Business is booming.

“Promoting the importance of awareness, organization and equipping ourselves is a culture or a value system we have nurtured for a long time,” President Isaias

President Isaias President Isaias Afwerki gave a live radio and television interview with national media outlets on the 7th of October, focusing on various domestic and regional developments. Excerpts of the second part of the interview follow:

Excellency, the government has been importing essential/ strategic consumer goods for sale to the public at fair prices. Obviously, the public’s needs are extensive. What are the prospects for the private sector to be involved and what should the government do in policy terms and other arrangements to encourage the private sector to invest especially in import substitution enterprises?

The question itself is based on a wrong assumption because Eritrea’s imports are not so large to begin with. Otherwise, if you can answer the following questions, you are welcome to invest.
Do you have the required capital? Can you satisfy the people’s demands? Do you know the country’s needs? What do you plan to bring to the market? Of course, as an investor, you should also prove that your capital is legally earned.

In countries like ours, whose economies are rather primitive, the private sector acts more as an appendage or satellite of big overseas companies rather than an independent actor. To create a viable private sector, the government has established a number of policies in the last 25 years. Among other things, it returned properties nationalized by the Ethiopian Dergue regime to the owners and also invested in new ventures.

There is no law preventing anyone who has money from buying whatever they want. The investor does not add an iota to the government. But the question is “is the investment driven purely by speculation or a desire to help develop the nation’s economy and improve people’s living conditions?” If an investor engages in a business with the intent to gain a fair profit, people will support him or her without hesitation. In fact, our plan for 2017 is to allow those who have the capital and competence and genuinely understand the government’s policy to invest in the private sector.

We are used to hearsay that blames the government. Some say “The government has controlled everything. Had we been given an opportunity, we would have made miracles.” Those who make such claims need to understand that this country is actually small and, as such, it isn’t difficult to figure out what it has and what it needs. Therefore, if the private sector is to be operational, it is important to identify in detail the areas of industry and trade where it can function meaningfully and make its contribution to help grow the economy.

Those who make a living by speculating and siphoning Nakfa to import food and other consumer goods should be questioned on where and how they imported the goods and whether the money they accumulated was legally earned. Also, any item that is imported for sale here should be measured in terms of its competitiveness both locally and internationally.

In 2018, there is a plan to open some areas, which have been kept on hold in 2017, for investment. For example, one can now invest in a factory that makes clothes, which means adding a lot of values to the raw material, cotton. Such an industry needs to grow and its success is determined by the employment opportunities it creates and the contribution it makes to the national economy. Therefore, an investor needs to understand these factors and use them as a reference when he or she sets out to invest.

In this rather primitive economy, there hasn’t been a developed private sector to talk about. Policies need to be designed with a view to achieving sustainable economic growth and improving people’s living standards. This requires continued efforts to maintain a balance between people’s income and their living conditions.

The government’s import of basic and strategic consumer goods and others will increase. So far the government’s food imports have been limited to wheat, sorghum, legumes, sugar, cooking oil and the like. But now in the second phase, we should be able to provide other essential goods, as well.

The environment is rife with speculation. Therefore, until the economy grows and reaches some level of stability, can’t price controls be used as an interim solution to stabilize the market?

Sure, it is tempting to do that. But controlling prices is a daunting task. Of course, it’s not very difficult to determine the prices of all goods and services. In today’s world, the price of goods everywhere in the world is public knowledge. But still it’s much easier to focus your energies on ensuring the availability of consumer goods within the local market, which covers not only domestic products but also imported goods, rather than controlling prices.

Goods and services should be made available to customers at a fair price. By saying so, no one is suggesting that private businesses should not make a profit. A business person deserves a legitimate profit. But a business person who is out there to rip-off customers is like someone who jumps down a cliff. To such a person I say I have no interest in coming after you because there’s no point in controlling someone who bumps against the wall.

Massive investment have been made in human resource development. How do you assess our skilled resources vis-à-vis the vast development programs ahead?

It is a culture or a value system we have nurtured for a long time. We have always promoted the importance of awareness, organization and equipping ourselves. These three are always there. Our organization needs to be reinforced to tackle any eventualities which we may encounter, but before that the awareness of the general public is important; besides, popular knowledge is a driving force.

One may acquire knowledge through experience or in some other ways, but organization is of paramount importance to make proper use of the knowledge. These two should also be summed up with the necessary equipment or facilities to put them in practice. We need to be well- equipped and backed with the needed technology and machinery to implement the development programs or agricultural projects.

First, we always need to be aware and well-informed so as to deal with challenges that could sway us from reaching our intended goals. Managing the resources at hand and the equipment are two different things but one cannot prevail without the other. Time is a factor when it comes to equipping ourselves because it is dynamic and ever changing, which needs continuous updating. On top of that, challenges are coming in different forms; hence, the strength and way of our organization needs to be molded in accordance.

What did we learn from the past years of independence? What did we accomplish? What sort of resources have we accumulated? Our organization equally needs to be reinforced to surmount the challenges ahead. What has passed is a process we needed to go through and the experiences we acquired in that account are important, but today is another stage we need to be organized for.

In line with that, the dynamics of technology are at their fastest pace and its traits are changing rapidly. There is no way of relying on old technology these days. In this case, organization is the essence, between the resources, the knowledge and our intended goals. But the big question here is; can we execute the economic policies we have drafted? What is the status of our financial institutions? Do we have the capacity to implement the financial or fiscal policies we outline?

We need to see the capacity in terms of the new competencies we get every year. 15,000 students complete their high school education annually, out of whom, some go to college and the rest are trained to go to other institutions.

But we need to be well organized to absorb the force and utilize them in a very effective manner. What kind of organization do we need in order to quantify the goals we hit and the accomplishments we make in the vast development endeavors including energy programs, new technologies of irrigation, infrastructure, and various other domains? Dynamics are important when it comes to organization and awareness needs updating every now and then. It is not the structure of the organization we need to underline here; rather, it is the efficiency.

Most importantly, we focus on education and training, through which we intend to implement our agricultural, infrastructure, fisheries, industrial and various other related programs. The contribution of every individual’s knowledge is important and organizing such resources in accordance is definite. We take such issues seriously. There may be some setbacks during the implementation of such strategies, but the organization should always prevail, because the rest comes with experience; and needless to emphasize, it is in our culture to be organized. And we are not referring to the top administrational level only, but every group which works together needs to be organized.

Let’s take the Ministry of Information for instance. Time is changing, and is your equipment changing accordingly? Are you introducing new modern technologies to your work? Is your organization being strengthened? Is the awareness of the staff extensive enough to contribute effectively? It is a topic which needs to be seen from every level. In a nut shell, organization is the core factor here and the new structure of development fronts we have introduced is an example of the importance of organization.

Mr. President, do we have a compatible administration for our development programs?

I cannot say there is. We say we have collected water for instance, but do we have the capacity to administer the dams we have built. How do we make proper use of the water we have collected? How do we protect the cleanliness of the dams? Who is the beneficiary of these water projects? How do you organize all these factors and harness them properly?

There are vast agricultural projects and we are introducing new advanced technologies we have never used before. Some of them cannot simply be done; we need to look at the experience of others in many cases. How many construction companies do we have and how is their organization? We plan to build a certain amount of housing complexes in a year and we prepare the resources for that purpose. But how do we organize and manage these resources? How does your organization fit with the way you manage your resources and implement projects?

We use our experience to strengthen our organization, but experience by itself is not enough. So all the big plans we draft are based on vision. Hence proper administration of resources, including human, material and others is important to achieve the established goals. You need to select the best administrational structure and system. You need to know your resources in the beginning. The biggest bottleneck I consider at this time is technically skilled human resource. You can bring machineries and technology. Discipline, knowledge, technique, and experience are also incorporated within the technical capacity of the resources. We follow a clear path in our structure, system and organization.

Transparency in organization is by far a very vital factor. The working system should be smooth and multidimensional. There is no need for a long bureaucratic system. One individual can do three or four different tasks at a time, which in turn could help us save a great deal of time. The working system also needs to be efficient with an impact. There is no such thing as, ‘one size fits all’. In fact, corruption has become a cause for destruction in Africa and many other countries that have built a developed economy.

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