Costs of conflict derail Eritrea's
of three parts
By Andrew Maykuth
MASSAWA, Eritrea - Before war
with Ethiopia broke out last year, this port city on the Red
Sea was a showcase of Eritrea's ambitious campaign to
transform itself from one of the world's poorest nations into
one of its new shining stars.
The government was building a power plant, a port, a
telecommunications system, an airport, and a bus station in
Massawa, a steamy, whitewashed city designed by Arab traders
and Ottoman Turks.
Granite office buildings were rising from the rubble left
after Ethiopia ruthlessly bombed the city during Eritrea's
30-year war of liberation, which ended in 1991.
Now the young nation of Eritrea once again finds itself in
conflict with its larger neighbor, and many of the nation's
development plans have ground to a halt. This nation of 3.5
million people has been forced to divert enormous human and
financial resources to fight the war.
Throughout Africa and in many of the world's poorest
countries, war is absorbing much of the money that could go
for such basic commodities as food and shelter. The costs of
armies and weapons have also made it impossible for many
countries such as Eritrea to pay for more ambitious projects:
schools, highways, water and sewage works, and other utility
Worldwide, about $750 billion, or roughly $125 per person,
was spent on military costs last year. Although nearly
one-third of that was spent by the United States, the burden
fell disproportionately on the poorest countries that were
least able to afford it.
Military expenditures represent about 44 percent of
Eritrea's gross national product, the highest such percentage
in the world, according to analysts' estimates of the nation's
military spending. In the United States, which spends more of
its budget on arms than most countries do, the comparable
share is 3.4 percent.
The wars are also taking the would-be nation builders.
"Hundreds of thousands of young people are at the front,"
said Amanuel Ghebresellasie, the manager of Eritrea Railways,
whose project to rebuild a rundown colonial railroad from
Massawa inland has lost much of its trained labor to the
battle trenches. "The young are the most productive workers."
The war has taken a big toll. Eritrea's annual growth rate
fell from 7 percent to 4 percent last year, and the economy
this year will be close to stagnation, Yemane Ghebremeskel, an
adviser to President Isaias Afwerki, said.
Foreign investors have cooled on Eritrea: Several mining
and petroleum exploration projects are delayed. The
government, which was proud of reducing taxes set during
Ethiopian rule, has added a 20 percent surtax to pay for the
war, boosting the personal tax rate to about 50 percent. The
savings rate has fallen, defaults on mortgages are increasing,
and fewer Eritreans are investing in new homes.
The evidence of the slowdown is painfully apparent in
Massawa, the nation's decrepit principal port that supplies
the inland capital, Asmara.
At the $49 million Massawa Housing Complex, where the
government is building 536 upscale units, a retail and office
center, and new provincial and municipal offices, the war has
put contractors one year behind schedule.
During the first panicked days of the war, foreign
contractors ordered their expatriate workers to leave Eritrea.
And most Eritrean laborers rushed to the border to fight the
Ethiopians. The result: The sprawling waterfront construction
project lost all but 375 of its 4,000 employees.
The contractors have since trained some replacement
workers, but the project has only one-quarter of the staff it
had a year ago.
Construction of the $160 million Hirigio Power Plant
outside Massawa - a project that will nearly double the
nation's generating capacity - was also stymied when legions
of workers downed tools to go to the war front.
So many workers rushed off to fight that Afwerki exempted
power plant employees from war service.
"We had to bring some of them back from the war," the
general manager of the Eritrea Electric Authority, Abraham W.
Micael, said. "It's really amazing. Some wanted to go to the
war so much that they left during the night."
Eritrea is an unusual nation on a continent where many
countries are dependent upon international aid. The war
instilled Eritreans with an unassailable sense of
self-reliance, discipline, order, and scorn for outside
Young Eritreans are committed to giving 18 months to
national service, much of it spent on public works projects to
improve roads, irrigation, or soil conservation. Crime and
corruption are rare, drivers respect pedestrians, homeowners
keep their houses painted, and shop owners sweep their
The Organization of African Unity, supported by Western
nations, including the United States, is attempting to broker
a peace deal between the two former allies.
Even if a truce is struck, the mistrust between the two
nations will linger.
So will the economic damage.
"People have less income," the credit manager for the
Housing and Commerce Bank of Eritrea, Tekle Ghebremedhin,
said. "There's less money available for loans. Construction
has been delayed because of the inability to import. It's
going to take a couple of years for things to straighten out."