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          4/11/2014

 

 

 

What We (Don’t) Know About Eritrea’s Economy

Eritrea perfectly illustrates the amount of guesswork involved in economic analysis of Africa.

At the start of this week, Nigeria’s GDP figures nearly doubled after the government recalculated economic output. Statisticians rebased their numbers to include changes to the economy, and in a heartbeat Africa’s most populous country had also become its richest, leapfrogging South Africa by a mile, and shooting up the global rankings to join the likes of Norway and Poland.

Although the ground under their feet was exactly the same, the country they were living in on paper had suddenly shifted for Nigeria’s 170 million population. Or should that be 180 million? Or 140 million? Or even higher or lower? The actual size of Nigeria’s population is also based on questionable estimates and evidence, and it too is heavily contested.

The fact that Nigeria’s statistics are so deeply shrouded in doubt is striking especially given that it is, as we now know, the richest country on the continent. This begs the question: if our understanding of Nigeria rests on such shaky ground, what about poorer, less well-connected, and more closed off countries? For example, what about Eritrea?

No data

Trying to get any data about Eritrea can be a thankless task. Access to information is very limited and the authoritarian regime’s relationship with any media apart from those run by its own information ministry is strained at best. The Horn of Africa nation is deeply isolated internationally and is considered to have one of the worst records in the world when it comes to civil liberties, political rights and domestic freedoms.

Unsurprisingly, international headlines about the Red Sea state are rare, and when there is coverage, it is usually about runaways fleeing the nation’s grip, abductions of Eritrean refugees in the Sinai Peninsula, human rights violations, or tentative predictions about how long the regime can last.

With virtually no data to work with, it unsurprising that analysts also tend to shy away from the country. In continent-wide studies, Eritrea is often coloured in grey to demarcate ’no data’, while even multilateral organisations such as the African Development Bank sometimes have to release reports that pretend Eritrea does not exist.

The 2012 African Economic Outlook Report, which is probably the most comprehensive analysis of the country for several years, provides a few valuable if limited insights. But even this most complete report on record misses out some hugely important features such as population size.

Given the difficulties in estimating Eritrea’s population − existing figures range from about 3.5 million to almost double that at 6 million or more − it is perhaps wiser not to guess at all. However, the size of the population has enormous consequences for all per capita figures. The World Bank, for example, estimates Eritrea’s income per head to be $504, basing its calculations on population figures of just over 6 million. If Eritrea’s population were in fact closer to the 3.5 million mark, that income per head figure could be as much as $864.

The black market

However, especially when it comes to Eritrea, even reliable figures can only tell us so much. For instance, the country’s black market for currency exchange significantly complicates things.

The Eritrean currency has been pegged at 15 Nakfa to $1 since 2005. Due to high inflation over many years, the currency has lost value, but the government keeps it fixed in an attempt to tackle external debt. This has contributed to the blossoming of a parallel and illegal internal market for currency exchange. Those caught exchanging currency on the black market can be imprisoned for up to 18 months, but the entire economy depends on such illegal exchanges.

In late 2012, the rates in this illicit market offered three times the amount of Nakfa per dollar compared to official rates. And in March 2013, this already massive gap widened as the Eritrean government overvalued the national currency even more, fixing 10 Nakfa to $1. One important implication of this when examining Eritrea’s national economy is that using the official exchange rate is likely to hugely overestimate the real level of economic development. Using the rates found on the burgeoning black market would suggest the country is significantly poorer than if using the government’s rates.

Going a step further into the real detail of Eritrea’s economy, unofficial sources report that most households in the capital Asmara receive an average of $350 per month in undeclared remittances from relatives abroad. There are two particularly well-known mechanisms through which these clandestine transfers takes place: alongside shipments of contraband goods from Sudan, and when relatives from abroad visit.

These transfers are likely to be hugely significant for Eritrea’s economy. After all, a wage in the formal sector will at best leave you with 1500-2500 Nakfa per month. According to official rates, that comes to $150-250, but in reality it is worth considerably less and is barely enough to survive. For most families in Asmara, therefore, remittances are crucial and often constitute the majority − sometimes as much as 90% − of their overall income. Counterintuitively perhaps, Eritrea’s alarming brain drain ends up significantly stimulating its economy.

However, not all families in Eritrea are so lucky. A pattern of regional migration has occurred within the country in which those that have no relatives abroad are destined to a rural life as subsistence farmers cultivating mostly barren land, while those with close ties to family outside the country can maintain a life in the capital.

A shot in the dark

After Nigeria’s GDP was rebased earlier this week, nothing concrete changed. Nigerians didn’t suddenly have more cash in their wallets, the unemployed were still unemployed, and the many malaises in the national economy went nowhere. However, in the medium term, the updated figures could have a considerable impact, especially as foreign investors look at the country in a different, far more rosy light.

After all, statistics and economic analyses affect policies. Reliable figures can be crucial in helping actors − whether governments, individuals, corporations or multilateral organisations − make the right decisions, while unreliable ones can do the very opposite. When it comes to many countries, not least Eritrea, a great deal of caution needs to be taken before attempting any kind of shot in the dark.

Think Africa Press 

 

 

Eritrean Refugees at Risk

Eritrean refugees face human trafficking, exploitation, and hostility throughout North Africa and the Sahel

Hundreds of thousands of Eritreans have fled a repressive dictatorship since 2001. Their small northeast African country, which has a population 4-5 million and was once touted as part of an African “renaissance,” is one of the largest per-capita producers of asylum seekers in the world.

Many languish in desert camps. Some have been kidnapped, tortured, and ransomed—or killed—in the Sinai. Others have been left to die in the Sahara or drowned in the Mediterranean. Still others have been attacked as foreigners in South Africa, threatened with mass detention in Israel, or refused entry to the United States and Canada under post-9/11 “terrorism bars” based on their past association with an armed liberation movement—the one they are now fleeing.

It’s not easy being Eritrean.

The most horrifying of their misfortunes—the kidnapping, torture, and ransoming in Sinai—has generated attention in the media and among human rights organizations, as did the tragic shipwreck off Lampedusa Island. But the public response, like that to famine or natural disaster, tends to be emotive and ephemeral, turning the refugees into objects of pity or charity with little grasp of who they are, why they take such risks, or what can be done to halt the hemorrhaging.

This is abetted by the Eritrea government, which masks the political origins of these flows by insisting they are “migrants,” not refugees, and no different from those of other poor countries like their neighbor and archenemy, Ethiopia. It is a fiction that’s convenient for destination countries struggling with rising ultra-nationalist movements and eager for a rationale for turning the Eritreans (and others) away.

But this is not a human—or political—crisis amenable to simplistic solutions. Nor is it going away any time soon.

The Source

Eritrea’s history has been marked by conflict and controversy from the time its borders were determined on the battlefield between Italian and Abyssinian forces in the 1890s. A decade of British rule was followed by federation to and then annexation by Ethiopia. Finally in the 1990s, after a 30-year war that pitted the nationalists, themselves divided among competing factions, against successive U.S.- and Soviet-backed Ethiopian regimes, Eritrea gained recognition as a state.

Since then Eritrea has clashed with all of its neighbors, climaxing in an all-out border war with Ethiopia in 1998-2000 that triggered a rapid slide into repression and autocracy. It has survived by conscripting its youth into both military service and forced labor on state-controlled projects and businesses, while relying on its diaspora for financial support, even as it has produced a disproportionate share of the region’s refugees. This paradox underlines the strength of Eritrean identity, even among those who flee.

Eritrea is dominated by a single strong personality: former rebel commander, and now president, Isaias Afwerki. He has surrounded himself with weak institutions, and there is no viable successor in sight, though there are persistent rumors of a committee-in-waiting due to his failing health. Meanwhile, the three branches of government—nominally headed by a cabinet, a National Assembly, and a High Court—provide a façade of institutional governance, though power is exercised through informal networks that shift and change at the president’s discretion. There is no organizational chart; nor is there a published national budget. Every important decision is made in secret.

The ruling People’s Front for Democracy and Justice (PFDJ), a retooled version of the liberation army, functions as a mechanism for mobilizing and controlling the population. No other parties are permitted. Nor are non-governmental organizations—no independent trade unions, media, women’s organizations, student unions, charities, cultural associations, nothing. All but four religious denominations have been banned, and those that are permitted have had their leaderships compromised.

Refugees cite this lack of freedom—and fear of arrest should they question it—as one of the main reasons for their flight. But the camps in Ethiopia and Sudan reflect a highly unusual demographic: Most such populations are comprised of women, children, and elderly men, but UNHCR officials in Ethiopia and Sudan say that among those registering in the camps there, close to half in recent years have been women and men under the age of 25. The common denominator among them is their refusal to accept an undefined, open-ended national service. This, more than any other single factor, is propelling the exodus.

The UN refugee agency (UNHCR) has registered more than 300,000 Eritreans as refugees over the past decade, and many more have passed through Ethiopia and Sudan without being counted. The UNHCR representative in Sudan, Kai Lielsen, told me last year that he thought 70-80 percent of those who crossed into Sudan didn’t register and didn’t stay. Thus, a conservative estimate would put the total close to a million. For a country of only 4-5 million people, this is remarkable. And it is the combination of their vulnerability and their desperation that makes them easy marks.

The Trafficking

For years, the main refugee route ran through the Sahara to Libya and thence to Europe. When that was blocked by a pact between Libya and Italy in 2006, it shifted east to Egypt and Israel. Smugglers from the Arab tribe of Rashaida in northeastern Sudan worked with Sinai Bedouin to facilitate the transit, charging ever-higher fees until some realized they could make far more by ransoming those who are fleeing.

The smugglers-turned-traffickers eventually demanded as much as $40,000-50,000, forcing families to sell property, exhaust life savings, and tap relatives living abroad. As the voluntary flow dried up, they paid to have refugees kidnapped from UN-run camps after identifying those from urban, mostly Christian backgrounds (those most likely to have relatives in Europe and North America).

I spoke with one survivor in Israel last year whose story was typical. Philmon, a 28-year-old computer engineer, fled Eritrea in March 2012 after getting a tip he might be arrested for public statements critical of the country’s national service. Several weeks later, he was kidnapped from Sudan’s Shagara camp, taken with a truckload of others to a Bedouin outpost in the Sinai, and ordered to call relatives to raise $3,500 for his release. “The beatings started the first day to make us pay faster,” he told me.

Philmon’s sister, who lived in Eritrea, paid the ransom, but he was sold to another smuggler and ransomed again, this time for $30,000. “The first was like an appetizer. This was the main course,” he said. Over the next month, he was repeatedly beaten, often while hung by his hands from the ceiling. Convinced he could never raise the full amount, he attempted suicide. “I dreamed of grabbing a pistol and taking as many of them as possible, saving one bullet for myself.”

Early on they broke one of his wrists. Later, they dripped molten plastic on his hands and back, during many of his forced calls home to beg for money. After his family sold virtually everything they had to raise the $30,000, he was released. But his hands were so damaged he could no longer grip anything. He couldn’t walk and had to be carried into Israel. Because he was a torture victim, he was sent to a shelter in Tel Aviv for medical care. In this regard, he was one of the lucky ones.

For some 35,000 Eritreans who came to Israel since 2006, each day is suffused with uncertainty, as an anti-immigrant backlash builds. The government calls them “infiltrators,” not refugees, and threatens them with indefinite detention or, what many fear most, deportation to Eritrea. Philmon has moved on to Sweden where the reception was more welcoming, though there, too, a virulent anti-immigrant movement is growing.

Last year, the Sinai operation began to contract due to a confluence of factors: increased refugee awareness of the risks, the effective sealing of Israel’s border to keep them out, and Egyptian efforts to suppress a simmering Sinai insurgency among Bedouin Islamists. But this didn’t stop the trafficking—it just rerouted it.

What I found in eastern Sudan last summer was that Rashaida tribesmen were paying bounties to corrupt officials and local residents to capture potential ransom victims along the Sudan-Eritrea border—and even within Eritrea and Ethiopia—and were holding them within well-defended Rashaida communities there. Such captives would not be counted by government or agency monitors and would not show up at all were it not for the testimony of escapees and relatives.

Last fall, Lampedusa survivors revealed that Libya is becoming another site for ransoming and kidnapping, illustrating that as one door closes, new opportunities arise across a region of weak states and post-Arab Uprising instability. What Sudan and Libya have in common is not the predators but the prey. And the practice is expanding as word spreads of the profits to be had, much as with the drug trade elsewhere. And it will continue to expand as long as there’s a large-scale migration of vulnerable people with access to funds and no coordinated international response to stop it.

Eritrean refugee flows today run in all directions. They’re facilitated by smugglers with regional and, in some cases, global reach. The gangs behind this engage in a range of criminal activities, within which human trafficking is just a lucrative new line of business. Some have ties to global cartels and syndicates. Some have political agendas and fund them through such enterprises. Most are heavily armed.

Under such conditions, a narrowly conceived security response can quickly spin out of control and escalate into a major counterinsurgency, as in Sinai in Egypt. For weaker states across the Sahel, the risks of ill-thought-out action are infinitely greater.

What Needs to Happen

An effective approach to this crisis would start with education and empowerment of the target population and involve efforts to identify and protect refugees throughout their flight. A key step is the early, uncoerced determination of status according to international standards. This could be coupled with an expansion of incentives to deter onward migration, including education, training, employment, and, where appropriate, integration into host communities. But none of this can work without refugee engagement in the process itself.

Then, and only then, would a security operation targeted at the smuggling and trafficking have a chance of success. But it, too, needs to be multidimensional in substance and regional in scope. Each state in this network is acting independently of the others. Sudan has arrested individuals implicated in trafficking, including one police officer, but has not cracked down on corrupt officials or gone into Rashaida communities to take down the ring leaders. Ethiopia has instituted security measures within the refugee camps on its northern border but is not working with Sudan on cross-border movement. Egypt has launched military operations in the Sinai where the torture camps are situated, but the announced aim is to break up an Islamist insurgency—the government denies there is trafficking taking place. A coordinated initiative would start with a conference of affected states, and it would have to be supported by donor states and appropriate agencies (Interpol among them), not only in terms of aid but also intelligence, logistics, coordination, and communication.

But if the trafficking operations are truly to be rolled up, the marginalized populations from which they arise and on which they depend need to be offered sufficient incentives to withdraw support for the criminals. This means access to resources, economic alternatives to off-the-books trading, involvement in the local political process, education for their children, and more. These people need to be made stake holders in the states where they live, which is not the case today for the Sinai Bedouin or the Sudan-based Rashaida or most of the other groups involved in Trans-Sahel smuggling.

Meanwhile, to dry up this particular supply of prey, political change is needed at the source, in Eritrea. That means at a minimum opening up the political system and the economy, limiting (not necessarily ending) national service, releasing political prisoners, implementing the long-stalled constitution, and ending controls on travel so those who do want to go abroad as migrant workers can do so without illegally crossing borders and going through illicit smuggling networks.

The most important thing the United States can do to facilitate this process is convince Ethiopia to back off the border dispute that centers on a frontier town, Badme, and accept in practice—not just rhetorically—the 2002 Border Commission ruling that went in Eritrea’s favor.

Ethiopia’s intransigence on this issue—and U.S. inaction—has long been the Asmara regime’s most powerful argument for keeping the lid on all forms of dissent. Eritreans will simply not trust Washington—or Addis Ababa—until they see some evidence of good faith.

Dan Connell is a senior lecturer at Simmons College, Boston and a visiting scholar at the Boston University African Studies Center who has been writing about Eritrea for nearly 40 years. He is a contributor to Foreign Policy In Focus. Originally published in Foreign Policy in Focus under a Creative Commons License 3.0.

Views expressed in this article are the opinions of the author(s) and do not necessarily reflect the views of Epoch Times.

 

 

 

 

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Eritrea Rejected Ethiopia spokesman’s smear Diplomatic campaigns

Khartoum (HAN) April 10, 2014 – Ethiopian Foreign Ministry spokesman Dina Mufti accused Eritrea of playing a role in the ongoing South Sudan conflict, but Eritrea has dismissed claims by longstanding rival Ethiopia that it was destabilizing the East Africa region by involving itself in the ongoing conflict in South Sudan.

Eritrean Ambassador to Kenya Beyene Russom was quoted by Eritrean state television as saying that the allegations were part of an Ethiopian smear campaign.
Eritrea, Russom insisted, wanted to see the South Sudanese people solve their domestic problems and again Asmara strongly denied those accusations from Addis Aababa.

Ethiopian Foreign Ministry spokesman Dina Mufti accused Eritrea of playing a role in the ongoing South Sudan conflict.

“We have circumstantial evidence of Eritrea’s involvement [in the South Sudan crisis],” Mufti said.

Tensions between Addis Ababa and Asmara have persisted since a bloody two-year border war – in which tens of thousands were killed – ended in 2000.
South Sudan has been shaken by violence since last December, when President Salva Kiir accused his sacked vice-president, Riek Machar, of attempting to overthrow his regime.
The conflict has already claimed more than 10,000 lives, with the U.N. estimating that some 3.7 million people in South Sudan are now “severely food insecure” while around one million have been displaced by the violence.

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