Eritrea

THE STATE OF ERITREA was formed in 1993 after 30 years of fighting and then defeating Ethiopia. The United Nations-organized federation of 1952 had collapsed as predicted by Eritreans who always wanted [Page 322]independence: from Italian colonization after 1885, and from British military administration after 1945. Independence in 1993, however, did not bring peace, prosperity, or unity. President Isaias Afwerki's reputation as a reformer had been tarnished since the new war with Ethiopia in 1999–2000.

On both sides, more than 125,000 people died, with Ethiopia and its superior economic and population size trying to smother its enemy. The decades of occupation and fighting are still working through to today's political agenda. A constitution has still not been implemented in Eritrea; general elections have been postponed, opposition parties repressed, dissidents arrested, human rights violated, people expelled, and the media censored. Eritrea is still a one-party state, the judiciary is weak, and terrorism has raised its ugly head.

The Organization of African States, later succeeded by the African Union, is trying to realize its Framework Agreement, and other outside forces, such as the United Nations, United States, and European Union, are trying to end the conflict between Eritrea and Ethiopia.

The International Court of Justice's Boundary Commission's demarcation between the two countries has not been accepted by Ethiopia. It is not clear if Ethiopia will ever accept Eritrean sovereignty. Although Eritrea maintains the second largest army in Africa, instability in the Horn of Africa may well continue.

With the implementation of a peace agreement between the Sudanese People's Liberation Army (SPLA) and the central government in Sudan, relations between Eritrea and Sudan may become less tense. However, the ruling National Islamic Front (NIF) is bent on supporting the spread of Islamic fundamentalism into Eritrea, where half the population believes in Islam. Some, however, believe that the Sudanese policy of supporting the Eritrean Islamic Jihad (EIJ) was simply to weaken Eritrean support for the Sudanese opposition.

Politically, and in foreign policy terms, Eritrea is very volatile. Economically it does not look much better. With a GDP (Gross Domestic Product) income of around $130 per person (which means around $700 in Purchasing Power Parity), Eritrea ranks among the highest on the United Nations Human Development Index. This index is based on longevity, knowledge, and education of the population going beyond classic indicators of economics and finance (the higher the rank, the lower the quality of life).

After the war with Ethiopia, as GDP grew, droughts happened regularly; inflation and unemployment were and remain high. External debt is currently 60 percent higher than what the whole country earns with exports in one year. The debt cannot be sustained, and military spending, which is still around 17.5 percent of GDP, must be reduced. There is only very limited interest in Foreign Direct Investment (FDI), even though the International Monetary Fund encourages policies to welcome FDI proposals, which are meant to lead to an outward-looking market economy. However, centrally planned economy management is usually implemented.

The majority of the population lives in the countryside, living off agriculture and livestock husbandry, even though only five percent of land in Eritrea is arable. Half the population will need food aid for years to come. Close to half the population is under 15 years old. More than half the population lives on $1 a day. The population will increasingly pressure the government for housing, clothing, and food. It is one of the poorest countries in the world and tourism will not bring money into the economy: it is still in its infancy.

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