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Viewing cable 07ASMARA306, ERITREA: AGOA RESPONSE

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Reference ID Created Released Classification Origin
07ASMARA306 2007-03-16 08:56 2011-08-25 00:00 UNCLASSIFIED Embassy Asmara
VZCZCXYZ0003
PP RUEHWEB

DE RUEHAE #0306/01 0750856
ZNR UUUUU ZZH
P 160856Z MAR 07
FM AMEMBASSY ASMARA
TO RUEHC/SECSTATE WASHDC PRIORITY 8778
RUEHDS/AMEMBASSY ADDIS ABABA 6072
RUEHLO/AMEMBASSY LONDON 1311
RUEHFR/AMEMBASSY PARIS 1488
RUEKJCS/SECDEF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ
UNCLAS ASMARA 000306 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/EPS JPOTASH 
LONDON FOR AFRICA WATCHERS 
PARIS FOR AFRICA WATCHERS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PHUM ER
SUBJECT: ERITREA: AGOA RESPONSE 
 
REF:  STATE 22438 
 
1. Post point of contact: Pol/Econ Officer Holly Holzer, Tel: 
291-1-12-00-04, Fax: 291-1275-84, Email holzerhc@state.gov. 
 
2. Post's response is keyed to headers in Reftel. 
 
3. Market Economy/Economic Reform/Elimination of Trade Barriers: 
One of the world's poorest countries, Eritrea maintains economic 
policies contrary to free-market principles.  The government and the 
sole political party, The Peoples' Front for Democracy and Justice 
(PFDJ), operate a command economy and control all aspects of the 
economy.  The private sector is extremely small and limited to 
mainly small family owned shops.   In the past the government has 
seized businesses and provided no restitution for the owners.  Trade 
is strictly controlled.  The government severely limits foreign 
exchange and imports.  In 2005 and 2006, the GSE issued 
proclamations further restricting the access to and use of foreign 
currency and limiting imports.  In practice, imports are permitted 
only by businesses affiliated with the PFDJ. 
 
4. Political Pluralism/Rule of Law/Anti-Corruption: 
Initially scheduled in 1998, the government postponed elections 
citing the war with Ethiopia and to date have not rescheduled them. 
The 1997 constitution provides for democratic freedoms, however, it 
has not been implemented. The only political party permitted to 
operate in country is the Peoples' Front for Democracy and Justice 
(PFDJ).  No independent media exists and the journalists, editors 
and political party members arrested in 2001 following criticism of 
the regime remain incarcerated with no due process.  The government 
continues to detain two Eritrean U.S. Embassy employees, arrested in 
2001.  While corruption is not overt, graft exists.  On paper the 
judiciary system is fair, however, government proclamations and 
police practice have undermined the strength of the judiciary, which 
is subject to executive influence. Individuals are often arrested 
and detained without due process.  The government argues that until 
the border is demarcated in Ethiopia, national security remains a 
primary concern and all other issues, such as democracy and economic 
freedoms are secondary. 
 
5. Poverty Reduction:  Eritrea ranks 157 on the UN Human Development 
Index.  Poverty is widespread, particularly in the rural areas, and 
affects much of the population.  The government, even with limited 
resources, does strive to reduce poverty, focusing on infrastructure 
development and health and education.  Limited resources and 
capacity have constrained significant improvements and the 
government often makes confusing and contradictory policy choices. 
For example, despite food shortages, the government in 2006 stopped 
all food distributions for 10 months by international organizations, 
allowing for food to rot in warehouses.  Equally puzzling was the 
demand by the government in July 2005, for USAID - Eritrea's largest 
bilateral partner - to cease all development programs in Eritrea. 
USAID's offices were closed in December 2005 with only a small 
humanitarian aid unit remaining in the Embassy.  Since May 2005, 
when the GSE issued a proclamation requiring all non-governmental 
organizations (NGOs) to register in order to continue working in 
Eritrea, the GSE has greatly reduced the number of NGOs allowed to 
operate in country by refusing to register them.  Many of these 
NGOs' programs were directly related to poverty reduction efforts. 
The GSE continues to limit the operations of those NGOs remaining 
in-country by means of travel restrictions, limitations on the 
number of expatriate staff allowed to work within the organizations 
and difficulties in obtaining fuel and supplies. 
 
6. Labor/Child Labor:  The unimplemented constitution forbids forced 
or compulsory labor and under Eritrean law children under the age of 
14 are not permitted to work. Youth 14-18 are prohibited from 
working more than 7 hours per day and are not allowed to work in the 
transport industries and in jobs involving toxic chemicals or 
dangerous machines. In the rural areas, children often work on 
family farms.  The government has ratified ILO 29, ILO 105 and ILO 
138 however has not ratified ILO 182.  All men between the ages of 
18-40 and single women 18-27 who do not have children are 
conscripted into the military or national service program, with some 
working in civilian jobs at significantly reduced wages.  There are 
no formal restrictions on labor unions and there are three 
government sponsored unions.  Freedom of assembly and association is 
greatly restricted, thus limiting the formation of private unions. 
 
DELISI