ADF

The African Development Bank’s Group Board of Directors approved an African Development Fund (ADF) grant of USD 19.2 million to Eritrea on November 30, 2011 to improve equitable access, quality and relevance of technical, vocational education and training.

The project will be financed jointly by an ADF grant of USD 18.65 million and an Eritrean Government’s contribution of USD 2.06 million.

“The project was in line with the Bank’s Higher Education, Science and Technology strategy and the State of Eritrea’s prioritization in these sectors.

It will contribute to foster inclusive economic growth”, said AfDB Vice President Kamal El Kheshen during a signing ceremony with the Director General of Eritrean Treasury Department, in Tunis where the AfDB is located temporarily.

The key outcome of this project will be an increase in the supply of quality middle level technicians needed by the Eritrean economy.

It will support the provision of quality intermediate level technical and vocational training skills needed in the manufacturing and other sectors to foster economic growth and reduce poverty.

Specifically, the project will mainstream entrepreneurship while institutionalizing studies to measure the external efficiency of training systems.

In addition to the 50,000 students targeted by the project, other beneficiaries will include instructors, adults living near the technical institutions who will have access to training or retraining in selected modules in various trades.

To date, the African Development Bank has already financed two education projects in Eritrea for a total amount of USD 50.47 million.

The Asmara Geocongress 2011 was held this month in Eritrea’s capital Asmara. The event was a great success and showcased Eritrea’s mining and exploration activity and potential.

Below is a link to view the Asmara Geocongress Journal 2011. The Journal contains information regarding Eritrea’s Mining Law; Investment Opportunities; Mining exploration activities; and statements from the Eritrean Minister of Energy and Mines, Mr Ahmed Haj Ali.

To view the journal: click here

The Common Market for Eastern and Southern Africa, (COMESA) has procured equipment to be used in three regional laboratories meant to enhance Sanitary and Phytosanitary (SPS) requirements. This is part of efforts by the regional bloc to establish SPS regional reference laboratories. The three laboratories are the Central Veterinary Research Institute for Animal Health in Zambia, the Food Technology laboratory for food safety of Mauritius and the Plant Inspectorate Service for Plant Health of Kenya.

This has been revealed by Dr Chungu Mwila, Director of Investment Promotion and Private Sector Development (IPPSD) at the COMESA Secretariat. Dr Mwila was speaking at the opening of the national training workshop for Zambia on SPS held in Lusaka from 12th to 14th January 2011. The training was co-organised by COMESA, the Zambian Government and the African Nations in Sanitary and Phytosanitary Standard Setting Organisations Project (PAN-SPSO).

Dr Mwila pointed out that COMESA countries need to comply with SPS requirements in order for them to fully participate in the multilateral trading arena and also protect the lives and health of humans, animals and plants in the region.

“It is important to note that most African national fail to access international markets for their agricultural and food products mainly because of non compliance with SPS requirements.

SPS standards are a major part of the international trading regime and we need to conform to these rules if we are to occupy our rightful position in the international trading area,” Dr Mwila pointed out. He added that the harmonization of SPS measures in the COMESA region is hampered by several factors which include insufficient human resources capacities, insufficient institutional capacities, incompatible legislation, regulatory, inspection and certification systems. Other factors are insufficient dialogue among the relevant SPS authorities in the various Member States and inadequate participation of Member States in international fora that deal with SPS matters, particularly the standard setting processes.

It is for this reason that COMESA is working to assist Member States ensure that the SPS measures they implement conform to agreed regional and international standards set by the World Organisation for Animal Health, International Plant Protection Convention (IPPC) and Codex Alimentarius Commission (CAC).

COMESA and PAN-SPSO have teamed up and help Member States develop their capacities in SPS. After the training, it is expected that African countries will be strengthened to empower national SPS offices for effective participation in SPS standard setting activities, strengthening of a common position in SPS by African nations and at the level of Regional Economic Groupings (RECs). The technical capacity of African countries to draft standards and develop science-based arguments will have been strengthened.

So far, COMESA has trained close to 150 SPS experts in Member States at different levels in order to form a nucleus of SPS experts in the region, helping to establish the three regional labs, sensitising stakeholders at national level and adopting SPS regulations which were done in December 2009 by the COMESA Council of Ministers.

International Standards for SPS Measures are the standards, guidelines and recommendations recognized as the basis for application of SPS measures by members of the World Trade Organisation.

COMESA and PAN-SPSO are conducting the training in eight COMESA Member States namely: Democratic Republic of Congo, Comoros, Eritrea, Madagascar, Malawi, Mauritius, Seychelles and Zambia.

For the full video please click here: ABNDigital

Angel of Hope

By Amanuel Biedemariam

Over the last 11 years, the Economist magazine portrayed Eritrea in the least flattering and in a way that could have discouraged investors from looking at Eritrea as a potential business prospect.

In October 1 2009, The Economist released a report based on Ibrahim’s Index with the heading “Who is doing well in Africa?” and placed Eritrea as THE worst performing nation and concluded Eritrea is “failing.” In September of 2010 The Economist reported an article that headlined, Eritrea “A Siege State” and echoed everything the ICG reported, to mention some.

The irony is, the economist over the last two months have changed its tune and declared, “Eritrea will be THE fastest growing economy in the world.” The question is how did that happen? What changed?

The Economist is still getting it wrong. The paper is suggesting that Eritrea’s growth will be based on mining and specifically gold. Obviously, Eritreans are happy to hear that their economy will improve. However, the report is still misleading because it fails to give the international community some accurate picture of what Eritrea is all about. Eritrea’s future prosperity will not be based on the extraction of minerals alone; it will be a result of the wit, dedication and hard work of the Eritrean people. It is happening because of the most brave, experienced, brilliant visionary leaders the world has ever witnessed. Above all, it is based on the “Illusive United Resilience” and GOLDEN heart of the people of Eritrea!

The Economist is not alone however. The doomsday of Eritrea was a dream many envisioned, hoped and worked-for day in and out. It was a concerted effort by many who thought; with-ease, they can undo Eritrea’s independence and remold-it in accordance with their interests. These efforts were led by the US and implemented by their mercenary leaders of Africa, USAID, NGOs, The Human Right Watch and the like. It placed the mercenary regime in Ethiopia on the forefront with Eritrean Lost Souls that our. Sophia Tesfamariam loves to call, “EQL” for Eritrean Quisling League.

Their main target is his Excellency President Isaias Afwerki and the leadership of Eritrea. They waged successive military campaigns and failed. They placed undeclared economic, military and other sanctions to isolate and shake loose the core. They waged major defamation and demonizing campaigns with clear intent to penalize and to justify their actions. They tried to sabotage everything Eritrean however possible. They distorted, spun, made up stories and propagated. They made every effort under the sun to frustrate the youth into giving up and disperse all over. They conducted major psychological warfare on the people of Eritrea to dislodge the people from the government. They failed, failed and failed miserably to their embarrassment at every corner!

These shameless enemies of Eritrea have some commonalities. They over estimated their powers. They overplayed their diplomatic hands; overestimated the capacity of the regional organizations such as IGAD and; heavily over-invested on the defunct Ethiopian regime that worked against their interests at every turn.

Moreover, they overestimated the ability of the Eritrean criminal elements that-they paraded as opposition. The enemies falsely assumed they can form a government in exile in Ethiopia, the US or other places. They also counted on their media’s reach to do all the demonizing to the point that it could impact the Eritrean societies and their international audience.

Above all, they made three major mistakes. That is: firstly, they underestimated the resilient nature of the Eritrean people. Secondly, they ignored Eritrean unity and third and most importantly, they gambled on the “Failure” and supposed weaknesses of Eritrea. The above mentioned reasons intertwine. But what makes the last three stand out is that they gambled on the failures of the Eritrean people. That means, every time Eritreans succeed by overcoming the hurdles the enemies placed; it discredited them and in reverse emboldened Eritrea’s resolve and; readied Eritreans for more challenges. To illustrate this example:

In 2003, Awate, Asmarino and co… demonstrated in front of the State Department in DC demanding the US stop giving humanitarian assistance to Eritrea. They waged sustained efforts to tell the world and Eritrea how poor and desperate Eritrea was and preached it will crumble any time. They lobbied the EU to stop from giving funding for development. Mind you, these are people that claim to care about the people of Eritrea. In October 2007, The New York Times released an article “Resentment and Rations as Eritrea Nears a Crisis” with a picture of average Eritreans lined to “purchase” bread. At the same time Eritrea was refused aid after a crippling drought and a prolonged “No War No Peace” situation with Ethiopia. This shows the cross connection between the US, international media, Ethiopia, and the Eritrean EQL’s at work.

This deliberate attempt to strangulate Eritrea was designed to create an impression that Eritrea is failing; while, at the same time hoping to ignite unrest in Eritrea. These are regular campaigns that Eritreans grew accustomed to. However, while the enemies are working hard to create havoc or at least create the impression of it; the Government and people of Eritrea were working hard to change their future for good. The people and the government worked extremely hard readying the land for farming, creating dams to preserve water; terracing land and planted vegetation to prevent erosion. They followed on all the collective and mechanized farming programs that the government put in motion. In one occasion during the Eritrean independence celebrations, the Eritrean Government paraded tractors through the middle of the stadium getting a sustained applause of support. Eritreans never looked back since. The hard work and a good rainy season have assured food security to the point that President Isaias declared that food security was just a stage. Eritrea is looking forward to the next stage – exporting food.

To that end, all the necessary social and physical infrastructures are being put in place in aggressive speed and unrivaled efficiency. Eritrean efficiency is putting to shame Western aid/alms providers/enablers that sustained failed leaderships of Africa for decades. Eritrean maturity, painfully acquired experiences, eagerness to learn and willingness to work as hard to change their lives is making a visible difference in every sector. Their toil is providing year around supply of produce, animal feed and abundant meat. It is changing once destroyed landscape into a lash agricultural farm land. In the outskirts of the city of Mendefera one such effort enabled a farmer to meet the milk needs of the city and is providing services in Asmara.

Countless bridges were built connecting villages that were separated for ions facilitating businesses. It is keeping people and animals from drowning in flooded rivers during rainy seasons; enabling smooth flow of traffic and, importantly, it is providing easy medical access for women and children, who are normally the ones that take the brunt of backwardness. New highways and roads are being built connecting remote areas and opening up incredible landscapes for tourism. Eritrea poses some of the most breathtaking terrains and mountains that are difficult to access. Yet the local residents are joining in with the local construction companies that are constructing the roads making it a communal effort. These incredible achievements are being accomplished with indigenous engineering and muscle. Eritrea is building her own schools, medical facilities and other structures to sustain the societal needs. Eritrea is developing her own teachers in all fields of studies such as agriculture, business, engineering and medicine. In 2009 the first batch of doctors graduated from Orota School of Medicine giving Eritrea her first locally developed doctors. The College of Marine Science Technology in Massawa graduated 127 students in 2008. The Eritrea Institute of Technology is the biggest boarding educational institute that caters to the needs of over 10,000 students. With all the challenges that Eritrea faced after independence, the people and government focused on these key issues and are tackling them strategically with minimal resources.

Eritrea’s answer to the brain drain is the ability to develop local capacities and create mechanisms that sustains it. It feels like a miracle that Eritrea survived let alone get to where it is today. Over 70% of Eritrea has access to potable water enabling a core drilling company to focus on mineral drilling instead. And that will be another landmark that Eritrea can check-off soon. Here is one thing to ponder. According to USA Today Afghanistan is projected to cost $117 billion in 2011. However, one can hardly notice a difference in the lives of the Afghanis. In Eritrea all these accomplished are achieved under a hostile environment, with little or no assistance, with prudence and unrivaled efficiency.

The Economist also ignored what motivates Eritreans. Eritreans hold dear their obligations to those who paid with dear life, limbs and untold suffering to bring the nation. What is clear is that the West is deliberately oblivious to how Eritrea came about and the uniqueness of the people. They ignore the brilliance, patience, the can do attitude; will to meet the challenges the West hurls at them every second. They undermine Eritrea’s brilliance and capacity. They chided Eritrea’s desire to self reliance. And they are still pursuing their criminal colonial aspirations day in and out.

Eritrea’s gold is the heart of the people of Eritrea. Eritreans know more than gold or any of the resources; they have each other through thick and thin. Everything Eritreans do is different. When we dance our dances are communal. Young, old, man or woman from all region of Eritrea dance together. We eat together. Our holidays are collectively celebrated. We are the epitome of harmony and collective-joy anchored in Eritrea.

Therefore, by all standards, Eritrean standards that is, where we are today are a million percent better than what they expected. It is also a defeat for them because after forcibly allowing our colonization, after major infusion of military, monetary and other assistance by all the powers to subjugate; that “Illusive United Resilience” is at work frustrating them as always. It takes different forms because Eritreans can adopt easily as we are with the Mekete campaign that Eritreans are conducting worldwide to fight the Unjust and Illegal Sanction that they placed on Eritrea in order to undermine her independence. That is a clear indicator that their mischievous plans are continuous.

So why are the Economist, the IMF and others saying Eritrea is the fastest growing country on earth? Why the hoopla? Could it be that they are trying to set the Eritrean people’s expectations? Where were they when Eritrea was setting the templates for the future, working hard day and night, hungry and thirsty? Where were they when genuine appeals were being made? Why can’t they give the people of Eritrea their respect and dues by telling the truth? Why can’t they at least, reevaluate their sinister approaches in light of the Wikileaks revelation that is exposing the fraudulent nature of Western journalism?

Conclusion

Eritreans were able to do this because they are smart people and believe if you don’t know how a bird “Kokah” flies then you are not a bird hunter. They know from experience that their best ally is their ability to set their own course and destiny and, their unity. They have learned that safeguarding Eritrea is a 24 hour job. It is their love, their mission and a way of life. And every day, they are enjoying the sweetness of freedom more and more because that is the best resource Eritrea unearthed with dear life and it will only get better!

Awetnayu@hotmail.com

The Economist Intelligence Unit has published the “2011: country by country” report. According to the report economic growth rates for 2011 will take different directions depending on where you live. If you live in the rich world growth will underperform, if you live in the developing world growth rate predictions look rosy.

The world GDP growth is predicted to slow down from 3.5% in 2010 to 2.5% in 2011, as fiscal stimulus is withdrawn and emerging markets will continue, to a large extent, to shrug off the 2008-09 economic crisis. Eritrea, the former Italian colony, which won independence from Ethiopia in 1993 after a long bloody war, is set to become the world’s top growth leader in 2011.

Eritrea will overtake Qatar as the world’s fastest-growing economy in 2011, as production begins at the country’s first operational mine (Bisha) operated by Nevsun Resources Ltd. (TSX:NSU)(NYSE Amex:NSU).

“We have had a fantastic year and we expect our growth to continue as we move from construction to commercial production in 2011,” said Cliff T. Davis, President and Chief Executive Officer, Nevsun Resources in a recent press release.

The world growth league table 2011 in real GDP growth shows Eritrea on the top of the 20 fastest-growing economies followed by Qatar, Ghana, Ethiopia, China, India, Uzbekistan, Laos, Haiti, Papua New Guinea, Angola, Botswana, Liberia, Mozambique, Tanzania, Sao Tome and Principe, Sri Lanka, Vietnam, Rwanda, Malawi.

For more information please visit: Finfacts

Asmara, (Shabait) 25 April 2010 – The existing favorable atmosphere in Eritrea has a vital role to play in rising productively both in term of quality and quantity, Stated Mr. Stifano Bonazi, an Italian national who is the general manager of the privately-owned ZA-ER Plant.

He explained that the plant has offered various training courses to about 500 Eritrean employees, and that it has managed to produce about 500 shirts and from 150 to 200 trousers on a daily basis.

Mr. Stifano further noted that the plant’s products are not only qualitative but are also being sold at a fair price, and that such products are highly demanded in the European, Asian and African markets. There are also plans to boost production up to 1,300 shirts and trousers on daily basis in the near future, he elaborated. He went on to say that the plant has 7 selling stations in different parts of the country, including 3 in Asmara, and each in Mendefera, Keren, Dekemhare and Tessenei.

The owner of the plant, Italian Zambayeti Jiancarlo, stated on his part that the task requires high caution and efficiency, and that it supplies up to 4,500 threads to the local and international market daily.

ZA-ER is a privately-owned plant set up in 2004, and at present it has about 500 employees.

World Trade Indicators 2009/2010

Trade Policy

Eritrea has made significant progress since independence in 1993 in liberalizing its trade regime. In 1994, the country radically reduced the number of tariffs and simplified its customs procedures. Its MFN Tariff Trade Restrictiveness Index (TTRI) ¹ is 5.8 percent, below the average for both SubSaharan Africa (SSA) (11.3 percent) and lowincome countries (11.6 percent). Tariff protection for agricultural products is much less restrictive (4.2 percent) than for non-agricultural products (8.5 percent). Based on the TTRI, it ranks 66^th out of 125 countries (where 1^stis least restrictive). The maximum MFN tariff imposed by Eritrea was 25 percent as of 2006.

As a step towards making its economy more open, the country is planning to launch a free trade zone at its Massawa harbor later in 2009 to attract foreign investment. With this free trade zone, Eritrea would remove trade barriers such as taxes and quotas and minimize bureaucracy at the harbor, encouraging further trade.

External Environment

According to Eritrea’s Market Access TTRI² (including preferences) of 0.9 percent, the country’s exports face much lower barriers than an average SSA (3.9 percent) or low-income country (5.6 percent). Similarly, the weighted average overall rest of the world tariff (including preferences) faced by the country is a relatively low 1.7 percent, with 3.1 percent for agricultural products and 1.4 percent for non-agricultural products. The Eritrean currency, the nakfa, which is pegged to the U.S. dollar, depreciated by 7 percent against the euro in 2008, making the country’s exports less expensive in foreign currency terms.

Eritrea belongs to the seven-member Intergovernmental Authority on Development (IGAD), which is currently planning to create a free trade area. The country is also a member of the Common Market for Eastern and Southern Africa (COMESA), which established a customs union in June 2009 and plans to fully implement it in 2012. As negotiations between the Eastern and Southern Africa (ESA) group and the EU towards a full Economic Partnership Agreement (EPA) could not be completed prior to the December 2007 deadline, the preferences under the Cotonou Agreement elapsed. Eritrea, however, maintains a similar level of preferences to the EU market under the “Everything But Arms” (EBA) initiative for least developed countries. The country continues to negotiate a comprehensive EPA with the EU as part of the ESA group. The country is neither a member of the WTO nor an applicant for membership.

Behind the Border Constraints

Eritrea ranks in the bottom 5 percent of friendly business environments according to the Ease of Doing Business index, on which it ranked 175^th out of 183 countries in 2009. The latest Doing Business Report 2010 is available here: DOING BUSINESS 2010

Reflecting the extent of trade facilitation in the country, Eritrea’s score on the Logistics Performance Index (LPI) is 2.19 on a scale of 1 to 5, compared to the averages of 2.35 and 2.29 for its SSA and low-income comparators, respectively.

It ranks 124^th (out of 150) in the world and 29^th(out of 39) in the SSA region (with South Africa leading the regional group). Among the LPI subcategories, its strongest performance is in lowering domestic logistics costs while its weakest performance is in ensuring the timeliness of shipments in reaching their destination.

Trade Outcomes

Real trade growth (in constant 2000 US dollars) is estimated to have been only 3.7 percent in 2008, although this is a significant improvement over the contraction of 1.6 percent in 2007. Growth will remain positive in 2009 but at a lower rate of 1.8 percent. Imports increased by an estimated 3.9 percent in 2009 after falling by 1.5 percent the year before, while exports grew by an estimated 2.7 percent following a 2.3 percent fall in 2007. Both imports and exports are expected to continue to register positive growth in 2009, albeit at lower rates of 1.7 percent and 2.1 percent, respectively.

In nominal terms, trade growth accelerated to an estimated 12.7 percent in 2008 from 5.2 percent in 2007. While import growth rose from 1.2 percent in 2007 to an estimated 11.7 percent in 2008, driven in part by high food and oil prices, export growth fell from 29.8 percent to an estimated 17.5 percent. Services exports grew at an estimated rate of 8.6 percent in 2008, compared to 24.2 percent in the previous year, and are expected to fall by 0.3 percent in 2009.

Goods exports experienced a very high estimated growth of 45.8 percent in 2008, a little lower than the growth rate of 51.5 percent in 2007, but are expected to grow by only 0.7 percent in 2009. The recent discovery of gold is expected to boost exports in the near future, with the country’s Bisha gold mine scheduled to begin production in 2010.

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Unless otherwise indicated, all data are as of August 2009 and are drawn from the World Trade Indicators 2009/10 Database. The database, Country Trade Briefs and Trade-at-a-Glance Tables, are available at http://www.worldbank.org/wti.

If using information from this brief, please provide the following source citation: World Bank. 2010. “Eritrea Trade Brief.” World Trade Indicators 2009/10: Country Trade Briefs. Washington, DC: World Bank. Available at http://www.worldbank.org/wti.

Notes

1. TTRI calculates the equivalent uniform tariff that would keep domestic welfare constant. It is weighted by import shares and import demand elasticity.

2. MA-TTRI calculates the equivalent uniform tariff of trading partners that would keep their level of imports constant. It is weighted by import values and import demand elasticities of trading partners.

References

Capitaleritrea. 2009. “Eritrea to Attract Investors with Free Trade Zone at Sea Ports.” Capitaleritrea. May 19, 2009. <http://www.capitaleritrea.com/2009/ 05/19/eritrea-to-attract-investors-with-free-trade-zone-at-sea-ports/>.

COMESA. 2009. “COMESA Launches its Customs Union.” COMESA. July 24, 2009. <http://www.comesa.int/lang-fr/component/ content/article/168-comesa-launches-its-customs-union>.

Europa. 2009. “Africa, Caribbean, Pacific—Regional Negotiations of Economic Partnership Agreements.” Europa. June 2009. <http:// ec.europa.eu/trade/issues/bilateral/regions/acp/ regneg_en.htm>.

The Economist Intelligence Unit (EIU). 2009. “Country Report—Eritrea.” EIU. May 2009. <http:// countryanalysis.eiu.com/country_reports>.

The Intergovernmental Authority on Development (IGAD). 2008. “IGAD Member States and Development Partners Discuss Minimum Integration Plan for the Region.” IGAD. November 4, 2008. <http://www.igad.org/index.php?option= com_content&task=view&id=194&Itemid=64

Eritrea said on Wednesday that its economy will be unaffected by the U.N. sanctions imposed on the nation, which were an international response to Asmara’s alleged support of Islamist rebel groups in Somalia.

Punitive measures including an arms embargo, travel restrictions and asset freezes for some of the country’s top officials raised fears the limitations may slow an economy reliant on financial and moral support from the diaspora.

Remittances from Europe, the United States, the Middle East and other African nations are Eritrea’s biggest source of foreign exchange. Analysts say they continue to flow because high-ranking Eritreans travel to other countries and drum up support for the Red Sea state.

Eritrea has dismissed concerns saying sanctions would not slow development.

“The sanctions should not have any impact on investment, no impact on trade, or Eritrea’s external ties with its economic partners,” Yemane Ghebremeskel, director of the Eritrean president’s office, told Reuters in an interview.

“Our development strategy is not really based on injections of development assistance anyway. There are still extensive development plans in place designed to enhance productivity and expand services in education and health,” he said.

The country would build more than 50 new schools this year, he said.

The U.N. imposed sanctions last month because Security Council members say Eritrea has given support to Islamist insurgents in Somalia who are battling the U.N.-backed transitional government. Violence in the Horn of Africa nation has killed at least 19,000 people since the start of 2007.

‘IT’S WEDDING SEASON’

Yemane said average Eritreans were disappointed in the United Nations over the sanctions but they remained fairly indifferent to the measures themselves.

“They know these sanctions have nothing to do with justice or international law. People don’t give it undue weight — it’s January, wedding season, people are getting on with their business and going to parties,” he said.

Yemane reiterated the view of President Isaias Afwerki that the sanctions are baseless and contravene international law.

“Those sanctions are not based on international law. The accusations have not been proved and Eritrea has not been given the opportunity to make its case on an independent platform.”

Last week the President told local media that no solid facts have been produced against Eritrea and no proper legal procedures have been applied to discover the truth.

“In the final analysis, the conspiracy was essentially masterminded by U.S. intelligence agencies, especially the CIA,” the President said.

Eritrea’s economy contracted sharply in 2008 while inflation surged to double digits, according to the International Monetary Fund, but better rains in 2009 could have boosted growth to about 3.5 percent. Source: (Reuters)

Horn of Africa

London based think tank Chatham House published a briefing paper on economic drivers of conflict and cooperation in the Horn of Africa.

According to the research agency, economic relations between nations in the Horn of Africa could play a vital role in bringing peaceful cooperation to the region. However, disagreement over territorial integrity, cultural nationalism and internal factionalism have economic elements which fuel conflict or are critical to its outcome.

Further, it states the Horn of Africa remains highly violent and conflict driven within and across national borders. The fact that the region is linked together through colonial occurrences, common ecological zones and cultural interdependence, explains why disputes in one country can have political and economic significance beyond its borders.

The termination of trade between Eritrea and Ethiopia after the 1998-2000 war represents an economic driver of conflict, the report states. The border closure between Eritrea and Ethiopia caused all Ethiopian trade to be redirected via Djibouti.

The growth of trade volumes via Djibouti went up from 1.7 million tonnes in 1997 to 3.1 million tonnes in 1998 and 4.2 million tonnes in 2002. Before the conflict the port of Assab was handling 80 – 85% of Ethiopia’s international trade, with only 15 – 20% passing through Djibouti.

According to the think tank a possible return of trade between Ethiopia and Eritrea will depend on a number of factors;

• The degree of development in the economic infrastructure of  Tigray
• The availability of finance to upgrade the ports of Massawa and Assab
• The degree of competitive measures applied from Djibouti
• Low cost operation costs at ports in Somalia (Berbera port fees 40% lower than those in Djibouti)
• The development of relations between Eritrea and Ethiopia
• The alternative of road supply routes with Sudan (cheap import and exports- only 45km from Tessenei)

For  more: plesae visit the Chatham House Web page

Summary points:

• Among the drivers of conflict in the Horn of Africa economic motivations have been ubiquitous and pervasive in prompting and sustaining conflict. At other times economic drivers have exhibited a potential for peaceful cooperation. An understanding of their role and relationship with other forces of change is essential.
• Conflict in the Horn frequently has economic impacts across national borders. This paper identifies four major zones of borderland insecurity in which informal trade as much as formal relationships can both sustain conflict and offer potential for post conflict cooperation.
• Underlying the various sub-regional conflicts are a number of recurrent economic themes, including access to sea ports, livestock as a basis for livelihoods, energy related issues, the wider impact of localized conflict, drought, land rights and remittances.
• The establishment of permanent peace can only be built upon a common set of values reflecting equity, tolerance and an acknowledgment of the potential of traditional institutions in entrenching community cohesion. Only on such a foundation will specific programmes be assured of harnessing those economic drivers necessary for their success.

By Olad Hassan

Zimbabwe is entering a new era in relations with the world amid signs of increasing investor interest and the ongoing negotiations between ZANU PF and MDC to lay out a new political direction for the country.

The list of talks and events is long, starting from the meetings between the country’s two main parties on issues such as power sharing, government posts, economy and media reforms to this week’s ZANU PF party congress, where delegates are going to discuss the future of the party and who is going to continue leading ZANU PF.

On the side lines the country’s Finance Minister has recently announced that the Zimbabwean economy (GDP) will grow by 7 percent in 2010. The budget for next year includes a reduction of corporate tax to 25 percent from 30 percent, a move welcomed by companies and investors. The Minister hopes that a substantial part of the money for the Budget will come from the countries vast mining resources.

Investors should look out for Zimbabwe as a potential investment opportunity as mining shares seem to be undervalued given the vast mining potential of the country.

However, analysts say as long as there is no better access to capital for mining companies and no trustworthy unity government in place investors should be cautious to gamble their money.

At the other hand shares of mining companies in Zimbabwe can be obtained at a very low price which might yield high returns in future. Bargains always come with a risk and Zimbabwe certainly appears to be an uncertain destination for investors.

But the fact that mining companies in Zimbabwe are re-opening and some have already managed to find financiers in order to start production is encouraging.

For example the Chinese ahead of time entered the mining market and recently expressed their interest to upgrade the countries transport infrastructure. Western companies such as Anglo American announced to invest millions in order to explore platinum and several locally owned mines have by now started producing and exporting natural resources.

Companies to watch out are:

Mwana Africa PLC. (LON:MWA)

Caledonia Mining Corporation (OTC:CALVF)