- Part IV: domestic Issues
It is to be remembered that on 7 and 9 February 2020, National media outlets, Eri- Tv and Dimtsi Hafash Radio Programme, have conducted exclusive interview with His Excellency President Isaias Afwerki on range of subjects focusing both on regional and domestic issues. Excerpts of the fourth part of the interview on domestic issues follow:
- Your Excellency, the introduction of a new salary scale in the year 2016 for government employees has benefited those in the Eritrean Defense Forces, as well as nearly 70% of those in national service and civil service. But the salaries of senior employees and those whose education is below twelfth grade has not yet been increased. What is the government’s salary settlement program for this year?
I would first like to remind everyone that this issue cannot be talked about in an hour or two as it needs a long time. The people and the concerned government employees must understand the issue. It is a topic that must be dealt with in-depth and with other programs.
When we talk about government employees, we are not dealing with ordinary government employees as in other countries. Members of the Eritrean society that fought in the liberation war later became government employees. When someone who has spent their life in the struggle, in raising children, and taking various responsibilities finally becomes an employee of the government, we must ask how this person lives. And when did they become a government employee? How is the senior, intermediate, and new employee classified?
Since the issue raised is related to salary, you can look into this topic in-depth and collect data until you have the full picture. Government employees are still working with a nominal salary. We cannot say that the salaries paid after Eritrea’s liberation covered the costs of living, but this cannot continue the way it has.
Having realized that the introduction of a new currency in 2015 might impact our fiscal and monetary policies, it was said that government employees’ salaries should be considered along with it. Of course, this idea did not just come in 2015 – it had been a cause for concern for some time.
How can a government employee lead a normal life? Those who lived alone in the past now support a family – how can they live on the same salary? Let us start talking about this issue in relation to the period starting from 2015, that is, with the introduction of the new currency, by conducting the required assessments of the salary scale and looking at the living conditions of people, including the destitute and the needy, who cannot be seen in the end in isolation from government employees. We must search for ways to change their living standards for the better.
Given the many obstacles that we faced in the past and the inability to build our economy quietly, this has put great pressure on us, in addition to other pressures. To find the answer, we must do our duty and conduct studies.
The matter that needs to be addressed is not only the salaries of government employees, but the conditions of our economy. Let us look at this vital issue. If we want to come up with a comprehensive solution, we must first understand and define our problems. Finding a solution does not take place solely with ambitions. The determining factor in this is our economic reality and how and where it is going. If the salary is to be adjusted, it must be done in a way that improves the standard of living of all employees with different levels of salaries. We must go back and look at the conditions of our economy. But what are the criteria that we look at? If you want to talk about the economy of any society, the first criterion is productivity or innovation. It is all about wealth creation. You must look at what the production is and its quantity in every sector –for instance, in fish production, agricultural and mining activities, and other sources of production.
An evaluation of all sectors and factories can provide us with a general picture of the nation’s wealth and how it has been developing or how it will develop. In the end, if you think about the issue of salaries, you should think about the conditions of all government employees and not only about individuals. If we want to grow our economy, we must understand the challenges and opportunities, and by what methods growth can be achieved. This field is very large, and you cannot find an easy answer for it; you must have numbers.
This topic leads us to say that the economy is not limited solely to the production process. It also requires wealth distribution. If the economy includes production, distribution and consumption, then production is the basis. Increasing production is an important process to support the economy and create wealth. What about wealth distribution? The distribution of wealth is arguably related to production, and ultimately to consumption as well.
How is wealth distributed now, not only among government employees, but also to those who depend on the agricultural sector and other areas such as trade and investment? How do these people live and how is the nation’s wealth distributed to all of these groups? Is wealth distributed equitably and does it promote safety and stability? Does it provide additional strength to the economy?
There may be a distribution of wealth, but what does that distribution look like, and how and what are the living standards of our people? How do they get their share of the wealth, and how does it affect the living standards of government employees and others? When we want to decide the amount of salary it should not be for a year or two. It must be for an extended period, with sustainability ensured. The salary affects government employees, but it must go beyond that to affect the economy positively.
Generally, we must collect information related to these matters, complete the necessary studies, and in the end, without wasting more time, and after confirming the conditions of our economy, its growth, and nature, we must decide the amount of the salary despite the difficulty of this matter.
In addition to the studies we are conducting to determine the salary, we must decide the salary scale, and we said let’s start from the lowest level. The matter was discussed extensively. It was said that if you want to define the lowest level, you have to assess what individuals need in terms food, water, clothes, shoes, and housing. In short, we must determine the minimum level cost of living.
We said let us make the minimum level of salary 1800 Nakfa, with five total levels ranging from 1800 to 4000 Nakfa. Age, skills, and specialization were considered for the minimal salary of 1800, but for those who graduated with a bachelor’s degree, the starting salary is 4000 Nakfa. As for the five levels, they should be arranged well, provided that this is a starting point on which to focus. When we collect sufficient information and data, then we are able to have a clear picture, and in this case we can determine what may be done. But now, instead of waiting for the study to be completed, we saw that we should start with this and implement it on the ground.
Given that the total salary is frequently entered in the state budget, for how long will the state budget bear this burden? Since we cannot apply this decision to all, we decided to start with those who are less well-paid, for example, members of the Defense Forces, civil service, and government and parastatal organizations. If we say we start with the members of the Defense Forces, let us start with the ordinary individuals, and then move up the ranks slowly.
We put the Defense Forces at the forefront because they constitute the majority of those who work in remote areas and villages. The salary adjustments should begin with them. Also, those who live in villages are given precedence over those who live in cities. Similarly, those raising families are prioritized.
As for government employees living in cities, we can come to them later. It was decided for this approach to be implemented in 2018. Based on economic growth and development trends, data collection in various areas is required – fisheries and agricultural development, and national development related to energy, infrastructure, water, housing, and various services.
If we take agriculture, for example, our people are dependent on it. How much annual production can we have? How much food is imported by the government, in addition to local production? Do we have agricultural programs that we talk about year after year, because the rainfall is beyond our control and can change annually? Thus, we may not be able to guarantee our productivity, including consumables, which go hand in hand with salary. We mostly import agricultural produce, and this leads us to disburse funds in hard currency, which we must reduce. It is only when we solve this challenge that we can confidently say the introduction of the new salary scale has worked.
And now the first stage of salary adjustment has begun for members of the Defense Forces. But in the civil service this program has not been implemented, and we can ask what the guarantee is for those who receive the lowest salary, 1800 Nakfa.
If a person who receives 1800 buys a bottle of water for five or ten Nakfa, and at the same time pays 1000 in house rent, then a salary of 1800 will not be sufficient. That is why we say ‘no need to rush but will study it carefully.’
The state owns water as a public resource. But at what price is water being sold in cities and do people who live in villages and towns have access to clean drinking water? What can a government employee with a salary of 1800 buy?
If we want to live in dignity, we must know the existing prices. There may be basic foodstuffs that the state brings to the citizen, but individual needs are not limited to that. When we try to study the situation, data can surprise.
For example, the government sells water to water-tank truck operators at 47 cents per barrel, which operators then sell for 50 Nakfa. A liter of milk is now sold for at least 20 Nakfa. But it should not cost more than four Nakfa.
The cost of living cannot rise in that way, and it is not possible to live in this way anywhere in the world. We must find solution to this matter. If a person’s salary, as mentioned, is 1800, how can they live or rent a house?
The employees, especially those who support families, are in a difficult situation because most of them receive the lowest salary. How can a government employee live in this situation? The cost of living is the sum of the basic consumables that a person needs – food, clothes, housing, and other supplies. The government cannot come in and intervene, saying the price should be like this, or lower or raise this price.
Prices are increasing, and because buying and selling are conducted with speculation, this is driving inflation. When a 200- liter plastic barrel is sold at 40 cents per liter, one liter ought to be sold for a quarter of a cent. So, in what sense does one sell half a liter of water at five, eight or ten Nakfa?
Moreover, the salaries that started with the introduction of the new currency in 2015 should be considered. How strong is the purchasing power of the new currency? The issue of addressing the cost of living is determined on the basis of the government employee’s salary of 1800 or 4000 and the purchasing power of the currency. Once the government has decided that the price of the dollar is 15 Nakfa, it is not considered sufficient given the high cost in the markets. What can one buy for 15 Nakfa from the market? Is the price of the dollar close to the prices in the countries that deal in dollars? This causes you to doubt the stability of the exchange in this respect. There will be a drop in the purchasing power in the markets, because the salary that the employee receives, whether it is 1800 or 4000, will be exchanged in the markets for the purpose of purchasing.
If all employees spend their salaries in the markets to buy their necessities, surely that lowers the purchasing power of the currency. And this continuous depreciation of the currency leads to a decrease in the value of salaries and their inability to buy, and life becomes difficult.
Speculation must be controlled, as it is harmful to the economy. It is difficult to say now that there is a merchant who pays taxes in a legal way and earns a fair profit from their trade. The cumulative effect of all this is seen in the living conditions of government employees. We all know who is building economic projects and working in national development activities — it is the government employees who constitute the majority. But, if the salary you decide on today does not help them to live tomorrow, it is not possible to continue in this manner.
So who needs control must be controlled, as it is not reasonable to live at the expense of others. It is the responsibility of the government to protect the employee who toils. In what sense can one sell a sheep that one bought from a shepherd at 700 Nakfa at a price of 3000? The shepherd who worked hard to raise the sheep did not profit from it. Therefore, adjustments must be made. It is considered unhelpful to confirm the effectiveness of salaries before stopping speculation. Therefore, we decided to start with the priorities where there is an influential link between the two sides, i.e. salaries and the issue of controlling prices in the markets.
The issue cannot be addressed as if it could be solved simply by increasing salaries only. Therefore, the situation needs a sustainable adjustment. Improving people>s lives and changing the quality of their lives should proceed along with economic growth and wealth distribution. Hence, the salaries that started will not stop and should continue, and the task of controlling the economic situation is necessary. If we take 1800 Nakfa as a salary at the present time, we assume 60- 70% of it covers basic needs. But we see considerable price increases every year, making the salary too weak to cover 20% of needs. If prices continue to increase in this way, what can an employee buy after two or three years? What can one buy with a salary of 1800 Nakfa or even 4000 Nakfa? So, it does not make sense to say that we decided to increase salaries before we put an end to speculation and the damage it is causing the economy.
You take water for free and sell it as you want. The price of a plastic bottle, at its highest, is only 80 cents. So how on earth can a bottle of water be sold at 10 Nakfa? Is it fair? Do people have the ability to buy it? The government cannot remain silent when such injustice happens. In order for the government worker to be productive and contribute to the economic and social development, they must get service that rewards their effort. And this issue is not only limited to the employees, but also the common people.
Animals slaughtered for meat are provided by the farmer who raises them. Farmers are part of the society, but they do not have clean water to drink for themselves or their livestock. The cattle are their wealth, which they sell at low prices to speculators who then sell them at very high prices. Should the government simply watch such an act without stopping it? It is impossible for the government to tolerate this.
Therefore, salaries that have been approved to improve the living conditions of government employees are not reversible. Besides this, irresponsible actions that complicate the living and economic situation must be controlled. And the matter of controlling the markets is in progress. Following studies that were conducted, it has been in effect since 2018, and it is showing relative progress, though not at the required level.
Without any convincing reason, one load of sand that they took from this land has been sold at 10000 or 11000. They also sell water they took from the dams at ten, 50 or 80 Nakfa. This must be controlled. As for the salaries approved, people who did not receive the salaries fixed in 2018 for various reasons must be paid their two-year salary retroactively. We must also know that there is no government decision that sets 500 Nakfa as a salary for any reason. People who have been paid 500 Nakfa must receive the difference, 1300. This is the only acceptable solution. There is no other way to settle this issue.
And in the end, any government worker – in the army, construction companies, and various government agencies – must receive their salary under this specified value scale. As for the people who did not receive this salary, their salaries will be adjusted according to the accepted value. By 2021 we do not want to hear of an employee who has not received their salary as they should.
This does not mean that we have put an end to the problem. The point I talked about earlier is how we can describe the reality of our economy and where it should go, in addition to the large development projects that are being mapped out. After the completion of our preparations during 2020, we will continue in 2021 to achieve the development that we desire.
Efforts must be made to build a stable and growing economy. As far as production is concerned, we must define sectors or industries that we can work on, and think about how we can gradually strengthen them. Reforming government work in a manner that eliminates corruption and strengthens the factors of production was outlined in the announcement made last year on Independence Day.
Government workers are not the only productive people. Ultimate production is conducted by the entire population. Our goal is to provide opportunities for the people and work to strengthen its productive role. This is our responsibility. It must be understood that this is not easy. It does not end with a discussion that comes from knowledgeable people, as this issue concerns the people in general. This is what the people should know because it represents the complex and interrelated matter that affects their lives and contributes to their development. The state of the economy should be understood by the ordinary citizen, in order for them to contribute to its construction with vigor and vitality. It should not be perceived that economy is explained by the higher authorities only.
In order for the issue to be understood in this way, the points that I have made in-depth regarding the economy must be well recognized by the people because the economy is related to their daily lives. Since the people participate in building the economy, the people should know what the economy is and where it is going. This way they can consciously confront interventions that negatively impact the growth of their livelihoods.
At this time, we are on a better stage and we can push our economy to a higher level. We overcame our external challenges with our steadfastness. And since we trust in our capabilities, we can push our economy towards development, even in light of challenges. Society must realize the depth of the task to build a strong economy.
The issue of understanding means doing the work, and if all people understand the situation well, they can actively participate in the development programs that are defined in projects related to both industry and other sectors. This task can be accomplished with the participation of all people.
The issue that we started with, the salaries of government workers, has taken us to several issues. If we take the issue of salaries alone, it is very difficult to believe that by raising salaries to 1800 or to 4000 the challenges for employees will have been solved. This is not the final solution to the issue and it needs continuous follow-up. In the three years since the introduction of the new salary scale, we have been able to recognize strengths and weaknesses. And we are working with great commitment to solve this issue so that there are no unresolved issues regarding salaries next year. We want to ensure that every employee gets the specified salary according to their level. And I mentioned that we must go beyond the problem of salaries and work on improving the lives of people by building a stable economy.
- Your Excellency, the issue of residential houses is a challenge. To solve this problem, it was previously mentioned that housing projects have been planned. What are the viable programs for 2020?
This in itself is a significant topic. Housing is one of the programs that we have not been able to fully address in the past. Every effort to improve the living standards of people is interlinked.
So considering that this issue is one of the basic problems, we must find a solution. Attempts have been made to precast houses and provide construction materials. Attempts were made to establish local companies that work in construction and foreign companies have also been invited. We tried foreign companies that built what is known as the “Korea Quarter” in Massawa and Asmara. The housing programs were introduced in connection with the issue of providing homes. The projects started and at a time when we did not develop other sectors, providing a home for every citizen was the initial objective.
What would the map in front of us look like? We consider what percentage of citizens or families have their own homes, regardless of their quality, whether they are traditional or modern. Owning a house, whether in the countryside or urban areas, is considered one of the basic requirements for living. Houses must contain sewer lines, toilets, water lines and electricity, transportation facilities, and access to markets, as well as to education and health services. This development must gradually be extended to all parts of the country for the benefit of everyone.
What matters most to us is the citizen who lives in the remote countryside who does not find potable and sufficient drinking water and water for washing or cleaning. The main concern is how we can provide sufficient water for hygiene, agriculture, and livestock.
Instead of focusing only on big cities, we must ensure the improvement of this situation and also gradually solve the issue of living. We can talk about the challenges that prevented the completion of many buildings, given the quality of construction materials and equipment that we can produce with our own capabilities, doors, windows and flooring materials. What are the materials that we have and that we can import? And by adding all of these factors, one can ask in the end what percentage of the population has their own home? This also must improve. If it was 10% in the past year, let us say it reached 15% in the current year, and then 20% and 30% subsequently, in order to ensure its continuous development. We can finally complete the remainder by providing the needed materials and equipment.
And since the challenges are not easy, we have not been able to accomplish what we have previously put in place at the required level. If there are those who believe that any problem related to economic and development projects will be solved in isolation from providing housing projects, they should not waste their time. If you do not initiate a solution to the problem of houses in the foreground, you cannot solve the problem of eating and drinking, for example.
Based on our observations in the past two years, we can ask about our capabilities and the obstacles facing us. Is it stemming from a lack of equipment and machinery? Or is it stemming from the lack of professional staff? Through this research we can say that we have at least some understanding of these obstacles. When we say that we have not accomplished this task at the required level in the past, we try to study the obstacles that prevented this from being achieved, and work to find solutions. To solve this problem, we must gradually provide housing throughout the country. The benefit of this situation is the role it plays in upgrading production and the creation of a prosperous economy. If only 1% of the productive force owns homes, the role that the workforce can play is very limited in achieving the desired development. When the worker owns a house, he will definitely contribute more.
We have been able to improve the building material industry, and we have no problem. We have a cement factory that has materials sufficient for the industry, but as a result of the continuous power outages, we have to import cement from abroad. But is there sufficient water or human resources trained in the professions?
There are new programs we have introduced to achieve housing projects in a stable manner with the capabilities we have. We must, above all, encourage foreign investment in housing projects if we are sure that they benefit us.
We have some programs in this regard that we will start implementing in 2021 by specifying the areas and number of houses to be built? What are the types of homes that will be built, and what can we do regarding the provision of building materials, manpower, machinery and technology? This will give us a general picture. And since we have not previously succeeded in accomplishing what we planned in building houses, it is not necessary to say that we will do this now and achieve this. So we preferred to start this year to work until we are sure of what we are doing and we will see it next year.