Monthly Archives: February 2017

Some Notes on Eritrea’s Economy

According to the recently published Global Economic Prospects, a World Bank Group flagship report, the year 2016 was marked by stagnant global trade, subdued investment, and heightened policy uncertainty. For 2017, a subdued recovery is expected, with receding obstacles to activity in commodity exporters and solid domestic demand in commodity importers. Additionally, weak investment is weighing on medium-term prospects across many emerging markets and developing economies (EMDEs). Although fiscal stimulus in major economies, if implemented, may boost global growth above expectations, risks to growth forecasts remain tilted to the downside.

 

For Eritrea, GDP growth was slightly above 4% in 2016, outpacing the global average, as well as GDP growth in the advanced economies, developing economies, and Africa (see figure 1). As well, Eritrea’s projected growth for the next several years is expected to outpace global projections (see figure 2). Importantly, such economic growth can be central to poverty reduction and the realization of broader development goals. Moving forward, Eritrea can address several areas in order to sustain positive economic momentum and enhance overall development.

 

Manufacturing and skills development

 

An area Eritrea should prioritize is manufacturing and skills development. As Eritrea continues to grow and integrate into the broader regional and global economy, it is vital to raise and vary exports, moving away from low-value added and potentially unstable primary products. Manufacturing is essential to growth, and with rapid technical change and global economic integration, it is becoming important as a means of modernizing and diversifying the economic base.

 

Consequently, focusing on and investing in technical and vocational programs and human capital development are key since they can help build and refine the population’s skills and capabilities to compete within fiercely competitive markets. Notably, advanced skills are not just a requirement for “hi-tech” sectors; even supposedly “simple” areas such as apparel, footwear, and basic engineering products require a degree of skills to compete. Of further importance, a skilled, knowledgeable workforce dramatically improves the investment climate since trained, skilled workers create an attractive economic environment for investors.

 

Beyond their necessity for competing in regional or global markets, Eritrea should invest in technical and vocational skills programs and human capital development since they help in the fulfillment of a range of fundamental human rights, significantly contribute to social inclusion, can considerably raise productivity and earnings (particularly of the working poor), reduce unemployment, increase the efficiency of entrepreneurs, and play positive, influential roles in crime and poverty reduction (AfDB; BCG; World Bank 2014).

 

The importance of technical and vocational skills and human capital development is particularly apparent in relation to skills gaps. Skills gaps are prevalent across much of the developing world – such as in Eritrea – and they persist despite generally high unemployment rates. Potential workers, lacking the skills and training required by various industries, remain idle and unproductive. An insightful case is Sri Lanka; while the country has the most educated workforce in South Asia, with 87 percent of citizens completing secondary school, its workforce is not equipped with the right skills to be machine operators, technicians, sales associates, and managers (World Bank 2014). In this context, vocational and technical training programs can provide workers with the vital skills required by dynamic, evolving economies, and can ultimately help address problems of unemployment and lack of productivity (BCG).

 

Notably, skills acquired from or honed within technical and vocational programs are especially significant for youth. Young people frequently remain at the end of the job queue for the formal labor market because they lack adequate skills and experience (Boateng 2002). With little access to formal employment, youth may instead turn to the informal sector. While the informal sector can frequently offer certain tangible benefits, it can also be characterized by long, unpredictable hours and limited protections, returns, safety, or security. More problematically, youth unemployment can also potentially lead to emigration, or crime and other harmful or dangerous behaviors, such as sex work or illicit drug use.

 

Overall, vocational and technical programs and human capital development are critical elements in encouraging and accelerating development, inclusive growth, and poverty reduction through economic transformation and job creation (AfDB). Moving forward, Eritrea should continue to invest in vocational and technical programs, and seek to enhance their overall effectiveness and impact. Doing so will require firm political commitment, the ongoing participation and cooperation of local and international partners, sustainable financing (especially for infrastructure and equipment), and the foresight to ensure that expansion does not dilute the quality of training.

 

To augment impact, the potential for enterprise-based training should be explored, while technical and vocational programs should be carefully assessed, diversified, and matched with the skills required by the labor market, possibly with the active participation of employers (Kanyenze, Mhone and Spareboom 2000; World Bank 2014). An illustrative example is the system of productivity councils that was a fundamental component of the rapid growth and success of the East Asian economies. Specifically, the system involved the specific skills profile required by the private sector being fed directly into the curricula of the educational and technical sector.

 

Finally, the Eritrean government and relevant stakeholders can further develop awareness campaigns illustrating that technical and vocational programs are an important means of empowering individuals to fully develop their capabilities and tangibly improve their lives. Importantly, these campaigns will help garner greater attention and participation, while counteracting potential obstacles related to perceptions of the alleged low prestige of technical and vocational programs.

 

Fisheries

 

Eritrea’s coastline on the Red Sea is approximately 1200 kilometers, making it one of the longest in the world, with approximately 1000 kilometers more coming from its numerous islands on the Red Sea. Notably, the waters of the southern part of the Red Sea are highly productive and rich in biodiversity, with substantial populations of over 1000 species of fish. Commercially valuable fish include groupers, snappers, emperors, lizardfish, breams, jacks, trevallies, mackerels, tunas, sharks, sardines, and anchovies.

 

However, while the region, which includes hundreds of islands as well as the major ports of Massawa in central Eritrea and Assab in the south, has a potential yield of 80000 metric tons of fish per year, Eritrea’s annual total capture production remains quite low. Thus, not only can the fisheries sector play an important role for poverty reduction, employment, income generation, food security (e.g. through reducing the need to depend on food imports to fill gaps), and nutrition (e.g. fish products are an important source of animal protein and essential micronutrients for balanced nutrition and good health), it also holds the potential to be a significant export industry and thus contribute to overall development and growth.

 

It is imperative, however, that Eritrea develop this sector in environmentally-friendly, sustainable ways. Proper management can avoid pollution and destructive fishing practices, ultimately ensuring the continued productivity of coastal waters and future growth, food security and jobs for coastal communities.

 

Tourism

Globally, the tourism industry accounts for about 10% of global GDP and one out of every 11 jobs. Tourism is an important foreign exchange earner, and many countries encourage tourism to help promote development and economic growth. The conclusion that tourism benefits nations’ economies applies both to developed nations and developing countries, although the effect may be stronger for less-developed countries with a relatively simple economy – such as Eritrea (Sahli and Carey 2013).

For Eritrea, a country blessed with a warm, hospitable climate, rich cultural heritage, and great natural assets, the tourism sector holds enormous potential to reduce poverty and enhance economic growth. However, the country must remain committed to the continued development of basic infrastructure (e.g. roads and airport facilities). Furthermore, the experience of countries that have developed successful tourism sectors (e.g. the Association of Southeast Asian Nations [ASEAN]) can offer important lessons for Eritrea, particularly in terms of improving connectivity, visa facilitation, and services. While tourism can promote growth and development, Eritrea must also make efforts to minimize or avoid potential adverse effects (e.g. on environment, cultural heritage, or local communities).

 

Figure 1

2016-gdp-growth

Source: World Bank 2017

Note: GDP Growth, Constant 2010 USD

Figure 2

economic-prospects

Source: World Bank 2017

Note: GDP Growth, Constant 2010 USD


Silomn’tye miti z’koney (Why isn’t it 100)?: A Story about Lessons

“Jennifer. Peter. Fatima…Thomas…Fikre.” One by one, Ms. Iliana, the elementary science teacher, called out our names. One by one, we slowly arose from our seats and nervously shuffled to her desk to collect our recently graded exams. Sloth-like, single file, and heads down, we must have appeared like prisoners on a boat inching our way toward the end of the plank.

Ms. Iliana was a challenging, demanding teacher, and fully dedicated to her craft. She was also a strict, no-nonsense disciplinarian. Like a drill sergeant. When she said class started at 8:00am, it meant to be in your desk, with books open and pens at the ready by 7:55am. If the clock read 4:05pm, and class was actually slated to end at 4:00pm, there was hardly a flicker of movement or an attempt to pack up. No chance. Class ended when Ms. Iliana said so. And it wasn’t enough to simply attend her class; we were expected to sit up straight. And to participate. Chewing gum? Passing paper notes? Whispering jokes behind her back while she wrote on the chalkboard? Fuhgeddaboudit. Unless, that is, you wanted to be assigned to some tedious task during lunch hour, kept after school in detention, or “drafted” into the school’s campus beautification program (i.e. picking up garbage around the playground). 

On top of this, Ms. Iliana was a difficult grader. Very, very difficult. In fact, rumour had it that no student had ever received a score above 90 percent on any of Ms. Iliana’s exams – and she had been the school’s science teacher for 16 years.
Thus, it was with a great sense of trepidation that I approached her desk to collect my exam. Thomas, one of the top students in our entire grade, slowly passed by me as he solemnly trudged back to his desk. He was beet-red and I could see his eyes welling up. Fatima and Peter, now slouched in their chairs with similarly disheartened faces, seemed to have hardly fared better. “This can’t be good,” I muttered quietly. 

Collecting myself, I extended my hands to receive my exam. My palms were moist and sweaty and my hands shook nervously as I grasped the paper. As I turned around to return to my chair, I made brief eye-contact with Ms. Iliana. She gave me the smallest of smirks before matter-of-factly stating, “Good.” 
Good? What was she talking about? I was totally confused. “Is she mocking me?” I wondered. “What type of schadenfreude was this? How could she smile and take pleasure at the misfortune of her students?”

Like a seasoned poker pro keeping the faces of their cards hidden from competitors, I held my exam close to my chest as I glanced down to see my grade. I was taken aback. “Wow,” I said quietly before going over the exam several times to make sure the marks tallied up and to ensure I wasn’t hallucinating. It was like a shopper who had mistakenly been given too much change after paying the cashier. But there was no mistake! As I moved to sit back down, I broke into a wide smile, pumped my fist (like Jordan after sinking that buzzer beater against Utah in Game One of the 1997 NBA Finals), and whispered, “Yes!” I was elated. I received a 99 on my exam.
The rest of the school day seemed to pass by in a blur. I could hardly focus in any of my other classes, since all I could think about was how excited I was to show my mother my exam. Ms. Iliana was a strong believer in family involvement within education and she required that all students get their assignments, tests, and homework signed by their parents. Students usually dreaded the practice, but I was a firm supporter that day.

When I arrived home that evening my mother was still at work, and so my older sister prepared dinner for me and my two brothers. The macaroni and cheese was so delicious that I ate two heaping helpings, and the juice – you know, the frozen juice that only required you to add water – tasted extra sweet. Afterward, we went out for a quick game of footy in the neighborhood lot, before washing up and then heading to bed. 

That night, I could not fall asleep. I just lay there staring at the ceiling with the radio playing in the background. I was so excited about my exam and sharing it with my mother. Although I left the exam on the fridge for her to look over, I decided I would stay up to see her, no matter how late she arrived. A single mother of five, my mother worked three jobs and often came home very late at night after a long day or extremely early in the morning after the night shift.


Screeeech
. The front door opened as my mother made her way in. It was nearly midnight. Her keys jangled as she tossed them onto the table and I heard her distinct footsteps in the hall near the kitchen. Excitedly, I jumped out of bed and raced down the stairs. My mother was seated, still wearing her nursing uniform, scanning the large stack of mail. Bills. Bills. Ads. Ads. Bills. As I came into the kitchen, she looked up, surprised. “What are you still doing up?” she asked. 

“Hey, mama…we had an exam with Ms. Iliana. I need you to sign it,” I explained.

Furrowing her brow, she put down the envelopes in her hand. “Bring it over…and also pass my glasses from the purse.” 

She took the exam and then looked at me, before putting on her reading glasses. She slowly navigated her way through the exam, closely reading every question, poring over all of my answers, and analyzing Ms. Iliana’s comments. I simply stood there, wearing my black and yellow, Batman-embroidered pyjamas, with my arms crossed, and a wide grin stretching from ear to ear. 

After what seemed like an eternity, she turned over the last page and placed the exam on the table. She took a final glance at the exam before shifting her attention toward me. I just stood there, proud as a peacock and eager to soak up the seemingly imminent plaudits. What transpired, however, shocked me and is something that I will never forget.

“Silomn’tye miti z’koney (why is it not one hundred)?” My mother demanded, pointing at the 99 circled in red ink at the top of the front page. 

“Huh? I got 99,” I responded. “She must be confused,” I thought to myself.

“Yes, you did. And why is it not 100?” She repeated. 

“Mama! It was the highest grade in the class,” I pleaded, my voice rising slightly. 

“And why is it not 100?” She asked again, this time even more assertively.

I just stood there, perplexed and without an answer. After a brief pause, my mother grabbed her pen and signed the exam. Then she turned to me. 

“Excellent. I’m proud of you. But I want you to be the best you can be. I don’t care about the scores of the other students. Just yours. Never be satisfied in anything that you do. There is always room for improvement. Okay?”

I nodded in agreement. She then gave me a hug and walked me to my room. Although it would take some time to fully sink in, the lessons I learned that night have been amongst the most important of my life and they have served as important guiding principles in everything that I do.

Aim high, do not settle, and never be satisfied. Today is about being better than you were yesterday, and tomorrow is about being better than you were today. If it is bad, make it good. And if it is good, make it better.

Thanks, mama.


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