On the sun-bleached heights of the Asmara plateau, July is beles season, a few weeks of wild cactus fruit and ostentatious metropolitan chic. It is when the fig cacti, the beles, yield their knobbly pellets of fruit to sure-handed children, who pick them to earn their families some cash. July is also when Eritrea’s diaspora engine goes into reverse and expat families hustle through Asmara’s tiny airport and out on to the tiled streets of the capital, where they parade in the Gucci glamour and hip-hop bling of London and New York. Because their arrival coincides with the ripening of the cactus fruit – and because they have disappeared by the time the fruit is gone – they, too, are dubbed beles by the compatriots they leave behind.

The two cross paths on street corners in Asmara, where plastic buckets filled with the pickings from the cactus fields sit at the knees of female traders, swathed like mummies in the white cotton shawls of the Christian highlands. Some diaspora families sweep past, Dad speaking to the kids in Tigrinya, the local language, the kids replying in English or Swedish or Dutch. Others pause to buy handfuls of the fruit, whose yellow skin conceals a fleshy orange core that tastes of mango.

At 2,300m above sea level, this is one of Africa’s cleanest, calmest, most crime-free cities, a home above the clouds for 400,000 people and the capital of the continent’s newest nation-state. It’s a cauldron of cultural influences – domestic and foreign, old and new, beles and beles – but ranks as an outlier in Africa. It’s a sliver of rock that clings to the continental shelf like it’s afraid of slipping into the Red Sea, but its four million people refer to their neighbours as “Africans” with a cool detachment.

Eritrea’s admirers praise the dignity of its people, lean, elegant and proud. The critics lament the character of its geopolitics, belligerent, bossy and headstrong. Both are rooted in a powerful belief in Eritrean exceptionalism, the driving force behind a 30-year armed struggle for liberation from Ethiopian rule that finally ended in independence in 1993. It was a remarkable victory for a guerrilla army of Marxist fighters after the rest of the world had written off their cause as hopeless, or simply stopped caring. But in the years since, Eritrea has become a study in what happens when the heroes who win the war cannot recast themselves to live in peace.

Six o’clock on a Monday evening and the poky members’ room of the Casa degli Italiani was full. Half a dozen Eritrean men, all past their 60th birthdays, sat in corduroy blazers and leather jackets behind battered wooden school desks, drinking coffee and smoking cigarettes. The men grew up when Eritrea was an Italian colony, as it was latterly under Benito Mussolini’s fascist regime. Some even fought for Italy during the second world war. They spoke fluent Italian and greeted each other at the club that evening with “Come stai?” and “Bene, bene”. Then they sat down, slipped into silence, and locked their eyes on to the television, which was tuned into the Italian channel Rai Due and beamed out the final kilometres of stage 16 of the Tour de France.

British and French colonies rarely absorbed the habits of their colonial masters with ease, but Eritrea did – in spite of a humiliating fascist apartheid system. The colonisers wanted to make Asmara a home from home, so they built a city of pastel shades, mottled brickwork and ornate stone mosaics. It was also a laboratory for bold architectural styles – rationalism, futurism, monumentalism – that would never pass muster in Italy. The result is a cocktail of convex façades, jutting balconies and porthole windows. Ancient Fiat 850s still trundle down Harnet Avenue, the main drag, which is lined with palm trees reminiscent of southern Italy. And when the sun sets, the avenue floods with Asmarinos out for the passeggiata, or evening stroll, which they punctuate with espressos in cafés, plates of lasagne or scoops of ice-cream from the gelaterias. No wonder so many travel writers write glowing accounts of an African dolce vita.

But they omit the country’s dark side. The guerrillas of the liberation struggle have become the ministers of an autocratic regime whose secrecy, sealed borders and intolerance of dissent have attracted the same “pariah state” labels often applied to Kim Jong-il’s North Korea. “They have always been control freaks,” one Eritrean told me in Nairobi before I left for Asmara. In that conversation, I first felt the shadow of fear cast by the regime’s iron rule.

Michela Wrong, a former FT journalist and author of I Didn’t Do It For You, which charts the country’s history, told me by e-mail: “Trouble is, no one will want to be seen talking to you inside Eritrea itself. And you need to be very careful not to quote people and not to get people into trouble by even being seen with them.” A United Nations official who has worked in the country warned: “People may sidle up to you and say critical things to test you. Best to respond positively and say how great Eritrea is.” When I tried to fix a meeting with another Eritrean in Nairobi via a friend of a friend, I first had to persuade him I was not an Eritrean government agent; he was convinced there was no other way I could have got a visa. (I got it by sending an e-mail request to the information minister and following it up with a phone call a week later.) By the time I arrived at Asmara airport, where a flunky from the information ministry tapped me on the shoulder as I was changing money, I had been sucked into the culture of suspicion. Then I opened my hotel wardrobe. It was lined with an old copy of the Financial Times.

Diplomats in Asmara said they took it for granted that some of their Eritrean employees were spying on them. The manager of a café told me his regulars included security agents who sat eavesdropping on conversations. I was warned there were informers on every corner. A taxi driver expressed the mood by clenching his fist into a trembling ball of tension. “The generals, the colonels, they are sooo…” he said with a grimace, struggling for the word as his knuckles looked ready to snap. “So straight.”

For the first few minutes of my encounter with the straight-man-in-chief, Isaias Afewerki, the president who has stamped his domineering character on the regime, I was left contemplating his sandals. He had breezed by with a cursory handshake in the presidential reception house and swept into the interview room where he sat down on a sofa. He was encircled by a huddle of advisers and photographers so all I could see through the doorway were the black sandals on the ends of his long legs.

The sandal is a symbol of the struggle Isaias (family names go first in Eritrea) waged through the Eritrean People’s Liberation Front, the guerrilla army that overthrew the Ethiopian dictator Mengistu Haile Mariam in 1991 and paved the way for a referendum on Eritrean independence two years later. They were a rigid, determined force that at their peak numbered more than 90,000, with an unwavering sense of righteousness, committed to discipline and equality, proud of their self-reliance and ready to sacrifice everything for the cause. The EPLF could not afford boots for the craggy mountains where they carved out a stronghold of subterranean bunkers, so fighters had to wear slip-on sandals made from melted-down tyres and more suited to the beach. The centre of Asmara is now graced by a six-metre pair of sandals set on a plinth.

For many former guerrillas in government, the scars of the struggle are physical: they have trouble getting through airport metal detectors because they have so much shrapnel lodged in their bodies. But the deeper wounds are psychological, rooted in the indifference of foreign governments, the United Nations and the international media to their struggle. It has created “an odd mix of xenophobia and supremacy” in the regime, one diplomat said. Everyone was against us; we triumphed on our own.

That may explain why Isaias, an intense, abrasive man with a sheriff’s moustache, has no time for polite diplomacy. His regime is not blighted by corruption. He has not created a Kim Jong-il-style personality cult. But he has purged his critics ruthlessly since the guerrilla days. He has barricaded himself into a defensive bunker from which he surveys a world of conspiracy theories and “special interests” plotting against him. “You may represent one of those groups,” he told me. His only obvious international friend is Qatar.

One of the biggest enemies, meanwhile, is the CIA, which Isaias accuses of funding Eritrean opposition groups in exile and fabricating charges that Eritrea is supporting Islamist insurgents linked to al-Qaeda in war-ravaged Somalia. The other nemesis is Ethiopia. Its prime minister led a rebel group from northern Ethiopia that joined forces with Isaias to topple Mengistu in 1991, but the former comrades-in-arms fell out in 1998 over a two-year border war that killed at least 70,000 people. An independent commission ruled in 2002 that Ethiopia should return the disputed territory to Eritrea, but it has not been forced to do so – further proof to the Eritrean regime of the world’s indifference.

It was different in the heady days after independence, when the west fawned over Isaias and entrepreneurs from the diaspora flocked home. The president pledged to introduce multiparty democracy and free markets. Progress towards those goals came slowly but surely in the 1990s, the centrepiece being the drafting of a new constitution. Then, all of a sudden, they were abandoned.

The border war is often given as the explanation, but Eritreans still debate whether Isaias ever meant what he said about liberalism. Some say he had been willing to experiment but started backtracking once he saw that openness could not be reconciled with his disciplinary instincts. Others say it was always a façade to win US blessing for the ejection of Mengistu. What is clear is that the regime has used the spectre of security threats to justify its authoritarianism. “We could have done better without this conflict,” Isaias said. “We could have done better without this psyche of having a conflict that is not resolved, being prepared for any eventuality. That limits your resources but, again, you don’t have any other choice.”

In 2001, he jailed 15 senior members of the ruling party who had voiced concern about the slide to one-man rule. Denied trial, some are feared to have died in shipping-container prisons in the desert. Civil society organisations and the free press were shut down and several journalists were thrown in jail. Elections planned for that year were postponed indefinitely. Freedom of movement, freedom of assembly, freedom of religion and freedom of speech were severely curtailed and remain so today.

When I told Isaias that there was a climate of fear on the streets he responded with sarcasm. “It’s a very important discovery on your part. You’ve been able to discover this in how many hours?” I said I’d been in the country for two days. “It’s very unique. You must have a very unique brain,” he said.

“I don’t think so,” I said.

“To be able to know and read everything in this country in a matter of hours, it’s amazing,” he said. “You must be a superhuman.”

On the streets of Asmara, it did not take long to identify the single least popular government programme: compulsory military service. A year and a half of national service is mandatory for men and women and it begins with six months at Sawa, a desolate training camp where teenagers are levered out of bed at 4am and put through gruelling military drills, while also having to prepare for their high school exams.

In what began as small talk – on the steps of the Catholic cathedral, outside a pizza joint, in a clothes shop – young women told me, in tones of hushed sadness, about its effects. If you don’t go, you don’t graduate, said one frizzy-haired 22-year-old recounting her experience of the camp. “They want you to understand what it’s like to be away from home for so long, what they went through.” Stoicism is waning: most conscripts in the past two years were born after the end of the struggle and the rumours from Sawa are that they have been more unruly than their predecessors.

After Sawa, the majority of men serve in the military, many dug into trenches braced for the Ethiopian attack that may never come. Others are given back-breaking jobs in construction or farming. A few are set to work in government offices in the capital. If you stay at the state-owned Asmara Palace hotel – once run under contract by the InterContinental group – you will probably be served by conscripts.

The young women I met had two objections to this system. The first was that conscripts are paid a pittance: no more than 450 nakfa – less than £20 – a month. The second was that service can go on indefinitely. Many people stay indentured well beyond the official 18 months, unable to pursue their own ambitions until they receive a “demobilisation” notice. It can arrive at any time – or not at all. Some of those recruited as fresh-faced teenage boys are still working as conscripts in their forties. The total number in national service today is estimated at more than 500,000.

“You take a child, a child who could be a carpenter, an astronaut, a pope, and you turn them into nothing. For what? For a stupid dispute between you and Meles [Zenawi, Ethiopia’s prime minister],” said one businessman who returned after independence but has lost faith in the regime.

A young woman told me it was possible to scrape by on a national service salary if you lived with your parents, but that it was impossible for young men to save enough money to pay for a wedding. The problem was often academic anyway, she added, because conscripts were not going to meet any girls while they were dug into foxholes.

The 22-year-old said she “sneaked out” of national service after Sawa, a move that would get a man thrown in jail. When I asked her if she would go to the front line if war broke out again with Ethiopia, she said: “No. I’d run away. Seriously, what’s the point? You’re gonna die.”

National service may in reality have little to do with Ethiopia. One theory is that external threats are used as a pretext by Isaias for another objective: economic dictatorship. In the past five or so years, the regime has begun to create a command economy where it controls resource allocation, production, distribution and consumption. Shackling a big chunk of the workforce is an essential element. Isaias denies he is pursuing Soviet-style central planning, but says state intervention is justified when it ensures resources are distributed equitably. The country has never been rich. But by withdrawing licences from private businesses, making farmers sell produce to the state at fixed prices, maintaining a monopoly on imports and dictating how the country’s scant dollar reserves are used, the regime is strangling wealth creation. Eritrea suffers from shortages of everything from diesel and tea to batteries and flour. It recently went without domestic beer for eight months because the government would not give the state-owned brewery the dollars it needed to buy malt.

The shortages have preserved an impressive recycling culture (I saw a defunct fridge being converted into a chicken coop), but they create hardship too. The number of beggars in Asmara has jumped in recent years, a sign of desperation in a country where people have such a strong sense of pride. The regime provides monthly food rations to some families – a few kilograms of flour, spaghetti, red pepper, and so on – but in the poor Geza Berhanu neighbourhood, people told me they were not enough.

Isaias told me short-term pain was necessary for long-term gain: “The whole population will have to sacrifice a breakfast, for example, and you can use that saving for putting in place a road.”

The UN World Food Programme can’t alleviate the hunger because it was shut down in 2005 after the regime decided that its handouts were demeaning. Most international aid agencies have been driven out, too: there were 38 at the peak in the 1990s but today just four survive. “The self-reliance philosophy is admirable,” said the diplomat, “but they’ve taken it to an illogical extreme where it becomes self-defeating.”

The big question is how the place survives at all. The answer lies with the beles diaspora, who number close to a million and whose remittances are estimated to make up 25 to 30 per cent of Eritrea’s gross domestic product, the second highest proportion in the world after Somalia. Expatriate Eritreans also pay a 2 per cent tax on income via their nearest embassy. If they do not comply, the embassies refuse to issue permits to visit home and their relatives in Eritrea are often harassed.

Eritrea’s dependence on the diaspora is the biggest hole in the regime’s claims of self-sufficiency. It is also its biggest political weakness. If Isaias led a genuine totalitarian dictatorship, it would not simply control what people ate and did and said; it would control what they thought. But most Eritreans have not been brainwashed. Free thinking in the country still thrives and is nourished by the flow of influences that began with Italian colonialism and continues today via relatives in Europe and North America who provide a personal window on to richer, freer lives.

Asmarinos wear Chicago Bulls shirts and Oakley sunglasses sent from overseas; the latest evening craze is salsa classes; and on the day I left, the Miss Eritrea beauty contest was going on. It is a place where school children are taught in English from the age of 11, and where their parents can buy satellite dishes to receive CNN and the BBC. So while the regime is turning inwards, the people have embraced globalisation. That is why Eritreans are not accepting a status quo of hunger and repression. Instead they are asking: what happened to the dream we fought for?

“I don’t think anyone who came back after independence has become what they wanted to be,” the businessman told me. “Some, because they were unlucky. Some, because they had unrealistic expectations. But mostly because of the government saying: ‘You cannot do this, you must do that.’ Making things so difficult.”

The new struggle in Eritrea is over the country’s spirit. Isaias’s vision of that spirit is still informed by the guerrilla years, symbolised by the fig cactus itself: a prickly survivor, thriving in adversity; tough, resilient and nobody’s friend. Many Eritreans, however, want to move on, and their model is the beles diaspora: driven by betterment, not bitterness; a desire to take advantage of the world, not to prove they don’t need it.

At least 43,000 people voted against the regime with their feet last year, braving harsh terrain and army shoot-to-kill orders to flee to Sudan or Ethiopia. Eritrea was the second-biggest source of asylum seekers in the world, according to the UN, a striking position for a country with the world’s 113th biggest population.

The frizzy-haired 22-year-old has decided to complete her national service so she can try to obtain an exit visa legally. “When I was younger, I had hopes and dreams here,” she said. “Now I don’t expect anything. I take things as they come. Dreams don’t come true in Eritrea.”

Barney Jopson is the FT’s East Africa correspondent. To read the full interview with Isaias Afewerki, go to www.ft.com/isaias