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Local Media Interview with President IsaiasAfwerki: Excerpts Part II

  • “A consumption-only society that does not save and invest earnings in production cannot promote economic growth and development”
  • -2016 began with the changing of the Nakfa currency to maintain macro-economic stability. How do you analyze the implementation of these policies and how is our status in the economically decisive sectors?

Various details including fiscal constancy and budget issues could be raised in addition to the three basic economic steps we consider in directing our strategies and drafting our programs. Production is the first factor that defines the economy. The status of production and output in various domains is the collective indicator for economic growth. This could comprise mining, agriculture, industrial manufacturing and tourism, among others. The first indicator to evaluate our economic growth or downturn is what we are producing.

As I have mentioned earlier, energy, water, transportation, communications, education, and health are the fundamental domains. There is no way of promoting economic production without putting in place and reinforcing these sectors. We have a favorable climate, vast arable land and a hard-working society. To evaluate the sum of all these factors, comes the issue of food security. However, food security by itself is not the final result. We have to be able to see beyond combatting food deficiency and toil for introducing massive programs that would lead to sustainable development. How far could our agricultural development programs, including fisheries and livestock, take us in our development endeavors?

Taking the 2017 agricultural development programs, for instance, we should not be misdirected by the sufficient rainfall in 2015 and 2016, which may have led to a bountiful harvest. What if the rainfall for this year is not generous enough as the previous years? Our agricultural programs should be reinforced at every stage and phase. We can also look at the statistical data pertaining to the agricultural development programs we introduced in Kerkebet, Teseney, Fanco, Gerset, all the way to Omhajer, including programs at hand for the highlands from Tsorona to Tsilima, Asmara and its environs, and cultivable lands to the north from Karneshm to Keren. Besides, programs have been charted out and worked upon, including dairy products. Installation of processing factories also goes parallel with the growth of livestock, particularly dairy farming.

The Eastern Development Zone should be enhanced in line with the Gahtelay and other dam projects. Indeed, they should go beyond the parameters of local consumption and aim for export purposes. If we are to ensure maximally efficient use of land, we should consider other cash crops in addition to the customary sorghum, maize, wheat, barley, teff and others. Coffee farms have been assessed at large and the revitalization of the tannery industry is considered greatly in line with the agricultural development programs. Hence, considering the importance of exporting agricultural output to maintain a better financial reward, the volume of supply is important, and to ensure that level, installation of the said facilities is pertinent.

In regards to manufacturing produce, we have new networks which have started at a small scale. We have refrigeration companies put in place in Adi Guaedad, Alebu and Massawa, to preserve food products for export purposes. We have initiated a long term plastic tube and pipeline factory to support the outlined water and sewage programs. This factory we have established in Massawa should be able to meet the basic demands, although it is not our final frontier in similar programs, metal works of similar production is also another thing we will be working on. Maritime and air transportation in the port city of Massawa should also be boosted to enhance the free zone area. We can bring about industrial development from the water and energy facilities in the area.

Not only that, but the western development zone also has its own choices. We have plans to boost the Alebu, Tesseney, Gerset agro-industrial projects. These are related to production and wealth distribution, which is a basic growth indicator. We have to know the basic gauging instruments to ensure equal distribution of wealth, infrastructure and services to the general public. Distribution of wealth simply means equitable allocation of national resources. If a particular locality or region of a country is to be productive, the available facilities, including electricity, water, education, health, infrastructure, transportation, communication and others should be put in place. National wealth should be distributed equitably among citizens. Besides, it is the second indicator of economic development in addition to production.

On the third level, there is consumption, starting from the family level all the way to regional and national level. Economics is not only about production but also about consumption. In this regard, one must save earnings. A consumption-only society that does not save and invest earnings in production cannot promote economic growth and development. Especially those who live in the primary level of economic growth should be keen in saving.

  • -Mr. President, one of the significant achievements in 2016 was the salary raises for those in the civil service. However, there are some in the civil service who did not get the raise. When will it be implemented? And the parameter for the salary raise seems to be based on education level. Don’t you think competence, productivity and seniority should have been taken into account? In line with the salary increment there comes also workplace discipline and productivity. What would you say to this effect?

Salary raises have been made and are ongoing to include all government employees. The main concern here is not the salary raise but what can be done with the money once you are paid. Could it satisfy your daily needs in terms of buying foodstuffs? Can it pay house rent and other necessities? You have to know the power of one Nakfa vis-à-vis the day-to-day market. At the end of the day, rigorous measures should be taken to stabilize the market and ensure macro-economic stability.

We should ask how much is the country’s economy growing in terms of impacting the lives of citizens. When we talk about salary raises, we should also understand the currency’s buying power. Inflation in different forms could occur. Hence, appropriate measures should sustainably be taken to ensure the quality of life of citizens. All necessary elements for living have to be available.

There have been many distortions in our economy. Speculation was one factor that has been affecting our economy. The pressure it caused on the living standards of the society is not to be viewed lightly. The main victims were those in the civil service. That is why the salary raise was introduced. It is part of the equitable distribution of resources. And salary is one means of ensuring equal distribution of resources.

The process of raising salary is ongoing, stage by stage, until all those in the civil service have fully benefited. Priority will be given to those in the army, police and the security services. All those in the lowest rung of the civil service should be given priority. Records of seniority, job complexity and other necessary parameters will be also taken into account in subsequent stages of the salary adjustments process.

When we consider the military, the salary for lower ranking personnel is 1,800 Nakfa. It doesn’t stop there. Training programs must be organized in different skills so that those in the profession can work towards attaining a higher salary. The same will be applied to those in the civil service.

Finally, salary should be aligned with productivity. It should be based on where the individual works and what the individual is working on. The profession in which one is engaged should be looked at thoroughly.

We could also talk about the power of the Nakfa. One of our greatest challenges has been the shortage of residential houses. The provision of social services, especially for those in the civil service, has also been challenging. Immediately after independence, the housing projects in Asmara and Massawa were initiated. Those projects made a small contribution in solving the problem of residential houses. However, the problem still remains and is still affecting the lives of citizens. And that is not something to be left unnoticed, it should be solved. In order to solve the problem, we will have to introduce modern technology and machineries for manufacturing building materials. This must be accompanied with human resource development.

Before we talk about salary raises, all concerned government institutions should work towards solving the acute housing shortage. In order to solve the problem there should be equitable distribution of social services among the cities, semi-urban centers and villages. This includes provisions of electrical power supply, potable water, education, health, transportation and other services.

The other issue of concern is the price of consumer goods. The price of consumer goods is being manipulated by middle men. There is no direct relationship between the producer and the consumer. The distortion we are witnessing in the living standard of the society is caused by the middle men who have no sense of responsibility. All the distortions should be corrected and necessary measures should be taken.

One of the main problems is also the speculation surrounding remittances. We have reached a stage where we are witnessing forged currency in circulation. We know where the money sent by Eritrean nationals residing abroad is ending up. It falls in hands of criminals and is exchanged illegally irrespective of the legal exchange rate. In even worse cases, some of the hard currency, meant to stay in the domestic economy, is being exchanged in foreign lands. And that is the main cause for inflation. This scenario should be immediately corrected. If the living standard of citizens is to improve, a conducive atmosphere should be created. The government institutions should shoulder the responsibility of creating the conducive atmosphere. Salary raises alone are not enough. We should not tolerate the problems that have arisen over the past years, creating a burden on the lives of citizens.

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