Eritrean Economy is in a Deep Sinking Hole

You Can Not fool Mother Economy:
Eritrean Economy is in a Deep Sinking Hole.

By Seyoum Tesfaye, Atlanta Georgia
August 17, 2012

The political bankruptcy of The Eritrean ruling clique and the dysfunctional PFDJ is now total and irreversible. The high octane anti-American vitriolic rhetoric is a cry for help and for attention. The world is not blinking. The PFDJ “economic system” is headed to a free fall zone. Organizational or political manipulation can’t make international investors flood the streets of Asmara.   The global completion with all legal guarantees and flexible investment option is more attractive than the obsessive compulsive control freak behavior of the PFDJ and its warlords. Capital flows in search of its advantage. When compared with rational and pragmatist tyrants the Eritrean leadership truly deserves the lowest grade. The summation of all international organizations engaged in collecting economic and financial data only affirm this vivid fact. At times even the North Korean tyrant makes marginal sense. The clique in Asmara is a creature of a different kind. It contaminates and try’s to destroy anything its hand gets into: Politics, economy, culture, religion, education, entrepreneurial spirit, literature, etc. For power and money it will breach all ethics and human values. This is the kind of enemy the Eritrean people are faced with. The political beast wants them to invest their hard earned money to finance its idiotic and chaotic economic agenda.

The Eritrean regime is desperate and very low in foreign exchange. The highly centralized command economy is headed to a grinding halt. Nothing in the economic realm is functioning according to the basic principles of free economy. After practicing a premeditated hostile policy towards nationalist entrepreneurs for over two decades now it has come up with a deceitful proposal to hoodwink innocent and possibly gullible but business oriented Eritreans to become its Diaspora ATM cards. The so-called “investment conference” supposedly to take place in Asmara on Augusts 27 and 28, 2012 is not in the interest of the independent Eritrean business class or wishful individual small –investor. It is a deliberate ploy to salvage its financial pyramid game.

It is necessary that we have periodic access to some of the growing global consensus by international economic and financial institutions on the details of the mismanaged Eritrean National economy. Our struggle is saturated with extensive political polemics and conversations. It is imperative that we start paying more attention to the mangled Eritrean economy and incorporate it to our discourse.

At this juncture purchasing even a single dollar in PFDJ controlled economic ventures is inadvertently cooperation with the persecution of the Eritrean people. The regime that has put over 300,000 youth under perpetual servitude does not deserve a single penny from the Diaspora community.

With its gold mining partner companies (economic mercenaries) facing massive legal challenge and future international investors hesitating to trust a sanctioned, lawless and extremely mercurial sultanstic Eritrean “leaders” the regime has to concoct a different format to “steal” the meager financial resources of Eritreans at home and in the Diaspora. Those Eritreans who do not see through this shenanigan and invest even a penny will live to regret their decision. This is the time to utilize the full weight of the UNSC resolutions and finincially starve the regime not to deposit your hard won money in a sinking hole. No economic or financial cooperation with this brutal regime.

The summary information below that is presented to bring to the attention of the readers what internationally recognized institutions are reporting about the status of the Eritrean economy under the control freak regime. Hopefully the readers will make an effort to access the full reports and share it with other Eritreans and expand the imperative conversation.

• Index Mundi in its Eritrea Economic Profile 2102 Report register’s and shares this summary with the world : GDP (official exchange rate) $2.b Billion (2011 est.) and that 50% the people of Eritrea live below the poverty line.  It states that the Revenue was $715.2 million and expenditure $1.021 billion (2011 estimate). Budget surplus was (negative) -11.3% of GDP (2011 estimate) and inflation rate was 20%. Export and import for 2011 was registered as: $383.5 million and $875.1million. Foreign exchange reserve for 2011 was $163.7 million and external debt was $1.109 billion.
• The Richest People on its may 27, 2012 report dealing with the “20 Poorest Countries in the World 2102” based “on International Monitory Fund 2011 Gross Domestic Product per capita (GDP Per capita)” states the following stark fact: the lowest rate is given to Congo, Democratic Republic of $348.00, followed by Liberia $456.00, Zimbabwe $487.00, Burundi 4615.00 and Eritrea standing at number 5 with $735.00.
• GlobObserver’s Eritrea Economic Profile 2012 states: “Eritrea is essentially an importing country, agriculture exports (mainly coffee, cotton, leather) depend on the amount of rainfall and outdated irrigation systems; this has created a tremendous trade deficit during the past years, which has been constantly deepening and should worsen still in the coming years.”
• Tradingeconomics.com: Eritrea GDP based on Purchasing Power Parity (PPP) per capita GDP-“The GDP based on Purchasing Power Parity (PPP) per capita GDP in Eritrea was reported at 679.92 U.S. dollars in 2009, according to the International Monetary Fund (IMF). In 2015, Eritrea's GDP based on Purchasing Power Parity (PPP) per capita GDP is expected to be 751.38 U.S. dollars. In 2009, Eritrea's economy share of world total GDP, adjusted by Purchasing Power Parity, was 0.01 percent. In 2015, Eritrea's share of world total GDP is forecasted to be 0.01 percent.”
• Heritage.org: Its 2012 Index of Economic Freedom states: “Eritrea’s economic freedom score is 36.2, making its economy one of the least free in the 2012 index. Its overall score is 0.5 point lower than last year, reflecting large declines in fiscal freedom and labor freedom. Eritrea is ranked 45th out of the 46 countries in the Sub-Saharan African region.”
• The World Bank ease of doing business project index ranks the world countries from 1 to 183. Number 1 representing the best and the highest number the worst. Eritrea was ranked 178 in 2010 and 180 in 2011. The 3 countries that had worse ranking than Eritrea in 2011 were Guinea Bissau (181), Central African Republic (182) and Chad (183).

So much for the so-called the fastest economic growth in the world propaganda- this is the result of enslaving 300,000 youth laboring at an average of 40 hour a week for minimum of 10 years- that is after spending approximately 6, 240,000,000( 300,000x 40x 52x10) free labor hour stolen from a generation.

No amount of acidic and vitriolic polemics by the ruling regime can dislodge or dilute the data as presented by globally recognized various institutions. More importantly the conclusion is being widely accepted by the leadership of critical nations and major economic institutions and actors. The key is that we, Eritreans at home and in the Diaspora, have to familiarize ourselves with the growing data and wage a cold blooded and hard nosed campaign to expose the total failure of the regime on the economic front as well. Not only that we must strategized seriously on how the illegal funds the regime collects from the Diaspora through various ways of fundraising must come to an end leave alone participate in its pyramid skim  the so-called “investment conference”.

The regime can wage periodic political bluff to buy a month or two and derail some political discussions. But the national economy cannot be managed by bluff or disinformation. Where are the factories, the thousands of jobs and the Singaporiztion or Eritrea? The export based economy? Turning Eritrea into a financial hub of the Horn of Africa? You can not fool mother economy for ever. No dictator has ever succeeded before; the Eritrean regime will not be the first one. The Great Leap Forward has become the Great Slide into PFDJ’s Sinking hole. Keep away from the sinkhole.

There are much more learned Eritrean intellectuals who could use their talent and thoroughly expose, in a more comprehensive way, the massive economic dislocation of the country under this regime. This part of the task needs to pick up speed so that both the political and economic national catastrophe can be integrated in our national discussion towards the democratization of Eritrea. Help us shorten the tyrant’s days. It is a shared duty.

Disclaimer; the perspective presented in this brief article represents my own view and only my personal view.

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