Eritrea

Overall View

Eritrea's once flourishing economy and society were affected by 30 years of conflict with Ethiopia (1962-1992), picked up in the 1993-97 period, but are again suffering from the 1998 - 2000 that caused 20,000 deaths, many thousands of disabled persons, displaced persons, female headed households and orphans. The present period is one of uncertainty and mobilization, that is claiming 200,000 of its young men and women in the army and one quarter of GDP in defence spending.

Thirty years of war have left the country devastated. The task of reconstruction is enormous. Eritrea is one of the poorest countries in the world. The UN Human Development Report 2005 ranked Eritrea 156th out of 177. Poverty approaches 66%. Illiteracy affects 43% of men and 53% of women. Life expectancy is as low at 54, and HIV/AIDS is a growing problem, particularly devastating as the infection combines with tuberculosis, malnutrition, malaria and poor reproductive health. Most of Eritrea's 4.5 million population lives a subsistence lifestyle, supported by aid imports. The population is growing rapidly, at some 2.7%, requiring increased resources to meet basic needs. About 70% of the population relies on agriculture and ¾ of its exports are composed of food and live animals. GDP growth is sluggish, standing below 2% in 2005, uneven and closely linked to rainfall; that also causes high food prices and double-digit inflation rates. Some 1.4 million remain dependant, to varying degrees, on food aid.

Eritrea's development objective is to attain rapid and widely shared economic growth, macro- economic stability and sustainable poverty reduction. To that end it is using a strategy based on investment in human resources, technology and economic infrastructure to enhance productivity, and export expansion; and investment in high potential growth sectors where Eritrea as a comparative advantage. Foreigners and the expatriate community (of some one million) are waiting for an improvement in the investment climate to invest in Eritrea. This includes a need to enhance internal capacities; in terms of policy and legal frameworks, to ensure enabling environments; as well as the creation of a critical mass of expertise for planning, information management, communication, policy analysis and implementation.

Unemployment levels are high, but skilled workers are scarce
New enterprises are opening, but face multiple constraints such as outdated machinery, poorinfrastructure, low management capacity, difficulties to import and obtain credits and aclimate not sufficiently favourable to private sector development.

The country though has considerable potential: natural resources such as valuable minerals, a varied landscape and long coastline, two major harbours and a geographical position that makes it a door to East Africa, and strong work ethics.

Activities

• Employment

  • Supporting Local Economic Development.
  • Supporting labour-intensive reconstruction and income generation.

• Social protection

  • Promoting HIV/AIDS policies and code of practice at the work place
  • Promoting OSH

• Social Dialogue

  • Strengthening the capacity of the workers organizations