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Economy of Eritrea

Agriculture contributed 24% to GDP as of 2007, and it employed about 17% of the work force in 2009. Agricultural exports include cotton, fruits and vegetables, hides, and meat, but farmers are largely dependent on rain-fed agriculture, and growth in this and other sectors is hampered by lack of a dependable water supply. Worker remittances and other private transfers from abroad contribute about 32% of GDP. While in the past the Government of Eritrea stated that it was committed to a market economy and privatization, the government and the ruling PFDJ party maintain complete control of the economy. The government has imposed an arbitrary and complex set of regulatory requirements that discourage investment from both foreign and domestic sources, and it often reclaims successful private enterprises and property. After independence, Eritrea had established a growing and healthy economy. But the 1998-2000 war with Ethiopia had a major negative impact on the economy and discouraged investment. Eritrea lost many valuable economic assets during the last round of fighting in May-June 2000, when a significant portion of its territory in the agriculturally important west and south was occupied by Ethiopia. During this period, more than one million Eritreans were displaced, although nearly all had been resettled by 2007. According to World Bank estimates, Eritreans also lost livestock worth some $225 million, and 55,000 homes worth $41 million during the war. Damage to public buildings, including hospitals, was estimated at $24 million. Much of the transportation and communication infrastructure is outmoded and deteriorating, although a large volume of intercity road-building activity is currently underway. The government sought international assistance for various development projects and mobilized young Eritreans serving in the national service to repair crumbling roads and dams. In 2005, the government asked the U.S. Agency for International Development (USAID) to cease operations in Eritrea. According to the International Monetary Fund (IMF), post-border war recovery was impaired by 4 consecutive years of recurrent drought that have reduced the already low domestic food production capacity. The government reports that harvests have improved but provides no data to support these claims. Eritrea currently suffers from large structural fiscal deficits caused by high levels of spending on defense, which have resulted in the stock of debt rising to unsustainable levels. Exports have collapsed due to strict controls on foreign currencies and trade, as well as a closed border with Ethiopia, which was the major trading partner for Eritrea prior to the war. In 2006, Eritrea normalized relations with Sudan and began to open the border to trade between the two countries. Large and persistent transfers from Eritreans living abroad offer significant support to the economy. The port in Massawa has been rehabilitated and is being developed. In addition, the government has begun to export fish and sea cucumbers from the Red Sea to markets in Europe and Asia on a limited basis. A newly constructed airport in Massawa capable of handling jets could facilitate the export of high-value perishable seafood. Real GDP (2009 est.): $1.87 billion. Annual growth rate (2009 est.): 3.6%. Per capita GNI (2008, World Bank): $640 (purchasing power parity); $300 (Atlas method). Avg. inflation rate (2008 est.): 18%. Mineral resources: Gold, copper, iron ore, potash, oil. Agriculture (24% of GDP in 2007): Products --millet, sorghum, teff, wheat, barley, flax, cotton, papayas, citrus fruits, bananas, beans and lentils, potatoes, vegetables, fish, dairy products, meat, and skins. Cultivated land- -10% of arable land. Industry (19% of GDP in 2007): Types --processed food and dairy products, alcoholic beverages, leather goods, textiles, chemicals, cement and other construction materials, salt, paper, and matches. Trade: Exports (2005 est.)--$12 million: skins, meat, live sheep and cattle, gum arabic. Major markets --Middle East (Saudi Arabia, Yemen), Europe (Italy), Djibouti, and Sudan. Imports (2005 est.)--$474 million: food, military materiel, and fuel, manufactured goods, machinery and transportation equipment. Major suppliers --U.A.E., Saudi Arabia, Italy, Germany, Belgium.

Geography of Eritrea

Eritrea is located in the Horn of Africa and is bordered on the northeast and east by the Red Sea, on the west and northwest by Sudan, on the south by Ethiopia, and on the southeast by Djibouti. The country has a high central plateau that varies from 1,800 to 3,000 meters (6,000-10,000 ft.) above sea level. A coastal plain, western lowlands, and some 300 islands comprise the remainder of Eritrea's land mass. Eritrea has no year-round rivers. The climate is temperate in the mountains and hot in the lowlands. Asmara, the capital, is about 2,300 meters (7,500 ft.) above sea level. Maximum temperature is 26o C (80o F). The weather is usually sunny and dry, with the short or belg rains occurring February-April and the big or meher rains beginning in late June and ending in mid-September. Official Name: State of Eritrea Area: 125,000 sq. km. (48,000 sq. mi.); about the size of Pennsylvania. Cities: Capital--Asmara (est. pop. 435,000). Other cities--Keren (57,000); Assab (28,000); Massawa (25,000); Afabet (25,000); Tessenie (25,000); Mendefera (25,000); Dekemhare (20,000); Adekeieh (15,000); Barentu (15,000); Ghinda (15,000). Terrain: Central highlands straddle escarpment associated with Rift Valley, dry coastal plains, and western lowlands. Climate: Temperate in the highlands; hot in the lowlands.

Government of Eritrea

Eritrea's Government faced formidable challenges following independence. With no constitution, no judicial system, and an education system in shambles, the Eritrean Government was required to build institutions of government from scratch. Currently, the Government of Eritrea exercises strict control of political, social, and economic systems, with nearly no civil liberties allowed. On May 19, 1993, the PGE issued a proclamation regarding the reorganization of the government. The government was reorganized, and after a national, freely contested election, the Transitional National Assembly, which chose Isaias as President of the PGE, was expanded to include both EPLF and non-EPLF members. The EPLF established itself as a political party, the People's Front for Democracy and Justice (PFDJ). The PGE declared that during a 4-year transition period it would draft and ratify a constitution, draft a law on political parties, draft a press law, and carry out elections for a constitutional government. In March 1994, the PGE created a constitutional commission charged with drafting a constitution flexible enough to meet the current needs of a population suffering from 30 years of civil war as well as those of the future, when prospective stability and prosperity would change the political landscape. Commission members traveled throughout the country and to Eritrean communities abroad holding meetings to explain constitutional options to the people and to solicit their input. A new constitution was ratified in 1997 but has not been implemented, and general elections have not been held. The government had announced that Transitional National Assembly elections would take place in December 2001, but those were postponed and new elections have not been rescheduled. The present government structure includes legislative, executive, and judicial bodies. The legislature, the Transitional National Assembly, comprises 75 members of the PFDJ and 75 additional popularly elected members. The Transitional National Assembly is the highest legal power in the government until the establishment of a democratic, constitutional government. The legislature sets the internal and external policies of the government, regulates implementation of those policies, approves the budget, and elects the president of the country. The president nominates individuals to head the various ministries, authorities, commissions, and offices, and the Transitional National Assembly ratifies those nominations. The cabinet is the country's executive branch. It is composed of 17 ministers and chaired by the president. It implements policies, regulations, and laws and is accountable to the Transitional National Assembly. The ministries are agriculture; defense; education; energy and mines; finance; fisheries; foreign affairs; health; information; labor and human welfare; land, water, and environment; local governments; justice; public works; trade and industry; transportation and communication; and tourism. Nominally, the judiciary operates independently of both the legislative and executive bodies, with a court system that extends from the village through to the district, provincial, and national levels. In practice, however, the independence of the judiciary is limited. In 2001, for example, the president of the High Court was detained after criticizing the government for judicial interference. In September 2001, after several months in which a number of prominent PFDJ party members had publicly aired grievances against the government and in which they called for implementation of the constitution and the holding of elections, the government instituted a crackdown. Eleven prominent dissidents, members of what had come to be known as the Group of 15, were arrested and held without charge in an unknown location. At the same time, the government shut down the independent press and arrested its reporters and editors, holding them incommunicado and without charge. In subsequent weeks, the government arrested other individuals, including two Eritrean employees of the U.S. Embassy. Principal Government Officials President of the State of Eritrea and Chairman of the Executive Council of the PFDJ--Isaias Afwerki Director, Office of the President--Yemane Ghebremeskel Minister of Defense--Sebhat Ephrem Minister of Foreign Affairs--Osman Saleh Minister of Finance--Berhane Abrehe Minister of National Development--Dr. Woldai Futur Ambassador to the United States--Ghirmai Ghebremariam Eritrea maintains an embassy in the United States at 1708 New Hampshire Ave., NW, Washington, DC 20009 (tel. 202-319-1991) headed by Ambassador Girma Asmerom. Type: Transitional government. Independence: Eritrea officially celebrated its independence on May 24, 1993. Constitution: Ratified May 24, 1997, but not yet implemented. Branches: Executive--president, cabinet. Legislative--Transitional National Assembly (does not meet). Judicial--Supreme Court. Administrative subdivisions: Six administrative regions. Political party: People's Front for Democracy and Justice (name adopted by the Eritrean People's Liberation Front when it established itself as a political party). Suffrage: Universal, age 18 and above (although no national elections have been held). Central government budget (2005 est.): $485 million. Defense (2004 est.): $185 million.

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History of Eritrea

Prior to Italian colonization in 1885, what is now Eritrea had been ruled by the various local or international powers that successively dominated the Red Sea region. In 1896, the Italians used Eritrea as a springboard for their disastrous attempt to conquer Ethiopia. Eritrea was placed under British military administration after the Italian surrender in World War II. In 1952, a UN resolution federating Eritrea with Ethiopia went into effect. The resolution ignored Eritrean pleas for independence but guaranteed Eritreans some democratic rights and a measure of autonomy. Almost immediately after the federation went into effect, however, these rights began to be abridged or violated. In 1962, Emperor Haile Sellassie unilaterally dissolved the Eritrean parliament and annexed the country, sparking the Eritrean fight for independence from Ethiopia that continued after Haile Sellassie was ousted in a coup in 1974. The new Ethiopian Government, called the Derg, was a Marxist military junta led by strongman Mengistu Haile Miriam. During the 1960s, the Eritrean Liberation Front (ELF) led the Eritrean independence struggle. In 1970, some members of the group broke away to form the Eritrean People's Liberation Front (EPLF). By the late 1970s, the EPLF had become the dominant armed Eritrean group fighting against the Ethiopian Government, with Isaias Afwerki as its leader. The EPLF used material captured from the Ethiopian Army to fight against the government. By 1977 the EPLF was poised to drive the Ethiopians out of Eritrea. That same year, however, a massive airlift of Soviet arms to Ethiopia enabled the Ethiopian Army to regain the initiative and forced the EPLF to retreat to the bush. Between 1978 and 1986, the Derg launched eight major offensives against the independence movement--all failed. In 1988, the EPLF captured Afabet, headquarters of the Ethiopian Army in northeastern Eritrea, prompting the Ethiopian Army to withdraw from its garrisons in Eritrea's western lowlands. EPLF fighters then moved into position around Keren, Eritrea's second-largest city. Meanwhile, other dissident movements were making headway throughout Ethiopia. At the end of the 1980s, the Soviet Union informed Mengistu that it would not be renewing its defense and cooperation agreement. With the withdrawal of Soviet support and supplies, the Ethiopian Army's morale plummeted, and the EPLF--along with other Ethiopian rebel forces--began to advance on Ethiopian positions. The United States played a facilitative role in the peace talks in Washington during the months leading up to the May 1991 fall of the Mengistu regime. In mid-May, Mengistu resigned as head of the Ethiopian Government and went into exile in Zimbabwe, leaving a caretaker government in Addis Ababa. Later that month, the United States chaired talks in London to formalize the end of the war. The four major combatant groups, including the EPLF, attended these talks. Having defeated the Ethiopian forces in Eritrea, EPLF troops took control of their homeland. In May 1991, the EPLF established the Provisional Government of Eritrea (PGE) to administer Eritrean affairs until a referendum could be held on independence and a permanent government established. EPLF leader Isaias became the head of the PGE, and the EPLF Central Committee served as its legislative body. A high-level U.S. delegation was present in Addis Ababa for the July 1-5, 1991 conference that established a transitional government in Ethiopia. The EPLF attended the July conference as an observer and held talks with the new transitional government regarding Eritrea's relationship to Ethiopia. The outcome of those talks was an agreement in which the Ethiopians recognized the right of the Eritreans to hold a referendum on independence. Although some EPLF cadres at one time espoused a Marxist ideology, Soviet assistance for Mengistu limited the level of Eritrean interest in seeking Soviet support. The fall of communist regimes in the former Soviet Union and the Eastern Bloc convinced them it was a failed system. The EPLF (and later its successor, the PFDJ) expressed its commitment to establishing a democratic form of government and a free-market economy in Eritrea. The United States agreed to provide assistance to both Ethiopia and Eritrea, conditional on continued progress toward democracy and human rights. On April 23-25, 1993, Eritreans voted overwhelmingly for independence from Ethiopia in a UN-monitored free and fair referendum. The Eritrean authorities declared Eritrea an independent state on April 27, and Eritrea officially celebrated its independence on May 24, 1993.

People of Eritrea

Eritrea's population comprises nine ethnic groups, most of whom speak Semitic or Cushitic languages. The Tigrinya and Tigre make up four-fifths of the population and speak different, but somewhat mutually intelligible, Semitic languages. In general, most of the Christians live in the highlands, while Muslims and adherents of traditional beliefs live in lowland regions. Tigrinya and Arabic are the most frequently used languages for commercial and official transactions. In urban areas, English is widely spoken and is the language used for secondary and university education. Nationality: Noun and adjective --Eritrean(s). Population (2010 est.): 5.6 million. Annual population growth rate: 2.5%. Ethnic groups: Tigrinya 50%, Tigre 31.4%, Saho 5%, Afar 5%, Beja 2.5%, Bilen 2.1%, Kunama 2%, Nara 1.5%, and Rashaida 0.5%. Religions: Christian 50%, mostly Orthodox, Muslim 48%, indigenous beliefs 2%. Education: Years compulsory --none. Attendance --elementary (net 2002) 45.2%; secondary (net 2002) 21.2%. Health: Infant mortality rate (2003)--43/1,000. Life expectancy --61 yrs. Work force (2009): Agriculture--17.3%; services--59.5%; industry--23.2%.