Region: Eastern Africa
Capital: Asmara (Asmera)
Population: 5,028,475 (July 2008 est.)
Surface area: 121,320 sq km
Currency: CFA nakfa (ERN)
GDP per capita: Purchasing power parity US $800 (2007 est.)
Eritrea is a one-man dictatorship under President Isaias Afewerki, now in his 26th year in power. It has no legislature, no independent civil society organizations or media outlets, and no independent judiciary. The government restricts religious freedoms, banning all but four groups.
The UN Special Rapporteur on the situation of human rights in Eritrea expressed concern that patterns of violations identified over the past six years persist, namely arbitrary and incommunicado detention, indefinite military/national service amounting to forced labour and severe restrictions on fundamental freedoms.
In her fifth and final report to the Human Rights Council, Sheila Keetharuth expressed concern that the human rights violations she identified in her first and subsequent reports, as well as in those of the Commission of Inquiry in Eritrea remained unchanged.
Children and women in Eritrea remain especially vulnerable to under-nutrition and residual effects of decades of war that limit young children’s physical growth and development. Many of Eritrea’s population continue to be vulnerable to threats posed by unequal access to food, health services, education, social protection and employment. This is further compounded by the impact of natural hazards, such as floods, volcanic eruptions, displacement of landmines and drought. Food shortages, declining aid, and the continued “no war, no peace” stalemate with Ethiopia are all contributing factors to vulnerability in Eritrea.
Eritrea is a young nation-state. After a 30-year war with Ethiopia, Eritrea attained de facto independence in May 1991 and de jure independence two years later. The initial years of independence were marked by impressive progress in rehabilitating basic economic and social infrastructure, improving social indicators, macroeconomic stability and economic growth. From 1993 to 1997, the economy grew at an average annual rate o f 10.9 percent. These development gains were interrupted when a border dispute with Ethiopia erupted into renewed conflict in May 1998. A Temporary Security Zone monitored by a United Nations (UN) peace keeping force was established in accordance with the Peace Agreement signed in 2000.The Ethiopia-Eritrea Boundary Commission (EEBC) made a final “virtual” demarcation of the boundary at the end of 2007. This has been accepted by Eritrea but was rejected by Ethiopia. Tensions between the two countries remain high and both have troops positioned alongside the border. In January 2008 the UN Security Council extended the United Nations Mission in Ethiopia and Eritrea (UNMEE) mandate until July 2008. In February 2008, UNMEE commenced plans to relocate personnel and equipment from the Temporary Security Zone in response to interruptions to regular supplies. In a situation that has been described as "no war, no peace", Eritrea's government has remained in a state of heightened mobilization and some 200,000 are estimated to be mobilized. As such, tackling the underlying imbalances in the economy is not a priority for the government at this stage.
Eritrea is one of the world’s most repressive and closed countries. The government of President Isaias Afewerki has effectively banned the independent press. Journalists languish in detention, as do officials who question Isaias’s leadership; many have died in jail. No civil society organizations are allowed to exist. Arbitrary arrest of citizens is rampant, and torture in detention is common. Leading religious institutions – Orthodox Christian and Muslim – are run by government-appointees; adherents of other religions are jailed until they renounce their faiths. Nearly all men and many women over 18 are conscripted into indefinite “national service,” which exploits them as forced labour at survival wages.
Since independence from Ethiopia in 1993, Eritrea has faced the economic problems of a small, desperately poor country, accentuated by the recent implementation of restrictive economic policies. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice (PFDJ). Like the economies of many African nations, a large share of the population - nearly 80% - is engaged in subsistence agriculture, but they produce only a small share of total output. Since the conclusion of the Ethiopian-Eritrea war in 2000, the government has maintained a firm grip on the economy, expanding the use of the military and party-owned businesses to complete Eritrea's development agenda. The government strictly controls the use of foreign currency by limiting access and availability. Few private enterprises remain in Eritrea. Eritrea's economy depends heavily on taxes paid by members of the Diaspora. Erratic rainfall and the delayed demobilization of agriculturalists from the military continue to interfere with agricultural production, and Eritrea's recent harvests have been unable to meet the food needs of the country. The Government continues to place its hope for additional revenue on the development of several international mining projects. Despite difficulties for international companies in working with the Eritrean Government, a Canadian mining company signed a contract with the government in 2007 and began mineral extraction in 2010. Eritrea's economic future depends upon its ability to master social problems such as illiteracy, unemployment, and low skills, and more importantly, on the government's willingness to support a true market economy. Economic growth in Eritrea was strong in 2011, estimated at 8.2% compared to 2.2% in 2010. Underpinning this performance was the coming on stream of mining projects with substantial foreign investment (notably the Bisha gold mine) and high levels of production of silver, copper and zinc. Growth is projected to fall to 6.3% in 2012 however, before halving in 2013 due to expected falls in world mineral prices. The authorities believe that the country has good medium to long-term prospects for offshore oil production, fishing and tourism. The budget deficit has been improving in recent years, contracting from 16% of GDP in 2010 to 15% in 2011, and it is projected to improve further in the next two years, as a result of higher mineral revenues. Inflation reached an estimated 13.5% in 2011 but is expected to decline to 12.5% and 12% in 2012 and 2013, respectively, owing to projected improvements in agricultural production as drought recedes.
The current account was consolidated by 6% in 2010 to near balance in 2011, reflecting higher export earnings. The country is expected to maintain a small current account surplus in the medium term – of about 1-2% of GDP in 2012 and 2013 – contingent on mineral prices. With the amelioration of the global financial crisis, gold prices might decline reversing the trend on the current account and leading it into deficit. In addition, any eventual hardening of UN sanctions on mining and foreign remittances will further strain Eritrea’s current account.
The food crisis in the Horn of Africa has affected the country, especially local grain supplies, but its impact has been nowhere near as severe as in neighboring countries according to a recent AfDB assessment. Broadly, perennial food insecurity poses a serious threat to economic stability and overall development. The judicious use of the projected increases in mineral revenue will be important for mitigating these challenges and for strengthening both economic resilience and diversification.
Eritrea has a disproportionately young population, and half of its youth are unemployed. Youth skills are not being developed to match the demands of the labor market. In addition, the absence of data on youth and labor hampers the government from making informed policy decisions.