, although inflation is expected to decline marginally from an estimated 17% in 2012 to 14% in 2013 and to pick up to 15% in 2014, in line with trends in international oil prices. The nakfa has been pegged to the dollar at Nfa15.38:US$1 since 2005. Over this period it has become severely overvalued, underpinned by double-digit inflation and large current-account deficits. In mid-2011 the parallel-market rate was reportedly almost three times as high as the official exchange rate. Strict government controls have meant that the misaligned exchange rate has resulted in foreign-exchange shortages rather than a growing black market. Little change is expected in this situation in 2013-14.

  EXTERNAL ACCOUNT: Following a contraction in 2012, as gold production declined, exports are forecast to grow steadily over 2013-13 driven by the onset of copper production at the Bisha mine and the start of gold production at the Koka mine. Imports are forecast to grow steadily as investment in mining boosts demand for capital goods. Overall, the trade deficit is expected to stay wide, averaging 17% of GDP in 2013-14. The surplus on the service account is expected to fall as imports of mining-related services rise. Income debits are expected to fluctuate in line with revenue from mining. Remittances from the diaspora-a significant source of revenue for the PFDJ-are expected to decline slightly, slipping below 10% of GDP as various countries begin to implement the 2011 UN sanctions and scrutinise the methods used to collect the 2% "diaspora tax" levied on Eritrean citizens working abroad. Overall, the current-account deficit is forecast to moderate from 6.3% of GDP in 2012 to 5.7% of GDP in 2013 before widening again to 6.4% of GDP in 2014.

  October 31, 2012

Country Briefing

Land area

124,320 sq km, including the Dahlak archipelago

Population

5.58m (2012 UN estimate)

Main towns

Population in 2012 (World Gazetteer estimates):

 Asmara (capital): 697,013

 Assab: 101,284

 Keren: 82,178

 Massawa: 53,090

 Mendefera: 25,332

Climate

Temperate on highland plateau, hot and arid on coast

Weather in coastal area

Hottest months, June-August, 30-45°C; coldest months, October-February, 24-32°C

Weather in highland area

Hottest month May, 30°C maximum; coldest months, December-February, 0°C minimum

Languages

Three official languages—Tigrinya, Arabic and English; other languages include Tigre, Saho, Afar, Kunama, Bilen, Italian, Amharic and Nara

Measures

Metric system

Currency

The nakfa (Nfa), the exchange rate has been fixed at Nfa15.38:US$1 since 2005

Time

3 hours ahead of GMT

Public holidays

January 1st (New Year's Day), May 24th (Independence Day), June 20th (Martyrs' Day), September 1st (anniversary of the start of war of independence), September 11th (Eritrean New Year), September 27th (Meskel), December 25th (Christmas), Orthodox Christmas, Orthodox Epiphany, Id al-Fitr, Id al-Adha, Mauled

August 28, 2012