How does 'poor' Eritrea afford to fund Al-Shabaab?

The second youngest African nation, Eritrea is already struggling to extricate itself from a diplomatic quagmire after only two decades of an independent existence. Run by a secretive and isolated Asmara regime, the Red Sea nation has recently rolled out a rather uninspiring charm offensive to change the decidedly hostile perception by its neighbours, but recent claims of arming militant Somalia rebels are unlikely to win it the propaganda war.

Reports that three shipments of arms had been delivered by Eritrea to the Al-Qaeda-allied Al-Shabaab rebels that Kenya is battling inside Somalia were hotly refuted, but recent international investigations have cited Asmara for sponsoring terrorist activities in the region.But how does Eritrea, whose economy is currently worth less than $3 billion and is one of the poorest countries in the world, manage to finance Al-Shabaab and other Islamist groups in the Horn of Africa, as alleged by a UN report?

The United Nation Development Programme's (UNDP) annual Human Development Index ranked Eritrea 177th out of 187 countries this year, while the country was not ranked at all in 2009 and 2010 due to a lack of data attributed to the country's secretive nature.

It has been a wobbly path for the country of 5.4 million (according to the UN) which earned independence from arch-foe Ethiopia in 1993. President Isaias Afewerki, who has led a provisional government since, set out a vision of creating an "African Singapore" within ten years of independence.

Then, Eritreans were solidly united following years of bloody nationalistic conflict with Ethiopia, but the dream was to slowly peter out as the new country struggled to repair a war economy and its traditional subsistence agriculture and fishing industries failed to bring in hard currency from exports.

Mining since then has held hope for the economy, with a recent big find of the Bisha Gold concession expected to bring in some much-needed foreign currency. However the mine only became fully operational this year and is years from being a steady revenue stream.

However, remittances from its sizeable diaspora have been a major cash cow. There are an estimated 1.6 million Eritreans--25 per cent of the population--living abroad. Each Eritrean in the diaspora must by law pay two per cent "tax" on their earnings to the government, in addition to a raft of other voluntary contributions.

More than 85 per cent of the diaspora pay this money, channelled through embassies and other government organisations. The Eritrean government has justified this cash through its stated policy of self-reliance meant to reduce its dependence on foreign aid from the West.

But one decade after a border war with Ethiopia that claimed a conservative estimate of 70,000 lives, the Eritrean government is still collecting a contribution to "defend against the Ethiopian invasion". While this money runs into the hundreds of millions of dollars, it still would not be enough to arm and fund rebels in the Horn of Africa. Security analysts and a UN report claimed that other nations are also involved in financing rebel movements.

The rich Middle East nation of Qatar is a key ally of President Isaias Afewerki. His presidential jet was reportedly a gift from Qatar, while Doha is said to provide the biggest portion of financial aid to Eritrea. Asmara and Doha also have a wider military cooperation agreement but it remains extremely unclear if this finds its way into Eritrea's regional activities.

The embattled nation of Iran also holds geopolitical interest in Eritrea, and has been accused of having a secret deal to set up a military base in the Red Sea port city of Assab to install long range missiles which it could use to target Israel.

The Theran-Asmara military base deal remains a secret as the two nations have denied the report. However a group of Iranian experts were recently sighted in Assab: Eritrea said the technicians were there to maintain an oil refinery.

Individual tycoons from other Arab nations are also said to be channel money through Asmara to Al-Shabaab, while the UN Monitoring Group on Eritrea and Somalia report cited former Libyan leader Muammar Gaddafi as also sending arms and money to Eritrea.The UN report said that Eritrea has built a massive network of arms smuggling across Africa and the Middle East.

Eritrea is not a multiparty country and the ruling People’s Front for Democracy and Justice (PFDJ) plays a key role in daily government activities including in sectors such as banking. There is no separation between the PFDJ and the government. This blurring of roles has helped the PFDJ run a global multi-million dollar empire, with a senior guerilla party leader running the Bank of Eritrea.

The report said that an elite number of Eritrean officials have direct access to the money, with the convoluted paper trail seemingly deliberate.

The best known is the Red Sea Corporation, one of the 25 party-owned firms involved in major national and international business. These companies operating in various countries are supervised by senior military and government officials.

The PFDJ's biggest financial hub is allegedly the United Arab Emirate of Dubai. Other PFDJ bases include Nairobi, New York, Frankfurt, Rome and London.

In addition to Somalia, Eritrea has been linked to weapons smuggling to Hezbollah, Sudan, DR Congo and even Ethiopia. However Asmara has angrily denied these allegations and blamed the West and rival Ethiopia for "fabricating stories".

The UN Security Council is expected to vote on a new round of sanctions which aim to block government access from Eritreans' remittances and contributions as well as money from new gold mines. If adopted it would be a major economic blow for Eritrea.

The writer filed this analysis for NMG

(Source: The Citizen)

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