Premier of China

The Chinese government is committed to assisting African countries in improving their agricultural production and infrastructure and promoting socioeconomic development through the provision of preferential credit, said Chinese Commerce Minister Chen Deming here Monday.

“Thanks to our concerted efforts, China-Africa cooperation in agriculture and infrastructure has experienced leaps and bounds over the years,” Chen said on the second day of the fourth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC).

“Such cooperation has diversified in forms, increased in size and moved to high levels,” Chen added.

The Chinese minister of commerce said China will continue to pursue the agenda of “friendship, cooperation and development” with African countries by advancing bilateral trade and commerce and by contributing to agricultural development, food security and infrastructure building in Africa on the basis of mutual benefits and win-win principle.

Chen proposed four points to promote cooperation between China and African countries in the future.

First, improving Africa’s capacity for agricultural production. “In the next three years, China will organize 50 groups of agricultural experts to Africa for transferring and disseminating agro-technology and for putting into place a system of agro-technology promotion among African countries,” he said.

Second, actively pursuing an innovative model of China-Africa agricultural cooperation. He said that China will continue to encourage competent and reputable agro-businesses to invest in Africa, and transfer and deploy China’s technology and managerial expertise in agriculture.

Third, enhancing cooperation in infrastructure building. The minister said “China continues to identify infrastructure as a priority for China-Africa cooperation and will intensify investments in infrastructure projects across Africa.”

Fourth, creating platforms for the cooperation of Chinese and African businesses. Chen noted that “Business is on the forefront of deepening China-Africa cooperation in agriculture and infrastructure. The governments of China and Africa should work closely and make good policies, but more importantly, leave businesses to the laws of the market.”

The fourth FOCAC ministerial meeting opened in the Egyptian Red Sea resort of Sharm el-Sheikh on Sunday.

The main agenda of the conference is to review the implementation of the follow-up activities of the FOCAC Beijing Summit and the third ministerial conference and explore new initiatives and measures on Sino-African cooperation in priority areas such as human resources development, agriculture, infrastructure development, investment and trade. Source: (Xinhua)

IMF

ASMARA, Eritrea September 29, 2009/African Press Organization (APO)/ — An International Monetary Fund (IMF) mission visited Eritrea during September 14–29, 2009 to conduct the 2009 Article IV consultation discussions.

The last Article IV consultation was concluded in April 2008. The mission met with Mr. Ali, Minister of Energy and Mines, Mr. Woldemariam, Acting Governor of the Bank of Eritrea, Mrs. Woldeghiorghis, Director General of the Treasury and Mr. Tesfaldet, Director General of the Budget (both in the Ministry of Finance), other senior officials, and representatives of the international community and civil society.

The mission is grateful to the authorities for their very warm hospitality and fruitful discussions. Mr. Mario de Zamaróczy, mission chief for Eritrea, issued the following statement today in Asmara:

“The mission reviewed economic developments since the last consultation and discussed the authorities’ macroeconomic policies against the backdrop of a severe drought in 2008, the international food and oil price crises, and the global recession. In the wake of these exogenous shocks, Eritrea’s economic performance has weakened, with growth remaining elusive, while inflation has accelerated and progress in fiscal consolidation, stalled.

“The mission noted a number of areas where progress had been made. These included continued investment in agricultural and irrigation projects to wean the country’s farming industry progressively away from dependence on irregular rainfall; public investment program in targeted key sectors, such as education, health, mining, infrastructure, cement production, tourism, green energy, and fisheries. These investments are expected to contribute to a resumption of growth in the medium term. However, even with the positive impact of forthcoming mining and cement productions, Eritrea’s medium-term outlook could present downside risks. The mission expressed concerns with regard to the size of the fiscal and current account deficits, external and domestic debt levels, and high inflation. Growth, even with the maturation of earlier investments, may remain below the level necessary to achieve a significant reduction in poverty.

“The policy discussions centered on a number of possible policy measures to rekindle economic growth and private sector activities. In the short run, the focus should be on restoring macroeconomic and financial balances, through fiscal consolidation; reducing banking sector financing of the budget deficit; and relaxing import and exchange controls to re-launch imports of basic and intermediary goods. As global pressures recede, it would be important to bring inflation under control through restrained fiscal and monetary policies. The government’s expenditure prioritization efforts were identified as key to raising the effectiveness of public outlays in a resource-constrained environment. In the medium term, the focus should be on measures that promote external competitiveness; liberalization of the financial sector; removal of administrative bottlenecks; and promotion of private investment in the productive sectors. The mission believes that with the right set of reform policies and building on the country’s rich human and mineral resource potential, Eritrea could be well placed to rebound as the world recession wanes.

“The mission welcomed the authorities’ renewed interest in drawing on the IMF’s and other donors capacity-building assistance to develop institutional and human capacity in the civil service. The mission noted that the IMF’s East Africa Regional Technical Assistance Center (East AFRITAC) was well placed to provide technical assistance on a grant basis.

“It is expected that, subject to IMF management approval, the IMF’s Executive Board will consider the mission’s report in December 2009.” Source: (IMF)

The AU is calling on the Security Council of the United Nations to implement sanctions against Eritrea.

These sanctions can imply the suspension of trade relations, rail, sea, air, postal, telegraphic, radio as well as the severance of diplomatic relations with a state.

For countries such as Eritrea being able to import goods and services for the national economy can mean the life line for survival. 

The threat of sanctions on goods and services in hand with the introduction of tariff and trade barriers, import duties as well as import and export quotas would cause heavy administrative fences for Eritrea. This would make it nearly impossible for a country to supply for the needs of its people.

Eritrea is already one of the poorest nations in the world, with an average yearly per capita income of $US 200 and ranking 157th out of 177 states in the World Development Index (World Bank 2006). Thus, it seems obvious that the introduction of sanctions could have a crushing impact on trade and food security levels for the population of Eritrea.

Especially, as the country is already highly vulnerable to external factors such as commodity prices and foreign exchange flows.

Previous examples of countries which have been sanctioned resulted in impoverishment, increase of child mortality and the lack of elementary items for living. This has led to a majority of people not being able to feed themselves, the GDP falling extremely and the gradual run down of necessary facilities.

In the eye of the increasing economical advances made in the country, the call to sanction Eritrea by neighbouring countries is definitely representing an ethical and humanitarian injustice against the people living in Eritrea.

The WHO has stated recently that good progress has been made in Eritrea to improve life expectancy for its people. 

For the first time in years, foreign investment seems to not be scared away from the nation in the Horn of Africa and willing to provide with heavily needed foreign exchange. 

Further, the World Bank is underlining that the prospect to ensure food security, develop human resources and physical infrastructure has improved for Eritrea. Moreover, the World Bank is referring to the positive outlook for economical growth with the introduction of a free trade zones as well as the development of the mining sector in Eritrea.

Between 2005 and 2007 Eritrea had an average GDP growth rate of 1%. Experts have estimated that Eritrea requires a sustained real economic growth of 7% or higher in the long term, to reach its Millennium Goal to reduce the number of people living in extreme poverty by 50% until 2015.

Being in the middle of  an economical downturn is definitely not going to be a very easy situation for many people around the world. Nevertheless, it is a periodic occurrence, which is necessary to put things right in a world living too often beyond its means.

Eritrea has been on the track of self-reliance since the independence gained from Ethiopia in the beginning of the Nineties. In many fields, such as humanitarian aid, foreign investment exposure and transport infrastructre, it chose directions apart from the norm of other African countries.

Of course this is the harder way to go for a nation and often difficult to comprehend, because it requires sacrificing in first instance. Moreover, for many years Eritreans have lived far below their means for the sake of their nation and national identity. While others, which  now have to come into terms with the bubble burst, used to know no limit.

Thus in times of recession individuals, corporates, national economies and the world tend to lay out their cards newly because it resembles a period of chance, thoughtfulness and self scrutiny.

This is also a chancel for Eritrea to enter into a new relationship in respect to international trade. Especially as a nation, which has a big tourism potential, is soon to enter into the mining industry and is opening its sea ports for free trade.

On the preparations for the upcoming Eritrean National Day on the 24th May 2009, the President of Eritrea has explained to Reuters News Agency, how the country is going to approach these challenges.

“The Norwegians would like to talk about 150 years from now. The Nigerians may want to exploit all their oil resources in 10 days or 10 hours or maybe 10 years, and that’s it, you’re finished. This is a resource of generations.” (President Isaias Afwerki of Eritrea on Reuters News Agency)

The President believes that economical stimulation has to be sustainable in order to fit a nations characteristic of infrastructure. Therefore, he suggests that instead of a tempting short term approach, Eritrea should seek for a more adequate pace to manage the exposure to a free market and a influx of foreign investment. This would be the only way how to best serve Eritrea’s interests for todays and the coming generations ahead.

According to Araia dozens of companies have already registered, because Eritrea’s ports are located along the busiest shipping routes of the world. Further, he outlined that approximately 20.000 ships loaded with 700 million tonnes of cargo, which is around 9% of the total global freight market, would pass each year the coast of Eritrea.

The country is said to have invested millions of $US for the infrastructure of the harbour and airport in Massawa. There are already around 12 companies from countries such as China, Italy, Israel, India, Djibouti, Sudan and Dubai, which have registered under the scheme.

Araia points out that the competitive advantage of Massawa or Assab lies in the low labour costs compared to ports such as Dubai, Djibouti or Aden. Although, Eritrea is aware of the fierce competition from neighbouring countries, it believes it can tap into the niche market of small scale freight operations. Because, small companies would shift away from expensive harbours in the region in favour of the less expensive Eritrean ports. Thus, the initial strategy would be to focus on small cargo business first.

Eritrea’s second and strategically better located port Assab, due to it’s closer location to the Indian Ocean, will follow Massawa into the free trade zone in 2010. Eritrea hopes with this measures to stimulate economical activities in the country as well as to lay the foundation for a good soil of future trade with the world.

ASMARA, May 7 (Xinhua) — Eritrean President Isaias Afwerki on Thursday underscored that stability is the most important factor to promote economic and social development in the African country. Isaias made the remarks in an exclusive interview with Xinhua ahead of the upcoming 16th anniversary of the founding of the State of Eritrea.

“Many may underestimate the importance of stability, but talking about achievements, you have to talk about the preconditions for achievements, and we believe stability is a basic requirement. Without stability, it is very difficult to talk about achievements in the economy, achievements in social programs and other sectors,” the Eritrean president noted.

He added that his country has been able to consolidate the stability based on the long political tradition in Eritrea, in spited of the regional and international challenges.

Isaias also mentioned the achievements in the infrastructure in the past years since independence as his government has adopted a strategy to guarantee the development of infrastructure in the sectors of mining, agriculture, tourism and industry among others.

Eritrea is “in the right track of putting in place a viable infrastructure that will create a conducing framework for investment and then development”, taking consideration of the timespan and the limitation of resources, he noted.

Isaias also explained that his country started from nothing in the field of social service, including healthcare and education, while such service is currently being provided to the Eritrea people in the above fields.

On the recent development of the bilateral ties with China, the Eritrean president said that the strategic partnership between the two countries has developed at a high speed, which was successful in many fields, as the relation between the two countries went beyond the establishment of diplomatic ties on the exact day of Eritrea’s independence.

He expressed the intention of his country to expand cooperation with China in critical economic sectors with priorities on mining, infrastructure and agriculture, as well as service.

On the implementation of the eight major moves China would take to develop relations with Africa, which was announced at the Beijing Summit of the Forum on China-Africa Cooperation in 2006, Isaias said the Forum boost the strategic partnership between China and Africa to a higher level.

The president said that many countries in the Africa see the fruits and achievements, with the understanding that China will bring changes to Africa, promote the economic development in the continent.

He also expected China and Africa to grasp the opportunity during the current global economic crisis to strengthen the bilateral cooperation, as African countries appreciate the investment style of “mutual benefit and common development” initiated by China in Africa as a “two-way cooperation.”

African countries should boost coordination to adopt realistic polices to meet the challenges facing the continent and the Sino-African cooperation and benefit from the Chinese investment and the strategic partnership, Isaias noted, calling for more efforts to develop Africa as a viable market.

The Eritrean president also praised the successful handling of the serious earthquake in Wenchuan in China’s southwest province of Sichuan in May 2008, which made China more prepared to deal with natural disasters in the future.

On the upcoming 60th founding anniversary of the People’s Republic of China in October, Isaias sent congratulations to the Chinese people as China has developed into a major world economic power in the past years and made contributions to world peace and prosperity.

“We, not only here in Eritrea, but along the continent in everywhere, would wish the Chinese people to continue along the same path so that we see more of positive change and cooperation between China and other peoples, ” he concluded.

Eritrea, which currently has a population of about 5 million, formally announced its independence from Ethiopia in 1993.

According to the Qatar News Agency, Sheikh Abdullah bin Zayed Al Nahyan met on Sunday with the President of Eritrea in Asmara, in order to discuss bilateral relations on investment, economy and trade. The UAE Foreign Minister is currently visiting several African countries in order to strengthen ties with the continent. Read more: QNA