His excellency President Isaias Afwerki conducted an extensive interview with the local media from 27 to 30 of December, 2011, regarding global, regional as well as local issues. Excerpts of the fourth part of the interview follows:
Your Excellency President, let us start our questions on domestic issues with the following. We understand that the economic system charted in the Eritrean National Charter is mixed economy that encourages the private sector. On the other side, it shoulders the Government to design strategy and policy in order to ensure economic development. How could planned and mixed economy reconcile? As both concepts are corresponding, what is the understanding of governments regarding both concepts? What is the practical and viable economic system vis-à-vis the failed global economic philosophy?
The stereotypical way of thinking that the existing economic system has no alternative, makes the concept “encourages the private sector” rigid. Generally speaking, what level of economic development are we talking about? What does government and private sector mean? May be to date they have started to contemplate about the meaning of the concepts with the prevailing economic crisis. We could also say the understanding is deepening. The private sector includes a person that is engaged in productive economic activities. A person that is not government employee but employed by others or self employed. The stereotypical concept comes with the admittance of the few that live exploiting others or engaged in different commercial activities representing the economic order. This is a very dangerous concept regarding the private sector. The understanding of the existence of conflict between the private sector and government-political or economic- is far more dangerous. Basically economy means the relationship between different sectors of the population engaged in different activities working to improve the living standard of the people. Such organization has its own standard of measurement in terms of economic development of a given society. To our understanding, it is also in the Charter, these are complementary to each other and not in conflict. On my part, understanding the government and private sector in isolation is incorrect. Citizens of a country that are engaged in different productive economic activities would reinforce the economy and the economy of that country will equally develop. The role and level of contribution may vary. When they talk about capitalism they also raise the issue of small and big government. The rightists in the US and Europe claim that there is no need of a big government and even they say no need of a government at all. On the other hand some sectors say the cause of the financial and economic crisis we are witnessing to day is the lack of control on the part of the government. One of the government’s functions is to control or has the regulatory mandate. It has to ensure that members of the society or individuals engaged in economic activities pay due taxes and legally oversee their activities.
The brain washing activities we have been witnessing within the last 20-30 years with the pretext of “market economy, economy led by private sector” was not an easy thing. As a result the stereotype way of thinking was taken as norm. Every professional might have his own explanation. The portraying of capitalism with the opinion that “there is no need of a government, there should not be restriction, government should not control, taxation should not be equivalent to our income, we are the ones who guide the economy”, has result the 15 trillion debt of the to the US government. On the other side, where are those who claim that “no need of government, government should be lean, the role of government should be limited to controlling, the private sector should be left unrestricted, and public services should run by private sectors”? The situation has reached to the existing level because they were able to control the economy with their propaganda of privatization and many other seemingly philosophical concepts. May be we are talking about the developed economies. When we talk about our case, we inherited nothing. Every thing was destroyed during the war. And the first duty of the government is to create conducive atmosphere and productive incentive. No one expects the private sector or investors from outside to come and create the expected atmosphere for economic development. In our case the first responsibility of the government is to put in place the necessary infrastructure. All kinds of roads have to be built. There should be the provision of clean water, electricity, transportation facilities and social services and equal distribution of education and health services. It is only when there exists the equal opportunity of education for every citizen that we could talk about development. The responsibility of nation building during the first stage of development effort lies on the government. Leaving the task for the private sector or to others that we have been talking about is impractical. Who would build the railroad? Who puts in place the transportation facilities? It is obvious that the government could not do it alone; however it has the bigger share. The responsibility of government is not only to collect taxes and control. Tax collection and controlling is aimed at improving the life style of the society. In the mean time the role of those who have the initiative to work and try to get rich through their toil will grow. This has been indicated in the Charter; and is a process that could not happen overnight. It is the responsibility of the government to put in place the basic infrastructure and in the process the initiative, contribution and productivity of the private sector grows. If the process is to create economic polarization the government is not playing its due role. Conventionally speaking we could say there should be a middle class; but what percent of the population? Equally wealth distribution and other procedures should be taken into consideration. If economic stability is expected there should be a mechanism in which the majority benefits. Few people could emerge affluent and others poor and with the majority benefiting it would balance the economy. And when we talk about infrastructure we mean to create that atmosphere. There are investment, financial and other economic regulations. The government collects taxes and invests on activities that could improve the lives of citizens. This may not be realized in one or ten years, it’s dynamic process. The government could not be engaged indefinitely in building roads and developing electricity supply. It is complementary process. The involvement of the government in the economic activities should always be there. The stereotype concept that government and the private sector are constantly in conflict is out of context.
The meaning of private sector is outstretched. Thus, according to your opinion what does it mean?
Sometimes I even find it difficult to reach into an exact explanation because it is such a dynamic concept. Private sector is not something that is poles apart from the society as to have its own benefits. A small shop is a private sector. A shepherd that either has ten to thirty sheep or 200 cattle is a private sector. He is a citizen living through his efforts so as to develop his living style. The standards might be different; industrial private sectors, invention or manufacturing private sectors, and large businesses private sectors that are engaged in various economical activities. You can say it is large and fair according to its standard; however, it is wrong to think that the private sectors are only those people who fly from country to country or who book reservation in expensive hotels. When private sectors are said to be dynamic it means that it changes and develops with time and current situation of the economic growth. Hence, when the government is working to motivate this sector it doesn’t mean that it only works to create conducive ground for limited private sectors or individuals with capital. According to the charter, private sector concerns everybody whether the investment is major or minor with huge or small capitals. It is a sector that independently actuates on the economic development generated by the government. Even though it is explained like this on historical or some great events but it changes its wheels according to the economic growth. Therefore, building favorable environment to motivate the private sectors means only creating conducive ground for the whole society. When a huge amount of capital is invested on education it is to help the society in every corner of the country to learn, develop and to participate on the economic growth as per their profession. As a result, it helps the citizens change their lifestyle every year. Even this works for the production of the private sectors since every citizen cannot be an employee under the government. On the contrary, maybe it is not quoted in the charter yet if the government workers are reduced in number it will lead to an efficient workforce; lean and clean government – not corrupted. It is only when they are small in number that the technology and the knowledge need would be efficient. With today’s rapid technological advancements huge government is not practical. However, a government has to play a defined role. Sometimes it is surprising to see the number of government employee’s registered in some countries. Basically, in a country that I know with a population not more than five million; there are 850,000 government employees. Let’s think like those workers have a family with two, three or four children. So the whole population is a government employee. Thus, in order the government to play its role it should be described with regards of its shape and competence. ‘The government is trying to stabilize the economy by printing papers, bail out’, are the issues of the current situation. Why are all these things happening? According to the old understanding and philosophy only the few could control the economy and the rest which are the bigger part is controlled by the government thus it leads to such unfavorable situations. Before reaching this stage any society, even a society like us which is in developing stage, has to change its understanding on such matters. It has to be started from a fair ground.
Horn of Africa–a region that is often characterized by recurrent drought and famine—has recently been affected by the worst drought in 60 years. What is the primary culprit for this cycle of drought and famine? What is the normative action for countries in the Horn region to consider so as to get rid of such state of affairs? On the other hand, can you brief us about Eritrea’s strategy of food security, livestock raising and guaranteeing national food reserve, as well as the accomplishments scored, the experience gained thus far and the prospects ahead?
All the problems in the region essentially arise from economic mismanagement. Any given nation ought to orient itself right from the outset. Several new nations are instructed all along to adhere to the theory of privatization in vogue. Before the new nation builds up its economy on solid ground, its economic resources becomes subject to external monopoly under the guise of promoting foreign investment. Unless the state tailors its scarce resources towards focused programs from the very beginning, let alone will it be able to guarantee food security, or improve the quality of life of its people, it can by no means lay the groundwork for sanguine economy.
Surprisingly, whereas the government itself cartelizes the private sector in a number of countries, there is no such a thing as private or public sector. If a government official owns a bank, factory, or corners the market of the poultry and livestock raising industry, where does the boundary between the private and public sectors lie? If the government at the helm controls the economy in the face of its set of ethical rules, it simply proves to be both the public and private sectors. Without the least investment for the growth of the country’s economy, a considerable quantity of the country’s national resources and even the handouts acquired from foreign aid is but that of government officials to be deposited through arranged transactions in bank accounts abroad.
An international company might construct an airport while investing in the mining industry or the government official might venture to establish near his hometown some industry. How can peoples’ economies advance if national resources are controlled by a handful, or the deposits of money are saved in foreign banks that are owned by international investors? Sadly, too, the sparsely populated Africa, a continent endowed with huge natural resources, now after 5 or 6 decades of independence remains haunted by recurrent drought. Although it might be argued that a significant portion of the continent’s land to have constituted deserts, that is where oil reserves and mineral prospects are located. In spite of all these resources, why has famine continued to epitomize Africa and Africans?
To the detriment of putting in place necessary infrastructure facilities, neo-colonizers, who arrive posing as investors, are not only after exploiting Africa’s raw materials, but also are not interested in opening markets or selling products, establishing manufacturing industries, expanding road networks, energy sources and water supply services. Other than absorbing skilled human power either for unskilled jobs or intellectual role, they do not promote transfer of knowledge and technology so as to properly harness the nation’s resources. Unfortunately, an institutional procedure that facilitates such operations is now well established.
The main market and center of international aid organizations, which annually offer decayed food aids, is here in Africa, provided that the continent has continuously been stricken by famine. A number of political and economic philosophers in the western hemisphere are credited to have said that the plight of Africans is a blessing in disguise for those monopolist profiteers. And as a stopgap, they nurture dependent human resources in order for them not to upgrade their skills and live on their own. Despite the task these ‘charity’ organizations undertake might appear from a distance as benevolence, such self-serving is practically at the ordeal of others. A critical mass of various complicated factors has, therefore, given rise to current privation.
Many of the political systems in the developing nations themselves are imposed upon the peoples to foster indigence in the interest of external forces. Under such state of affairs, no reasonable person would think that famine and deprivation could be dealt with in the near future unless a paradigm shift is put into operation. Drought and famine in the Horn region have time and again been manipulated for blackmail. Food handout is by all standards intended to foster the culture of dependency up to the point of being dehumanized. If your mind is tuned to depend on foreign ‘generosity’ for subsistence, you are then degraded to the lowest level of dehumanization by means of blackmail.
It comes as no wonder that food aid or any other economic assistance, which is solicited in the name of the most indigent Africans, has on several occasions been employed as a political weapon. Natural catastrophe aside, Africa is the right Hollywood of privation for anyone who wants to film starving, anxious, grief-stricken, weeping, skinny and bony children and adults with flies swarming on their eyes and mouths. Semi-desert Eritrea, however, as opposed to the rest African countries abundantly endowed with natural resources has, within the parameters of its internal capacity, managed to independently implement development programs, which are now bearing fruitful outcome. Africa seeks to witness change out of the existing predicament and marginalization the continent is in.
Having realized the status quo, governments are also duty-bound to follow an independent line all on their own with a view to eradicating privation, improving the quality of life of the people, as well as according primacy for guaranteeing food security on the crest of other priorities. In general, the problem in the region is basically the result of overall collateral mismanagement; and hence, Africa needs to first be held responsible before pointing its fingers at external forces.
Your Excellency President, your response with respect to Eritrea’s potential mineral deposits has always been reserved. How far profitable is the concentration of minerals in Eritrea? What investment ventures have been secured thus far in the effort to take advantage of the prospects, and what are the achievements accomplished to date? Other than the potential dynamism mining industry could have in the country’s economic growth, what curses does it harbor to which the nation should remain vigilant?
Eritrea has always opted to pursue a prudent policy of not priding itself on mineral deposits until the mining industry reaches the summit of its accomplishment. The Ministry of Mines and Energy, nonetheless, organized last October Asmara Geo-Congress 2011 during which mineralogical profiles of many excavated and explored sites throughout the country were made public. Interestingly, the wide-ranging statistical data international mineralogists presented during the four-day Geo-Congress had only refuted false readings by outsiders. In fact, Eritrea boasts more mineral deposits than that of gold. Concentrations within rocks and in soil profiles of some sites have also proven potential mineral deposits. If the country’s economy and industrial development advance sufficiently well, and if sources of energy and the supply of electricity expand fair enough for industrialization, we can exploit the nation’s mineral deposits stage by stage.
Evidently, Eritrea is richly endowed with diverse natural resources. Much anticipated numerous natural resources are yet to be explored, whereas mineral deposits that had not been exploited during the Italian colonial period by the then technology are yet to be exploited. Owing to geological factors, the concentration of the sought after minerals in mineral deposits thus far explored is a matter of opinion whether they can be mined profitably. The main concern in averting the downside, however, is that we need to take heed not to overstate the nation’s natural sources as the sole mainstay of the people. If the entire focus rests on mineral deposits and if the people start to take delight in bread and circuses being appeased upon as if just around the corner, it runs counter to the definition of economics. Needless to say, sustainable economic development is a sanguine headway of complementary sectors.
The experience of other nations is also a point of reference for the country to draw a lesson. When it comes to the hot issue in the Horn of Africa, one of the major factors for guaranteeing national security is not a stockpile of armaments, but rather, it is the peoples’ consciousness, harmony, industriousness and work ethic as well as its visionary vibrancy for sustainable economic development. If the exploration of mineral deposits is coupled with strong economy, in essence, it ensures sustainable development. Once Eritrea’s current development programs across all sectors reach the desired stage, the exploration and excavation of minerals now at its initial stage will have a lasting effect for posterity. In order for a country to exploit its mineral deposits, besides the transfer of knowledge and technology and the requisite investment on the project, it needs to build its internal capacity. Although nations might at the outset want to capitalize on the project through lease or joint ventures, cooperation partnership with international companies, even at the height of economic development, is not unnatural.
The transfer of expertise and technology, as well as the upgrading of human resources together with the revenues will in return be invested towards sustainable development. With all the aforementioned collateral dimensions, the survey on Eritrea’s natural resources is at its early stage. Indeed, the least portion of the country’s natural resources has as yet begun its exploration and excavation phases. While new explorations in different sites are on the horizon, there are also some blocks that have entered into operation. Relatively speaking, the concentration of copper or other minerals in a specific mineral deposit is not to be weighed against the value of gold. It is a matter of fact that the timeliness of such mineralogical prospects, however limited, is vital in the national economic programs for all-round development drive.
Despite Eritrea’s liabilities is relatively small, current prospects in the mining sector will not only enable the country not to fall into arrears, but it will also help build up national reserve gradually for ensuring the improvement of the people’s quality of life and the sustainability of multidimensional economic development. Impressive development achievements the nation scored throughout the two decades has now reached such a promising stage. The Government or any fellow compatriot ought to have an in-depth understanding as regards Eritrea’s mineral deposits, lest they might look forward to a very dramatic or ambitious improvement in the quality of life of the people.